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Vol. 4, No. 152 – August 8, 1996 STATE COURT CASES CONSTITUTIONAL LAW — ATTORNEY/CLIENT — PRIVILEGED STATEMENTS Now on Counsel Connect 10-3-9805 Richard McGuinness v. Timothy L. Barnes, Esq., etc., et al., Law Div. (9 pp.) Attorney s out- of-court statements — regarding the handling of a medical malpractice case — made at a legal seminar can be used against him in legal malpractice case alleging that the attorney failed to properly handle a plaintiff s medical malpractice case, and the court rejects the attorney s argument that such statements should be privileged due to public policy considerations. [Approved for publication Aug. 6, 1996.] CONSTITUTIONAL LAW — R.I.C.O. — INVESTIGATIVE INTERROGATORIES Now on Counsel Connect 10-3-9806 IMO John Doe, et al., Law Div. (22 pp.) The court denies petitioners constitutional challenges to the investigative interrogatories served upon them under New Jersey s RICO statute, N.J.S.A. 2C:41-5, and refuses to modify the interrogatories or set them aside on that basis, but will schedule a separate hearing on petitioners claims that the interrogatories are overbroad and unduly burdensome. [Approved for publication Aug. 8, 1996.] CONSTRUCTION — BONDS — ARBITRATION Now on Counsel Connect 43-3-9807 Andre Constr. Assocs. Inc. v. Catel Inc., et al., Law Div. (9 pp.) Surety s motion for summary judgment is granted against principal/indemnitor for all expenses, including attorneys fees, incurred by the surety under a performance and payment bond, and principal s argument that the fee dispute should be arbitrated is rejected. [Approved for publication Aug. 6, 1996.] EDUCATION 16-2-9808 Donald C. Backer v. Bd. of Educ. of the Twp. of Roxbury, etc., App. Div. (9 pp.) The local board s decision to withhold teacher s pay increase was within the area of its discretionary powers and is affirmed as it was not patently arbitrary or without rational basis. ENVIRONMENT — CLEANUP COSTS 17-2-9809 McCay Devel. Co., Inc. v. Jenny Oil Corp., et al. v. H.A. Fernot Co. Inc., et al., App. Div. (21 pp.) In an action seeking Spill Act contribution for cleanup costs for contamination around a gas station, since plaintiff failed to prove that one defendant discharged any hazardous substance, summary judgment both on statutory and negligence counts was proper, however, although negligence count was properly dismissed as to the second defendant, the court reverses the summary judgment in favor of the second defendant on the statutory count, and, exercising original jurisdiction, holds that defendant liable for contribution. HEALTH — DENTAL PLANS — INSURANCE 22-2-9810 Consol. Healthcare Management Inc. v. N. J. Dep’t of Ins., App. Div. (9 pp.) The court affirms the decision of state insurance department — disapproving three dental services plans pursuant to the Dental Plan Organization Act, N.J.S.A. 17:48D-1 to -24 — since the plans embodied a legally precluded subcontracting or middleman service structure, were not “capitative” as required by law, and did not satisfy the act’s expense limit requirements. INSURANCE — P.I.P. 23-2-9811 Gaetano DeVito v. Northbrook Property & Casualty Ins. Co., et al., App. Div. (4 pp.) Trial court correctly held that plaintiff, who was attacked and injured when he stopped to inspect his vehicle for damage after someone threw a rock at it, is entitled to PIP coverage, since there is a sufficient nexus between the vehicle’s use and the assault to satisfy the statute, however the record does not substantiate the award, and matter is remanded for a redetermination of same. INSURANCE — PRIMARY CARRIERS DUTY TO EXCESS CARRIERS Now on Counsel Connect 23-3-9812 Am. Centennial Ins. Co. v. Warner-Lambert Co., et al., Law Div. (12 pp.) Because primary carrier breached its duty of good faith and the standards of care imposed by the insurance industry when it failed to attempt to settle underlying litigation, instead leaving all litigation and negotiation maneuvers to its insured, the excess carrier was damaged, and primary carrier must reimburse excess carrier for all monies it has paid in satisfaction of the judgment, plus pre-judgment interest. [Approved for publication Aug. 6, 1996.] INSURANCE — VERBAL THRESHOLD 23-2-9813 Leo Martin, et al. v. Robert F. Bortnick, et al., App. Div. (8 pp.) Trial court erred in dismissing plaintiff s verbal threshold claim, finding that plaintiff had failed to prove a nexus between the accident and his claimed injuries, since there was objective, credible evidence which should not have been rejected by the judge as a matter of law, and the existence of later accidents merely raised a fact question as to the effect, if any, of the later accidents, and did not defeat plaintiff s cause of action against defendants. LANDLORD/TENANT Now on Counsel Connect 27-3-9814 Prospect Point Gardens, Inc. v. Oleg Timoshenko, et al., Law Div. (8 pp.) When renewal of a written lease is offered and the landlord combines notice of a proposed rent increase with other substantive changes in the lease conditions, the offer is fully integrated, and the landlord loses his right to the less stringent notice requirements under N.J.S.A. 2A:18-61.1f and must satisfy the two separate notice requirements of N.J.S.A. 2A:18-61.1i. [Approved for publication Aug. 6, 1996.] MUNICIPAL LAW Now on Counsel Connect 30-3-9815 Mary E. Patterson, et al. v. Cardell Cooper, et al.; Charles Robinson Jr., et al. v. Cardell Cooper, et al., Law Div. (14 pp.) Nothing in the plain language of N.J.S.A. 40A:9-132 enabled the mayor to be counted in a quorum of the city council at a July 27, 1994, meeting, and, therefore, no quorum existed and any resolutions purportedly adopted at the meeting are void ab initio, however, at an Aug. 15, 1994, meeting, the mayor s vote was acceptable under N.J.S.A. 40A:9-132 and those challenged matters were validly approved. [Approved for publication Aug. 6, 1996.] NEGLIGENCE — CONTRACTORS 31-2-9816 Alice I. Mavrikidis, et al. v. Clar Pine Servicenter, et al., App. Div. (14 pp.) Landowner was wrongfully held liable for the acts of its paving contractor — when contractor s truck collided with plaintiff s vehicle, fell over and dumped hot asphalt on her — since landowner did not exercise requisite control over the contractor and there was no evidence that the contractor lacked the requisite skill to pave or transport hot asphalt, and, further, the judge mistakenly framed the jury interrogatory regarding whether paving was an inherently dangerous activity by lumping paving and asphalt transport together. NEGLIGENCE — FIREFIGHTERS — PRODUCT LIABILITY – - LADDERS 31-2-9817 Louis Kiefer Jr. v. Aluminum Ladder Co., et al., App. Div. (8 pp.) Where plaintiff sued firefighters and ladder manufacturer for injuries he sustained when ladder collapsed while he was being rescued from a fire, although dismissals of claims against firefighters were interlocutory, when the suit in which those claims originated ultimately was dismissed against the remaining defendant — the ladder company — albeit without prejudice as to the ladder company, all rulings, including the interlocutory dismissals, became final and appealable; therefore, having failed to file a timely appeal of the dismissals of the firefighters, the trial court s determination that plaintiff is barred from raising those issues again in the second suit against the ladder company was correct. PHYSICIAN/PATIENT 29-2-9818 Alissa Damon, etc., et al. v. Ocean Gynecological and Obstetrical Assoc., P.A., et al., App. Div. (3 pp.) Given the life-long impact of the infant plaintiff s injury — a deformed arm with motion restrictions — and the probable effects of physical and cosmetic injury, the court s conscience is not shocked by $1.5 million verdict against doctor who caused the deformity by deviations from accepted medical practices during delivery. CRIMINAL LAW AND PROCEDURE — CAPITAL CASES Now on Counsel Connect 14-1-9819 State v. Jacinto K. Hightower, Supreme Ct. (74 pp. — includes concurring and dissenting opinion) Because of juror misconduct that exposed the jury to extraneous influences, defendant s death sentence is reversed, and the matter is remanded for a new penalty trial. Now on Counsel Connect 14-1-9820 State v. Donald Loftin, Supreme Ct. (182 pp. — includes two dissenting opinions) Analyzing a plethora of alleged trial errors, the majority affirms defendant s murder conviction and death sentence, although two dissenting justices find merit in some of the alleged errors, including failure to death-qualify the guilt-phase jury, and undue restriction on the defendant s ability to proffer relevant mitigation evidence. FEDERAL COURT CASES BANKRUPTCY 42-8-9821 In re: Tristram Coffin v. Malvern Fed. Sav. Bank, Third Cir. (6 pp.) The bankruptcy court s finding — that bank s lien was not discharged and that at the end of the case it would be free to exercise its state law remedies under its mortgage — was an advisory opinion, and therefore neither the district court nor the Third Circuit has jurisdiction to review such finding, and matter is remanded to the bankruptcy court. [Filed July 29, 1996.] CONTRACTS — BAILMENTS 11-7-9822 Genstar Container Corp. v. L.R. Gram Transp., Inc., U.S. Dist. Ct. (11 pp.) On plaintiff s complaint for damage to and loss of storage containers, summary judgment cannot be granted as to most complaint counts, since there are genuine issues of material fact, such as how many containers were returned to plaintiff and how many were damaged by defendant, however, summary judgment is granted to plaintiff on that aspect of defendant s counterclaim seeking unpaid storage fees at an increased rate, since plaintiff never agreed to pay the increased rate. [Filed July 30, 1996.] FAIR HOUSING — H.U.D. FORECLOSURES 41-7-9823 Hill Manor Residents Ass’n, et al. v. Henry G. Cisneros, et al., U.S. Dist. Ct. (36 pp.) The record does not support a finding that plaintiffs are likely to succeed on their claim that HUD acted arbitrarily or capriciously in its determination to proceed with foreclosure in this long-tanding default situation, and while plaintiffs may suffer harm if HUD is permitted to foreclose, that harm is essentially self-inflicted because it arises from the inability of plaintiffs equity investor to meet reasonable deadlines agreed to by plaintiffs and HUD to solve the default situation; therefore plaintiffs application for a preliminary injunction enjoining the foreclosure is denied. [Filed July 30, 1996.] JURISDICTION 24-7-9824 TEC Tran Corp. v. Hancock Elecs. Corp., U.S. Dist. Ct. (18 pp.) In an action for breach of subcontract, defendant s motion to dismiss for lack of jurisdiction is denied, since the quality and nature of the interstate transactions between the parties, taken as a whole, are not random, fortuitous, or attenuated but rather demonstrate defendant s concerted effort to reach out to plaintiff in this state. [Filed July 30, 1996.] LABOR AND EMPLOYMENT — RETALIATION 25-7-9825 Donna Marie Schmidig v. John J. Fahy, et al., U.S. Dist. Ct. (13 pp.) Since plaintiff has failed to prove a nexus between the treatment she received in her position in the arson squad — assuming such treatment was adverse, which is far from clear — and her protected activity — the filing of a gender discrimination complaint before her transfer to the arson squad — her retaliation complaint is dismissed. [Filed July 30, 1996.] A Daily Reporter of New Jersey Court Decisions NEXT WEEK IN THE … When a North Carolina jury cleared former televangelist Jim Bakker of securities fraud allegations, it closed another chapter on the preacher’s strange story. The co-author on this one was Michael Quiat, the Hackensack lawyer who won the case. See page 1 of the Aug. 12 Law Journal.

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