                                NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.




                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-3590-17T2

ELIZABETH LOPEZ-NEGRON,
individually and on behalf of
all others similarly situated,

          Plaintiff-Appellant,

v.

PROGRESSIVE CASUALTY
INSURANCE COMPANY,
PROGRESSIVE GARDEN STATE
INSURANCE COMPANY,
PROGRESSIVE FREEDOM
INSURANCE COMPANY, and
DRIVE NEW JERSEY
INSURANCE COMPANY,

     Defendants-Respondents.
_______________________________

ELIZABETH LOPEZ-NEGRON,
individually and on behalf of
all others similarly situated,

          Plaintiff-Appellant,

v.

PROGRESSIVE DIRECT
INSURANCE COMPANY,

     Defendant-Respondent.
_____________________________

            Argued May 28, 2019 – Decided June 18, 2019

            Before Judges Sabatino, Haas and Mitterhoff.

            On appeal from Superior Court of New Jersey, Law
            Division, Camden County, Docket Nos. L-0779-15 and
            L-4577-15.

            Jeremy E. Abay argued the cause for appellant (Sacks
            Weston Diamond, LLC and Dilworth Paxson, LLP,
            attorneys; John K. Weston (Sacks Weston Diamond,
            LLC) of the Pennsylvania bar, admitted pro hac vice,
            Jeremy E. Abay, Thomas S. Biemer, Jerry R.
            DeSiderato, and Erik L. Coccia, on the briefs).

            Michael K. Loucks (Skadden, Arps, Slate, Meagher &
            Flom, LLP) of the Massachusetts bar, admitted pro hac
            vice, argued the cause for respondents (Carl D. Poplar,
            P.A. and Michael K. Loucks, attorneys; Michael K.
            Loucks, of counsel; Carl D. Poplar, on the briefs).

PER CURIAM

      This case returns two years after our 2017 opinion reversing the Law

Division's Rule 4:6-2(e) dismissal of plaintiff's complaint for failure to state a

claim. Lopez-Negron v. Progressive Cas. Ins. Co., No. A-1632-15 (App. Div.

Mar. 6, 2017). On remand, after related federal qui tam litigation settled, the




                                                                          A-3590-17T2
                                        2
Law Division dismissed the complaint again, this time on entire controversy

grounds.

      For the reasons that follow, we reverse and again reinstate plaintiff's state

court action.

                                        I.

      The Factual Background

      We discussed the factual background underlying Lopez-Negron's

complaints in our prior opinion, Lopez-Negron, slip op. at 4-15, and incorporate

that full discussion here. The following brief summary will suffice, recognizing

that plaintiff's factual allegations have yet to be explored through complete

discovery or tried.

      New Jersey's Fair Automobile Insurance Reform Act, L. 1990, c. 8, § 6,

amended N.J.S.A. 39:6A-4.3(d), a provision of the Automobile Insurance Cost

Reduction Act, N.J.S.A. 39:6A-1.1 to -35, to require that automobile insurers

offer applicants the option to designate their health insurance provider as the

primary payer of Personal Injury Protection ("PIP") benefits. Plans providing

such a designation are often referred to as "health-first" policies, whereby the

auto insurer serves as a secondary payer for injuries that policyholders sustain

in motor vehicle accidents. See N.J.S.A. 39:6A-4.3(d). However, Medicare and


                                                                           A-3590-17T2
                                        3
Medicaid recipients cannot qualify for "health-first" policies. See N.J.A.C.

11:3-14.5(a). Federal law generally requires Medicare and Medicaid to be

secondary payers of last resort if a primary payer exists. See 42 U.S.C. §

1395Y(b)(2)(A)(ii); 42 C.F.R. § 433.139 (2018).

      Plaintiff Elizabeth Lopez-Negron, who was covered by Medicare, applied

for automobile insurance with Progressive online. She obtained a "health-first"

plan from Progressive despite her ineligibility. The online application process

used by Progressive posed a number of questions, including asking if the

applicant had health insurance and if this insurance covers injuries from an

accident. If the applicant answered yes, Progressive's website recommended the

applicant obtain a "health-first" policy. Elsewhere on Progressive's website, and

in optional "pop-ups" on the digital application, Progressive elaborated with

more details about the "health-first" option.

      Progressive did not obtain other information about Lopez-Negron's health

insurance coverage and Medicare status until after she was in the auto accident

leading to the present controversy.

      In May of 2010, Lopez-Negron was in a motor vehicle accident. She

received treatment from Diagnostic Imaging, Inc. ("Diagnostic"), Oxford Health




                                                                         A-3590-17T2
                                        4
Care PC ("Oxford"), Aria Health System ("Aria"), and the City of Philadelphia

EMS Division.

      Particularly relevant to the state claims are the x-rays plaintiff received

from Diagnostic. Diagnostic submitted its bills to Progressive. Progressive's

claims adjuster denied the bills because Lopez-Negron had a "health-first" auto

policy. Diagnostic then submitted its bills to Medicare, and Medicare paid for

the two x-rays.

      Lopez-Negron filed a bodily injury claim against the third-party tortfeasor

in the accident and received a settlement from that driver's insurer. Medicare

placed a subrogation lien on the settlement proceeds.

      Plaintiff's Federal Qui Tam Complaint

      In January 2014, Lopez-Negron filed a qui tam action on behalf of the

United States and the State of New Jersey against Progressive Casualty

Insurance Company and Progressive Garden State Insurance Company

("Progressive") in the United States District Court for the District of New

Jersey. 1 The federal complaint alleged claims under the False Claims Act



1
  The federal and state actions list different defendants, but all defendants in the
federal action are included in plaintiff's state actions. Accordingly, we will refer
to defendants collectively as "Progressive."


                                                                            A-3590-17T2
                                         5
("FCA"), 31 U.S.C. §§ 3729-3733, and state law claims under the New Jersey

False Claims Act ("NJFCA"), N.J.S.A. 2A:32C-1 to -18. Generally, the federal

complaint alleged Progressive engaged in "an illegal scheme by which [the

insurance company] exploited New Jersey auto insurance law to avoid paying

medical benefits to motor vehicle accident victims by causing healthcare

providers to submit false and fraudulent claims to Medicare and Medicaid."

       The federal complaint was initially filed in camera and under seal,

pursuant to the requirements of the FCA and NJFCA, which allow the United

States and New Jersey to review such complaints before deciding whether they

will intervene in the matter. 31 U.S.C. § 3730(b)(2); N.J.S.A. 2A:32C -5(c) to

(d).

       On March 11, 2015, the United States declined to intervene in the qui tam

case, and the district court subsequently unsealed the federal complaint on

March 17, 2015. The State of New Jersey likewise declined to intervene on

August 3, 2015.      Negron v. Progressive Cas. Ins. Co., Civ. No. 14-577

(NLH/KMW), 2016 U.S. Dist. LEXIS 24994, at *2 n.2 (D.N.J. Mar. 1, 2016).

       The New Jersey Class Action Complaint

       Meanwhile, in February 2015, Lopez-Negron filed a class action

complaint (Docket No. L-779-15) in the Law Division, pursuant to Rule 4:32,


                                                                        A-3590-17T2
                                       6
against Progressive Casualty Insurance Company, Progressive Garden State

Insurance Company, Progressive Freedom Insurance Company, and Drive New

Jersey Insurance Company. The class action complaint raises claims against

Progressive under the New Jersey Consumer Fraud Act ("NJCFA"), N.J.S.A.

56:8-1 to -20, the New Jersey Truth-in-Consumer Contract, Warranty and Notice

Act ("TCCWA"), N.J.S.A. 56:12-14 to -18, plus common-law claims of fraud,

unjust enrichment, breach of contract, and bad faith.

      Lopez-Negron brought the class action "on behalf of all Medicare and

Medicaid beneficiaries who have purchased New Jersey auto insurance policies

from Defendants that, in violation of State and Federal law, deem Medicare or

Medicaid the primary payer of medical expenses," including those who had a

Medicare or Medicaid lien levied on a third-party recovery as a result of this

purchase. The Law Division complaint alleges that "[a]s a direct and proximate

result of Defendants' unconscionable commercial practices, Plaintiff and

members of the Class suffered loss, including paying for insurance policies that

were in violation of applicable law, and the imposition of Medicare and

Medicaid liens."    As such, Lopez-Negron seeks various forms of relief,

including statewide class certification, injunctive relief, and damages.




                                                                           A-3590-17T2
                                        7
      In December 2015, Lopez-Negron filed a second class action complaint

in the Law Division against another Progressive entity, Progressive Direct

Insurance Company (Docket No. L-4577-15). This complaint was substantively

identical to plaintiff's initial class action complaint. Lopez-Negron asserts that

she discovered the identity of this fifth Progressive defendant during the first

appeal in the state action, and that she filed the separate complaint to toll the

statute of limitations.

      Pursuant to a consent order, this second state action was stayed pending

the resolution on appeal of the first state action. The consent order also specified

that the matter "shall be consolidated" with the first state action once the appeal

was resolved.

      Motions to Dismiss

      Progressive filed separate motions to dismiss the complaint in both the

federal and state cases. In each instance, Progressive argued that Lopez-Negron

failed to present a viable claim upon which relief may be granted.

      The Federal Motion to Dismiss

      In the federal case, Progressive moved to dismiss the case under Fed. R.

Civ. P. 12(b)(6) in June 2015. Progressive attached plaintiff's class action




                                                                            A-3590-17T2
                                         8
complaint as an exhibit in its motion to dismiss, but evidently did not raise the

entire controversy doctrine or any related fragmentation issues at that time.

      On March 1, 2016, the district court denied Progressive's motion to

dismiss, finding that Lopez-Negron sufficiently pled her FCA and NJFCA

claims. Negron, 2016 U.S. Dist. LEXIS 24994, at *2. The court specifically

found in its detailed written opinion that Lopez-Negron met her pleading burden

under the FCA, which requires a plaintiff to show "(1) the defendant presented

or caused to be presented to an agent of the United States a claim for payment;

(2) the claim was false or fraudulent; and (3) the defendant knew the claim was

false or fraudulent." Id. at *14 (quoting Hutchins v. Wilentz, Goldman &

Spitzer, 253 F.3d 176, 182 (3d Cir. 2001)).

      The Motion to Dismiss the Law Division Case and the First Appeal

      Meanwhile, in June 2015, Progressive moved to dismiss the state class

action complaint under Rule 4:6-2(e) for failure to state a claim. Progressive

also moved to strike the class allegations as deficient under Rule 4:32-1.

      The Law Division granted Progressive's motion to dismiss on November

5, 2015, finding Lopez-Negron's claims not viable as a matter of law. The Law

Division did not rule upon Progressive's motion to strike the class claims.




                                                                         A-3590-17T2
                                        9
      Lopez-Negron appealed the Law Division's grant of Progressive's motion

to dismiss. Progressive did not argue the entire controversy doctrine or object

to the existence of the simultaneous federal and state actions in its motion to

dismiss or in its initial briefs on appeal. The federal complaint, however, was

attached as an exhibit to Progressive's Law Division motion.

      Before oral argument in the first appeal, this court requested supplemental

briefs on "the propriety of the federal qui tam lawsuit and the state court lawsuit

being litigated simultaneously," and specifically discussing "the applicability of

the doctrines of single controversy, issue preclusion, and claim p reclusion and

any other related doctrines, as well as whether the state law claims could be or

could have been addressed by the federal court as matters within its

supplemental jurisdiction." The parties responded, with Progressive arguing to

the court for the first time that Lopez-Negron's claims should be precluded under

the entire controversy doctrine.

      On March 6, 2017, in an unpublished opinion, this court vacated the

dismissal order and remanded the case to the Law Division. Lopez-Negron, slip

op. at 3. Among other things, we concluded the Law Division had impermissibly

"decided fact-dependent matters of knowledge, intent, feasibility and

reasonableness" at the motion to dismiss phase. Ibid.


                                                                           A-3590-17T2
                                       10
      In remanding this case to the trial court in 2017, we noted "the duplicative

nature of the overall litigation clearly raises the specter of potential inconsistent

factual and legal determinations, not to mention the arguably wasteful

expenditure of scarce judicial resources." Lopez-Negron, slip op. at 39. We

instructed that these forum concerns "be addressed by the Law Division

promptly on remand." Id. at 40. We stated in this regard:

             More specifically, plaintiff shall be afforded thirty days
             to move, if she wishes, for leave to amend her
             complaint in the federal action to include, by way of
             supplemental jurisdiction, all of the additional state-law
             claims included in her present Law Division action. We
             do not, of course, presume how the district court would
             rule on such a motion, especially given the amount of
             time that already has been expended in the federal case.
             In any event, the Law Division may properly take into
             account whether plaintiff has attempted to invoke the
             supplemental jurisdiction of the federal court, in
             deciding whether single controversy or other principles
             weigh against allowing the Law Division case to
             proceed at the same time the federal action is ongoing.

                   At the very least, if the Law Division judge
             decides to allow this case to continue into the discovery
             phase, the judge and counsel should consider
             coordinating discovery with the discovery in the federal
             action.

                   We suggest that the Law Division convene a case
             management conference within forty-five days of this
             opinion, at which opportunity the court and counsel
             may explore these and other forum and procedural
             concerns.

                                                                             A-3590-17T2
                                        11
            [Id. at 40-41].

      Post-Remand Proceedings

            Motion for Leave to Amend and Stay

      Following this court's remand, Lopez-Negron filed a motion in the district

court for leave to amend her federal complaint to include the state claims. The

New Jersey action was stayed pending the resolution of the federal action. Each

side was allowed to file a motion to dissolve the stay or extend the stay after the

motion to amend the complaint in the district court was decided.

      The district court held off ruling on the motion as the parties attempted to

settle the federal claims. This delay was apparently due to a consensus between

both parties and the court to wait and see if the federal claims settled.

      On September 12, 2017, the district court dismissed Lopez-Negron's

motion to amend because of a "September 11, 2017 letter advising that a

tentative settlement ha[d] been reached." The court noted that Lopez-Negron

could "refile the motion if the settlement [was] not consummated."

      Partial Discovery in the Federal Case

      Before the federal case settled, the parties conducted a partial amount of

discovery. Lopez-Negron describes this discovery as being limited to damages,

specifically "to determining which health-first policyholders were insured by

                                                                            A-3590-17T2
                                       12
Medicare/Medicaid at the time of their respective auto accidents, then obtaining

and sorting through Medicare/Medicaid data to identify which claims should

have been paid by Progressive." Progressive describes the federal discovery as

"extensive," and including "document discovery, responding to interrogatories

and seeking policy and claims information from Medicare and Medicaid going

as far back as 2008 for individuals who had made claims on Progressive policies

during that time." In any event, there were no depositions taken or expert reports

exchanged.

      A proposed joint discovery plan filed on August 23, 2017 states that after

Progressive responded to Lopez-Negron's initial document requests and

interrogatories and made additional productions in the fall of 2016, the parties

"agreed to focus discovery on potential damages in an effort to reach an early

resolution of this matter through settlement."

      The Federal Settlement

      On November 14, 2017, the United States, the State of New Jersey, Lopez-

Negron, and Progressive entered into a settlement agreement in the federal qui

tam action. Without any admission of wrongdoing, Progressive agreed to pay

$1,380,000 plus interest in settlement to the United States and $620,000 plus

interest to the State of New Jersey. The settlement agreement provided that the


                                                                          A-3590-17T2
                                       13
United States and New Jersey would pay Lopez-Negron thirty percent of these

settlement amounts. Progressive also was to pay Lopez-Negron $212,700 "as

payment for attorney's fees" and $180,000 "for costs and expenses in connection

with the Civil Action."

      The settlement agreement specified that the United States and New Jersey

"release the Progressive Entities from any civil or administrative monetary claim

that the United States or New Jersey has for the Covered Conduct" under various

statutes and common law theories. Lopez-Negron, as relator, released "the

Progressive entities from any civil monetary claim the Relator has on behalf of

the United States or New Jersey for the Covered Conduct under the False Claims

Act, 31 U.S.C. §§ 3729-3733, the New Jersey False Claims Act, N.J. Stat. Ann.

§ 2A:32C-1, or the Medicare Secondary Payer Act, 42 U.S.C. § 1395y."

      The United States and New Jersey specifically reserved claims in the

settlement, such as those involving any criminal liability or liability arising

under the Internal Revenue Code. There is not a similar provision reserving

specific claims for Lopez-Negron.

      On February 15, 2018, the district court issued an order dismissing the

claims in the federal case, pursuant to the settlement agreement.




                                                                         A-3590-17T2
                                      14
      Progressive's Motion to Preclude the State Action

      Following the federal settlement agreement, the stay of the Law Division

case was lifted through a consent order in November 2017. Progressive then

filed a "Motion to Preclude the Complaint Under R. 4:30A." Progressive also

filed a motion to strike the class allegations.

      On March 16, 2018, a different Law Division judge who had been

assigned the case ("the second judge") issued an oral opinion, after hearing

argument from the parties. The judge's opinion and companion order granted

Progressive's motion to preclude the state complaint under Rule 4:30A and

dismissed all of Lopez-Negron's claims with prejudice.

      In his oral opinion, the second judge found it was clear that the state and

federal actions involved the same parties, facts, and series of transactions, and

observed the "core . . . of the matter is the same in . . . both actions." The judge

was persuaded that Lopez-Negron "recognized that these were the same core

controversies" when she moved to have the state claims included in the federal

case. The judge also found that if Lopez-Negron wanted to preserve these state

claims, that should have been made explicit in the settlement agreement,

pointing out that, by comparison, the United States and New Jersey both

expressly reserved claims in the settlement agreement. The judge was persuaded


                                                                            A-3590-17T2
                                        15
that Lopez-Negron should have included the state claims in the federal action,

and that the state claims should be dismissed under the entire controversy

doctrine. The judge also concurrently granted Progressive's motion to strike the

class claims, because Lopez-Negron no longer had standing as a class

representative.

                                        II.

      Although the parties make a variety of arguments, sub-arguments, and

counter-arguments, the core of this appeal is whether the Law Division

appropriately relied upon the entire controversy doctrine in dismissing plaintiff's

state court complaint with prejudice. We conclude it erred in doing so.

      The entire controversy doctrine is an equitable preclusion doctrine that

"seeks to assure that all aspects of a legal dispute occur in a single lawsuit."

Olds v. Donnelly, 150 N.J. 424, 431 (1997). As our Supreme Court recently

reiterated, "The entire controversy doctrine 'seeks to impel litigants to

consolidate their claims arising from a single controversy whenever possible.'"

Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl, P.C., 237

N.J. 91, 98 (2019) (quoting Thornton v. Potamkin Chevrolet, 94 N.J. 1, 5

(1983)). "The doctrine serves 'to encourage complete and final dispositions

through the avoidance of piecemeal decisions and to promote judicial efficiency


                                                                           A-3590-17T2
                                       16
and the reduction of delay.'" Ibid. (quoting Wadeer v. N.J. Mfs. Ins. Co., 220

N.J. 591, 610 (2015)).

      The doctrine generally disfavors successive suits regarding the same

controversy. See DiTrolio v. Antiles, 142 N.J. 253, 267 (1995). Therefore,

when a party fails to assert a claim that the entire controversy doctrine required

be joined in an action, the court has the authority to bar that claim. R. 4:30A.

      Even so, "the boundaries of the entire controversy doctrine are not

limitless. It remains an equitable doctrine whose application is left to judicial

discretion based on the factual circumstances of individual cases." Highland

Lakes Country Club & Cmty. Ass'n v. Nicastro, 201 N.J. 123, 125 (2009)

(quoting Oliver v. Ambrose, 152 N.J. 383, 395 (1998)). As such, "the polestar

for the application" of the doctrine is "judicial fairness," and "a court must apply

the doctrine in accordance with equitable principles, with careful attention to

the facts of a given case." Dimitrakopoulos, 237 N.J. at 114 (quoting K-Land

Corp. No. 28 v. Landis Sewerage Auth., 173 N.J. 59, 74 (2002)). 2




2
   We appreciate the helpful supplemental briefs of counsel we requested
addressing the Supreme Court's opinion in Dimitrakopoulos, as well as the
excellent written and oral advocacy of both parties in grappling with this
procedurally complicated matter.
                                                                            A-3590-17T2
                                        17
      The Supreme Court has expressed three "significant concerns" supporting

preclusion under the entire controversy doctrine: "(1) the need for complete and

final disposition through the avoidance of piecemeal decisions; (2) fairness to

parties to the action and those with a material interest in the action; and (3)

efficiency and the avoidance of waste and the reduction of delay." Id. at 108

(quoting Wadeer, 220 N.J. at 605). The doctrine should not be applied "where

to do so would be unfair in the totality of the circumstances and would n ot

promote any of its objectives, namely, the promotion of conclusive

determinations, party fairness, and judicial economy and efficiency." Id. at 114

(quoting K-Land, 173 N.J. at 70). When analyzing fairness, "courts should

consider fairness to the court system as a whole, as well as to all parties."

Wadeer, 220 N.J. at 605.

      In ruling on Progressive's motion to dismiss plaintiff's state court action

on entire controversy principles, the Law Division focused largely upon the

overlap between the federal and state litigations, as well as considerations of

judicial economy. These are surely relevant and important parts of the analysis.

      We concur with the Law Division that there was a substantial overlap

between the allegations Lopez-Negron pled in her federal lawsuit and those she

pled in the Law Division. Plaintiff eventually acknowledged that when she


                                                                         A-3590-17T2
                                      18
moved to file her supplemental claims in the district court. Except for the qui

tam feature of the federal action that swept in the United States and the State of

New Jersey, there is a common identity of parties in the two lawsuits: Lopez-

Negron and Progressive (or its various related companies).         The operative

allegations as to Progressive's allegedly-flawed website process for obtaining a

"health-first" auto policy are essentially the same.

      The basic theme of both lawsuits – i.e., that Progressive misled Medicare

and Medicaid recipients into buying health-first policies for which they were

ineligible – is repetitive.

      To be sure, the federal qui tam case focused on the alleged damages to the

government programs in making erroneous Medicaid or Medicare payments on

claims until the mistaken health-first elections were discovered. In addition,

plaintiff's federal complaint invoked different federal and state laws to support

liability than in the Law Division case. On the whole, however, the second Law

Division judge was correct in recognizing the substantial overlap and

duplicative aspects of the two cases.

      To a certain extent, these two actions raise concerns about the duplicate

consumption of resources in the two forums, and the inherent risks of

inconsistent determinations had both cases been decided on their merits. As of


                                                                          A-3590-17T2
                                        19
this point, the lawsuits have taken the time and attention of a United States

District Judge, a United States Magistrate Judge, a private mediator, two Law

Division judges, and four Appellate Division judges. 3 Additional time and

effort was expended in the two courts by their respective administrative

personnel in judges' chambers and in the clerks' offices, over the course of

several years. It surely would have been more economical and efficient, if

possible, to have this case processed, managed, and adjudicated in one

courthouse, and not two.

      Plaintiff points out that the distinctive features of qui tam litigation, in

which she functioned as a "relator" bringing claims of injury on behalf of the

governments, provides ample justification for her decision to litigate the same

core allegations in the two forums.      At oral argument on appeal, counsel

represented to the court that the United States Government has taken the legal

position that it has the unilateral authority to control the course of a qui tam

action, including the power to dismiss the case on its own motion. In addition,

plaintiff argues that it is by no means certain the federal court would have


3
  We appreciate that the second Law Division judge and the fourth Appellate
Division judge were brought into the case as the result of periodic judicial
reassignments, and annual changes in the appellate "Parts." Even so, the
cumulative time spent by the respective jurists would be substantial, even if
those administrative reassignments had not occurred.
                                                                          A-3590-17T2
                                      20
granted her motion to amend her complaint in that forum to include the

additional state-law claims and exercised supplemental jurisdiction over them

under 28 U.S.C. § 1367. We need not comment or rule upon these issues of

federal law, other than to express our recognition that this dual-forum procedural

context is complicated, and that it might not necessarily have been feasible for

plaintiff's entire "bucket" of claims to be poured into one venue.

      The separate state and federal actions did raise risks of inconsistent

adjudications in the two forums. For example, the fact-finder in the federal case

(say, the district judge in an injunctive hearing, or a jury at a trial on liabilit y or

damages) hypothetically might find plaintiff and her witnesses credible and

Progressive's witnesses not credible, while a state judge or jury might find the

opposite. Or the federal decision-maker(s) might find that plaintiff had failed

to meet her burden of proving her core allegations of wrongdoing, while the

state decision-maker(s) might be persuaded she did meet her burden. Indeed,

the first Law Division judge and the district judge diverged sharply in their

perceptions as to whether Progressive's website application process for "health-

first" policies was misleading or otherwise flawed.

      Plaintiff suggests that the prospect of inconsistent adjudications can

adequately be addressed by the courts. For example, the court could stay the


                                                                               A-3590-17T2
                                         21
state court action while the federal case proceeded. If and when the federal case

was decided on its merits, the federal findings may have certain preclusive

effects in the state court case under principles of collateral estoppel. Although

that approach may have advantages, the resulting preclusive impacts might well

be disputed, particularly if the findings or a jury verdict in the federal case had

any ambiguities or material omissions. See Winters v. N. Hudson Reg'l Fire and

Rescue, 212 N.J. 67, 95-96 (2012) (articulating that collateral estoppel is an

equitable doctrine requiring satisfaction of five factors, including that the

determination of the issue for which collateral estoppel is sought be "essential

to the prior judgment"). Moreover, the losing party in the federal case could

seek appellate review in the Third Circuit Court of Appeals, which would

prolong the uncertainty. As Oliver Hardy used to say to his sidekick Stan Laurel,

conducting a post-federal preclusion analysis here could easily turn out to be

"another fine mess." 4

      That said, the original risks presented of inconsistent adjudications have

now evaporated because the federal action has settled, with no ultimate findings

of liability or damages. Moreover, the United States and the State of New Jersey


4
  See, e.g., Another Fine Mess (Hal Roach Studios 1930). There is some debate
about whether Hardy's actual quote is "another nice mess."


                                                                           A-3590-17T2
                                       22
have received their monetary recoveries and are no longer involved, so the

remaining lawsuit is now a two-party dispute.5 The matter therefore is in a much

different posture than it was in 2017 when the first appeal was before this court.

Hence, no further weight should be given to the inconsistency concern, at least

prospectively. The federal case is over and done with.

      As we have already noted, the federal settlement documents are silent

about the claims pending in the Law Division. Neither plaintiff nor Progressive

attempted to include those remaining state-court claims as part of a potential

global settlement, although nothing legally prevented either side from making

such an attempt.

      Progressive essentially argues that plaintiff waived its remaining state-law

claims by failing to insist upon language in the federal settlement preserving

those claims. Conversely, plaintiff argues that Progressive waived its right to

object to the Law Division case going forward, in part because it missed a chance

to wrap those claims into a global settlement. We adopt neither interpretation

of the omission of the Law Division claims. The federal disposition simply is

what it is: a partial and consensual resolution of the overall controversy between



5
  We make no advisory comments about whether this case is appropriate for
class certification, or whether Lopez-Negron is a suitable class representative.
                                                                          A-3590-17T2
                                       23
plaintiff and Progressive. Neither side was obligated to negotiate a resolution

of the state claims in the federal settlement. 6

      Having made these observations, we turn to the most salient factor that

must guide our analysis of the entire controversy doctrine for this case: the

principles of equity and fairness. The Supreme Court stressed this factor in

Dimitrakopoulos, 237 N.J. at 114-15. As the Supreme Court reiterated, in

remanding that case for the trial court to conduct a weighing of equitable factors,

"'the polestar for the application of the [entire controversy] rule is judicial

fairness.'" Id. at 114 (alteration in original) (quoting K-Land, 173 N.J. at 74).

The court must consider the "totality of the circumstances" in evaluating

whether it should apply the doctrine to preclude an action. Id. at 119.

      The second Law Divisions judge's oral opinion in this case was delivered

before the Supreme Court issued Dimitrakopoulos, with its emphasis on equity

and fairness. The oral opinion does not elaborate much upon these equitable

considerations. Given the posture of this case, we have sufficient information


6
  We do not read our opinion in Archbrook Laguna, LLC v. Marsh, 414 N.J.
Super. 97 (App. Div. 2010), to mandate dismissal of the present case. Unlike
the present matter, the plaintiff in that case had previously voluntarily dismissed
claims it had brought in a separate action in another state, and then attempted to
revive them in a New Jersey action. Id. at 102-03. Additionally, the litigation
in another state ended after a jury trial that involved specific findings on the
merits of the out-of-state case. Id. at 104.
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before us to evaluate the equitable factors rather than delegate reconsideration

to the trial court in light of Dimitrakopoulos and provoke even further appellate

review.

      After reflecting upon the parties' arguments and the rather idiosyncratic

path of the federal and state court actions, we conclude that the equitable factors

weigh in favor of allowing plaintiff's yet-to-be-adjudicated state law claims to

go forward. There is no allegation that existence of the federal qui tam action

was not duly disclosed to Progressive when that case was unsealed shortly after

the Law Division case was filed.        Progressive knew all along that it was

defending both the federal and state cases based on a common core set of factual

allegations.

      When it initially moved to dismiss the Law Division action, Progressive

exclusively invoked Rule 4:6-2(e) (failure to state a claim), and did not raise the

entire controversy doctrine as a separate independent ground for dismissal. It

was not until this court, sua sponte, inquired into the subject before oral

argument on the first appeal and requested supplemental briefing, that the entire

controversy concern came to the fore.

      Case law instructs that the entire controversy doctrine is an affirmative

defense, which can be waived if not timely asserted. Aikens v. Schmidt, 329


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N.J. Super. 335, 339-40 (App. Div. 2000). Although Progressive complains

about having to endure four years of litigation, it could have attempted to

forestall the duplicative and piecemeal actions by asking the court to bar the

Law Division case with an early motion. It chose not to do so, perhaps for

strategic reasons that are not obvious on the surface. Although we do not rule

that Progressive "waived" its right to invoke the entire controversy doctrine, the

belated timing of its argument, prompted by this court's sua sponte inquiry in

2017, is at least relevant to the overall equities presented.

      We discern no strong institutional reasons to dismiss the Law Division

case at this juncture. Although paper (or digital) discovery of documents was

conducted in the federal case, no depositions were yet taken. No expert reports

were exchanged. Presumably many of the documents uncovered and supplied

in the federal case will be useful in the Law Division case. It is not wasteful or

institutionally detrimental for the Law Division case to proceed, now that the

federal action has settled. The controversy is no longer fragmented into two

forums.

      Lastly, we conclude it would be unfair to plaintiff and the putative class

members to extinguish these state-law claims before discovery is completed,

followed by possible dispositive motions or a trial. As we have noted, plaint iff


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                                        26
could not entirely control the path of the qui tam claims, and it was not clear if

the federal court would have exercised supplemental jurisdiction over the state

claims if it reached the merits of that motion. We also recognize, as did the

district judge in the cognate action, that plaintiff's allegations of improper

conduct, as pleaded, had enough potential merit to survive a motion to dismiss

for failure to state a viable claim.

      For these reasons, we reverse the trial court's dismissal order and reinstate

the case in the Law Division. The trial judge shall convene a case management

conference within thirty days to plan the remaining discovery and pretrial

motions, including the disposition of class certification issues.

      To the extent we have not commented on other points raised by both

parties, we have fully considered them but conclude they lack sufficient merit

or importance to require written comment. R. 2:11-3(e)(1)(E).

      Reversed and remanded.




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