Civil Case Law Update Mt. Laurel, New Jersey March 7, 2009 Presenters Honorable Paulette Sapp-Peterson, J.A.D. (moderator) Honorable Francine Axelrad, P.J.A.D. Honorable Marc Baldwin, P.J. Civ. Honorable Peter A. Buchsbaum, J.S.C. Commentators From the Bar: Gregory J. Giordano, Esq. Kenneth G. Andres, Jr., Esq. CIVIL PRACTICE & PROCEDURE Owens v. Feigin, 194 N.J. 607 (2008) PER CURIAM [Civ 108 ]. The Court noted that the CRA created a statutory cause of action for damages against public defendants, and arguably could fall within the TCA's purview. However, nothing in the language or legislative history of the CRA convincingly evidenced that the New Jersey Legislature meant to import the requirements for suit contained in the TCA as necessary predicates for bringing a CRA claim. Therefore, the notice of claim requirement in the TCA did not apply to causes of action under the CRA. Hisenaj v. Kuehner, 194 N.J. 6 (2008) LAVECCHIA, J. [Civ 107]. The Supreme Court found the Appellate Division overstepped its bounds in considering material not part of the evidentiary record. The Court held that the trial court ruling that defendant’s expert, a biomechanical engineer, had an adequately reliable foundation from which to extrapolate an opinion, was not so wide off the mark as to constitute an abuse of discretion and a manifest denial of justice. Malick v. Seaview Lincoln Mercury, 398 N.J. Super. 182 (App. Div. 2008) S.L. REISNER, J.A.D. [Civ 108]. Because Rule 4:42-11 and Rule 4:58-2 now both refer to awards of “prejudgment interest, ” the Appellate Division concluded that the parties $1 million/$175,000 high–low agreement in which plaintiff waived “prejudgment interest,” but did not waive “attorneys fees and costs” under the offer of judgment rule was ambiguous. The trial judge should not have summarily awarded plaintiff interest but should have held a plenary hearing to resolve the ambiguity. Wilson v. Paradise Vill. Beach Resort & Spa, 395 N.J. Super. 520 (App. Div. 2007) SKILLMAN, P.J.A.D. [Civ 109]. The Appellate Division held that the defendant resort’ s maintenance of websites in addition to advertisement by airlines was insufficient to establish jurisdiction. SWH Funding Corp. v. Walden Printing, 399 N.J. Super. 1 (App. Div. 2008) FUENTES, J.A.D. [ Civ 109]. The Appellate Division held that when a party seeks to vacate an arbitration award entered by default pursuant to Rule 4:21A-4(f), the party must establish “good cause” and a “meritorious defense.” EVIDENCE Bardis v. First Trenton Ins. Co., 397 N.J. Super. 138 (App. Div. 2007), certif. granted, 194 N.J. 444 (2008) (argued 11/17/08) WINKELSTEIN, J.A.D. [Ev 27]. The Appellate Division held that although a UIM claim is a first-party claim by an insured against his insurance carrier, based on breach of contract, the proofs necessary to sustain that claim are the same proofs that an insured must establish against the tortfeasor. Thus, whether the carrier paid PIP benefits on behalf of the insured is not relevant. Second, the Appellate Division concluded that to permit evidence that an insurance carrier previously paid PIP benefits would complicate the insurance carrier’s decision to pay those benefits, thereby interfering with the public policy encouraging prompt payment of an injured party’s medical expenses. IMMUNITIES & JURISDICTION JURISDICTION Dolan v. Sea Transfer Corp., 398 N.J. Super. 313 (App. Div.), certif. denied, 195 N.J. 520 (2008) S.L. REISNER, J.A.D. [Jur 19]. New York’s interest in fully compensating accident victims and promoting traffic safety predominated over New Jersey’s interest in limiting the liability of non-negligent vehicle owners, and mandated application of New York’s law imposing vicarious liability on a vehicle owner (including, as here, the owner of a component of a tractor-trailer) for the negligence of the vehicle’s driver. Goldhaber v. Kohlenberg, 395 N.J. Super. 380 (App. Div. 2007) WEFING, P.J.A.D. [Jur 19]. Determined that New Jersey has jurisdiction to adjudicate since defendant knew the plaintiffs lived in New Jersey and knew the municipality in which they resided, as he made specific disparaging references to that municipality, and also referenced plaintiffs’ neighbors and posted their address. However, because defendant put up a meritorious defense in his motion seeking to set aside the judgment, the trial court’s determination denying the application to set aside default judgment is reversed. Nicastro v. McIntyre Machinery Am., Ltd., 399 N.J. Super. 539 (App. Div.), certif. granted, 196 N.J. 344 (2008) LISA, P.J.A.D. [Jur 19]. The court held that the British manufacturer here is subject to jurisdiction in New Jersey under the stream of commerce theory based upon its establishment of an exclusive United States distributor agreement, through which the worker's New Jersey employer purchased the machine. IMMUNITIES Dickson v. Twp. of Hamilton, 400 N.J. Super. 189 (App. Div.), certif. denied, 196 N.J. 461 (2008) LIHOTZ, J.A.D. [Immun 33]. The weather immunity provided by N.J.S.A. 59:4-7 extends to the township here, where the accident, which occurred on a state-owned roadway, was caused solely by the weather. Leidy v. County of Ocean, 398 N.J. Super. 449 (App. Div. 2008) PARRILLO, P.J.A.D. [Immun 33]. The delay in notice, caused by the lack of any reasonable efforts by plaintiff in 90 days to ascertain ownership of the roadway, likely prejudiced Monmouth County in its efforts to investigate the accident scene which, due to time and weather, might have changed. Sahli v. Woodbine Bd. of Educ., 193 N.J. 309 (2008) WALLACE, J. [Immun 33]. To the extent that he has incurred legal fees in his capacity as school board solicitor, plaintiff is not entitled to indemnification under N.J.S.A. 18A:16-6 or under the board's insurance policy; both afford him protection in his capacity as secretary pro tem. INSURANCE Villa v. Short, 195 N.J. 15 (2008) WALLACE, J. [Ins 83]. The exclusion in a homeowner’s policy for the intentional or criminal acts of an insured person excludes coverage for all insureds under the policy. Tyrell Hardy v. Abdul-Matin, ___ N.J. __ (2009) Wallace, J. [Ins. 80]. The Supreme Court held that the unambiguous language in N.J.S.A. 39:6A-7(b)(2) and the Liberty Mutual insurance policy make it clear that the plaintiff may not receive PIP benefits because he did not have the permission of the owner to occupy the vehicle in which he was injured. Chubb Custom Ins. Co. v. The Prudential Ins. Co. of Am., 195 N.J. 231 (2008) LONG, J. [Ins 79]. A service of suit clause is an agreement by the insurer to submit to personal jurisdiction in the court in which the insured has filed a coverage dispute; it does not allow the insured to trump the insurer’s first filing with a later filing of its own. Sensient Colors Inc. v. Allstate Ins. Co., 193 N.J. 373 (2008) ALBIN, J. [Ins 82]. In this environmental clean-up insurance coverage action, special equities overcome the presumption favoring the first-filed action in New York and support proceeding in New Jersey. BREAK PUBLIC POLICY Cutler v. Dorn, 196 N.J. 419 (2008) LAVECCHIA, J. [Pub 75]. The threshold for demonstrating a religionbased, discriminatory hostile work environment is no more stringent than the threshold that applies to sexually or racially hostile work environment claims. Plaintiff's case satisfied the standards for a hostile work environment claim to warrant, and subsequently uphold, a jury determination. Godfrey v. Princeton Theological Seminary, 196 N.J. 178 (2008) LAVECCHIA, J. [Pub 75]. The Lehmann v. Toys 'R Us standard for demonstrating a prima facie LAD hostile work environment claim based on sexual harassment is extended to non-workplace seminary; tenantalumnus' repeated asking of two female students for a date does not satisfy the severeor-pervasive prong. Tarr v. Ciasulli's Mack Auto Mall, l94 N.J. 212 (2008) LaVECCHIA, J. [Pub 77]. Arising in connection with a sexual harassment case, punitive damages may not be awarded for general deterrence but jury may only consider deterrence of the specific defendant before it; in assessing a punitive damages award the jury may consider the defendant's entire financial picture - its worth at the time of wrongdoing, subsequent events concerning the corporation's financial condition, including the reasons for those changes, and its worth at the time of trial. Mason v. City of Hoboken, 196 N.J. 51 (2008) RABNER, C.J. OPRA and common law right to access actions in Superior Court have a 45-day statute of limitations; under the "catalyst" theory, requestors qualify for attorneys fees as prevailing parties if they can show the lawsuit was causally related to relief obtained and relief had basis in law; burden of proof shifts to agency if it failed to respond at all to request within 7 business days. Borough of Glassboro v. Fraternal Order of Police Lodge No. 108, 197 N.J. 1 (2008) LONG, J. Under N.J.S.A. 40A:14-122.6, residence is a tie-breaker in promotion of police officer in a non-civil service municipality only if resident and non-resident achieve same score on qualifying test; arbitrator correctly found record did not support elevation of lower scoring, resident officer over higher-scoring, non-resident officer but it was beyond his authority to promote higher scoring officer on incomplete record as to Phase III of three-part promotional process; affirmed in part; reversed and remanded for Borough to conduct new Phase III proceeding. Tartaglia v. Paine Webber, 197 N.J. 81 (2008) HOENS, J. A whistleblower need not complain first to an external authority in order to sustain a retaliatory discharge claim under Pierce. TORTS/NEGLIGENCE Sciarrotta v. Global Spectrum, 194 N.J. 345 (2008) RIVERA-SOTO, J. [TORTS 87]. The limited duty rule, which pertains to the provision of screened seating in specific areas of sports venues, applies to pre-game warm-ups. Compliance with the limited duty rule by a sports venue owner or operator thereby satisfies the duty of care to patrons in the stands. Moreover, under the limited duty rule, there is no separate duty to warn of the risk of objects leaving the field of play. McDarby v. Merck, 401 N.J. Super. 10 (App. Div.), certif. granted, 196 N.J. 597 (2008). PAYNE, J.A.D. A state law cause of action for failure to warn is not preempted by the Federal Food Drug & Cosmetic Act (FDCA). Any action for consumer fraud is subsumed by the New Jersey Product Liability Act (PLA). A punitive damage award under the PLA is preempted by the FDCA. Bauer v. Nesbitt, 399 N.J. Super. 71 (App. Div.), certif. granted, 196 N.J. 85 (2008) PAYNE, J.A.D. [TORTS 85]. Summary judgment in favor of bar was improper when evidence could support breach of Dram Shop Act with respect to decedent and common-law negligence with respect to defendant Nesbitt. Champion v. Dunfee, 398 N.J. Super. 112 (App. Div.), certif. denied, 195 N.J. 420 (2008) PARRILLO, P.J.A.D. [TORTS 85]. A guest passenger who has no special relationship to a visibly intoxicated driver owes no duty to a fellow passenger to prevent him from driving. Mazzacano v. Happy Hour Social and Athletic Club of Maple Shade, Inc. 193 N.J. 307 (2009), ALBIN, J. Although the New Jersey Licensed Alcoholic Beverage Server Fair Liability Act permits a finding of liability when a licensed alcoholic beverage server allows a patron to become visibly intoxicated through the self-service of alcohol at a party, it does not impose a separate duty to monitor alcohol ingestion or define negligence as the failure to monitor. The Court declined to impose a monitoring duty that is not set forth in the Act. Ogborne v. Mercer Cemetery Corp., __ N.J. __ , (2009) WALLACE, Jr., J. The “palpably unreasonable” standard of the Tort Claims Act should be applied where a cause of action involves the physical condition of public property. ATTORNEY CLIENT DeNike v. Cupo, 196 N.J. 502 (2008) RABNER, C.J. Supreme Court imposed restrictions on job-seeking judges, effectively banning discussions between judges seeking post-retirement jobs and attorneys appearing before them based on RPC 1.12(c), which prohibits employment discussions outright between judge who is participating "personally and substantially" in matter and attorney for one of the parties, and Canon 3(C)(1) and Rule 1:12-1(f); holding Judge Escala committed the appearance of impropriety when he discussed a job offer with party's attorney while winding up a commercial dispute before him in 2006 that cast doubt on the integrity of the judicial process, warranting vacation of judgment and new trial. Brundage v. Estate. of Carambio, 195 N.J. 575 (2008) HOENS, J. [Atty 31]. While negotiating settlement in palimony action on behalf of plaintiff who did not cohabit, attorney failed to disclose unpublished Family Part decision on appeal in which he represented another palimony plaintiff whose case was dismissed for lack of cohabitation; Supreme Court reversed setting aside settlement, concluding attorney's behavior was "troubling sharp" but did not violate the professional conduct rule relating to conduct toward the tribunal, thus the imposition of a litigation sanction on the attorney's client was not warranted. McKnight v. Office of the Public Defender, 197 N.J. 180 (2008). PER CURIAM. The Supreme Court reversed the Appellate Division majority and adopted Judge Stern’s dissent, holding that in a legal malpractice action brought by a criminal defendant against his attorney, the claim does not accrue and the statute of limitations does not begin to run until the criminal defendant receives relief through some form of exoneration; referred matter to Supreme Court Criminal Practice Committee to draft a rule requiring that a copy of any PCR petition alleging ineffective assistance of counsel be forwarded to the attorney whose performance has been placed in question and law firm or PD’s office to alert of a potential lawsuit. Hernandez v. Baugh, 401 N.J. Super. 539 (App. Div. 2008) WEFING, P.J.A.D. [Atty 31]. Plaintiff's legal malpractice claim is not precluded on summary judgment by his statement in the underlying matter that the settlement was fair and reasonable because of the qualifying language "taking into account all relevant factors"; Puder v. Buechel is distinguished; defendant-attorney's malpractice was arguably one of the relevant factors behind plaintiff's decision to settle the underlying litigation on the terms he did. Schulman v. Wolff & Samson, P.C., 401 N.J. Super. 467 (App. Div.), certif. denied, 196 N.J. 600 (2008) MESSANO, J.A.D. [Atty 32]. Plaintiffs' shareholder derivative claims for legal malpractice and breach of fiduciary duty, as well as their individual and derivative claims for fraud and breach of contract, are not subject to dismissal under Puder's rationale; defendantattorneys did not represent plaintiffs individually; moreover, breach of contract and fraud are different claims than legal malpractice. CONSUMER PROTECTION Bosland v. Warnock Dodge, __N.J.__ (2009) HOENS, J. [Consum 37]. The Supreme Court held that the plaintiff is not required to make a claim for a refund from the car dealer before filing a consumer fraud complaint that the dealer overcharged the buyer for registering the car for a fee. Czar, Inc. v. Heath, 398 N.J. Super. 133 (App. Div.), leave to appeal granted by 195 N.J. 414 (2008) LYONS, J.A.D. [Consum 37]. A claim under the New Jersey Consumer Fraud Act is legally viable where a customer cabinmaker’s services , in a newly constructed home, fell within the definition of “home improvement” under N.J.A.C. 13:45A-16.1A. Koruba v. American Honda Motor Co. Inc., 396 N.J. Super. 517 (App. Div. 2007), certif. denied, 194 N.J. 272 (2008) PARRILLO, P.J.A.D. [Consum 37]. Plaintiff's failure to adequately warn claim against the ATV’s manufacturer was properly dismissed as his sole proof of inadequacy, his expert opinion, lacked the requisite factual basis; his negligence claim against the seller was properly dismissed since negligence is not a basis for liability under his exclusive remedy, the PLA. Maguire v. Mohrmann, 397 N.J. Super. 103 (App. Div. 2007) LIHOTZ, J.A.D. [Consum 37]. Defendant-pet dealer is subject to regulations issued pursuant to the Consumer Fraud Act; since plaintiff- buyer substantially complied with the notice requirements of those regulations, she is entitled to damages after her puppy died five days after the purchase. Sinclair v. Merck & Co., Inc., 195 N.J. 51 (2008) WALLACE, J. [Consum 38]. The Products Liability Act is the sole source of remedy for defective products claims; it does not include the remedy of medical monitoring where, as here, no manifest injury is alleged. JUDGMENT/DAMAGES Bolz v. Bolz, 400 N.J. Super. 154 (App. Div. 2008) RODRIGUEZ, A.A., J.A.D. [Jud 25]. Where an automobile collision involves both public and private tortfeasors, apportionment of each driver’s negligence or fault must be assessed, even if there is a possibility that the public entity may not be liable for damages because plaintiff did not meet the Tort Claims Act injury threshold. DEG, LLC v. Twp. of Fairfield, 398 N.J. Super. 59 (App. Div.), certif. granted, 195 N.J. 421 (2008) SKILLMAN, P.J.A.D. [Jud 25]. A governmental body that entered into a settlement agreement that it would not enforce its ordinance barring sexually oriented businesses on certain locations because it believed there was a substantial question as to the ordinance’s constitutionality was not precluded from seeking relief from the agreement if it could demonstrate that continued enforcement of the agreement was no longer equitable due to changes in the law or facts. Meyer v. Bixenholtz Construction, 402 N.J. Super. 1 (App. Div. 2008) STERN, P.J.A.D. [Jud 25]. Damages in the amount of actual monetary loss of $500 per violation, whichever is greater, may be assessed where unsolicited faxes are sent in violation of the Telephone Consumer Protection Act.