The Supreme Court decided 15 major cases in the field of tort law this term. The opinions covered a wide spectrum, including the conduct of voir dire, the scope of expert testimony and the use of remittitur. The court also explored standards of liability for res ipsa in medical malpractice cases, child sex abuse cases, Title 59 cases and the Consumer Fraud Statute. One case that attracted widespread public attention was the high court’s decision to take away the $70 million malpractice verdict in Pellicer v. St. Barnabas Hospital.
The Supreme Court has firmly established a moderate course in tort law. The Court fashioned tight standards of proof for plaintiffs in automobile cases and for the use of res ipsa in medical malpractice litigation. Where the court perceived a legislative intent for expansive liability like consumer fraud and child sex abuse, the Court interpreted the statutes liberally. In those situations like Title 59 and the Dram Shop statute, where the legislative intent was to restrict liability, the Court clamped down on attempts to expand the reach of the statutory standards of liability.
In the recent primary campaign, one of the contestants seeking the Republican nomination for governor charged that the New Jersey Supreme Court was “the most liberal in the nation.” This is no longer true in tort law.
N.J.R.E. 703provides that an expert may rely upon facts or data that are not in evidence “if of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject.” The state rule is modeled after F.R.E. 703, which was designedto”bring the judicial practice into line with the practice of experts themselves when not in court.” Soden v. Freightliner Corp., 714 F. 2d 498, 502 (5th Cir. 1983 ). The New Jersey Rules of Evidence were originally amended in 1982 to “allow more latitude in the admission of expert opinion testimony while honoring the spirit of the former rule.” N.J.R. E. 56 (2).
In Ryan v. KDI Sylvan Pools, Inc., 121 N.J. 276 (1990), the Supreme Court instructed trial judges to make a determination regarding what an expert witness could rely on by inquiring into whether or not professionals in the given field rely on certain information. “If the conclusion is affirmative, then it is presumed to be reasonable.” In clinical medicine, it is common for physicians to rely on laboratory findings and pathological and radiological reports to make a diagnosis and formulate a treatment plan. The rule has been widely used in personal injury cases to permit medical experts to offer opinions relying on histories, records and tests. It has been common practice in personal injury trials for medical experts to refer to a wide ranging set of diagnostic tests and procedures in support of their testimony. Some of the challenges the courts have faced are delineating what an expert may or may not rely on to reach an opinion, what the witness can communicate to the jury about the underlying data, and what affect the testimony has on a party’s claims and defenses
The effort to resolve these problems led to the promulgation of N.J.R.E. 808which provides that
expert opinion which is included in an admissible hearsay statement shall be excluded if the declarant has not been produced as a witness, unless the trial judge finds that the circumstances involved in rendering the opinion including the motive, duty, and interest of the declarant, whether litigation was contemplated by the declarant, the complexity of the subject matter, and the likelihood of accuracy of the opinion, tend to establish its trustworthiness.
In Nowacki v. Community Medical Center, 279 N.J. Super 276 (App. Div. 1995),plaintiff was injured while attempting to get onto a treatment table at defendant’s facility and alleged that the defendant’s employees were negligent for failing to assist her. Plaintiff claimed that she suffered a traumatic fracture to her arm and leg. Defendants contended that plaintiff sustained a “pathological fracture” caused by metastatic carcinoma that was totally unrelated to the fall. The hospital record was replete with references to a diagnosis of “pathological fracture” and its cause which defendant wanted to admit into evidence and have their experts testify about. In response to a pretrial motion filed by plaintiff’s counsel, the trial court entered an order in limine over defendant’s objection precluding admission into evidence of the disputed portions of the record, prohibiting cross-examination of the plaintiff’s expert about the entries in the chart and preventing the defense experts from making explicit references to the hospital diagnosis. Each side’s expert testified to the diagnosis they made and the reasons for it. The only reference to the disputed portions of the record that the trial judge permitted was that defense counsel was able to point out in the examination and cross-examination of the experts that plaintiff’s physician did not agree with the opinions of the treating doctors in the hospital and defendant’s expert did.
Defendants took an appeal based in part on their argument that the in limine ruling was an abuse of discretion. The trial court’s decision was upheld on appeal on grounds that the pathological fracture entries in the hospital record were a “complex diagnosis” by nontestifying physicians involving a critical issue in dispute, as opposed to an uncontested diagnosis or insignificant issue.
The most common application of N.J.R.E. 703 in civil cases pertains to expert testimony in automobile litigation where the plaintiffs must vault the verbal threshold. Almost every case revolves around whether or not there is credible objective proof that the plaintiff sustained a herniated disc and this usually hinges on the interpretation of MRI films. Plaintiff presents expert testimony featuring MRIs with positive findings of disc pathology and the defendants contest these findings with their own experts. As long as the experts are qualified to look at them and offer their conclusions, the testimony goes smoothly.
A problem arises when a party’s expert is not qualified to interpret the MRI film or does not see it and seeks to rely on the report of the radiologist to support or refute the diagnosis of a herniated disc. This leads to objections by counsel on hearsay grounds to any references to the MRI report being admitted or serving as a basis for an expert opinion. The situation has generally arisen when plaintiffs in automobile cases utilize treating chiropractors at trial to support a diagnosis of a herniated disc where the expert relies on the MRI reports because they are not qualified to read and interpret the films. This apparently led to a county-wide prohibition in one venue called the “Union County Rule,” where chiropractors were not allowed to refer to MRI or EMG reports when testifying in automobile cases.
The plaintiff in Brun v. Cardoso, 390 N.J. Super 409 (App. Div. 2006),was injured in a motor vehicle accident and had the limitation on lawsuit provision in her policy. Plaintiff alleged that she sustained herniated discs and attempted to clear the threshold by relying on a positive MRI and EMG. Plaintiff was treated by a chiropractor who referred the patient for the MRI scan and a neurologist who performed an EMG. The chiropractor did not have the training to interpret MRI films and relied solely on the report to make the diagnosis. At the time of trial, plaintiff elected to proceed only with the testimony of the chiropractor who was going to rely on the MRI report to support the diagnosis of herniated disc. In response to a motion in limine by defense counsel, the trial judge ruled that the chiropractor could not testify about the diagnosis of a herniated disc without a radiologist testifying about the findings on the MRI. The plaintiff’s lawyer was unsuccessful in locating the radiologist who did the original interpretation of the MRI and another radiologist from the same practice reached different conclusions and the trial judge barred the testimony. This led to a dismissal of plaintiff’s claims at the conclusion of her case because she had no objective proof of a permanent injury required by the threshold.
The Appellate Division sustained the trial judge’s ruling limiting the chiropractor’s testimony because of the degree of complexity of the procedures utilized in formulating the conclusion expressed in the expert’s report. The appellate judges were especially concerned that defense counsel was deprived of the opportunity to cross-examine the radiologist who authored the report on a “critical issue such as the basis for the diagnosis or cause of the condition in question.”
The same problem arose again in automobile litigation in Agha v. Feiner, 198 N.J. 50 (2009), where a plaintiff attempted to clear the threshold with a herniated disc diagnosed by a pain management specialist who had relied on a positive MRI and EMG reports to reach his diagnosis. The physician did not review the films. After plaintiff’s counsel asked the pain management physician on direct examination what the results of the MRI report were, defense counsel objected and requested a limiting instruction which would advise the jury that the testimony could be allowed only as a basis for the expert’s testimony but not a substantive proof of a herniated disc. The trial judge refused to give the instruction on the grounds that the testimony was permissible under N.J.R.E. 703 . The plaintiff’s medical expert went on to describe the positive findings in the MRI report and explain why it supported his diagnosis. The trial court also allowed plaintiff’s chiropractor to give similar testimony over defense counsel’s objection. Plaintiff’s counsel had listed the radiologist who read the MRI report as a witness but elected not to call him after the trial court overruled defense counsel’s objections to the other expert testimony.
Defense counsel brought in a well-traveled radiologist who testified that plaintiff did not have a traumatically induced herniated disc. Plaintiff’s counsel conducted a vigorous cross-examination of the bias of defendant’s radiologist and in summation argued that the jury should accord the treating radiologist’s conclusion in the report greater weight because he was as pure as the white, driven snow.
On appeal, defense counsel argued that the trial court’s evidentiary rulings were mistaken because they allowed plaintiff to prove a herniated disc based on the experts’ references to a radiological report that was inadmissible hearsay. Defendant pointed out that the author of the MRI report was not subject to cross-examination while the defense expert was. In light of the failure to offer direct proof of the herniated disc with expert testimony that interpreted the MRI films, defendant argued that plaintiff’s case should have been dismissed at the close of their case because there was no proof of a permanent injury based on objective medical evidence. Plaintiff argued that the ruling was correct under N.J.R.E. 703and that it was entitled to a new trial if the ruling was found to be incorrect.
In an unpublished opinion, Judges Weissbard, Gilroy and Baxter agreed with defense counsel’s position and reversed and remanded the case for entry of judgment for defendant. Citing Brun, the appellate judges believed that this was “a classic case of bootstrapping otherwise inadmissible MRI reports into evidence.” Again, the inability of defense counsel to cross-examine the author of the MRI report was a critical concern for the appellate court. The judges took judicial notice of a “thorough, if not blistering” attack by plaintiff’s counsel of defendant’s radiologist during cross examination and plaintiff’s comments in summation praising the pristine motivation of the radiologist who wrote the MRI report.
The Supreme Court granted plaintiff’s petition for certification to review the denial of defendant’s motion for involuntary dismissal. ATLA participated as amicus. The justices’ laser-like questions aimed at plaintiff’s counsel at oral argument clearly highlighted their concerns. Justice Albin fired the following salvo at plaintiff’s counsel: “Isn’t there something wrong with being able to launder that evidence [MRI report] through an expert who knows nothing about reading an MRI and getting it into evidence?”
Justice Albin gave a sarcastic précis of the chiropractor’s testimony: ” I don’t know how to read an MRI but I can read a report.”
A critical question by the Chief Justice addressed to plaintiff’s counsel underscored the justices’ concern with the unfair impact of the trial court’s rulings on defense counsel’s position at trial: “The critical issue you need to prove was that there was a herniated disc which turned on the MRI. How was your adversary going to cross-examine on that, if faced with a chiropractor who can’t read an MRI and pain management who didn’t read it?”
Plaintiff’s counsel did not have answers to these questions readily available and quickly retreated to safer ground, asking that the Appellate Division’s decision to dismiss the case be reversed and that plaintiff be granted a new trial because plaintiff had relied on the trial court’s ruling in deciding not to call the radiologist.
It was left to amicus to argue that N.J.R.E. 703 permitted the testimony and that the failure of the witnesses to read and interpret the films went to the weight to be accorded the testimony, not its admissibility. Amicus argued that the MRI was only one piece of an objective clinical puzzle assembled by the treating physicians to support their conclusions. Since there was other objective clinical evidence for the physician’s examinations, the MRI was only one element of plaintiff’s proofs. This argument had already been undercut by plaintiff’s counsel,who could not point to specific references in the trial record of other bases for the expert’s conclusion other than the MRI report. Amicus counsel was hard-pressed to convince a skeptical court that the critical evidence could be received by a jury through experts that had not seen the radiographic evidence. Especially puzzling to the justices was why plaintiff’s counsel did not have the pain management physician read the MRIs since he was qualified to do so.
A unanimous decision authored by Justice Long upheld the Appellate Division’s evidentiary ruling but reversed the decision to dismiss plaintiff’s claim and ordered a new trial. Agha v. Feiner , 198 N.J. 50 (2009).According to Justice Long, the “fundamental question here centers on what the jury is empowered to do with that underling data. Is it limited to using the data solely to evaluate the quality of the testifying physician’s opinion or can it accept as true the conclusions in the out of court reports?” The answer is that N.J.R.E. 703 “ was not intended as a conduit through which the jury may be provided the results of contested out-of-court expert reports.”The justices were unwilling to countenance a broad interpretation of N.J.R.E 703 in this case because it would violate the hearsay rules; it would allow experts to testify beyond their area of expertise and would destroy a party’s right to effective cross-examination of a nontestifying expert.
Agha will not have an earth-shattering impact on the trial of verbal threshold cases. Brun had already transformed the landscape, causing lawyers to obtain experts to present direct testimony about objective testing of disc pathology. A greater concern is whether or not Agha will have a deleterious impact on how expert testimony is handled in more complex cases where the critical issue is not whether or not there is objective credible evidence of a permanent injury under AICRA.
Justice Rivera-Soto focused on the problem with a thought-provoking hypothetical in the oral argument at Agha:
Tell me if you can distinguish the MRI report from a lab report. Oncologist [is] testifying and oncologist testifies that patient has cancer & I know that because I sent him to a phlebotomist, he took blood, sent it to a laboratory; the laboratory came back with a report. I read the report and I say he has cancer. Do you know how to do these tests? He says ‘No. I don’t but these are the kinds of reports I rely on every day.’ Under the rule, should the lab tech be required to come in and testify?
Unfortunately the question was not answered directly by the parties and the opinion does not address it. But the answer is important and it is no.
F.R.E. 703was enacted over 25 years ago to reflect the reality in the medical and scientific world that experts routinely rely on data of all kinds to reach legitimate conclusions in their disciplines. Physicians routinely base decision on records, opinions of other physicians, radiographic reports, laboratory reports and pathology reports to make diagnoses and formulate treatment plans. When physicians testify in trials, this data base is a fundamental component of their opinions and N.J.R.E 703allows reference to these data points to the jury. The whole purpose behind the rule change was to provide a method of proof that reflected on what was occurring in the real world without requiring an endless parade of experts and technicians to testify about the underlying tests and reports. As a practical matter, N.J.R.E. 703has allowed experts to build a case based on hearsay records where the expert’s references have an aura of reliability and do not go to the critical issue in the case. It has only been when a party contests the medical or scientific opinion, that the objection is entertained and the opposite party must prove the medical or scientific fact contained in the record or report.
A hypothetical will illustrate the operation of the rule. Plaintiff claims that he was afflicted with pulmonary carcinoma as a consequence of exposure to defendant’s product. The plaintiff brings in the treating oncologist to testify about the plaintiff’s diagnosis and the cause of the disease. The oncologist relied on the information generated in the plaintiff’s work-up including laboratory tests, pathology reports, radiographic reports and the findings of other specialists. If the defendant does not contest the diagnosis, the testimony comes in without limitation and the jury can consider all of the references as substantive evidence of the medical issues.
If the defendant has placed the diagnosis in play by obtaining a pathologist who looked at the slides and arrived at a different diagnosis, then the defendant is entitled to object to the reference by plaintiff’s oncologist to the pathology reports as substantive evidence of plaintiff’s diagnosis and causal relationship. In order to avoid a limiting instruction and a motion for dismissal, plaintiff would have to offer an expert pathologist who reviewed the tissue samples to present testimony in support of the lung cancer diagnosis. It is not every case that an objection to the underlying data is sustained. The issue must be contested. It is also not every piece of data that is objectionable. The basic inquiry is the same. Do experts in the field customarily rely on this data? Routine lab reports and other basic information in clinical setting with their attendant sense of reliability can still be referred to by experts. Even if the opposing party contests specific hearsay data the expert relies on, it can still be referred to if there are other bases for the opinion apart from the hearsay reports in question.
Agha is a decision that is limited to its unique fact pattern. The MRI evidence in question was the most critical aspect of the case. The defendant’s contested the radiographic evidence with expert testimony. The plaintiff’s experts were either unqualified to interpret the data or did not even look at the evidence. It was inherently unfair to allow the plaintiff to refer to meet his burden of proof by referring to a report that was not in evidence that could not be challenged on cross-examination by defense counsel. Agha is not authority for undermining the broad and practical intent of N.J.R.E. 703 to allow medical and scientific professionals to rely on data to explain their opinions and to allow the jury to hear what the data is.
When Jastram v. Kruse, 197 N.J. 216 (2008),came to trial, the lawyers believed it was a typical soft tissue automobile accident case without a verbal threshold. The 17-year-old plaintiff was treated by an orthopedist, a chiropractor and a pain management specialist. Plaintiff’s examining orthopedist diagnosed a permanent, “significant ligamentous injury to the plaintiff’s lumbar spine and damage to the spinal column which produced lumbar spinal instability.” Plaintiff’s counsel had made an offer of judgment for $12,500, which defendant declined to pay.
Defendant’s carrier believed it held the winning hand. Plaintiff did not complain of any injuries to the police officer at the scene. She did not go to the emergency room and did not seek any medical treatment for two weeks. The MRI was negative and the plaintiff had declined injections with the pain management specialist. There was a nineteen-month gap in treatment. None of the physicians had restricted the patient’s activities and she was gainfully employed. Defendant’s examining physician had not found any objective sign of injury and diagnosed a temporary strain and sprain.
The plaintiff had a far different view of her case. Tiffany Jastram believed she had suffered an injury which had a significant adverse impact on the quality of her life. Plaintiff had physical pain every day which impaired her activities of daily living. She could not stand or sit for long periods of time and could not sleep through the night. Plaintiff was unable to perform heavy house chores. Jastram had a lifetime passion for horseback riding, and had participated in many competitions. She also worked at a local stable in exchange for riding time. After the accident, Jastram could no longer ride. Plaintiff testified that she could no longer exercise or dance with her friends socially.
The defendant decided to roll the dice. It proved to be a costly mistake when the jury returned a compensatory damage award of $500,000 for plaintiff’s pain, suffering and disability. The trial judge denied defense counsel’s motion for a new trial on grounds that the verdict was excessive. The court found that plaintiff had laid out a compelling narrative and there was sufficient medical evidence to support the verdict. The court also noted the plaintiff’s long life expectancy of over 55 years.
Defendant fared much better in the Appellate Division. Jastram v. Kruse 2007 WL 3145333. The two appellate judges concluded the verdict was excessive and remitted it to $50,000. This court was obviously impressed by the medical defense and did not believe the evidence warranted the damages award. The opinion contains a complete recitation of the key bullet points of the defendant’s position. Reference was also made to a series of published cases where personal injury verdicts were reduced. The judges also expressed their opinion that “there is nothing about this case to distinguish it from the thousands of garden-variety lumbar strains and sprains that pass through our courts every year, most of which settle for sums well under $50,000.” The appellate judges also concluded that the case would not have gotten by summary judgment if the plaintiff had a verbal threshold. The two judges also believed the plaintiff’s offer of judgment was a marker accurately measuring the true value of the case. The Supreme Court granted plaintiff’s petition for certification.
A unanimous Supreme Court reversed the Appellate Division and reinstated the verdict. Justice Long used the opinion as an opportunity to educate judges and lawyers about remittitur, which is a court’s power to deny a defendants’ motion for a new trial based on excessive damages, if the plaintiff consents to a specific reduction in the damages award. It is an option to be exercised only in limited circumstances where there is a “manifest” miscarriage of justice.
There are certain ground rules a trial judge must follow when considering a remittitur. A judicial review of a jury’s damage award much include all of the evidence in the record reviewed in the light most favorable to the plaintiff. Over 30 years ago, Chief Justice Hughes described this analysis as a “carefully reasoned and factually supported (and articulated) determination, after canvassing the record and weighing the evidence, that the continued viability of the judgment would constitute a manifest denial of justice.” Baxter v. Fairmont Food Co., 74 N.J. 588, 597-98 (1977). Factors to consider include the nature and extent of the plaintiff’s injury, the medical treatment the plaintiff had and may require in the future, and the impact of the injury on the plaintiff’s quality of plaintiff’s life, past, present and future. Even a generous award must be affirmed if it has reasonable support in the record. A reduction must be for a number that is the highest figure that could be supported by the evidence.
An appellate court also operates with additional constraints. A trial judge’s decision to deny a motion for a new trial can only be disturbed where “it appears that there was a miscarriage of justice under the law.” R. 2:10-1.Appellate judges must defer to the trial judges “feel for the case.”
Justice Long found that the appellate judges rode roughshod over these principles by viewing plaintiff’s case in a “negative light” and “violating the precept that it not sit as a thirteenth juror.” The Supreme Court opinion reviewed the evidence by examining the strengths of the plaintiff’s case, as opposed to the appellate decision view which emphasized its weaknesses. The high court also believed the lower appellate court’s conclusions to be dismissive of the trial judge’s feel for the case. Justice Long found that the appellate judges incorporated irrelevant considerations in their opinion, including the appellate court’s references to the settlement of “garden variety cases” and their opinion about whether or not the plaintiff would have met the verbal threshold. The reference to the offer of judgment was also inappropriate because settlement offers are not a permissible consideration in deciding such a motion because the relevant line of inquiry is only whether or not the jury verdict was supported by the evidence before it.
While courts may make reference to other decisions when analyzing whether or not a verdict is excessive, the court must make a factual analysis of how the awards are similar or different. Justice Long concluded that the cases selected by the Appellate Division opinion were not an appropriate benchmark for comparison.
Remittitur is a last resort to be employed under narrowly defined circumstances. The analysis is to be carefully performed by the trial judge, always keeping in mind Chief Justice Hughes’ admonition in Baxter that “the comparative strictness of these rules is historic in nature, with roots deep in the common law. In the American system of justice, the presumption of correctness of a verdict by a jury has behind it the wisdom of centuries of common law merged into our constitutional framework.”
Historic and Extraordinary Damage Award
Pellicer v. St. Barnabas Hospital, et al., 200 N.J. 22 (2009), was a high-stakes medical malpractice case that posed for the defendants a clear and present danger of an enormous verdict. The four-month-old plaintiff suffered catastrophic brain injuries after surgery when an endotracheal tube became dislodged, causing significant oxygen deprivation, leading to cortical blindness, spastic quadriparesis and global developmental delay. There was no apparent justification for the mishap and the defendants, including doctors and nurses, pointed the finger of blame at each other. The hospital was a defendant solely on the basis of being the employer of the other defendants.
A mistrial was declared after the hospital, for the first time, inexplicably located the cardiac monitoring strips that recorded the plaintiff’s vital statistics during the evening in question. While the strips revealed some information, they had not been adequately preserved, and vital data was lost. The hospital was sanctioned by the trial judge and was compelled to compensate the plaintiff over $215,000 in fees and costs.
Four months passed before the second trial began. The hospital entered into a settlement with the plaintiff for the full amount of its liability coverage of $11 million, in return, plaintiffs agreed not to pursue the other defendants for any judgment in excess of $108 million, representing the total amount of coverage for all defendants.
After a protracted trial, the jury returned a verdict of over $75 million, including: $1.6 million for future lost wages, $10.5 million for future care, $50 million for pain, suffering, disability and impairment, $162,000 for the mother’s past service loss, $560,000 to the mother for future service loss and $13,140,000 to the mother for loss of the infant’s services, care and companionship.
The trial court set aside the mother’s award for loss of services, care and companionship because there was no legal basis for the award. Defendant’s motions for new trial and remittitur were denied. After deducting the service loss and calculating pretrial interest, judgment was entered against defendants for over $70 million.
The record verdict made headlines and hospital groups assailed the high award as a potential threat to the future of their institutions. One thing was certain. The trial record was going to be closely examined on appeal.
For its appellate strategy, defense counsel focused on the jury selection process, which they contended was not properly conducted, leading to prejudicial comments by members of the pool that had poisoned the well. Defendants also attacked the comments made by plaintiff’s counsel during trial and in summation. Defense counsel challenged the propriety of some of the trial court’s rulings which allegedly demonstrated that the judge was biased against defendants. Defendant also challenged the verdict as excessive.
During voir dire, prospective jurors were questioned in open court about their bias against the defendants and health care providers in generally. Eight individuals expressed anger and disappointment with services at St. Barnabas, while others complained about health care providers in general. Some individuals expressed reservations about jury service because of good experiences they had at the hospital. All of this played out in open court. Entreaties by defense counsel to elicit the specific criticisms at side bar were denied by the trial judge. Defendants argued that allowing the open airing of these grievances established an air of hostility toward the defendants during the trial.
The remaining defendants had nothing to do with the late production of the damaged cardiac strips. However, defendants claimed that plaintiff’s counsel continually insinuated that the remaining defendants had destroyed evidence. Defendants also complained about allegations that plaintiff’s counsel made in summation accusing a defense expert of “fabricating” an expert report. The amount of money that was required to pay for plaintiff’s future care was disputed by the parties. Defendants also pointed to comments that plaintiff’s counsel allegedly made in which he stated “that defendants hoped that the child would die prematurely, thereby reducing his life care costs.”
Defense counsel also claimed the trial judge did not treat their clients fairly. Plaintiff’s mother was allowed to testify about her emotional reaction to her child’s injury, even though there was no cognizable claim for the harm. The defendants pointed to the $13 million verdict for loss of companionship as evidence of the enormous impact the testimony had on the jury’s emotions. The defendants were convinced that the white heat generated by the mother’s account of her trials and tribulations carried over to the award made for pain and suffering. A nurse was aggrieved by a ruling prohibiting her from using an expert previously retained by the hospital, and not allowing her additional time to obtain a different expert.
Plaintiff argued that voir dire was effective because prospective jurors with an axe to grind were identified and removed. Plaintiffs pointed out that many objections by defense counsel were sustained and curative instructions given when required. Plaintiff’s counsel defended the trial judge’s rulings and argued that defendants had a fair opportunity to defend their clients. The damage award was reasonable when considered in light of the plaintiff’s devastating injuries.
The Appellate Division and the Supreme Court had diametrically opposing views about the case. The Appellate Division upheld the verdict in an unpublished decision by a distinguished panel including Judges Skillman, Lisa and Holston. Pellicer v. St. Barnabas Hosp., 2007 WL 2301644 . The 44-page opinion was very detailed in its presentation of the facts and carefully reasoned.
The Appellate Division agreed with defendants that the better practice would have been to hear juror’s personal views about health care providers at side bar. However, the judges saw a process that had successfully identified and removed potentially biased jurors. In the view of these three judges, there was no reason to believe that the remaining panel members selected were influenced by the negative comments about St. Barnabas and other providers. There were “improprieties” by plaintiff’s counsel in summation, but the offending comments “were not of such nature or magnitude to have deprived any party of a fair trial.” While the appellate court disagreed with some of the trial court’s rulings, they concluded that none of the individual errors were significant enough to have denied defendants a fair trial. The award was not excessive given the devastating physical and economic harm done to the plaintiff. The judges believed the trial judge had done a capable job of presiding over the proceedings.
The Supreme Court granted all of the defendants’ petitions for certification. A unanimous court took away the verdict and ordered a new trial.
A primary reason for the justices’ decision was the rough and tumble jury selection process. Writing for the majority, Justice Hoens noted that “the repeated expressions of anger, resentment, bitterness, and dissatisfaction, much of it directed at the very facility where the tragic events were about to be considered had taken place, could not have been ignored by the jurors who overhear them.” The justices’ concerns about the fairness of the process were heightened by the contrast between the jury selection process conducted by the trial judge in the first trial, where all of the prospective juror’s opinions and criticisms were received at sidebar, and the second trial, where the same judge allowed negative feelings about defendants and other health care providers to be expressed openly. The justices formed the impression that the trial judge was still angry about the unexpected turn of events involving the last-minute production of the cardiac strip in the first trial and was looking to make up for lost time by impaneling a jury with all deliberate speed the second time around. Justice Hoens concluded that “the record here, gives us no comfort and provides no ground on which to conclude that the jury was the fair and unbiased, impartial decision-maker that is fundamental to our system of justice.”
This is a legitimate concern. A properly conducted voir dire probes deeply into the potential biases and prejudices of possible jurors. The recently enacted “Model Voir Dire Questions” compel trial judges to push people’s buttons to determine if they have deeply ingrained prejudices that preclude them from deciding a case fairly on its merits. Potentially inflammatory answers need to be taken at sidebar so they don’t risk prejudicing the remaining members of the panel. Trial lawyers understand that failing to control the process can cause things to get out of hand and taint the pool. It is a terrible burden on all the parties to try this emotionally charged case again. Hopefully, the parties can negotiate a settlement. If this opinion finally brings an end to the careless practice of letting prospective jurors vent their spleens in front of others during the selection process, it will have a salutary impact on the conduct of future trials.
The Supreme Court saw an entirely different trial than the Appellate Division did. The justices saw a pattern of erroneous rulings throughout the proceeding that impaired the defendants’ right to a fair trial. The high court reviewed the matter through the prism of “cumulative error,” a doctrine that macroscopically examines the trial record to assess if errors “in their aggregate . . . rendered the trial so unfair as to require a reversal.”
“Cumulative error” is not determined by counting up the number of mistakes until you reach a magic number that triggers corrective action. The mistakes have to create an “atmosphere of unfairness.” This is exactly what the High Court concluded happened here. The errors pervaded the trial. The justices saw a record replete with references to evidence by plaintiff’s counsel that was both irrelevant and inflammatory. This included plaintiff’s counsel’s intimation that defendant’s position on plaintiff’s reduced life expectancy was an exercise in bad faith. There was also a concern about the insinuations by plaintiff’s counsel that defendants had been involved with the cardiac monitoring tape fiasco. The opinion pointed to other comments in which allegations were made about an inappropriate manner in which defendant obtained an expert report. Finally, the high court did not believe the trial judge treated the parties in an even-handed fashion. The justices saw a trial judge making faulty calls motivated in part by her lingering anger at the hospital’s mishandling of evidence at the first trial.
The Court refused to rule on whether or not the damages award was excessive. Justice Hoens commented that the verdict “might well be sustainable” if the trial had been conducted fairly. The Court did require a new trial on damages “because this historic and extraordinary damage award cannot be separated from those errors.”
Justice Hoens was very clear about the fact that the Court felt a responsibility to scrutinize the record because of the high-profile damage award. This court has expressed its fidelity to the principle that judges should not interfere with jury verdicts unless absolutely necessary. The Court felt obligated to do so here because of a sincere belief that the defendant did not receive a fair trial.
Medical Malpractice Res Ipsa
The plaintiff in Khan v. Singh, N.J., 200 N.J. 82 (2009),had a long history of lower back pain caused by disc pathology. Plaintiff consulted with an orthopedic surgeon who noted an “acute left foot drop,” diagnosed lumbar radiculopathy secondary to disc herniation, and recommended surgery. Plaintiff sought a second opinion from the defendant, a specialist in pain management. After a course of conservative treatment with this physician failed, defendant recommended that plaintiff undergo a “thermal energy discectomy.” According to defendant, a presurgical discogram revealed a tear in the lining of the disc at L4-L5, but no extruded fragment. During the procedure, the physician inserted a radio-frequency needle into the injured disc, applying heat in order to shrink the herniated disc, and thereby reducing the pressure exerted by the disc on the nerve. Plaintiff was consciously sedated during the procedure.
Plaintiff testified that he experienced a left foot drop and had difficulty walking after the procedure. He experienced increased pain and disability over the next few days. The physician and the records noted only that there were no immediate complications and that the patient was walking without difficulty. Both doctor and patient agreed that he was experiencing a significant foot drop a few days later. An EMG revealed that the involved nerve root was completely destroyed.
Plaintiff filed a malpractice case against his physician. An orthopedist and a neurologist testified that defendant deviated from the standard of care. Neither expert had any experience in performing the procedure. The experts opined that the surgery was contra-indicated because the discogram revealed an extruded fragment from the herniated disc at L4-L5. This condition presents an increased risk of burning the nerve when heat is applied to the injured disc. Both physicians testified that the defendant burned and destroyed the L5 nerve root, causing the foot drop and other symptoms. The experts testified that it was generally recognized in the medical community that burning the nerve root only occurs when there is negligence in the performance of the procedure.
Defendant testified that he performed the procedure properly and that plaintiff did not show any acute signs of injury after the procedure. The physician conceded during cross-examination that burning the nerve root would be malpractice, but he adamantly denied that he did this.
Defendant’s orthopedic expert testified that the surgery was properly performed and that defendant complied with the standard of care. The expert noted that the patient’s nerve root was already damaged before the surgery by long-standing degenerative disc disease. He also testified that plaintiff’s pre-existing nerve injury may have worsened during the surgery because of normal chemical changes in the body during the procedure that may have irritated the nerve. The expert did not believe the nerve root was burned by the defendant because the patient would have screamed in pain and suffered an immediate loss of function. The expert did concede that burning the nerve root would have been a deviation from the standard of care. Defendant’s orthopedist did not have any training or experience in performing the procedure.
Plaintiff’s counsel requested a res ipsa charge based on his experts’ testimony that the injury would not have occurred without negligence in the performance of the procedure. Defendant opposed the request because his expert had testified that the plaintiff’s injury did not occur because of negligence. Defendant also argued that the record did not reveal an adequate foundation to support the conclusion that the type of injury sustained by plaintiff only occurred due to negligence. Defendant was concerned that the proposed charge was an invitation to the jury to penalize the defendant for his patient’s poor outcome. The trial judge agreed with the defendant and refused to give the jury charge.
Plaintiff appealed. The Appellate Division affirmed the trial judge’s decision, however one judge dissented. Khan v. Singh, 397 N.J. Super 184 (App. Div. 2007 ) .Two judges stated that a res ipsa charge should not be given in a medical malpractice case simply because experts assert that “it is common knowledge in the medical community that the mishap would not have occurred unless the defendant deviated from the applicable standard of care.” The two judges concluded that the plaintiff’s experts did not have sufficient “hands-on” experience to testify that the plaintiff’s injury would not have happened in the absence of negligence. The experts had also not referenced any medical literature to support their position. In light of the fact that the parties had different theories of causation, a conditional res ipsa charge was not appropriate. Although two appellate judges recognized that all of the experts conceded that burning the nerve was malpractice, “this is not the same as saying that the medical community recognizes that plaintiff’s injury would not have occurred in the absence of negligence.”
The dissenting judge thought that a conditional res ipsa charge should have been given since all the experts agreed that burning the nerve was a deviation from the standard of care. According to the dissenter, the jury should have been instructed to determine if the nerve root was burned during the procedure. If the jury reached this conclusion, then it should have been charged to apply the principles of res ipsa. The plaintiff took an appeal as of right to the Supreme Court, contending that the trial court erred in failing to give a res ipsa charge.
A unanimous Supreme Court upheld the verdict and rejected the argument that a res ipsa charge was required. Justice Hoens’s opinion contains an outline of the different situations in medical malpractice cases where a res ipsacharge should be given. One scenario is where a jury can infer, based on common knowledge that the injury would not have happened without medical negligence, like leaving a sponge in a patient during surgery. This was clearly not the case in Khan . A res ipsacharge may also be given in cases where experts provide a suitable foundation for the jury to use the inference. This occurs when medical experts testify that “the medical community recognizes that an event does not ordinarily occur in the absence of negligence.” The expert’s conclusion must be derived from the expert’s own professional experience or based on documented evidence that the proposition is accepted in the medical community. Buckelew v. Grossbard, 87 N.J. 512, 527, 529 (1981).
There is also the conditionalres ipsa charge which requires the appropriate expert testimony and a jury’s initial determination of a disputed issue of fact before the principles can be applied. This ordinarily occurs where the parties have a fundamental disagreement over how an incident occurs and a jury can only apply res ipsa if the jury finds the plaintiff’s version to be true. Roper v. Blumenfeld, 309 N.J. Super 219 (App. Div. 1998).
The Supreme Court agreed with the Appellate Division that the plaintiff did not provide an adequate foundation for the plaintiff’s experts to testify that the medical community recognized that plaintiff’s injuries would not have occurred in the absence of negligence. None of the experts had any personal experience with the procedure and they did not produce any citations to the medical literature to support their conclusions. The mere fact that these same experts were qualified to offer opinions on deviation does not mean that they would be allowed to testify that it was common knowledge in the medical community that this injury would not have happened without negligence.
It is clear from the opinion that the Justices did not believe that this case had the look and feel of a res ipsacase. The Justices did not perceive a factual dispute in this case whose resolution would be assisted by a res ipsacharge. The Court perceived there to be a fundamental difference in the parties’ positions on the causation of plaintiff’s injury and disability. The plaintiff argued that the defendant deviated from the standard of care by burning the patient’s nerve root during the procedure. The defendant contended that plaintiff’s pre-existing condition led to the resulting complication of surgery which had nothing to do with negligence. The jury’s resolution of the case hinged on whether or not plaintiff met his burden of proof on negligence and proximate case. This would be resolved by applying the standard principles of law on medical negligence, not res ipsa.Justice Hoens offered the following analysis in the opinion:
In this case there was no dispute that it would have been negligent for defendant to burn the nerve root during the procedure. Instead, what was in dispute was whether the injury was caused by a burn or was instead the result of a previously damaged, sick nerve root. In that context, it becomes plain that it is the injury that plaintiff sustained, not the mechanism that caused it, that is the occurrence. By suggesting that the jury be told first to decide whether the nerve root was burned and then to apply a res ipsa analysis, plaintiff attempts to transform a conclusion offered by an expert, … into a fact for the jury to decide as a predicate for affording him the inference of negligence itself.
The high court left for another day an examination of the parameters of the conditional res ipsa charge in a medical malpractice case. The Khan opinion makes it very clear that res ipsa will apply in medical malpractice cases under very sharply defined and limited circumstances. When a plaintiff relies on an expert to obtain a res ipsa charge, the testimony will be carefully scrutinized to assure that the witness presents support for the conclusion that it is common knowledge in the medical community that the occurrence would not have occurred in the absence of negligence.
Child Sexual Abuse Act
The C.S.A.A., N.J.S.A. 2A:61B-1, provides a cause of action for childhood victims of sexual abuse for “sexual contact” and “sexual penetration” against perpetrators and parents or guardians “standing in loco parentis” “who knowingly permit or acquiesce in sexual abuse” for “injury or illness” including psychological harm. Compensatory damages are obtainable for “pain and suffering, medical expenses, emotional trauma, diminished childhood, diminished enjoyment of life, costs of counseling, and lost wages.” A plaintiff may also seek punitive damages. Counsel fees are also awarded to a prevailing plaintiff.
The statute of limitations is two years from the reasonable discovery of the injury and its causal relationship to the act of sexual abuse. The statute is tolled due to the “plaintiff’s mental state, duress by the defendant, or any other equitable grounds.” A judicial determination about whether or not a claim is time-barred is made after a plenary hearing where the Rules of Evidence do not apply except for Rule 403. In R.L. v. Voytac, 199 N.J. 285 (2009),the high court formulated specific standards for trial courts to apply when resolving statute of limitation issues arising under the CSAA.
Between 1988 and 1990, R.L., age 10-12, claimed that he was sexually abused five to 10 times by defendant. Defendant began dating R.L’s mother in 1987 and married her a year later. The two were divorced shortly after the alleged acts of abuse had ended. According to plaintiff, defendant stated that “it might not be a good idea to tell anyone.” The boy did not report the alleged abuse at the time it occurred. After the encounters ended, plaintiff developed “gender issues” and engaged in “cross-dressing.” He also had other emotional problems, did poorly in high school and had brushes with the law. In 1996, plaintiff had 18 sessions with a psychologist but did not discuss the alleged assaults. The plaintiff did not “repress” the memory of the incident and was aware of what had happened.
In 1999, plaintiff had a “flashback” of the abuse while engaged in sexual activity with his girlfriend and subsequently told his mother that defendant “had done things to him as a child.” Plaintiff’s mother advised her son to “deal with this” and that “there’s no way it hasn’t affected you.”
In late February of 2002, plaintiff discussed his gender issues with a female friend and co-worker who inquired whether or not he had been sexually abused. This conversation purportedly caused a revelation for plaintiff concerning a connection between the cross-dressing, his psychological issues and the past sexual abuse. Plaintiff subsequently wrote two memoranda outlining his thoughts about his problems and their relationship to the sexual assaults. One memo was dated February 28, 2002. R.L. also returned to therapy with his therapist on February 28, 2002. Plaintiff then consulted with a lawyer who referred him to two other therapists for evaluations.
Plaintiff filed his lawsuit against defendant on February 13, 2004, nearly 14 years after the last act of abuse allegedly occurred. Plaintiff was 25 years of age at the time the lawsuit was filed. Defendant filed an answer, which was quickly followed by a summary judgment motion seeking dismissal of the cause of action on grounds of the statute of limitations. The trial judge conducted a plenary hearing at which the plaintiff and the female friend testified. Experts produced by the plaintiff testified that plaintiff did not make a connection between his gender issues and the abuse until February 28, 2002, after he had reconnected with his therapist. One of the plaintiff’s experts believed that the defendant’s abuse was “psychologically coercive,” leading to plaintiff’s inability to make an earlier connection between the abuse and his emotional problems. The defendant’s expert testified that the plaintiff made the connection between defendant’s actions and the harm at the time of the 1999 flashback or earlier and that any possible duress ended when defendant had left the family’s home years before.
The trial court granted the summary judgment application after the Lopez hearing,finding that the plaintiff’s cause of action had accrued before February of 2002 and that there was no basis for tolling the statute of limitations. The trial court concluded that the 1999 “flashback” demonstrated that plaintiff was aware of the abuse and its impact more than two years before the complaint was filed. The trial judge also believed that the plaintiff’s subsequent discussion with his mother alerted him to the link between the abuse and its emotional impact. Another conclusion was that the “revelation” flowing from the conversation with the female friend had actually occurred sometime before late February of 2002. The court also did not believe that any evidence had been produced at the Lopez hearing that would justify tolling the statute of limitations.
The Appellate Division reversed, concluding that the cause of action did not accrue until late February of 2002, after plaintiff consulted a therapist following the discussion with his co-worker and friend, because “R.L. could appreciate that the abuse caused him emotional injuries.” R.L. v. Voytac, 402 N.J. Super 392, 405 (App. Div. 2008 ) .Defendant’s petition for certification was granted to consider the legal standard to be applied when determining when a claim brought under the CSAA is time-barred.
Defendant argued that an objective standard should be used to determine when a cause of action accrues and that the courts below erred in applying a subjective standard. Defendant believed the analysis should be limited to determining “how a reasonable, ordinary person would have reacted under the circumstances.” Defendant argued that the application of an objective standard to the facts would necessarily lead to the conclusion that the cause of action accrued when the 1999 flashback occurred.
Plaintiff’s counsel argued at oral argument that the standard to be applied to determine the accrual date should be based on how a reasonable victim of child abuse would react under the circumstances. This would enable the fact finder to consider the special circumstances that victims contend with in the aftermath of abuse. Plaintiff also contended that an appropriate standard would have to take into account that a victim would require the assistance of a professional counselor to reach an understanding of the harm caused by childhood sexual abuse. It was plaintiff’s position that this did not occur until after plaintiff received counseling in late February of 2002.
In the alternative, plaintiff requested that the statute should be tolled because he was prevented from understanding the cause of his harms because he was actively engaged in suppressing these problems and was overwhelmed by the experience. The position was also advanced that duress tolled the statute in this case because the defendant had fostered an insidious relationship with R.L. that had continued to operate even in the absence of contact or communication between the two.
Justice Wallace authored a comprehensive opinion in R.L. v. Voytac on behalf of a unanimous Supreme Court, outlining the approach that courts should take in resolving the issue of the application of the time bar in the sexual abuse statute. A cause of action does not accrue until reasonable discovery of both: (1) The existence of an injury; and (2) The causal relationship of the injury to the acts of sex abuse.
These requirements were written into the law as a consequence of the legislative recognition that sex abuse may be recognized by adults after years of repressing memory. This assessment is to be determined by an objective test “based on the totality of the circumstances when the inured party in fact discovered, or when a reasonable person subjected to child sexual abuse should have discovered, that the claimed injury was causally related to the asserted child abuse by the defendant.” The burden of proof is on the plaintiff. The parties may rely on expert testimony to support their positions.
If the trial judge determines that the complaint was filed more than two years after the cause of action accrued, then it moves on to an evaluation of whether the statute should be tolled. There are three separate and distinct grounds for tolling the statute: (1) Plaintiff’s mental state; (2) Duress by defendant; and (3) Other equitable grounds.
None are defined in the statute. According to Justice Wallace, the tolling test is subjective; relying heavily on expert testimony of whether or not the victim was prevented from making the link between defendant’s actions and the harm. The experts will provide testimony on whether or not the plaintiff suffers from Post Traumatic Stress Syndrome, or has repressed the memory, or if the experience was too painful for the child to confront. The plaintiff may also have individual characteristics that warrant tolling the statute.
The Supreme Court remanded the case to the trial court to re-evaluate the case under the new standards. The justices’ review of the record revealed that the trial judge never made a finding of fact as to exactly what the accrual date was. According to the justices, a trial judge might find that the “flashback” in 1999 was the date on which a reasonable plaintiff might have discovered the injury and its cause, or that the conversation with the female friend and co-worker in 2002 was the trigger. The Court did not agree with the Appellate Division’s conclusion that the accrual date could be as late as the plaintiff’s February 28, 2002, consultation with his therapist, because the plaintiff had already made the link in the earlier conversation with the female friend and co-worker.
Even if the trial court determines that the accrual date was 1999, it must proceed to evaluate whether or not the statute should be tolled. The Supreme Court did not believe the trial court adequately evaluated this issue at all. Justice Wallace noted that there were a number of subjective factors to be considered, including the plaintiff’s vulnerability at a young age, his sexual immaturity, his ambivalent feelings about the abuse, and possible depression. One factor the Justices ruled out was duress. A single comment allegedly made by defendant to R.L. that he should not tell anyone while the abuse was occurring was not enough.
The R.L. standards establish a reasonable analytical framework to resolve statute of limitations issues under the Act. As the record in this case demonstrates, it will never be an easy task for trial judges to wade through the difficult, mind-boggling testimony of witnesses and the complicated and contradictory expert opinions presented at Lopez hearings to reach findings of fact and conclusions of law that can adequately balance the needs of victims for their day in court with the right of defendants to avoid the burden of defending stale claims.
The liability of bars and taverns for serving intoxicated patrons is strictly controlled by statute. N.J.S.A. 2A:22A-5 provides for liability “only when the server served a visibly intoxicated person, or served a minor, under circumstances where the server knew, or reasonably should have known, that the person served was a minor.” The passage of the law has abrogated the courts authority to expand dram shop liability using common law principles.
The principle of limited statutory liability was reaffirmed by the Supreme Court this term in Bauer v. Nesbitt, 198 N.J. 601 (2009). After having consumed alcohol, a young man accompanied a minor driver to defendant’s Inn to join other young adults at a party in progress. The minor was not served any alcohol at the establishment by the staff because they were aware that the customer was not legally entitled to drink alcohol. The young adult poured some rum from a bottle he was carrying into the minor’s soft drink while they were in the restaurant. The other young adults were drinking pitchers of beer served by the waitress.
The underage driver left the premises with his companion and drove his car into a guardrail, killing the passenger. The driver’s blood alcohol was 0.199 percent.
The estate brought a wrongful death action against the driver and the Inn, alleging that they had served a visibly intoxicated minor and had “negligently supervised” the minor by failing to make sure that he did not leave the premises with the car keys. The discovery clearly established that the Inn had not served the minor but the plaintiff argued that there was “constructive service” since the other patron had served the minor, from a private stash hidden under the table while they were on the premises.
In its summary judgment motion, the defendant argued that both of plaintiff’s imaginative theories of liability were barred by the Dram Shop Statute. The trial court granted the motion because there was no evidence that defendant served alcohol to the minor.
The Appellate Division reversed the order for summary judgment because it found that the Inn had a common-law duty to “to protect [decedent] from the foreseeable risk of injury to himself and others from an automobile accident by insuring that [decedent] did not drive while in an intoxicated state.” The appellate court did not embrace the concept of “constructive service.” On its own motion, the appellate court decided that the defendant could also be held responsible for serving the young adult while he was visibly intoxicated, even though the contention had not been pleaded by the plaintiff or pursued on appeal.
Defendant’s petition for certification was granted. As its first item of business, a unanimous Supreme Court revoked the appellate court’s reward of a new cause of action to the estate for serving the decedent while he was visibly intoxicated. The justices would not allow plaintiff to pursue a cause of action that the administrator had not pleaded or raised in a timely fashion.
The Supreme Court disavowed the negligent supervision theory because a defendant’s statutory liability must flow from direct service of alcohol to a visibly intoxicated patron. Permitting a negligent-supervision claim would “fly in the face” of the liability limits that the Legislature put in place.” The trial court’s summary judgment order was reinstated and the plaintiff’s case was dismissed. There is a very sharply defined pathway to liability in a Dram Shop Case and no deviation will be tolerated.
Our Supreme Court has repeatedly interpreted the Dangerous Condition of Public Property, N.J.S.A. 59:4- 2 , section of the TCA to restrict liability and favor immunity. “Immunity Rules” continues to be the trend this term.
In order to recover for a dangerous condition of public property, a plaintiff must prove the existence of a “dangerous condition,”, that the condition “created a reasonably foreseeable risk of the kind of injury which was incurred, that either the dangerous condition was caused by a negligent employee or the entity knew about the condition and that the entity’s conduct was ‘palpably unreasonable.’” Vincitore v. N.J. Sports & Exposition Auth., 169 N.J. 119, 125 (2001).Constructive notice exists “only if the plaintiff establishes that the condition had existed for such a period of time and was of such an obvious nature that the public entity, in the exercise of due care, should have discovered the condition and its dangerous character.” N.J.S.A. 59:4-2.Defense counsels have successfully persuaded the courts to use summary judgment as an opportunity to examine the plaintiff’s case on the merits, by critically examining the plaintiff’s opposition papers. Published appellate cases demonstrate that every element of proof must withstand careful judicial examination on summary judgment before a case may proceed to trial.
Plaintiff’s decedent in Polzo v. County of Essex, 196 N.J. 569 (2008 ), suffered fatal injuries after her bicycle allegedly struck a circular depression approximately two feet in diameter with a maximum depth of two inches on the shoulder of the defendant’s roadway. Decedent, who was wearing a helmet, was thrown to the pavement. striking her head. Plaintiff filed a wrongful death and survivorship lawsuit against the county alleging that his late wife’s injuries were caused by a dangerous condition of public property.
Plaintiff retained an engineering expert who opined in his report that the defect was dangerous, that it had existed for a long period of time (months if not years) and that the condition had caused the accident.
Plaintiff also unearthed discovery that there had been a number of prior complaints about potholes along other sections of the roadway; that defendant’s road department had responded approximately five weeks before the accident and had filled potholes along the entire length of the roadway. There was no direct testimony that anyone had seen the defect in question. The survival of the case on summary judgment appeared to depend upon the inference that the defect was discoverable when the county road crew made its sojourn down the roadway five weeks before the accident. When shown a photograph of the defect, defendant’s assistant supervisor of roads testified in depositions that the depression would have been repaired if it had been reported.
The County moved for summary judgment. The trial court dismissed the plaintiff’s complaint on the ground that the county’s conduct was not “palpably unreasonable in the absence of prior complaints or reports of prior injuries.”
The Appellate Division reversed in an unpublished decision. The appellate judges stated that there were sufficient facts from which a jury could conclude that there was constructive notice and “palpably unreasonable conduct.” The county’s petition for certification was granted.
A unanimous Supreme Court reversed and remanded the case to the law division with instructions to re-examine whether or not plaintiff had adduced sufficient proofs on constructive notice to withstand summary judgment. At this hearing, the spotlight will be on plaintiff’s counsel to pinpoint the proofs he will rely on to support constructive notice. Those facts will have to focus on the specific defect in the shoulder of the roadway.
Justice Rivera-Soto’s opinion pointedly questioned two aspects of the appellate opinion that which were not correctly analyzed. One was the willingness to accept plaintiff’s proofs about prior complaints about other potholes on the same roadway to establish constructive notice. According to Justice Soto, notice is a narrowly defined concept in Title 59 cases. The plaintiff’s opposition papers did not indicate if the potholes on the “roadway” had anything to do with the shoulder or were even in close location to the defect. Complaints about a dangerous condition in one location do not provide notice of a defect at a different location. Norris v. Borough of Leonia, 160 N.J. 427, 447-48 (1999).
The justices’ ire was also aroused by the threadbare conclusions in the liability expert report of the plaintiff that did not provide any factual support for his opinions. At oral argument, Justice Albin forced plaintiff’s counsel to concede that the expert did not provide any detailed reasons why the depression was dangerous or why the engineer believed the defect had existed for a long time. Justice Rivera-Soto made it very clear in his opinion that a plaintiff cannot fly through a summary judgment motion on the wings of an expert’s net opinion.
The oral argument before the high court, and its opinion this case, is instructive for lawyers handling Title 59 cases. When motions for summary judgment are made by public entities, the opposition papers will be scrutinized closely to determine if the facts support a prima facie case. The justices asked hard-hitting, probing questions at oral argument that required much more detailed answers than are generally demanded at summary judgment motions. Plaintiffs cannot ride by and fill in the holes later like a county road crew. To defeat a public entity’s summary judgment motion on a dangerous condition of public property case, you will need the cold, hard facts documented in the record and an expert report that covers all the bases. Otherwise, the case will not survive Title 59′s heightened standard of pretrial review.
There is one section of the TCA that imposes liability similar to the standards imposed on the private sector, N.J.S.A. 59:2-2: A public entity is liable for injury proximately caused by an act or omission of a public employee within the scope of his employment in the same manner and to the same extent as a private individual under like circumstances.” A public entity is legally responsible for “negligence arising out of acts or omissions of its employees in carrying out their ministerial functions.” N.J.S.A. 59:2-3 . However, a public entity will only be liable for injuries resulting from a dangerous condition of property created by an employee’s negligence, if the entity acted in a palpably unreasonable manner in failing to protect against the condition. N.J.S.A. 59:4-2.When a public employee’s negligence injures someone on public property, an issue arises as to which standard to apply, simple negligence or the more onerous “dangerous condition of public property” requirements.
The plaintiff in Ogborne v. Mercer Cemetery Corp., 197 N.J. 448 (2009 ), was trapped in a city park surrounded by brick walls and high iron bars after a city employee locked and chained the front gates without checking inside. Plaintiff walked around the inside perimeter of the park looking for a safe way out or for outside help without success. Plaintiff became concerned for her safety and climbed onto a wall several feet high to escape. Plaintiff sat on the top of the wall hoping to observe someone who could help her. When no one came to her rescue, she decided to jump. She was seriously injured when she landed on the ground below.
Plaintiff contended that the city of Trenton was liable for the negligence of the employee who locked the gate under N.J.S.A. 59:2-2 . Defendant argued that its liability had to be judged under N.J.S.A. 59:4-2 because it was a dangerous condition of public property case. Plaintiff moved for summary judgment and the trial court held that the city of Trenton was liable for the ministerial negligence of its employee who locked the gate and that it was not a dangerous condition of property case.
The jury found that defendant’s negligence was a proximate cause of plaintiff’s injury, that plaintiff was not negligent, and awarded $1.6 million in damages. Defendant did not file post-trial motions but did appeal.
The Appellate Division reversed, holding that it was a dangerous condition of public property case and that the issues of proximate cause and comparative negligence had to be retried because it was intertwined with the liability issue. The appellate court upheld both petitioned for certification on the liability issues and defendant cross-petitioned on the damages issue.
Plaintiff argued that this was a case of simple ministerial negligence by a public employee and that there was nothing intrinsically wrong with the property. The “palpably unreasonable” standard did not apply because there were no discretionary acts by the public entity involved.
Defendant argued that the public property was the issue, that it allegedly became dangerous after the public employee locked the gate, and that plaintiff had to establish all of the requirements of N.J.S.A. 59:4-2.
A unanimous Supreme Court upheld the Appellate Division and ordered a new trial. Liability had to be determined under the “dangerous condition of public property” standards. According to Justice Wallace, plaintiff’s incident was caused by a combination of plaintiff being in the park and the employee locking the gate. “It is reasonably debatable” that the locked gates created a dangerous condition of public property because plaintiff could not exit in the customary manner. The result reflects the high court’s conviction that “an immunity provision of the act will trump an applicable liability provision.”
A building owner that voluntarily installs a fire alarm does not have a non-delegable duty to comply with applicable provisions of the Uniform Fire Code. Baboghlian v. Swift Elec. Supply Co., et. al., 197 N.J. 509 (2009 ). The defendant property owner hired a contractor to install a fire alarm in a building. The installation in the existing building was not required by the code, however the owner was required to obtain a permit and test the alarm on an annual basis. These code requirements were later repealed.
A fire starting in defendant’s premises destroyed the structure and the building next door. The owner of the adjacent building filed a lawsuit against the defendant, alleging that the fire alarm did not work properly, allowing the fire to spread unchecked, destroying the neighbor’s building. The theory of liability was that a permit was not obtained when the alarm was installed and was not checked by the construction official. According to plaintiff, defendant’s failures to comply with the Uniform Fire Code were a proximate cause of the destruction of his building. Plaintiff also contended that the alarm was not properly maintained and checked. The defendant joined the contractor as a third-party defendant.
A jury found that the owner and the contractor were negligent but that their negligence was not a proximate cause of plaintiff’s damages. The issue on appeal was the trial court’s denial of plaintiff’s request for a jury instruction that the owner had a nondelegable duty to comply with the fire code. The Appellate Division held that the owner did have a nondelegable duty and that it was reversible error not to charge this principle of law to the jury. Baboghlian v. Swift Elec. Supply Co., 393 N.J. Super 187 (App. Div. 2007).
A unanimous Supreme Court reversed the Appellate Division and reinstated the jury verdict. The legal support for the ruling is based on the general rule that when one hires an independent contractor, he is not generally liable for the negligence of the contractor in the performance of the contract activity if it presents a significant risk of grave harm. The high court was unwilling to impose the non-delegable duty on the property owner because the defendant was not required by statute or code to install the alarm in the first place.
Litigation is the life blood of insurance companies. Insureds frequently sue their carriers in coverage disputes and insurance companies pursue their own claims against every one under the sun. Carriers even bring lawsuits for treble damages against individuals who allegedly commit insurance fraud. There is absolutely no data to support the proposition that judges or juries penalize insurance companies because they are perceived to have “deep pockets.” Trial judges advise juries that insurance companies have the same rights as other parties and should be treated fairly, but the cautionary instruction has outlived its usefulness. Insurance companies have expended enormous resources to instill skepticism in the public about personal injury lawsuits and claimants with measurable success. The Supreme Court has recognized the impact of the public discourse about tort reform; the voir dire questions it has approved delve into prospective juror’s possible prejudices against personal injury plaintiffs. The vast majority of informed citizens are also aware that the most commonly litigated personal injury claims involve defendants who are insured. Today’s jurors are more likely to be concerned about the impact of their decision-making on their own premiums, than they are to give in to the urge to sock it to the carrier. In this day and age, an insurance company is just another party.
Despite the new reality of public perception, courts still feel the need, from time to time, to protect insurance companies from the imagined threat posed by rampaging juries hell-bent on robbing the rich to pay the poor. Nowhere is this outdated intuition more pronounced than in UIM cases. After settling with the tortfeasor for their minimal policy limits, injured plaintiffs pursue first-party actions to obtain additional benefits from their carriers. Appellate precedent requires that the identity of the carrier be cloaked and that the jury be advised that the lawsuit is being pursued by the plaintiff against the culpable driver. Wenz v. Allstate Ins. Co., 316 N.J. Super 570 (App. Div. 1998). Court-sanctioned subterfuge can include a defense lawyer, identifying himself as the tortfeasor’s lawyer, presenting the errant driver’s testimony as his own and appealing to the jury in opening and closing to be fair to “his client.”
This procedural device flows from an irrational judicial concern that juries will not fairly evaluate the issues if they know a carrier is the defendant. The civil justice system is built on confidence that juries can decide disputes without passion, bias or prejudice under the watchful eyes of a trial judge. Do appellate courts think that UIM actions pose more of a challenge for the courts to handle than the legions of cases in the system where insurance carriers are named defendants, such as widows seeking life insurance benefits, totally disabled workers seeking disability payments or personal injury defendants saddled with excess judgments seeking compensation from their liability carriers for bad faith?
The success of our adversarial system also depends upon the skill and ability of lawyers to protect the interests of their clients. New Jersey’s capable defense bar will have little difficulty focusing the jury’s attention on the validity of the plaintiff’s UIM claim, while deflecting any possible prejudice due to the true identity of his client. Trial lawyers are much more adept at straightforward advocacy than they are at fictional role playing.
Bardis v. First Trenton Ins. Co., 199 N.J. 265 (2009 ), was a UIM claim brought by plaintiff against his carrier. The plaintiff’s attorney moved in limine at trial to correctly identify the defendant and to explain to the jury the true nature of the lawsuit, but the trial judge was constrained from doing so because of appellate precedent. The Appellate Division expressed its opinion that it was better practice to correctly identify the carrier, but concluded that the trial judge did not abuse his discretion in denying the application.
Unfortunately, the Supreme Court passed on the opportunity offered by this appeal to reaffirm its confidence in juries to handle rudimentary disputes like a first-party UIM claim. Six justices opted for concealing the carrier’s identity because it was not relevant to any issue in the case, and would “increase the risk of jury confusion because the jury would first be told that the defendant is an insurer, but would then be advised that this is irrelevant and should play no role in their evaluation of the claim.” The majority was also concerned about the juror’s perception of the defendant’s “deep pockets.” An “insurer’s identity is ordinarily irrelevant,”, but discretion is still vested in the discretion of the trial judge to decide differently if circumstances dictate a different result.
As this issue plays out in the future, the Supreme Court will become aware that UIM carriers often face situations where they do not want to be identified as the tortfeasor. When the culpable driver was intoxicated or reckless, or is a large corporate entity, the carriers are more than happy to tell the jury who they really are. What happens then? Is this a rule of convenience exclusively for insurance companies or will the fiction be retained?
In a dissent, Justice Albin pointed out the obvious: those juries can handle the truth, that creating fictional parties is an “unacceptable way to run a transparent court system” and that limiting instructions could properly set a framework for a jury’s fact-finding responsibilities.
The issue that drove the appeal was the plaintiff’s effort to introduce into evidence the decision by defendant’s PIP adjuster to pay the bills for the plaintiff’s medical treatment which the carrier now contended was not related to the accident. The trial judge was going to allow the testimony over defendant’s objection, as long as the witness was not identified as an employee of an insurance company. The parties then agreed to a stipulation that a representative of the defendant had paid the bills after determining that they were causally related to the automobile accident. Defense counsel walked away from the stipulation in summation, advising the jury that defendant had no idea who the individual was or why she had paid the bills. Plaintiff objected to the remarks to no avail.
The jury returned a verdict finding that the accident was not a proximate cause of the plaintiff’s injuries. On appeal, plaintiff sought a new trial on grounds that defense counsel’s disavowal of the stipulation was highly prejudicial and warranted a new trial because it made it look like plaintiff was trying to put one over on the jury. The Appellate Division held that insurance adjuster’s decision was irrelevant in a UIM case and that defense counsel’s comments were not grounds for a new trial.
The Supreme Court agreed with the Appellate Division that the testimony was irrelevant. The justices would not sanction the attempt to transform an administrative decision by a low-level insurance adjuster into a damning admission by a party where the employee did not have the background or training to make medical judgments. They also believed that allowing the testimony would create a risk that every PIP decision would also hinge on whether or not it would be used against the carrier in subsequent litigation. The Supreme Court ordered a new trial because defense counsel’s statement that he was unaware of the payments and their source may have caused the jury to reach an unjust result. The case against the “tortfeasor” will proceed again.
An automobile carrier has a statutory right to recoup its PIP payments from any tortfeasor who was not required to maintain personal injury protection benefits. N.J.S.A. 39:6A-9.1 . The law creates a potential conflict between the PIP carrier and its injured insured when they are seeking recovery from a liability policy with insufficient limits to fully compensate both parties. Who has priority? Is it the injured victim or the PIP carrier? The statute is silent on the issue.
The plaintiff in Fernandez v. Nationwide Mut. Fire Ins. Co., 199 N.J. 591 (2009) , was very seriously injured in a motor vehicle accident caused by a negligently operated commercial vehicle with policy limits of $1 million. The plaintiff’s PIP carrier, Nationwide, expended the full amount of $250,000 in PIP benefits and then pursued its claim for reimbursement in intercompany arbitration against the defendant’s liability carrier, receiving an award for the full amount.
Plaintiff filed suit against the culpable party and was awarded over $1.84 million in a nonbinding arbitration. Plaintiff settled with the defendant for the policy limits. The defendant’s liability carrier paid the plaintiff approximately $750,000 immediately and deposited the balance of approximately $250,000 in court pending a resolution of the competing claims to the funds.
Plaintiff filed a declaratory judgment action against the two carriers to establish his entitlement to the $250,000 deposited in court. Nationwide contended that it had a primary right to the proceeds. Plaintiff and Nationwide filed cross-motions for summary judgment. The trial court granted plaintiff’s application, holding that plaintiff was entitled to be made whole before the PIP carrier could recoup its loss.
Nationwide appealed. A three-judge appellate panel ruled that the PIP carrier’s statutory right had priority over the plaintiff’s tort claim to the proceeds. Fernandez v. Nationwide Mut. Fire Ins. Co., 402 N.J. Super 166 (App. Div. 2008).Judge Gilroy, author of the Appellate Division opinion, found that the purpose of the reimbursement statute was to shift the costs of benefits from the PIP provider to the carriers for the parties responsible for causing the accident. The appellate court recognized that the PIP carrier’s primary statutory right to the proceeds of the tortfeasor’s liability policy, established in Knox v. Lincoln General Ins. Co., 304 N.J. Super 431 (App. Div. 1997),was still a valid precedent.
The appellate judgesembraced the Knox rationalethat the legislature gave this right to the PIP carrier in consideration for its legal obligation to pay medical benefits immediately after an accident without regard to fault. Judge Gilroy concluded that the failure of the legislature to amend the PIP reimbursement statute after Knox validated the appellate court’s ruling that conferring the primary right on the PIP carrier was the original intent of the legislature. The Appellate Division did not view the reimbursement statute as creating a right of subrogation for the PIP carrier, allowing the court to curtail the PIP carrier’s rights for equitable reasons. It was the Appellate Division’s view that the PIP reimbursement law conferred on the PIP carrier a right to pursue a direct cause of action, placing it first in line to collect from the responsible party or carrier.
The Supreme Court rendered a split decision: 3-3. Justices LaVecchia , Rivera-Soto and Wallace affirmed the Appellate Division decision by adopting Judge Gilroy’s opinion. The per curiam decision recognized that Knox was solid precedent based on the intent of the statute to “advance stability in the insurance marketplace by requiring that the ultimate cost of PIP benefits be borne by the insurer of the responsible party not by the insurer of the victim.”
Justice Long wrote a dissenting opinion, joined in by Chief Justice Rabner and Justice Albin. The dissenters disagreed with the majority’s assertion that the Legislature intended to confer upon the PIP carrier the right to override its insured who was not compensated fully for his injuries. According to Justice Long, when the plaintiff’s damages exceed the tortfeasor’s policy limits, the proceeds belong to the plaintiff. “By allowing Nationwide to obtain reimbursement from the policy, it was plaintiff who was paying Nationwide back.”
The Courts’ difficult time in grappling with this issue is a reflection of the fact that the legislation’s authors never thought about the problem and the law does not deal with it. It is then left to the courts to hash out a decision that pays deference to a legislative intent that did not exist.
An insured is entitled to benefits from his own automobile insurance policy for personal injuries “caused by accident and arising out of the ownership, maintenance, operation or use of such uninsured motor vehicle,”, N.J.S.A. 17:28-1.1(a) (2 ). In order to qualify, claimant must show that his injuries were caused by an accident and that the accident arose from the ownership, maintenance, operation or use of an uninsured vehicle.
The plaintiff in Livsey v. Mercury Ins. Group, 197 N.J. 522 (2009), was wounded in an apparent drive-by shooting and sought UM benefits from her carrier. The insurance company declined to honor the claim on the grounds that there had not been an accident involving an uninsured motor vehicle. Plaintiff was unsuccessful in obtaining a declaratory judgment that she was contractually entitled to coverage because the trial court believed that there was not a substantial connection between plaintiff’s injuries and the ownership, maintenance, operation or use of an uninsured motor vehicle.
In order to succeed on appeal, appellant had to overcome precedent in Sciascia v. American Ins. Co., 183 N.J. Super 352 (Law. Div. 1982), aff’d 189 N.J. Super 236 (App. Div. 1983), aff’d, holding that UM benefits were not available to a victim wounded by shots fired from a passing car because the injuries were not a consequence of the use of a vehicle. The shootings were not a risk against which the insured and his carrier would have reasonably been expected to be protected against.
Appellant’s hope for success was fueled by a Supreme Court ruling that a victim wounded by gunfire from a motor vehicle could collect PIP, Lindstrom v. Hanover Insurance Co., 138 N.J. 242 (1994). This decision was based on the language of the PIP statute that allowing benefits for an injury “caused by an object propelled by or from an automobile.” N.J.S.A. 39:6A-4.According to the Court, the involvement of the automobile in the incident was critical because it provided the perpetrator with cover and a means of escape.
The appellate court in Livsey reversed the trial court decision because it believed that Lindstrom was authority for the proposition there was a sufficient role of an automobile in the causation of injury in a drive-by shooting to trigger coverage under either the PIP or UM statutes. Livsey v. Mercury Ins. Group, 396 N.J. Super 373, 378 (App. Div. 2007).The carrier’s petition for certification was granted to determine “whether a drive-by shooting constitutes an accident arising out of the ownership maintenance, operation or use of an automobile entitling the victim to statutorily mandated uninsured motorists’ benefits.”
In a 4-3 decision, the justices (Rivera-Soto, LaVecchia, Hoens and Rabner) answered the question in the negative. While the majority concurred with the courts below that the plaintiff was involved in an accident, they did not agree that a shooting “was a natural and probable incident or consequence of the use of an automobile by an uninsured motorist.”
A critical consideration in the majority opinion was the broader reach of the PIP statute which provided benefits for injuries “caused by objects propelled by or from an automobile” as opposed to the UM statute which did not contain this language. According to the majority, the UM statute required a “substantial nexus between the injury and the use of the vehicle” and this did not exist in a drive-by shooting.
Another important factor was the legislature’s intent in the PIP statute to provide the broadest possible coverage while UM benefits provide more tailored coverage.
The Consumer Fraud Act, (CFA), N.J.S.A. 56:8-19,provides a private cause of action to “any person who suffers any ascertainable loss of moneys or property, . . as a result of the use or employment by another person of any method, act, or practice declared unlawful under this act.” There are three broad categories of statutory claims against merchants, including affirmative acts, knowing omissions and regulatory violations. A plaintiff does not have to prove intent when the defendant commits an affirmative act or defies a regulation but must do so when the harm was caused by the defendant’s knowing omissions. Cox v. Sears, Reobuck & Co., 138 N.J. 2 (1994). A prima facie case requires proof of unlawful conduct by a defendant; an ascertainable loss by plaintiff and a causal relationship between the unlawful conduct and the ascertainable loss. Int’l Union of Operating Eng’rs Local No. 68 Welfare Fund v. Merck & Co., Inc., 192 N.J. 372, 389 (2007).A successful claimant can obtain treble damages and counsel fees.
The CFA has spawned a significant volume of litigation and is frequently deployed in class actions. The courts have interpreted the CFA liberally and its history is one of constant expansion of consumer protection. Gennari v. Weichert Co. Relators, 148 N.J. 582, 604 (1997).Courts will not interpret the statutory and regulatory language to restrict liability unless the language clearly exempts a business and the result is consistent with the legislative intent to protect consumers. This tradition continued this term in three cases decided by the Court.
A class action plaintiff in Bosland v. Warnock Dodge, Inc., 197 N.J. 543 (2009 ), sought relief against a car dealer under the CFA for allegedly overcharging either $40 or $20 for title or registration fees for the purchase of a new vehicle. Plaintiff contended that defendant violated automobile sales regulations, N.J.A.C. 13:45A-26B.1-26B.2 (a) (2) (i ), by failing to disclose and itemizethe service fees. Defendant obtained a dismissal from the trial court for plaintiff’s failure to state a claim in part based on her failure to present a presuit demand to the dealer for a refund required under these circumstances by Feinberg v. Red Bank Volvo, Inc., 331 N.J. Super 506 (App. Div. 2000) . The Appellate Division in this case reversed, finding that a pre-suit demand was not required by the CFA rejecting the Feinberg rationale. Bosland v. Warnock Dodge, Inc., 396 N.J. Super 267 (App. Div. 2007).(See Arthur Raynes, Commerical Law, 197 N.J.L.J. 756).
Defendant’s petition for certification was granted to determine if a presuit demand for a refund from the car dealer was a prerequisite for suit under the CFA. Plaintiff was joined by the Consumers League of New Jersey as amicus and defendant received the support of the Consumers League of New Jersey and the New Jersey Lawsuit Reform Alliance.
Defendant argued that the modest sum of money complained of was not an “ascertainable loss” absent an effort to first obtain a refund. Defendant and its amicuscomplained vigorously that without this requirement plaintiffs would hold businesses hostage for the commission of insignificant errors by seeking rewards of treble damages and counsel fees.
Plaintiff pointed out that the language of the law did not instruct a consumer to demand a refund and that requiring one would allow sellers the freedom to engage in unconscionable business practices by providing refunds only to educated consumers who were aware of the violations.
A unanimous Supreme Court rejected the claim that a presuit demand for a refund was required before filing a CFA lawsuit after concluding that the statute did not provide for it. Justice Hoens’ opinion presents an excellent history of the CFA and offers practical guideposts on making out a prima facie case. The high court found that the overcharge was “readily quantifiable” and “ascertainable.” A presuit demand would undermine the legislative policy behind the statute to protect consumers because a merchant could rely on the presuit refund demand requirement, overcharge customers without risk, and refund the windfall only after requests by individual customers. Addressing the complaints raised by defendant’s amicus , Justice Hoens pointedly commented that the CFA and the class-action mechanism were specifically designed to provide a remedy for “nominal claims” that might otherwise not be addressed.
The Internet is a lush environment for hucksters using questionable business practices to lure consumers into parting with their money with the simple click of a mouse. In Real v. Radir Wheels, Inc., 198 N.J. 511 (2009),a Missouri resident believed he was purchasing a vintage 1970 Corvette via E-Bay from a New Jersey resident and business. Instead, a trial judge found that the purchaser got a rusted hulk that did not run properly in clear derogation of defendant’s representations. The trial court ruled that the individual defendant was a “dealer” under the CFA and that he was liable. The trial court awarded damages of over $8,000 representing the difference in value between what plaintiff paid and what the vehicle was actually worth. The compensatory damages were trebled, and counsel fees of $25,953 and costs of $6,544.81 were awarded. The corporate defendant was dismissed as the trial court found that it was not involved in the transaction. ( See Arthur Raynes, Commerical Law, 197 N.J.L.J. 756).
At trial and on appeal, the defendant argued that the trial court had erred in applying the CFA to him because he was only a “casual dealer” of used cars. Although liability under the CFA applies to “any person” including “any natural person or his legal representative,” N.J.S.A. 56: 8-1 (d), the regulations applicable to the Lemon Law define “Automotive dealer” as “any person in the ordinary course of business is engaged in the sale of motor vehicles at retail,” N.J.A.C. 13:45A-26B.1. The trial court operated on the assumption that the Lemon Law regulations defined the circumstances under which a seller could be held responsible for selling a bad vehicle. The plaintiff’s proof on defendant’s status as a “dealer” was weak and defendant moved to dismiss the plaintiff’s CFA claim at the close of plaintiff’s case. The trial court reserved and ultimately found the defendant to be a “dealer” based on all the evidence adduced at trial.
The Appellate Division dismissed the CFA claim on grounds that plaintiff’s case in chief did not prove that defendant was a “dealer” but upheld the verdict “based on the trial court’s implicit finding of common law fraud.” Plaintiff forfeited his treble damages award and counsel fees.
Plaintiff’s petition for certification was granted. Plaintiff argued on appeal that defendant did not have to be a “dealer” to be subject to the liabilities of the CFA for selling a used car; if he did, he met the definition.
Justice Rivera-Soto, writing for a unanimous court, reversed the Appellate Division and reinstated the trial court’s verdict that defendant violated the CFA. The Internet is simply another commercial medium that the law applies to. Resolution of the case was a simple matter of applying the clear language of the CFA to the trial court’s factual conclusions. The statutory liabilities in the CFA applied to “persons” and the definition was broad enough to “ensnare defendant.” N.J.S.A. 56:8-1(d). The Corvette was “merchandise.” The fact that defendant may or may not have qualified as a “dealer” under the Lemon Law, was totally irrelevant to a determination of defendant’s liability under the CFA. The Used Car Lemon Law was never intended to substitute its terms for the consumer protection statute. The plaintiff “pled and proved a textbook claim under the CFA.”
New Jersey has a “Contractor’s Registration Act,” N.J.S.A. 56:8-136 , under which home improvement regulations are promulgated that establish prohibited practices, N.J.A.C. 13:45A-26B.1 . Any contractor violating the regulations may be liable under the CFA, N.J.S.A. 56:8-146;N.J.A.C. 13:45A-16.2.Builders of new homes are exempt under “The New Home Warranty and Builders’ Registration Act,” N.J.S.A. 56:8-140.This act, N.J.S.A. 46:3B-1 et al,requires builders “engaged in the construction of new homes” to register and participate in warranty programs.
The plaintiff in Czar, Inc. v. Heath, 198 N.J. 195 (2009), hired the defendant to design and install a kitchen in a new home under construction by a builder. The kitchen contractor sued the customer for his unpaid invoice. The aggrieved customer also filed a complaint against the kitchen contractor under the CFA, alleging that defendant violated the regulations promulgated under the Contractors’ Registration Act.The cases were consolidated. (See Arthur Raynes, Commerical Law, 197 N.J.L.J. 756).
The contractor moved in limine at trial to bar any claims against it under the CFA, contending that its work was part of the construction of a new home and was excluded from the CFA. The home owner argued that the contractor was not the builder of a new home and was engaged in a home improvement. The trial court agreed with the kitchen contractor and dismissed the claim. The Appellate Division reversed, because it concluded that the defendant was not hired to build a new residence, did not install or build any structural improvements in the home and was not entitled to any immunity. Czar, Inc. v. Heath, 398 N.J. Super 133 (App. Div. 2008).
The Supreme Court granted leave to appeal and agreed with the Appellate Division that the kitchen contractor hired by the future homeowner was subject to the CFA. While acknowledging that the New Home Warranty Act excludes builders of new homes from the liabilities of the Contractor’s Registration Act, the kitchen contractor was not entitled to the immunities because it was not required to register or provide a warranty to the home owner. Six justices did not believe the Legislature intended to provide a contractor with immunity from the Home Improvement statute, when it was not required under the New Home Warranty Act to provide its remedies to the homeowner. The High Court refused to engage in an interpretation of the statutes that would provide “less rather than more, protection for the homeowner.”
It should be very clear to the business community in New Jersey that when it comes to the rights of consumers the rule is: seller beware.
Over the last several years, appellate courts have constructed more and more stringent requirements regarding the proof and defense of tort claims. This trend continued this term. Reading and analyzing the New Jersey Supreme Court opinions gives trial lawyers a global picture of what it is like to practice in a more complicated age. Lawyers who ignore this reality do so at their own peril.
Grayzel is a certified trial attorney and a partner with Levinson Axelrod of Edison. The author represented the plaintiff in the Ogborne case, and David Wheaton, of Levinson Axelrod, represented the plaintiff in the Bardis case.