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Plaintiff Sophia Torres (“Torres”) suffered injuries as a result of a motor vehicle accident with the garbage truck being driven by Defendant Javier Pabon (“Pabon”) for his employer, Defendant Suburban Disposal (“Suburban”). Torres was seriously injured in a rear-end collision between her car and the Suburban truck. She claims that, due to the negligent maintenance of the truck’s taillights, she was unable to observe the truck and rear-ended it. In Torres v. Pabon, 2016 N.J. LEXIS 553 (2016), the Supreme Court reversed the $4.5 million jury verdict due to multiple errors committed by the trial court during the trial.

Due to five improper rulings, the Supreme Court found that the determination as to both liability and damages was affected, meriting a new trial on both. The verdict had been upheld by the Appellate Division. Thus, the Appellate Division ruling was reversed and the case remanded back to the trial court for a new trial.

The five improper rulings were as follows: (1) permitting an adverse inference charge for the failure of the Defendant Pabon to testify; (2) permitting the plaintiff to read to the jury untimely and improper requests for admission as to the opinions of the defendants’ orthopedic expert, Dr. Helbig; (3) permitting an adverse inference charge as to the failure of the defendants to have Dr. Helbig testify at trial; (4) the failure of the trial court to properly charge the jury on a driver’s duty to follow at a safe distance; and (5) the failure of the trial court to instruct the jury that the plaintiff’s medical expenses should not be included in the calculation of damages.

An “adverse inference” charge (also known as a Clawans charge) is merited when a party’s failure to present evidence “raises a natural inference that the party so failing fears exposure of those facts would be unfavorable to him.” In such a situation, the trial court judge would instruct the jury that it may draw an adverse inference against the party who would be expected to call that person as a witness but fails to do so.

However, there are a number of factors that the trial court must consider before deciding whether an adverse inference charge would be appropriate. The Supreme Court found that had the trial court undertaken a thorough analysis of these factors, it would have denied the plaintiff’s request for an adverse inference charge as to the defendants’ failure to call Pabon as a witness.

The first factor is that the uncalled witness was peculiarly within the power or control of the one party. Here, the Court found that the plaintiff could have simply served a notice in lieu of subpoena upon his counsel and that notice would have compelled Pabon to testify at the trial. Moreover, the plaintiff deposed Pabon and, thus, was fully familiar with his testimony.

By giving the adverse inference charge, when it was not merited, the trial court suggested to the jury that Pabon’s testimony would have undermined the defendants’ case and that defendants sought to conceal that testimony from the jury. However, plaintiff not only utilized his deposition testimony at trial but she also had the benefit of this jury charge, which was harmful to the defendants. Accordingly, the Court found the trial court erred in giving the jury the Clawans charge with respect to the defendants’ decision not to call Pabon to testify at trial.

Next, the Court considered the trial court’s ruling to permit plaintiff to read to the jury plaintiff’s late served requests for admissions stating Dr. Helbig’s opinions and its Clawans charge based upon defendants’ decision not to call Dr. Helbig as an expert witness at trial. As for the requests for admissions, they were served long after the close of discovery and were not even due until after the trial was well underway. The Court found that the defendants had no obligation to respond to them.

They were also substantively improper because the plaintiff was attempting to seek the defendants’ admissions to introduce into evidence portions of Dr. Helbig’s expert report. Thus, they did not conform to the rule pertaining to requests for admissions and the trial court’s ruling permitting their use was error.

As for the Clawans charge, again, the Supreme Court found that the trial court failed to undertake the proper analysis as to the use of an adverse inference charge. Plaintiff could have called Dr. Helbig to the stand. Thus, defendants did not have exclusive control over this witness.  Further, prior case law has held that a Clawans charge is rarely warranted when the missing witness is an expert witness because there are various reasons why an expert witness may not be called, unrelated to a party’s fear of adverse testimony.

Accordingly, the Supreme Court found that the trial court committed two errors as to Dr. Helbig. It improperly permitted the plaintiff’s attorney to read her untimely and improper requests for admission to the jury and it gave the jury an unwarranted Clawans charge as to the decision not to call Dr. Helbig as a witness.

As for the trial court’s instruction regarding the duty of a driver to maintain a safe distance while following another vehicle, the trial court mistakenly referred to this duty as belonging to the defendant when it was the plaintiff who was following the defendant – not vice versa. In this case, it was the plaintiff who was subject to the duty not to follow too closely, not the defendant. By juxtaposing the two parties and instructing the jury that the defendant had the obligation to follow the plaintiff’s vehicle at a safe distance, the jury may have been left with the mistaken impression that it was the defendant’s truck that was following the plaintiff’s vehicle too closely. Again, the Supreme Court found that this mistaken charge was contradictory, confusing, and was error.

Last, in her testimony, the plaintiff blurted out that she was unable to pay “hundreds of thousands of bills.” Under AICRA (Automobile Insurance Cost Reduction Act), evidence of the amounts collectible or paid under a standard insurance policy are inadmissible. There is a model jury charge (Medical Expenses (Auto)) which states that “the plaintiff’s claim in this case does not include any claims for medical expenses.” Although the defense counsel did not request this charge be given, the Court held that the trial court should have included the medical expense charge in its jury instructions. Without this charge, the jury may have mistakenly assumed that the medical expenses described by the plaintiff were part of her claim for damages.

The Supreme Court considered the cumulative nature of all of these trial court errors on the fairness of the trial. It concluded that the trial court’s five erroneous determinations warranted a new trial on both liability and damages. These rulings could have affected the jury’s determination of both the negligence of Pabon, as well as the plaintiff’s damages. Accordingly, the Supreme Court found that the defendants were not afforded a fair trial on either liability or damages and reversed and remanded the matter back to the trial court for a new trial.

Our New Jersey appellate court rules extensively detail the requirements for the form and content of an appellate brief. If the brief is nonconforming as to format, the Appellate Division clerk will not hesitate to require the format be revised to conform with our court rules and insist that the brief be resubmitted after it is revised. However, in Sackman v. N.J. Mfrs. Ins. Co., 2016 N.J. Super. LEXIS 61 (App. Div. Apr. 26, 2016), in a published decision, the Appellate Division went one step further and imposed a monetary sanction upon plaintiff’s counsel for filing a brief which essentially contained no law to support his arguments.

Plaintiff Stuart Sackman was injured in a motor vehicle accident. He claimed to have sustained a permanent injury and settled with the driver who rear ended him. He then filed this UIM action against NJM, his automobile insurance company. The UIM matter was eventually tried for 3 days before a jury. After deliberating for only 20 minutes, the jury returned a verdict, finding that the plaintiff did not sustain a permanent injury causally connected to this accident.

Plaintiff’s appeal argued that: (1) the judge erred in denying his motion to preclude the jury from having to find he suffered a permanent injury; (2) that the evidence presented at trial established such permanency as a matter of law; (3) that the brevity of the jury’s deliberations was per se indicative of bias and constituted a clear miscarriage of justice; and (4) that NJM’s counsel’s reference to the tortfeasor as the defendant was a misleading characterization of the trial and the court failed to give a curative instruction.

Plaintiff injured his left shoulder in this accident. Eventually, he underwent arthroscopic surgery to repair damage to his rotator cuff. This repair required the rotator cuff to be reattached using a screw, which is stitched into the bone.

The plaintiff’s insurance policy contained the verbal threshold. Hence, under N.J.S.A. 39:6A-8, the plaintiff needed to establish that he suffered a permanent injury to pursue a claim for pain and suffering incurred as a result of this accident.

In this appeal, the plaintiff solely relied upon Gilhooley v. County of Union, 164 N.J. 533 (2000) in arguing that he satisfied the permanency element of the verbal threshold. He argued that the orthopaedic hardware implanted by his doctor to repair his shoulder was sufficient evidence to satisfy, as a matter of law, that he had met the verbal threshold.

In opposition, NJM contended that the evidence offered at trial was not so one-sided that a reasonable juror could not have concluded that the injuries plaintiff suffered from the accident had healed. Further, NJM argued that the Gilhooley case did not apply because it dealt with an injury in the context of the Tort Claims Act, not N.J.S.A. 39:6A-8.

The Appellate Division found that the record was replete with evidence from which a rational juror could find that plaintiff did not present sufficient evidence to satisfy the verbal threshold. The Court noted that the plaintiff failed to discuss, or even cite, the relevant standard of review with respect to a motion for a directed verdict. Here, the Court found that the trial judge’s analysis and ultimate conclusion was amply supported by the evidence presented at trial and that the judge properly applied the statutory standard under AICRA. It found that the Gilhooley case did not apply to a verbal threshold case subject to N.J.S.A. 39:6A-8.

Next, the plaintiff’s appellate brief devoted 2 ½ pages to an argument that, the jury only spending 20 minutes in reaching its unanimous verdict that the plaintiff did not meet the verbal threshold, constituted a miscarriage of justice. The Court noted that the plaintiff failed to cite to any legal authority to support this relief.

The plaintiff’s last argument was that the trial judge should have given a curative instruction to the jury in response to a remark of defense counsel in her opening to the jury, referring to the tortfeasor as the defendant. Again, the Court pointed out that the plaintiff’s counsel devoted 1 ¼ pages in his brief to this argument without citing to any legal authority in support of this position.

The Appellate Division stated that “had the plaintiff’s appellate counsel taken the time and effort to conduct even a modicum of research of this legal issue,” he would have discovered a Supreme Court case exactly on point. Under this prior case, in a UIM matter, the Supreme Court found that it was not required to refer to the insurance company as the “defendant.”

After rejecting all of the plaintiff’s arguments, the Appellate Division took the unusual step in sharply chastising the plaintiff’s counsel for the “complete lack of any effort by counsel to cite and discuss, in a professionally reasonable manner, relevant legal authority in support of the three arguments raised therein.” The Court chose to impose a monetary sanction upon the plaintiff’s counsel because he “must be censured and sanctioned because [his brief] displayed an utter indifference to the standards of professional competence a tribunal is entitled to expect from an attorney admitted to practice law in this State.”

The Court noted the plaintiff’s attorney’s failure to cite to the relevant standard of review in reviewing the trial judge’s decision and, for his other arguments, the failure to cite to any legal authority to support his arguments. In a prior case, the Court had “repudiated the same type of shoddy, unprofessional submission.”

In Sackman, the Appellate Division stated that it was reaffirming its “commitment to the enforcement of professional standards” expressed in prior case law. By submitting such a shoddy, unprofessional brief, the Court found that the plaintiff’s attorney showed disrespect for the work of the court and the legal profession itself.

Hence, this indifference to the “fundamental tenets of the legal profession displayed by the plaintiff’s appellate counsel” warranted the imposition of a monetary sanction under the appellate court rules. Ironically, despite the harsh criticism by the Appellate Division of the conduct of the plaintiff’s counsel in the submission of this appellate brief, the monetary penalty imposed was only $200, payable to the clerk of the Appellate Division. It was to be payable by the attorney and not the plaintiff himself.

Regardless of the relatively minor penalty imposed, it is extraordinary for the Appellate Division to publicly chastise an attorney for the arguments made in his brief. It was apparent that what most bothered the Court was the lack of effort by the plaintiff’s counsel to cite to any applicable law. The Appellate Division’s imposition of this penalty clearly was sending a message that attorneys in this state are expected to research the law and submit a brief containing legal authorities supporting their arguments. The Appellate Division emphasized that is the kind of effort, at the minimum, expected by any judge from a lawyer admitted to practice in New Jersey.

In the recent published decision of Berkowitz v. Soper, 2016 N.J. Super. LEXIS 13 (App. Div. 2016), the Appellate Division reversed a $2 million jury verdict due to multiple errors made by the trial judge. This case involved a rear end collision between the plaintiff Joseph Berkowitz and Susan Soper. The plaintiff alleged back pain due to lumbar disc compression and bulges.

The defendant appealed the verdict, claiming that the trial judge committed multiple reversible errors in the course of deciding a series of evidential issues during the trial. The first error claimed was the failure to adjourn the trial due to an unforeseen medical emergency of the defendant which landed her in the hospital just prior to trial.

The trial had been adjourned 5 times previously. On the trial date, the defense counsel advised the court that 4 days previously, the defendant had been hospitalized for a heart issue and requested a brief adjournment to allow her to testify. Although this accident was a rear end collision, she would have been able to testify to the nature of the impact and identify photographs depicting the lack of damage to her car.

Despite the legitimate reasons offered to justify an adjournment, the trial judge mistakenly believed that only the Presiding Judge of the Civil Division had the authority to adjourn the trial date. However, the Appellate Division pointed out that the pertinent court rule does not limit this authority to only the Presiding Judge. The denial of this adjournment under the circumstances was inconsistent with “the fundamental principles of the justice and fairness that must guide all judicial decisions.”

Moreover, the court also disagreed with the trial judge’s assessment as to the lack of prejudice to the defendant. Due to her inability to attend the trial, she was unable to present an alternative account as to what caused the accident and, in particular, the severity of the impact. Given the excessiveness of the compensatory damage award, the court concluded that it is reasonable to assume that the jury may have been influenced by such a one-sided version of the collision.

Other trial errors consisted of the plaintiff and his attorney making multiple comments to the jury concerning his need for surgery, despite the lack of medical testimony on this point. In the plaintiff’s opening statement, he specifically made reference to the plaintiff’s neurologist having told the plaintiff that his choices were either to live with the pain or have surgery. However, the plaintiff’s attorney knew that he would not be calling the neurologist to testify. The Appellate Division found that such a deliberate misrepresentation of the evidence violated the attorney’s duty of candor.

Additionally, the plaintiff, in his testimony, continued to refer to advice he received from his doctors that he would need surgery – despite the trial judge’s admonition to the plaintiff that he should not refer to advice given to him by his doctors.

The appeals court also found that the jury verdict was excessive. This accident was the plaintiff’s third accident in 9 years. The plaintiff’s expert witness testified that this accident exacerbated the preexisting injuries from his other accidents and that the plaintiff now had radiculopathy consisting of pain radiating down from the lumbar region of his spine to his right leg.

The Appellate Division reviewed the standard the trial judges are to follow in determining whether a verdict is excessive. The judge is not to substitute his or her judgment for the jury. On an appellate level, the court must defer to the trial court judge who has the “feel of the case.” To determine whether the verdict is legally sustainable, the trial court judge must review a representative sampling of jury awards involving similar cases. This information would guide the trial judge in deciding whether the award was so wide of its mark that it constituted a miscarriage of justice.

Here, the trial judge did not follow this approach. The trial judge was candid in admitting that he did not know “of any of the cases or the people involved in them that were cited by either party” in terms of the analysis. He solely based his decision on the plaintiff’s life expectancy and his socioeconomic status.

Despite the lack of an economic claim, the trial court found that in considering the plaintiff’s lifestyle, an award of $2 million was “not an absurd amount.”  When considering how the injury would affect the plaintiff’s religious practices and his responsibility as a parent and spouse, the trial judge found that the award was generous but “did not shock the conscience.”

The Appellate Division overturned the verdict. It found that the trial was “saturated” with incompetent, inadmissible testimony from the plaintiff that irreparably tainted the jury’s verdict. Further, the defendant’s involuntary absence from the trial compounded this prejudice. Allowing the verdict to stand would be a miscarriage of justice. Hence, the Appellate Division reversed and remanded for a new trial on both liability and damages.

The plaintiff Sharon Glenn went to the UPS store to discuss shipping a large package. She claims to have placed her purse and an envelope with $600 in cash on the counter. After receiving a quote to ship the package from the UPS clerk, she picked up her purse but accidentally left the envelope on the counter. After walking 4 blocks, she realized she left the envelope on the counter and ran back to the store but the envelope was gone. Plaintiff requested that the UPS store review its security camera to find out who took her envelope but the camera was not working. In Glenn v. Duroseau, 2015 N.J. Super. Unpub. LEXIS 2864 (App. Div. Dec. 10, 2015), the plaintiff claimed that the defendant UPS owner was liable to her for failing to have a functioning security camera.

The plaintiff contended that the UPS clerk must have taken her money. However, there was insufficient proof of how long it took plaintiff to walk the 4 blocks or how many people were in and out of the UPS store during that time period.

Nevertheless, the trial court judge found that the UPS store owner was negligent in not maintaining a functioning security camera which would have established who actually took the money. However, the Appellate Division held that such an extension of a business owner’s duty to a patron “is untethered to any precedential or statutory authority.”

The Court noted that a proprietor does owe a duty to protect patrons from foreseeable criminal acts of third parties occurring on their premises. Foreseeability is the crucial element in determining whether such a duty should be imposed on an alleged tortfeasor. Here, the UPS owner had never experienced a similar theft, nor was he aware of his malfunctioning security camera. Hence, the Appellate Division found no basis to conclude that the defendant was negligent in failing to maintain his security system and reversed the judgment entered in favor of plaintiff.

The court in In re T. Keena, Transfer of Structured Settlement Proceeds, 2015 N.J. Super. LEXIS 163 (Law Div. June 18, 2015), was asked to approve the sale of a structured settlement to Peachtree Settlement Funding. The transaction provided for a sale of a future payment in the amount of $66,175 on June 19, 2109 for the current sum of $46,250.

Under the Structured Settlement Act, N.J.S.A. 2A16-63, judicial approval of the sale must be obtained. There must be a finding that the sale is in the payee’s best interest, taking into account the welfare and support of the payee’s dependents.

However, the term “best interest” is not defined by the Legislature and there is only one law division case on point.

The court noted that the reason for the structured settlement must not be lost; it’s to create a degree of financial security for the injured person. The settlement is typically structured in a good faith effort to save people from themselves, by insulating injured persons from the temptation to possibly squander their settlements. The court noted that it had approved previously such sales to address an urgent need such as education expenses, purchase of a home , payment of debts that threaten continued occupancy of the payee’s dwelling, payment of debts/fines that prevent a payee from being employable, payment of nonroutine medical expenses, purchase of a vehicle critical to the payee’s ability to earn income, retention of professional services needed to prevent a known harm, wedding costs, adoptions costs, and funeral expenses.

The court pointed out that its obligation was much more than merely inquiring into whether the payee is competent and has voluntarily entered in the agreement. The court must make express findings that the proposed sale is in the payee’s best interest by something improving his or her life, addressing an urgent need, making the loss of future income and the receipt of a lesser sum now akin to an investment in the future which will enhance that person’s life in a meaningful way.

Here the court did conclude that Keena’s decision to sell a future payment was in the best interest of both her and her family. Keena was looking to use the money to move to a new home after their home had been damaged by Superstorm Sandy. They had repaired the home but wanted to move to a mainland community. Also, additional future payments remained available to Keena which she intended to use for her children’s education. Thus, the sale was approved.

A dispute arose between plaintiff Bruce Kaye and defendant Alan Rosefielde, an attorney Kaye initially retained as outside counsel and later employed directly. For 2 years, Rosefielde served as COO of some of Kaye’s timeshare businesses and as to those entities General Counsel. During this time period, Rosefielde committed serious misconduct by acting on his own behalf, instead of for his employer’s benefit, which led to his dismissal and litigation. In Kaye v. Rosefielde, 223 N.J. 218 (2015), the New Jersey Supreme Court was asked to decide whether a court may order the equitable remedy of disgorgement of the employee’s compensation when the employee breached his duty of loyalty to his employer, yet the employer suffered no economic loss as a result.

After a bench trial, the trial court judge found that Rosefielde engaged in egregious misconduct and breached his duty of loyalty, breached his fiduciary duty, committed legal malpractice and civil fraud. The trial court rescinded Rosefielde’s interest in several entities and awarded compensatory damages, punitive damages, and legal fees. However, it did not order the equitable disgorgement of Rosefielde’s salary as a remedy for his breach of duty of loyalty on the ground that the plaintiff sustained no damages as a result of that breach. The Appellate Division affirmed that decision.

On certification to the Supreme Court, the plaintiff argued that if disgorgement is not available as a remedy for a breach of duty of loyalty, if an employer does not incur damages, the employer’s claim would be rendered meaningless. The Supreme Court noted that loyalty owed to an employer obligates the employee not to act contrary to the employer’s interest during the period of employment.

The Court stated the general rule that courts exercising their equitable powers are charged with formulating fair and practical remedies. Disgorgement may be a remedy if a court finds in favor of an employer’s claim for an employee’s disloyalty. It is based upon a principle of contract law that if the employee breaches the duty of loyalty, he may be compelled to forego the compensation earned during the period of disloyalty.

When an employee abuses his position and breaches the duty of loyalty, he fails to meet the employer’s expectation in the performance of his job duties for which he is being paid. Also, disgorgement may have a valuable deterrent effect because of the adverse consequences that may follow.

Thus, the Supreme Court held that an employer may seek disgorgement of a disloyal employee’s compensation with or without a finding of economic loss. If the trial court finds a breach, then it must consider the following: the employee’s degree of responsibility and level of compensation, the number of acts of disloyalty, the extent to which those acts jeopardized the employer’s business, and the degree of planning to undermine the employer taken by the employee. The trial court should also apportion the employee’s compensation, rather than ordering a wholesale disgorgement that may be disproportionate to the misconduct at issue. If there is a finding of disloyalty, then the trial court should apportion the employee’s compensation, ordering disgorgement only for the monthly pay periods in which the employee committed acts of disloyalty.

The exclusive remedy provision of the Workers Compensation Act, N.J.S.A. 34:15-8, bars the employee from suing his or her employee for a workplace bodily injury based upon negligence. However, this provision does not preclude an employer from agreeing to contractually indemnify a third party for its negligence. Under those circumstances, an employer could be liable in a negligence action filed by the employee. In the recent decision of Estate of D’Avila v. Hugo Neu Schnitzer East, 442 N.J. Super. 80  (App. Div. 2015), an issue arose because the employer had a contractual indemnification with a contractor who was sued by the employee’s estate due to a workplace accident, yet the trial court refused to permit the jury to consider allocating any percentage of fault to the employer on the verdict form.

In D’Avila, the decedent, a subcontractor’s employee, was struck on the head by an unsecured metal ladder and became paralyzed. Following the injury, the employee received negligent medical treatment, was deprived of sufficient oxygen causing brain damage, and died 3 years later.

The employee’s estate sued the job site’s owner (Hugo Neu) that served as the general contractor, several of the employee’s medical providers, and various other parties. The owner filed claims for contractual indemnification against both the decedent’s employer (S&B) and against an installation subcontractor (Femco), alleging that each of them was responsible for the danger of the unsecured ladder.

The trial court did permit the employer to participate in the trial and arguments at the jury trial. However, the trial court refused to allow the jury to consider allocating any percentage of fault to the employer on the verdict sheet, despite the requests of several parties, including the employer. The jury returned a multi-million dollar verdict. The jury found that both Hugo Neu and Femco were liable for causing the accident and allocated negligence 75% against Femco and 25% against Hugo Neu. The jury found some of the medical defendants liable and the verdict was molded accordingly. The total award entered was about $8.5 million.

The Appellate Division found that the trial court erred in allowing the employer to participate in the trial but disallowing the jury from determining the employer’s percentage of fault, if any, on the verdict sheet. Thus, the total amount of the verdict was not to be disturbed but the case was remanded back for further proceedings relating to such potential allocation of fault to the decedent’s employer.

The Appellate Division recognized the thorny issue of determining an employer’s liability in situations in which an employer has agreed to indemnify a third party sued by one of its employees for a workplace accident.  While an employee cannot sue the employer directly, the third party can seek indemnification from the employer, based upon contract, for the employee’s damages. While the employee cannot sue the employer directly, nothing in the Workers Compensation Act precludes an employer from assuming a contractual duty to indemnify a third party by agreement.

Thus, in this case, it is permissible for Hugo Neu to seek indemnification from the employer S&B for any of plaintiff’s damages caused by S&B or Hugo Neu. The only legal bar to such a claim would be if the third party (Hugo Neu) were found to be 100% liable. The Legislature has disallowed indemnification provisions in construction agreements that seek to impose liability where damages were caused by the indemnitee’s sole negligence.

Thus, the appeals court held that the negligence and contractual issues should be tried together before the same jury who will determine both the negligence and contractual indemnification issues simultaneously. The verdict form must be carefully crafted to address the employer’s potential fault only when it is absolutely necessary to do so.

Hence, the jury must first be instructed to only consider the employer’s negligence if they first determine that the conduct of the defendant seeking indemnity is not the sole cause of the accident. The jury must not be given an “ultimate outcome” instruction divulging that the plaintiff cannot recover any damages from the employer. Further, the trial court must mold the verdict so that the plaintiff’s damages are not reduced by the employer’s percentage of fault, if any. Instead, the non-employer defendants must fully bear any liability owed to the plaintiff. Thus, if the jury finds any negligence of the employer, it would be divided up proportionately among the other defendants.

At that point, the indemnification owed between the employer and the third party can be resolved, if either the employer or the third party is found to be negligent.

It is not well known, but New Jersey changed its rules of civil procedure, as of September 1, 2014, making it easier for out-of-state attorneys to serve subpoenas in New Jersey for an out-of-state case without having to retain NJ counsel. Previously, an out-of-state attorney would have to retain a NJ attorney, have them file a miscellaneous action, and obtain a court order for authority to issue a subpoena. However, effective September 1, 2014, New Jersey adopted the Uniform Interstate Deposition and Discovery Act. It made it easier for out-of-state counsel to serve a subpoena in NJ and made it easier for a NJ attorney to serve an out-of-state subpoena. (more…)

The defendant Kmart was a tenant of a 150,000 square foot building in which Belmont Associates was the landlord. The lease contained clauses regarding the parties’ responsibilities in maintaining the sidewalk area adjacent to the building and maintaining insurance. In Senatore v. Kmart Inc.,  2015 N.J. Super. Unpub. LEXIS 2210 (App. Div. Sept. 21, 2015, plaintiff Valerie Senatore sued Kmart, claiming injury due to a fall on the sidewalk. In turn, Kmart tendered its defense to Belmont’s insurance carrier and filed a third party complaint against Belmont, seeking indemnification from liability and attorneys fees.

Plaintiff alleged she was injured due to a dangerous condition of the sidewalk. She submitted photos of the sidewalk showing small cracks a couple of inches in size. Her expert report opined that these cracks were due to defects in the paving.

Belmont’s carrier rejected Kmart’s tender of its defense because Belmont had not named Kmart as an additional insured. Kmart claimed that Belmont breached the terms of the lease by failing to name Kmart as an additional insured.

The case was settled with the plaintiff with Kmart and Belmont each paying half of the settlement, but leaving open the issue of indemnification between them that would be resolved at a later date.

Belmont filed a motion for summary judgment, which was denied. The trial court awarded Kmart damages for breach of contract and indemnity paid, as well as legal fees and costs. Belmont appealed all of these orders.

The Appellate Division found that the appeal turned on the interpretation of the lease as to who was responsible for the maintenance and insurance of the sidewalk where the injury occurred. Belmont argued that the sidewalk was not a common area within the landlord’s maintenance obligation under the lease, that Kmart had a duty to name the landlord Belmont as an additional insured, and that Kmart breached its obligation by failing to do so.

The court rejected Belmont’s arguments. According to the lease, the sidewalks are not included in the demised premises leased to Kmart, which included the building, together with the licenses, rights, privileges and easements appurtenant thereto. Although Kmart had the right to use the common areas, it did not demise Kmart the common areas themselves.

Further, the lease expressly stated that the landlord was responsible for the maintenance of common areas. Although the lease required Kmart and the other tenants to keep the sidewalk in front of or adjoining their buildings free of snow, ice, and refuse, it did not require Kmart to maintain the paving of the sidewalk. Thus, if the cracks in the sidewalk, due to paving, caused plaintiff’s injuries, the Appellate Division found that it was due to the negligence of the landlord, rather than Kmart.

Last, the court noted that because Kmart did not have exclusive possession of the common areas such as the sidewalk, it would not have common law liability to the plaintiff. Regardless, even if under the case law a common law duty ran from Kmart to plaintiff, that did not change Belmont’s contractual duty to Kmart under the lease to maintain and repair the sidewalk.

Hence, based upon the court’s review of the lease provisions, it upheld the trial court’s ruling, enforcing Belmont’s duties to Kmart under the lease.