Third Circuit Weighs in on “Donning and Doffing” Issue

By: Raplh R. Smith, 3rd, Esq.

In Rosano v. Township of Teaneck, the United States Court of Appeals for the Third Circuit recently ruled on the question of whether police officers from the Township of Teaneck, N.J. were entitled to receive compensation in the form of overtime payments for time spent attending daily roll calls and changing into and out of their uniforms each day.  The police officers suing the Township claimed that such time was compensable work time under the Federal Fair Labor Standards Act (“FLSA”).  The officers argued that they were entitled to be compensated for the 10 minutes before and after the start of their tours of duty that they spent reporting for daily roll calls, known as “muster time”, and the time spent “donning and doffing” uniforms and equipment. The Federal District Court had previously ruled that this time was not compensable and subsequently dismissed their case.

In its appeal decision, the Third Circuit upheld the District Court’s ruling because, in its view, the “donning and doffing” of uniforms was not a work-related activity covered under the Officer’s Union Contract, and also found that the time for which the officers believed that they should be compensated was not sufficiently documented to justify any award of additional compensation.  The Court also found that the “muster time” likewise was not compensable because, in the Court’s view, the time was included as a component of the officers’ base salaries in the Collective Bargaining Agreement negotiated by the officers’ union. 

Moreover, in holding that the “donning and doffing” of the uniforms was not compensable time, the Court likewise focused on a particular exception under the FLSA that relieves employers of responsibility for compensating employees for activities which are preliminary or post-liminary to the principal activity or activities of a given job.  Under this exception, preliminary and post-liminary activities are compensable under the FLSA only where those activities are an integral and indispensable part of the principal activities for which the covered workmen are employed, and when they are not otherwise specifically excluded from compensability under the FLSA.  Because there was testimony in the case indicating that the “donning and doffing” of uniforms was done not for the benefit of the employer but for the convenience of the employees, the Court determined that there was no basis for requiring payment for such “donning and doffing” time under this FLSA exception.

This case highlights one of the many nuances that is contained in Federal and State Wage & Hour Laws which can either benefit (or penalize) an employer.  As happened in this case, having awareness of the exception actually benefited the employer in defending against claims for additional compensation, here overtime pay, for work allegedly performed. Hence, in constructing any type of compensation program for employees, employers are wise to be knowledgeable of the various exemptions that might exist under the FLSA to the “compensable time” rules that could help eliminate the need for additional compensation to employees.  Since such exemptions are sometimes difficult to implement in practice, advice from counsel may be useful in taking advantage of such legal pay exemptions.

Continuing Tort Claim Not Barred by Failure of Plaintiffs to File within Two-Year Statute of Limitations

Herbert and Karen Wreden served a tort claims act notice against the Township of Lafayette on January 28, 2008, due to the Township’s construction of a retaining wall and water drainage adjacent to the Wredens’ property. As a result of this construction, water was directed onto their property and caused flooding. In 2009, the retaining wall collapsed, sending large blocks of concrete tumbling onto their property and causing an unstable and unsafe roadway frontage in front of their property. On June 28, 2011, in Wreden v. Township of Lafayette, 2014 N.J. Super. LEXIS (App.Div. 2014), plaintiffs filed suit against the Township, alleging damage to their property.

On the trial court level, Lafayette successfully obtained a dismissal of the complaint based upon a failure to state a cause of action. This type of motion differs from a summary judgment motion because its basis is that the complaint itself fails to state a claim, as pled, as opposed to the court considering other evidence submitted such as certifications or testimony.

The Township claimed that:

  1. the plaintiffs’ claims for a continuing tort were barred by the two-year statute of limitations;
  2. that the plaintiffs were required to submit a new notice of tort claim to seek damages for the collapse of the retaining wall on their property;
  3. that it was entitled to plan or design immunity; and
  4. that the plaintiffs’ inverse condemnation claim was barred by the entire controversy doctrine.

The trial court granted a dismissal on all of the first 3 bases and refused to permit an amendment to the complaint on the 4th basis. However, the Appellate Division reversed all of the trial court’s rulings and remanded the matter back to the trial court.

First, the appeals court found that the trial court failed to consider that the plaintiffs faced continuous flooding to their property and improperly focused only on the date the notice of claim was filed. Although the suit was not filed until three years after the notice of claim, the trial judge made no determination as to the applicability of the continuing tort doctrine. Contrary to the judge’s ruling, the Appellate Division noted that the date upon which a notice of claim is filed does not mark the accrual date for a cause of action in a continuing tort case.

Second, the Appellate Division disagreed with the trial court that the plaintiffs would have to file a new notice of tort claim when the retaining wall collapsed. The plaintiffs had already placed the Township on notice of the problem and the eventual collapse of the wall was merely a continuation of the tort plaintiffs had previously described.

Third, the appeals court found that the trial court judge mistakenly considered evidence external to the pleadings (a certification from a Township Committee member) as to the Township’s approval of the project in granting a dismissal based upon the plan and design immunity defense. While such evidence may be considered in a summary judgment motion, it cannot be considered in ruling on a motion to dismiss based upon the pleadings.

Last, on appeal, the Court found that the trial court judge erred in refusing to permit the plaintiffs to include an inverse condemnation claim against the Township in an amended complaint. This case was still ongoing as to the other defendants when the plaintiffs learned that some of the retaining wall was actually built on their property. No final judgment had been entered as to all parties and, hence, the plaintiffs should have been permitted to amend their complaint to assert this new claim.

This case is a published decision and is precedential. Thus, public entities need to take note of this case for any claims that arguably involve a continuous tort and be aware that, if the damage is continuing to occur, the statute of limitations to file suit against that public entity has likely not started to run. 

Lora V. Northen Addresses NovaCare Attendees

lora-v-northenMt. Laurel, NJ – – Capehart Scatchard Shareholder, Lora V. Northen, Esq. recently spoke on “The Anatomy of a Workers’ Compensation Claim” at a seminar sponsored by NovaCare in Mays Landing, New Jersey.

In her presentation, Ms. Northen discussed how to control claims and save money in workers’ compensation.  She also covered the three available benefits in workers’ compensation, as well as issues involving maximum medical improvement.

Partner Amy G. Goldstein Sworn In as President-Elect of NJ American Academy of Matrimonial Lawyers

amy-goldsteinMt. Laurel, NJ – – Capehart Scatchard Shareholder, Amy C. Goldstein, Esq. was recently sworn in as President Elect of the New Jersey State Chapter of the American Academy of  Matrimonial Lawyers (NJ-AAML).

The American Academy of Matrimonial Lawyers was founded in 1962 “to encourage the study, improve the practice, elevate the standards and advance the cause of matrimonial law, to the end that the welfare of the family and society be protected.”  There are  only 1600 AAML Fellows across the United States. They are recognized by judges and attorneys as preeminent family law practitioners with a high level of knowledge, skill and integrity.

Ms. Goldstein’s practice areas include all aspects of  family law including marital dissolutions , alimony, child support, cohabitation, child custody issues, prenuptial, post nuptial and cohabitation agreements, post-divorce cases, appeals and all related matters.  Ms. Goldstein received her J.D. from the University of Pennsylvania School of Law in 1982.

Eleven Shareholders Named to “Best Attorneys in Business” List

Mt. Laurel, NJ – – Eleven attorneys from Capehart Scatchard were recognized on the first ever “Best Attorneys in Business” list, which was published in the June 2014 issue of South Jersey Biz magazine in recognition of their professional achievement and reputation among peers.

Attorneys are:  Stephen J. Alexander – Products Liability; Thomas D. Begley III – Tax Dispute and Resolution; Peter S. Bejsiuk – Professional Liability;  Vincent T. Cieslik – Business & Tax; Thomas A. Clark – Banking & Financial Services; Stephen T. Fannon – Workers’ Compensation; John K. Fiorilla – Transportation; Thomas J. Hastie, Jr. – Public Finance;  Christopher J. Hoare – Malpractice; Nikitas Moustakas – Health Care Administration and Betsy G. Ramos – Contract Law.

Shareholder Alan Fox Addresses Sterling Education Services Attendees

Mt. Laurel, NJ – – Shareholder Alan P. Fox, Esq. recently spoke at the Fifth Annual Landlord-Tenant Law Update held in Cherry Hill, N.J. and  sponsored by Sterling Education Services.

In his presentation, Mr. Fox focused on the rights and remedies available to a tenant or landlord under a residential or commercial real estate lease when either party files for bankruptcy protection. His presentation covered various bankruptcy issues, including  the automatic stay,  and the treatment of the landlord’s claims following the assumption or rejection of a residential or a commercial real estate lease in Bankruptcy.

$7 Million Dollars Awarded to Sons of Woman Killed in Car Accident

By: Christopher J. Hoare, Esq.

A jury in Fulton County, Georgia has awarded $7 million to the sons of 46-year-old Theressa Virgil, who was killed in an automobile accident. Franklin Hooker, Rodney Virgil, and Brandon Virgil stand to collect $6.9 million, as part of the liability for the accident was apportioned to the driver of the car in which Ms. Virgil had been riding, Michelle Collins.

On January 24, 2012, Ms. Collins and Ms. Virgil were traveling north on U.S. Highway 19 in Thomasville, Georgia, when the Chevrolet Impala they were driving experienced a flat tire. Collins pulled off the road on the left shoulder, at which point she and Virgil exited the vehicle and walked to its rear in order to retrieve the spare tire. As they were doing so, a Toyota Camry driven by defendant Jonathon Brown collided with them and their car. Collins suffered a broken leg and lacerated liver. Virgil was declared dead at the scene.

In April 2012, Atlanta attorneys S.K. Rod Dixon and Michael A. Mills filed a wrongful death suit on behalf of Virgil’s three adult children in Fulton County State Court. The suit, Hooker v. Brown, named the driver, Brown, and his employer, Guardian Pharmacy of Southeast Georgia, as defendants.

Defendants’ argument centered on its claim that Collins had stopped the car in the left lane of the highway, obstructing traffic, and thus was at fault for the accident. Plaintiff’s counsel presented to the jury as evidence a photograph taken at the scene by the investigating State Trooper. Through digital lightening, the photo was able to clearly exhibit that, contrary to defendant’s claim, Collins had pulled the car nearly completely off the road, with only the right rear tire resting on the yellow line.

A witness, who had been driving behind Brown on the night of the accident, testified that he had seen Collins’ hazard lights and moved safely into the right lane, but that defendant Brown drove straight into the car without slowing down. Plaintiffs’ counsel also presented cellphone records demonstrating that Brown had sent over 250 text messages in the three-and-half hours preceding the accident. Brown admitted in court that he had been having a “lover’s quarrel by text message” with his then-fiancée. Of note, Collins had initially been charged criminally with obstructing the roadway, but the prosecutor had subsequently dropped all charges when she discovered that Brown had taken his eyes off the road for a moment.

The jury deliberated for close to four hours before returning their verdict finding in favor of plaintiffs.

Victims of Train Derailment and Chemical Spill Permitted to Proceed with Class-Action Certification

By: Christopher J. Hoare, Esq.

On November 30, 2012, a southbound Conrail freight train, consisting of two locomotives and 82 cars, derailed as it crossed the East Jefferson Street Bridge. Six of the cars derailed, plunging four into the frigid waters of the Mantua Creek. One of the tankers ruptured, spilling approximately 20,000 gallons of vinyl chloride into the creek and air. Shortly thereafter, the Borough of Paulsboro declared a state of emergency, and residents were instructed to shelter in place or evacuate.

Individual lawsuits began to be filed. On April 13, 2013, the residents and business owners affected by the evacuation consolidated their claims and filed a class-action in the Superior Court of New Jersey, Gloucester County, against Consolidated Rail Corp., later adding CSX Transportation and Norfolk Southern Railway in their First Amended Complaint. A request was made for certification of two subclasses: one for those who incurred expenses related to the evacuation, such as hotel costs, and another for those who suffered damages due to interference with business, such as lost wages or sales.

Plaintiffs’ allege that the freight train in question proceeded across the bridge despite the presence of a red warning light indicating that the bridge was not prepared to safely accommodate rail traffic at that time. Further, plaintiffs allege that defendants were aware prior to the accident that the bridge was deficient, yet took no action to remedy or repair the problems.

Plaintiffs submit that many of them experienced acute symptoms in the wake of the incident, including coughing fits and other physical symptoms, due to exposure to the chemicals that had leaked from the tanker. The suit also indicates plaintiffs’ concern that exposure to the chemical places them at greater risk for future illness, including cancer. Lastly, plaintiffs’ claim that their properties have suffered loss in value, and assert other economic damages, as a result of defendants’ actions.

In November 2013, defendants filed motions to deny class-action status, arguing that ascertaining a class would require separate, complicated proof hearings, which would run counter to the purpose of a class-action certification. This argument was rejected by U.S. District Judge Robert Kugler:

The area affected by the chemical spill may be shown by discovery to be discrete, the applicable time frame is well established in the pleading, and purported class members either resided or did business within delineated areas or they did not.

Judge Kugler noted that through such records as plaintiffs’ addresses and officially sanctioned evacuation zones, factual findings could be made regarding who was affected by the spill and its aftermath. Defendants’ motions were thus dismissed, and plaintiffs’ motion for class-action status allowed to proceed.

PA Appellate Court Affirms Multi-Million Dollar Award to Victim of Dump Truck Accident

By: Christopher J. Hoare, Esq.

On May 7, 2010, defendant Theodus Williams was driving a dump truck in the course of employment of co-defendant Valvano Construction. He lost control of the vehicle and careened down a hill at more than 45 miles per hour. Williams struck the car of Steven and Doreen Mazur from the rear, propelling their car forward into plaintiff Holly Ann Kuchwara’s car. Kuchwara was injured in the accident, suffering lacerations to her face and fractures to her leg, ankle, and back. Her injuries necessitated surgery, and left her with scars, an altered gait, and lingering pain.

Kuchwara brought suit against both the truck driver, TheodusWilliams, and his employer, Valvano Construction. In the course of the month-long trial, it was revealed that at the time of the accident only three (3) of the truck’s eight (8) brakes were operational, that the steering wheel required maintenance, and that the speedometer and safety alarms on the truck were inoperable. The jury awarded plaintiff Kuchwara $9.1 million in compensatory damages, nearly $1 million in punitive damages, and $386,717 in delay damages.

Defendant Valvano appealed the verdict. Senior Judge William H. Platt rejected Valvano’s claim that it had been prejudiced by plaintiff’s expert witness, who testified that lack of proper maintenance of the truck constituted “reckless indifference.” Platt opined:

Furthermore, the record supports the trial court’s observation that [Valvano Construction] was not prejudiced by this testimony. [Valvano Construction’s] own witness, John Valvano Jr., conceded that ‘the company was indifferent to the safety of their vehicles.

A second plaintiff’s witness testified that Valvano did not maintain vehicle reports, nor certify the vehicles with the Public Utility Commission, nor inspect the vehicles. This witness testified that this exhibited an indifference to safety on the part of Valvano.

Valvano also argued that it deserved a new trial due to the court erroneously splitting the initial trial into compensatory and punitive stages, arguing that the compensatory stage influenced and inflated the punitive damages awarded by the jury. The $9.1 million in compensatory damages were structured such that $2 million was designated for ongoing medical expenses and $624,000 was allocated for future wages losses. Platt said:

In light of the fact that the jury’s compensatory damages award was more modest than the estimates of [Kuchwara’s] experts, we may presume that the jury did not inflate the award with punitive damages after being instructed on the specific nature of what their award should consider.

Additionally, Valvano alleged that a statement made by Kuchwara’s lawyer suggesting that the jury should “send a message” to the company and industry in general with its damages award should not have been allowed by the judge. The court disagreed, noting that the remark was in fact made by Valvano’s own attorney.

In response to a separate appeal by defendant Williams, the driver of the truck, the court denied a new trial. Williams argued that the jury had not been properly informed of the statutes or regulations that Williams was accused of violating. Judge Platt dismissed Williams’ argument, noting that the jury had received sufficient instructions upon which to assess liability and award damages.

The Pennsylvania Superior Court ultimately upheld the $10.5 million jury verdict in favor of the Plaintiff.

New Jersey Franchisee Prevails On Summary Judgment

By: Vincent T. Cieslik, Esq.

One of the most potent weapons in the arsenal of a defendant, particularly one with the financial ability to litigate on a limitless budget, is the motion for summary judgment. A motion for summary judgment says to the Court that a party is clearly entitled to win the entire case, and that the case need not be decided by a jury. Often with commercial parties, a motion for summary judgment is a strategic move to get the judge to decide the case in their favor early. A party outlines for the court why they believe their franchise or commercial agreement is “crystal clear” and why the other side has no case.

In one recent case, handled by the undersigned, the adverse party’s motion for summary judgment backfired, and the Judge made findings that benefited Capehart’s client who brought the claims, a franchisee. The Judge ruled that the agreement was not “crystal clear,” but instead had to be interpreted according to how the franchisee understood it, how it was explained to the franchisee when he signed it, and according to how the parties intended the agreement to work in the real world, after it was signed.

In this case, the franchisee asserted that he had an exclusive franchise to handle all real estate sales in a particular section of the Southern New Jersey shore market. His franchise agreement, he believed, gave him exclusive rights to the market and stipulated that the franchise company would not allow other realtors from the company to compete with him in said market. He also believed that the franchise company’s internet referral system was improperly sending leads to realtors outside of the lucrative shore market, even though he was entitled to those leads and sales as the franchisee. He likewise believed that the franchise company allowed a virtual or internet office to be set up in his territory, in order to siphon off sales to other realtors competing via the internet with his franchise in its exclusive territory.

The franchise company took the position that their agreement allowed them to do whatever they wanted, wherever and whenever they wanted, and that this meant the company could allow competition from within its brand against the franchisee in the disputed territory. The company “hung their hat” on a long franchise agreement, which is drafted by its home office lawyers, and is heavily slanted in favor of the company’s rights.

The franchise company took the position that the Judge merely needed to read select phrases from the franchise agreement, and, because they were crystal clear, the company should be entitled to win the case. The company believed that the agreements were so clear that the Judge should disregard the franchisee’s claims and how he understood the agreement would be managed during the relationship. The company further believed that the Court didn’t need to hear testimony from the franchisee about how he understood his territorial rights would be honored or protected.

The franchisee, however, felt that the Judge may want to hear testimony from other franchise owners about how they were being similarly treated.

In a key decision, the Judge sided with the franchisee, denying summary judgment. The Judge found that the evidence could sustain the franchisees’ claims now, and possibly at the end of the case, after the parties completed their trial preparation. The Judge found also that the oral testimony could overcome the language in the agreements, and that the court may find at trial for the franchisee after hearing all of the witness testimony.

So, franchisees do have rights in New Jersey Courts. They should present their valid claims, vigilantly develop their cases early in the litigation, and be prepared to counter tactical moves, such as motions for summary judgment. This will allow franchisees to respond quickly and diligently to aggressive litigation tactics, and use them to their advantage wherever possible, taking a potential loss and turning it into a big “W.”

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