Parents’ Emotional Distress Claim Due to Drowning of Son Barred Due to Failure to Meet Monetary Threshold of Tort Claims Act

By Betsy G. Ramos, Esq.

While the Title 59 permanency threshold, N.J.S.A 59:9-2, is a well known defense against bodily injury claims asserted against public entities, less publicized is the monetary threshold in that statutory section. No pain and suffering award can be asserted against a public entity unless the medical expenses incurred are in excess of $3,600. In Jung v. Village of Ridgewood, 2015 N.J. Super. Unpub. LEXIS 53 (App. Div. Jan. 8, 2015), this requirement resulted in a dismissal of the parents’ emotional distress claim filed due to the death of their son.

The plaintiffs’ son Soo died while swimming in the municipal swimming area operated by the Village of Ridgewood. The plaintiffs, as Soo’s parents, brought a negligence claim on his behalf but also filed a separate claim for their own severe emotional distress.

The family were visiting friends and they all went swimming at Graydon Pool in Ridgewood. Shortly after entering the pool, Soo and his friends began to swim from the shallow end to the dock at the deep end. Soo never reached the dock and drowned in the pool.

The case was tried and the jury awarded a total of $10 million – $4 million for Soo’s pain and suffering; $5 million for his family’s claims for emotional distress ($2 million for each parent and $1 million for his sister); and $1 million on his wrongful death claim.

Accepting Ridgewood’s argument that the plaintiffs were not entitled to damages for their pain and suffering because they did not meet the Tort Claims Act’s “verbal threshold” (the permanency requirement), the trial judge modified the verdict to dismiss the family’s emotional distress claim.

It was undisputed that the plaintiffs neither individually, nor collectively, incurred $3600 for their emotional distress claim. Because plaintiffs did not prove they met this threshold, the Appellate Division upheld the dismissal of their emotional distress claim.

Ridgewood had also appealed other evidentiary rulings, as well as the dismissal by summary judgment of its claims for  contribution and indemnification against Soo’s parents. Ridgewood had argued that Soo’s parents were negligent because they failed to obey posted warnings and instructions which required all children to take a deep water test prior to entering the deep area. Also, they argued that Soo’s parents were negligent because they failed to monitor their son. The Appellate Division agreed that these claims were not barred by the doctrine of parental immunity and were viable claims that should have been presented to the jury.

Fortunately for Ridgewood, the end result is that it was granted a new trial on liability and none of the verdict could be preserved. The Appellate Division held that Ridgewood was entitled to a new trial on liability and damages. The court found a new trial on issues was merited because the facts of negligence against Ridgewood and the parents were intertwined and also because the proofs plaintiffs presented on their emotional distress – which should not have been presented to the jury and which will not be presented when retried – may have affected the other damage awards.

Mary Ellen Rose Named to Executive Committee

mary-ellen-roseMt. Laurel, NJ – – Capehart Scatchard is pleased to announce that Shareholder Mary Ellen Rose, Esq. has been named as a member of the firm’s Executive Committee and as the Assistant Managing Shareholder of the firm.

Ms. Rose, a lifelong resident of New Jersey, focuses her practice in the areas of commercial and business law, transportation, and franchise law.  She received her undergraduate degree magna cum laude from West Virginia University and her law degree from Rutgers University School of Law in Camden.  Ms. Rose has been the Hiring Shareholder at the firm for over 10 years.   She is admitted to practice in New Jersey and Pennsylvania.

New Jersey Supreme Court Clarifies Required Independent Contractor Test Under Wage and Hour Laws

By Ralph R. Smith, 3rd, Esq.

On January 14, 2015, the New Jersey Supreme Court handed down its long awaited decision in Hargrove v. Sleepy’s (NJ S.Ct. A 70-12) (072742) that finally clarifies the legal standard for determining when someone is an independent contractor under New Jersey’s wage and hour laws.

At issue in Hargrove was whether certain deliverers of mattresses for Sleepy’s were employees or independent contractors. A group of these delivery drivers brought suit against Sleepy’s in New Jersey Federal District Court seeking class certification for all affected drivers and claimed that the group was wrongly classified as independent contractors (rather than Sleepy employees) under various Federal and State laws, including New Jersey’s wage and hour laws. The plaintiffs like all these other drivers were required by Sleepy’s to sign agreements that formally designated their relationship as independent contractors. Plaintiffs claimed that despite the agreements Sleepy’s actually exercised significant control over when and how they performed their deliveries to give rise to an employer-employee relationship.

In March 2012, the Federal District Court dismissed plaintiffs’ claims, finding that plaintiffs were rightly classified as independent contractors. In reaching this decision, the court applied a test known as the “right to control test” which was created by the United States Supreme Court in a case called Nationwide Mutual v. Darden, 503 U.S. 318 (1992). Under that test, the court in evaluating independent contractor status is required to look at all aspects of the relationship to determine how much control (and vice versa, independence) actually exists as part of the relationship between the parties.

An appeal of the District Court’s dismissal was taken to the United States Court of Appeals for Third Circuit. The three member panel of that court assigned to hear the appeal petitioned the New Jersey Supreme Court for guidance as to what legal standard should be applied under New Jersey wage and hour laws to determine an individual’s employment versus independent contractor status. This unusual request for assistance was made by the federal court because courts in New Jersey previously had applied a variety of tests under different statutes to determine independent contractor status, but surprisingly, there has never been any reported case decision identifying the appropriate standard to apply under New Jersey’s wage and hour statute.

In its decision, out of all the available tests that could have been chosen, the New Jersey Supreme Court opted to adopt what most believe to be the most challenging of those tests to meet in proving an independent contractor relationship. This standard, the ABC test, is currently used primarily to determine employment status under the state’s Unemployment Compensation Act.  Compared to the other available options, the Court believed that this test provided both employers and employees with greater predictability in determining what relationships are indeed to be considered independent ones because the other tests led to more inconsistent results due to the need to analyze a variety of relationship factors. Moreover, the Supreme Court noted that for years the New Jersey Department of Labor has been utilizing the “ABC test” as part of its enforcement activities in determining employment status. Since the Department of Labor is the agency responsible for enforcing New Jersey wage and hour laws, the Court felt that its continuing use of the ABC Test showed also that it was the correct standard for the courts to adopt.

There are three elements of the “ABC test” that must be satisfied in order to successfully overcome the presumption that an employment relationship exists rather than an independent contractor one. These elements include the following:

(A) Such individual has been and will continue to be free from control or direction over the performance of such services, both under his contract of service and in fact;

(B) Such services are either outside the usual course of the business for which a service is performed or that such services are performed outside of all the places of business of the enterprise for which such services are performed; and

(C) Such individual is customarily engaged in an independently established trade, occupation profession or business.

If the employer fails to establish any one of these elements, the affected individual will be deemed to be an employee for whom all typical rights, benefits, and entitlements under the law are to be afforded.

No Legal Duty Owed by Fraternity to Plaintiff Who Was Shot While Attending Fraternity Party

By Betsy G. Ramos, Esq.

The question of the legal duty owed is not always clear under New Jersey law, particularly, if the claimed injury does not fall within the analysis of traditional premises liability law. In Peguero v. Tau Kappa Epsilon, 2015 N.J. Super. LEXIS 9 (App. Div. 2015), the Appellate Division, in a published decision, had to decide whether a fraternity owed a party attendee a legal duty to prevent him from harm from the criminal act of another shooting and injuring him.

The plaintiff Peguero attended a large party hosted at a private residence rented by several fraternity members. After consuming several drinks, the plaintiff tried to assist a friend involved in an argument. During that altercation, the plaintiff was shot and wounded by an unknown assailant, who has never been identified. There was no evidence that the fraternity had any prior incidents involving guns on the premises or involving violent criminal behavior.

Plaintiff sued the fraternity and its members, claiming that it was negligent. The defendant fraternity argued that there was no evidence showing that it was reasonably foreseeable that plaintiff would be shot by a third party while attending this event. Hence, the defendants breached no legal duty to plaintiff under the circumstances. The trial court agreed and granted summary judgment, dismissing the complaint.

The Appellate Division noted that there are no reported cases in the State that have addressed the scope of duties that may be owed by a college fraternity or its officers or members to protect their guests from violent conduct that may occur at the social event. After reviewing the facts, the appeals court found that the defendant did not breach any duty owed to the plaintiff.

The court applied the nontraditional analysis of premises liability in reaching this determination. It focused on: “the relationship of the parties; the nature of the attendant risk; the opportunity and ability to exercise care; and the public policy considerations.” This is a fact intensive analysis.

In analyzing these factors, the Appellate Division found that the shooting of the plaintiff was not reasonably foreseeable. There was no previous pattern of criminal conduct at the fraternity house that would have alerted its members that an unknown assailant would pull a gun and shoot another guest. No witness saw the shooter with a gun or acting belligerently or dangerously prior to the shooting.

The appeals court did make it clear that it was not absolving a fraternity or its members from any criminal acts that occur on its premises. Acts such as hazing or sexual assaults have occurred at fraternities. However, under the facts of this case, there was simply no basis to impose civil liability upon the defendants.

Superior Court Decision Refused to Follow Unreported Decision in Dever V. New Jersey Manufacturers

There has been a great deal of controversy about respondent’s lien rights in motor vehicle accident cases since the unreported ruling in Dever v. New Jersey Mfrs. Ins. Co., No. A-3102-11T2 (App. Div. October 23, 2013). In one decision from last summer, an Atlantic City Superior Court Judge rejected the application of the Deverrule in a similar set of facts.

The Atlantic City case, Colmyer v. Vicki S. Abline, Docket No. ATL-L-5766-1 (August 12, 2014), involved a car accident between plaintiff, Timothy Colmyer, and defendant, Vicki S. Abline. The Little Egg Harbor Municipal Utilities Authority, plaintiff’s employer, paid workers’ compensation benefits and asserted a lien in the amount of $31,768. The MUA intervened in the case to protect its lien rights underN.J.S.A. 34:15-40. The defendant argued that N.J.S.A. 39:6A-12 bars the introduction of evidence of amounts “collectible or paid” by Personal Injury Protection. Defendant further argued that it made no difference whether the medical expenses were paid through workers’ compensation or PIP or any other source: the statutory bar precludes evidence of such payments.

The MUA countered that there was a double recovery in this case to the extent of its medical payments and that it was entitled to reimbursement under the statutory formula. Superior Court Judge, Honorable Allen Littlefield, J.S.C., first examined the two statutes. The Judge also noted that both plaintiff and defendant relied upon the unpublished decision in Dever, supra. Judge Littlefield wrote, “In Dever, the Appellate Division held that a plaintiff is statutorily precluded from recovering medical expenses from a tortfeasor where such expenses were paid by the plaintiff’s workers’ compensation carrier.”

Judge Littlefied next observed that Section 12 of Title 39 was adopted after Section 40 of the New Jersey Workers’ Compensation Act. He said that the legislature was fully aware of the provisions of Section 40 when it adopted Section 12. The logic is that the legislature could have abrogated respondent’s lien rights under Section 40 in adopting Section 12, but it did not.

Judge Littlefield further observed that “the Appellate Division decision in Lefkin v. Venturini, 229 N.J. Super. 1 (App. Div. 1988) is still good law and should be followed by the Court.” The rule in Lefkin is “that a plaintiff must pay the medical expense portion of a workers’ compensation lien out of his recovery from the tortfeasor defendant.” The Court in Lefkin said:

Where only workers’ compensation benefits and PIP benefits are available, the primary burden is placed on workers’ compensation as a matter of legislative policy by way of the collateral source rule of N.J.S.A. 39:6A-6. (citations omitted). And when only PIP benefits and tortfeasor liability are involved, the primary burden is placed as a matter of policy on the PIP carrier by N.J.S.A. 39:6A-12.

The court in Lefkin concluded that there is no bar against recovery of the medical expenses collected or collectible in workers’ compensation from the tortfeasor. The Court reasoned as follows:

This is so because PIP benefits are not available to an insured if workers’ compensation benefits are also available to him. Consequently, PIP benefits in that situation are neither collectible nor paid. Hence, N.J.S.A. 39:6A-12, which bars evidence in the third-party action only of ‘amounts collectible or paid’ under PIP coverage, is inapplicable, and there is no other impediment to the plaintiff-insured-employee recovering his medical expenses from the tortfeasor even though that recovery will ultimately be subject to the compensation lien.

Judge Littlefield concluded, “Because MUA is entitled to recover from Plaintiff’s recovery, it logically follows that evidence of Plaintiff’s medical expenses must be admissible at trial. If the medical bills were precluded, the compensation carrier would be unable to secure reimbursement from the Plaintiff pursuant to N.J.S.A. 34:15-40.”

There are now countless cases in New Jersey where plaintiffs who have both workers’ compensation recoveries and settlements in car accidents are refusing to reimburse medical expenses based on the theory advanced in Dever. This decision is not the final word on this subject but it shows that at least one Superior Court has flatly rejected the recent ruling in Dever.

John Geaney’s Workers’ Comp Blog Named Top 25 by LexisNexis

john-geaneyMt. Laurel, NJ – – For the fourth consecutive year, LexisNexis has named the New Jersey Workers’ Compensation Law Blog, published by John Geaney, Esq., as one of its “Top 25 Blogs for Workers’ Compensation and Workplace Issues.”

A seasoned workers’ compensation practitioner for over 30 years, Mr. Geaney, a Moorestown resident, is the author of Geaney’s New Jersey Workers’ Compensation Manual and A Guide to Employment Issues Under the ADA & FMLA co-distributed by the Firm and the New Jersey Institute for Continuing Legal Education.  Mr. Geaney concentrates his practice in the representation of employers in workers’ compensation defense matters, the Americans with Disabilities Act, and the Family and Medical Leave Act.