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Attorneys have a full arsenal of strategies at their disposal in the course of cross-examining an opposing party or witness during a trial in order to undermine that person’s credibility in front of a jury. “Impeachment by omission” is one such strategy whereby the attorney will use a fact stated by the witness at trial and claim that the failure of the witness to state that same fact under prior circumstances in which the fact naturally would have been made may undermine the credibility of both the fact the witness stated and the witness him or herself. However, as shown in Manata v. Pereira, 2014 N.J. Super. LEXIS 89 (App.Div. June 20, 2014), the source of the omission upon which the attorney attempted to impeach the witness must be admitted into evidence at trial and have circumstances indicating its trustworthiness for this strategy to work.

The Manata case arose from an automobile-pedestrian collision in Newark, New Jersey. The plaintiff, Maria Manata, testified she crossed a street in a crosswalk at an intersection on her way to work. As she neared the middle of the street, she stated she saw a car driven by the defendant Francisco Pereira, making a left turn towards her, which hit her, causing injuries. The defendant had a different version, stating the plaintiff stepped out from between two buses in the middle of the block and he did not have time to stop when his car struck her. The police did not respond to the accident. That evening the defendant went to the police station to fill out an accident report. However the plaintiff had already made a report containing only her version of the accident. The defendant read the report and claimed he disputed plaintiff’s version of the accident with the police officer, but, according to the defendant, the officer refused to change or add to the report.

At trial, the plaintiff’s attorney did not admit the police report into evidence or call the police officer who made the report to testify, but cross-examined the defendant on the report’s contents. The defendant kept to his story, telling the cross-examining attorney that the report was wrong and he had tried to have it changed. Nevertheless, the defendant admitted his version of events were not represented in the report. The plaintiff’s attorney ultimately argued in his summation that the defendant’s testimony lacked credibility because his version of the accident, missing from the police report, was a recently made-up fabrication. The jury, essentially believing the plaintiff’s version because it was in the police report, found for her and awarded her a substantial sum.

However, the Appellate Division disagreed with the conduct of the plaintiff’s counsel. While police reports are generally admissible into evidence as business records of regularly conducted activity to prove the fact that a statement was made to an officer, likewise, evidence of the absence of a statement in a police report may be admissible to prove the non-occurrence or nonexistence of the statements. However, in order to enter the police report into evidence, an official in the police department, typically the officer who took the report himself, needs to state the report was authentic and made in the course of a police officer’s regular duties. The court has the power to refuse to enter a business record into evidence if the source of the information or the circumstances of its preparation indicate that it is untrustworthy. Therefore, if the authenticating witness states that the report was made contrary to regular practice or under circumstances indicating it was not trustworthy, the court may exclude the report.

Here, the plaintiff’s attorney never entered the police report containing plaintiff’s version of the accident into evidence for the jury to examine. Therefore, the court could not make a finding about the report’s reliability. Without an officer’s testimony authenticating the report, it was not a reliable source of information upon which plaintiff’s attorney could cross-examine the defendant and his reliance on its substance, without entering it into evidence, was improper. Thus the plaintiff’s attorney’s “impeachment by omission” of the defendant, claiming he had made up the story about the plaintiff darting into the street mid-block based upon the fact that such a statement was not included in the report, was improper. The appellate court ordered a new trial with instructions on how to limit the plaintiff’s attorney’s use of the police report.

In Templo Fuente De Vida Corp. v. National Union Fire Insurance Co., 2014 N.J. Super. Unpub. LEXIS 1303 (App. Div. 2014), the plaintiffs, as assignee for Merl Financial Group (“MMI”), claimed that MMI’s insurance company wrongfully disclaimed coverage under an Officers, Directors, and Employees policy. This policy was a claims-made policy, which provided coverage only if the loss arose during the policy period and the insured gave notice to the carrier as soon as practicable. The issues in this case concerned whether notice was given “as soon as practicable” and whether the carrier had to show prejudice by the insureds’ failure to notify it of the claim as soon as practicable.

The underlying matter involved a claim against MMI and its principals, alleging failure to provide promised funding to plaintiffs for a construction project. Plaintiffs claimed that, due to this funding failure, they lost the project and incurred over $1,000,000 in an attempt to purchase the property for this project. MMI claimed that it was entitled to coverage for this claim under its policy with National Union Fire Insurance Co. (“National Union”). MMI reached a settlement with the plaintiffs and assigned its claim for coverage against its carrier to the plaintiffs.

While MMI was served with the plaintiffs’ complaint on February 21, 2006, it did not provide notice of the complaint to National Union until 6 months later on August 28, 2006. The carrier disclaimed coverage, stating that the insured failed to provide notice of this suit “as soon as practicable,” as required by the policy.

The trial court agreed with the carrier that the failure to give notice of the claim for 6 months breached the “as soon as practicable” policy provision. It relied on a prior case which found that a 5 ½ month lapse in providing notice breached a similar provision.

The trial court also rejected the plaintiffs’ argument that National Union had to show that it was prejudiced by its insureds’ failure to provide timely notice. It pointed out that under New Jersey case law, no prejudice need be shown for a claims made policy before a carrier can disclaim.

On appeal, the plaintiffs renewed their arguments. The Appellate Division rejected both arguments. It found that the policy language was clear that notice of the claim must be provided within the policy period and as soon as practicable. Here while notice was provided during the policy period, it was not provided as soon as practicable.

The Appellate Division also found that no prejudice need be shown before the carrier could disclaim. It noted that there are two different types of insurance policies – “claims made” and “occurrence” – and they differ based on how coverage is triggered. For claims made policies, coverage depends on when the insured notifies the insurer of the claim.

Under “occurrence” policies, coverage depends on when the act or omission giving rise to the claim occurs.  For these types of policies, when the insured does not provide timely notice, the insurer must establish prejudice to avoid coverage. However, that is not the case for claims made policies. That would result in an unbargained for expansion of coverage.

The Appellate Division found no merit to the plaintiffs’ attempt to distinguish prior case law, holding that no prejudice need be shown by the carrier if an insured fails to timely notify it of a claim under a claims made policy. Hence, it upheld the trial court’s order granting summary judgment to National Union, finding that there was no coverage under its policy.

In Burlington Coat Factory v. Jay Dee Trucking, 2014 N.J. Super. Unpub. LEXIS 1252 (App. Div. 2014), the Burlington Coat Factory (“Burlington”) sued Jay Dee Trucking (“Jay”) and its carrier National Specialty Insurance Co. (“National”), claiming that it was entitled to a defense and indemnification under a Trucker’s Policy issued to Jay for a lawsuit filed by one of its employees (“Singh”). In the underlying lawsuit, the employee claimed to have suffered personal injuries while cargo was being unloaded from a truck owned by Jay at Burlington’s loading dock. Burlington claimed that it was entitled to coverage under the “loading or unloading” provision in Jay’s policy with National.

The trial court found that no such coverage existed and granted summary judgment, dismissing Burlington’s suit. After considering the facts of the case, the Appellate Division affirmed, upholding the dismissal.

Burlington’s employee, Singh, claimed that Burlington had previously used a dock plate to bridge the gap between its loading dock and any delivery truck parked at the dock to unload cargo. However, three to four years before the accident, Burlington misplaced its dock plate, causing Singh to place “just any piece of board” he could find to bridge the gap between the dock and the back of the truck.

On the day of the accident, the Jay driver backed up to the loading dock in preparation of unloading cargo. One of Burlington’s employees placed a piece of plywood between the dock and the truck. The plywood was not secured or anchored in any way. Singh went inside to scan boxes. As he stepped onto the plywood, apparently the board slid and he fell between the truck and the loading dock.

Burlington claimed that National should have been required to defend and indemnify it for this underlying claim because “an accident must be covered by the auto insurance policy of a truck’s owner, where negligence is directly upon the act and preparation of the loading and unloading process of the truck in issue.”

However, prior case law held that the negligence of a premises owner in failing to maintain its loading dock, which resulted in the collapse of a docking plate upon one preparing to unload cargo, is not a negligent use of the truck that would trigger coverage under the truck’s policy. Here, while the accident occurred during the unloading process, it was the placement of the unstable board to bridge the gap between the truck and the loading dock that caused the accident.

The Appellate Division noted that when an accident occurs due to the owner’s failure to maintain its premises, there is no coverage under the loading/unloading provision of the trucker’s insurance policy because the accident arose not from the loading or unloading activities but, rather, from the negligent acts of the owner of the premises. Because Singh’s accident was not due to the negligence reasonably attributable to the use of the truck, Burlington was not entitled to coverage under National’s policy.

Plaintiff Dawn Pintimalli was at the Hamilton Marketplace to shop at the Staples store. She parked her car next to the island. When she returned to her car with her packages, she stepped up onto the curb to put her packages in her car, stepped down onto the parking lot, twisted her right ankle, and fell. In Pintimalli v. Staples, Inc., 2014 N.J. Super. Unpub. LEXIS 1279 (App. Div. June 4, 2014), Pintimalli sued Staples and the lot owners, claiming that the parking lot was in a defective condition and that caused her injury.

Following the accident, her husband photographed a depression in the lot between the curb and a storm drain grate. However, the plaintiff testified that she did not step down into the depression. Rather, she stepped down several feet before the depressed area.

The trial court granted the defendants’ motion for summary judgment, dismissing the case. The plaintiff appealed but the Appellate Division upheld the dismissal.

The issue in this case was proximate causation. The appeals court pointed out that the issue of a defendant’s liability cannot be presented to the jury simply because there is some evidence of negligence. The plaintiff must introduce evidence that affords a reasonable basis for the conclusion that it is more likely than not that the defendant’s conduct was a cause in fact of the plaintiff’s injury.

Here, the plaintiff placed herself several feet from the depression in the lot. Thus, the plaintiff failed to produce any evidence to conclude that there was a connection between the area of depression and her fall. Nor was there any evidence of a defect in the location of plaintiff’s actual fall. Accordingly, the Appellate Division agreed with the trial court that the plaintiff had failed to present proof of a genuine issue of material fact as to the issue of proximate causation.

The appeals court pointed out that when the evidence is so one-sided that one party must prevail as a matter of law, it is appropriate to grant summary judgment. Given that this case was so one sided, the Appellate Division found that the trial court had appropriately entered judgment in favor of the defendants in this case.

Plaintiff and his stepson, Louis Acerra, were at home and asleep when they were awakened by the sound of a smoke detector alerting them to a fire downstairs. They sought refuge in plaintiff’s bedroom, but then Acerra ran into the hallway filled with smoke and flames. Plaintiff thought Acerra had escaped and proceeded out a second story window. Once on the ground, he realized his stepson was still in the home. Thereafter, he witnessed firefighters bringing his stepson’s still burning, smoldering and smoking body from the house. In Litwin v. Whirlpool Corp., 2014 N.J. Super. LEXIS 84 (App. Div. June 11, 2014), the plaintiff sued the defendants for a Portee v. Jaffee emotional distress claim for witnessing his stepson’s injuries.

While Acerra survived the fire, plaintiff was his primary caretaker for 3 years. Ultimately, Acerra died 3 years later after undergoing multiple grafting procedures.

To establish a Portee claim for emotional distress, a plaintiff must prove 4 elements: (1) the death or serious physical injury caused by defendant’s negligence; (2) a marital or intimate, familial relationship between plaintiff and the injured person; (3) observation of the death or injury at the scene of the accident; and (4) resulting severe emotional distress.

The issue in this case is whether the plaintiff had observed his stepson’s injury.

The trial court judge granted summary judgment on the Portee claim, finding that plaintiff had failed to satisfy the observation prong necessary to assert this claim and failed to show that he had experienced severe emotional distress. The Appellate Division reversed, finding that the trial judge had too narrowly construed the elements of a Portee claim. Even though the plaintiff had not actually observed Acerrra burning inside of the home, that did not mean that this “observation” prong had not been satisfied.

The plaintiff’s experience of being in the fire, an eyewitness of him still being in the burning house and observing his still smoldering body removed from the burning house was sufficient. It was not necessary for him to have actually been inside the house and witnessed his son’s body burning to satisfy the observation prong of Portee.

The plaintiff Joanne Traetto lived next door to the defendant whose son played the drums, allegedly at all hours of the day and night. She worked out of her home as a computer analyst and could hear her neighbor’s 15 year old son play his drums in the garage. In Traetto v. Palzzao, 2014 N.J. Super. LEXIS 75 (App. Div. 2014), in a published decision, the Appellate Division addressed whether this noise could be an actionable private nuisance.

The trial court had dismissed the complaint through a motion for summary judgment, finding that the plaintiff was unable to establish a case for nuisance. To prove that a specific source of noise constitutes a nuisance, a plaintiff must show (1) injury to the health or comfort of ordinary people to an unreasonable extent and (2) unreasonableness under all the circumstances, particularly after balancing the needs of the maker to the needs of the listeners.

The Appellate Division noted that occasional noisy disturbances near residential living can rise to the level of nuisance if, based upon proximity, magnitude, frequency, and time of day, they cause residents more than mere annoyance, temporary physical pain, and more than usual anxiety and fright. As for the second element, the needs of the listeners and the utility of the maker’s conduct must be weighed against the quantum of harm to the plaintiff.

Here, the township health administrator had previously investigated a noise complaint from the plaintiff. He conducted a basic noise meter reading of the son’s drum playing and found that the level of the noise did not constitute an enforceable violation of the town’s municipal noise ordinance.

The plaintiff claimed that due to the noise, she was unable to perform her daily work obligations and it disrupted her sleep. It resulted in her being subjected to daily unnecessary stress and anxiety, for which she sought treatment with a therapist.

The Appellate Division found that the trial court should not have dismissed the case. It found that there was a factual dispute as to when the son played the drums. Moreover, although the township administrator found that there was no violation of the local noise ordinance, that did not obviate the court from determining if the noise from the drum playing unreasonably interfered with the plaintiff’s health or comfort.

Plaintiff James Stackhouse went for a swim in the defendant homeowner’s pool upon the invite of the defendant’s son. He slipped on an oily substance on the diving board and hurt his knee. In Stackhouse v. Bryant, 2014 N.J. Super. Unpub. LEXIS 1189 (App.Div. May 23, 2014), he sued the defendant for his injury, claiming that the diving board was a dangerous condition. The trial court granted summary judgment, dismissing the complaint as to the defendant, and this appeal ensued.

Others used the diving board prior to the plaintiff with no problem with the surface. No one was eating or drinking near the board. The plaintiff had used diving boards before and knew of the need to exercise caution. There had never been any prior incidents with the diving board.

 The trial judge found that the plaintiff was a social guest in the defendant’s home, notwithstanding the defendant’s lack of knowledge of his presence. Given the defendant had no reason to know of any dangerous condition of the diving board, he had no duty to rectify the condition or warn plaintiff of its presence.

On appeal, the plaintiff argued that the court should have analyzed this premises liability suit by applying the more flexible approach of Hopkins v. Fox & Lazo Realtors, 132 N.J. 426 (1993) and, as a result, the dismissal should be reversed. The Appellate Division disagreed.

It found that the plaintiff easily fit into one of the traditional status categories as a social guest. However, even analyzing liability based upon the Hopkins test, when one considered the relationship of the parties to determine if it is fair and just to impose a duty upon the landowner, the court found that it would be neither fair, nor just to impose a duty.

The plaintiff was unable to point to any evidence that defendant knew or had reason to know of an oily substance on the diving board. A homeowner has no duty to warn a social guest of a dangerous condition that the homeowner does not know, or should not know, exists. It would be unfair to impose a duty to warn on a homeowner to warn or remediate a transient condition of which he was unaware. Thus, under either the traditional analysis or the Hopkins test, the result would be the same. Hence, the Appellate Division upheld the dismissal of the complaint.

In Petersen v. New Jersey Mfrs. Ins. Co., 2014 N.J. Super. Unpub. LEXIS 995 (App. Div. May 2, 2014), the Appellate Division considered whether NJM adequately reserved its rights so as to permit it to later disclaim coverage. In Petersen, Lonnie and Kathleen Petersen’s son, Brandon, stabbed and robbed a neighbor. He was charged with attempted murder.

The neighbor, Doris Zayacz, sued Brandon and his parents in a civil suit. She alleged negligent, willful and wanton, and intentional acts. NJM decided to appoint counsel to represent the parents on the negligent and willful and wanton counts subject to a reservation of rights letter. It disclaimed as to the intentional act or punitive damages claims and advised that the insureds may want to retain counsel at their expense to cooperate with NJM’s counsel as to those claims.

NJM sought the Petersens’ consent to the representation by asking them to sign a copy of the letter, acknowledging their approval to the terms of the defense. However, the insureds never signed the letter. But, they did accept the services of the defense counsel chosen by NJM.

Discovery commenced but then was stayed pending a resolution of the criminal proceedings. Brandon pled guilty to the charges.

After the Supreme Court rendered its decision of Villa v. Short, 195 N.J. 15 (2008), ruling that a criminal acts clause such as the one in NJM’s policy barred coverage for all insureds under the policy, NJM disclaimed coverage as to the parents. Accordingly, it directed its assigned counsel to withdraw as their attorney.

A  judgment was entered and the Petersens assigned their rights against NJM to the plaintiff to pursue it’s the amount of the judgment. Thereafter, this matter ensued whereby the plaintiff attempted to collect on the judgment against the Petersens from NJM.

However, the Appellate Division found that NJM had properly reserved its rights and was able to disclaim coverage. NJM had informed the Petersens that it was investigating the matter and that its assigned defense counsel was directed to defend the insureds “until such time as any coverage issues have been resolved.”

Further, although the Petersens did not sign the reservation of rights letter to indicate their approval of NJM’s terms, they did accept the services of NJM’s defense counsel. By accepting this representation, the court found that they had accepted NJM’s terms.

This case bears out the importance of a properly worded reservation of rights letter. Although this case found that acceptance of the chosen defense counsel constituted an acceptance of the terms of the carrier’s offer to defend, language can be placed directly into the reservation of rights letter, stating that whether or not it is signed, acceptance of the services of the chosen defense counsel would be considered an acceptance of the terms of the defense.

In Lincoln Benefit Life Co. v. AEI Life, 2014 U.S. Dist. LEXIS 46726 (April 4, 2014), the plaintiff life insurance company sued in the District Court of New Jersey to void out two life insurance policies on the life of Gabrielle Fischer due to material misrepresentations made in the insurance application and/or due to the lack of an insurable interest at the time of the policy’s inception. The complaint claimed that the defendants engaged in a stranger originated life insurance or “STOLI” scheme in which they submitted false or deceptive applications on her life to obtain two $6.65 million life insurance policies. The issue in this case was whether diversity jurisdiction existed over the two LLC defendants.

To obtain jurisdiction on a diversity basis in federal court, the plaintiff and the defendants must be citizens of different states. In this case, the plaintiff, Lincoln Benefit, was a citizen of Nebraska. Defendant, Innovative Brokers, was a NY corporation. Defendant, AEI Life, LLC, was identified as a citizen of NY, and ALS Capital Ventures, LLC was identified as a citizen of Delaware.

The defendants moved to dismiss the complaint on the basis of the lack of contacts with NJ and also argued that the complaint, on its face, did not allege the citizenship of the LLCs. The defendants argued that because they were LLCs, the plaintiff was required to plead the citizenship of each member of the LLC to meet its burden of establishing the court’s subject matter jurisdiction.

The complaint clearly did not plead the citizenship of each member of the LLC. Thus, the court considered the plaintiff’s alternate argument that it should be granted jurisdictional discovery as an alternative to dismissal.

This issue had not yet been decided by the Third Circuit, which is the court of appeals for the District of New Jersey. While jurisdictional discovery has been permitted to establish personal jurisdiction, the appeals court has not decided whether discovery should be permitted to resolve uncertainties as to diversity jurisdiction.

After considering other cases in the circuit that have refused to permit this type of discovery, the court denied the request. The judge noted that it was the plaintiff’s burden to plead the basis for subject matter jurisdiction. Hence, the judge dismissed the complaint.

This case demonstrates how difficult it is to sue a limited liability company in federal court. Unless it is a one member LLC and the plaintiff knows in which state that member resides, it will remain very challenging to establish diversity jurisdiction against an LLC. Based upon this case, the court will not permit the plaintiff to find out through discovery the identity and citizenship of the LLC members in an attempt to establish that diversity of citizenship exists. 

Plaintiff Thomas Hackett suffered injuries when he hit his head on the ceiling when climbing a ladder to a water tower on the roof of a commercial building to repair an air conditioner. He was a technician working for Statewide Conditioning Inc., which had a contract with the defendants to perform the HVAC repair work. In Hackett v. Somerset Executive Square, 2014 N.J. Super. Unpub. LEXIS 678 (App. Div. March 27, 2014), the plaintiff sued the defendants, claiming that the small pass-through opening in the ceiling was a dangerous condition.

To access the roof, the plaintiff had to climb a fixed ladder and pass through the small opening in the ceiling. The fixed ladder’s clearance was about 19 inches between the edge of the ceiling opening and the ladder rungs. While he struggled through the pass-through earlier in the day, the third time that he went through, he hit his head on the ceiling, causing his injuries.

The plaintiff was aware of the obvious hazard and testified that it was a very restricted space. The trial judge found that the dangerous condition, the small cut-out in the ceiling allowing access to the roof, was open and obvious. Hence, the defendants had no duty to warn their business invitee of the condition. They were only required to protect the plaintiff from conditions that were not obvious or visible upon ordinary observation. The trial judge granted summary judgment, dismissing the case.

The plaintiff appealed to the Appellate Division. The appeals court noted that summary judgment is appropriate when the hazardous condition is obvious. Given that the evidence showed that the dangerous condition was apparent to the plaintiff, the Appellate Division agreed with the trial court judge and affirmed the dismissal of the case.

In upholding the decision, the court cited to several cases, which were not the traditional invitee cases. The court referred back to the Hopkins v. Fox & Lazo Realtors case and stated that “[o]ur courts have reduced the emphasis on the nature of the relationship between the parties, focusing also on other factors.”

This case exemplifies the blurring of the traditional categories (invitee, licensee, or trespasser) used to determine liability in a landowner premises case. Our NJ courts continue to focus on other factors such as the forseeability of the harm and the overall fairness in considering whether to impose a duty on a landowner for an injury caused by a condition of its property. The Hackett case is one case in which a NJ court refused to impose that duty.