Litigation

Plaintiff Tanisha Lane, a Whole Foods’ employee, was directed by her employer to park her vehicle in an area of the shopping center distant from the entrance to the store. While parked in that area during her shift, her side view mirror was stolen. The issue in Lane v. Whole Food, 2018 N.J. Super. Unpub. LEXIS 1625 (App. Div. July 10, 2018) was whether Whole Foods was responsible to pay for the damage to her vehicle because it directed plaintiff to park in this particular area of the parking lot.

Both Whole Foods, as well as the property owner’s management company, Silbert Realty and Management Company, Inc. (“Silbert”) were sued by plaintiff to recover the damage to her vehicle. Whole Foods was located in Clark Commons, a 240,000 square foot retail shopping center, in which it was one of 28 tenants. Per the lease between Whole Foods and the owner of the shopping center, the landlord was responsible for maintenance and security of the shopping center parking lot. The owner contracted with Silbert to fulfill these obligations.

Whole Foods did instruct its employees to park in an area of the parking lot which was distant from the store’s entrance. In fact, parking outside of that designated area by a Whole Foods’ employee could result in discipline, up to and including termination.

This area of the lot was not delineated with signs, painted lines, or other markings. Its use was not limited to Whole Foods’ employees. This area of the lot was open to all customers and employees of all of the shopping center’s tenants.

This incident was not the first incident in which plaintiff’s vehicle was damaged while parked in this location of the lot. On two prior occasions, her vehicle suffered damage, including having her bumper removed and paint damage.

The trial court, in a bench opinion, determined that both Whole Foods and Silbert had a duty to protect plaintiff’s vehicle while it was parked in the shopping center parking lot. Silbert’s duty was based upon the contractual obligation in the lease. Whole Foods’ obligation was based upon Whole Foods’ requirement for its employees to park in a designated area. The trial court found that this requirement created a duty to plaintiff. The trial court found Silbert 70% liable and Whole Foods 30% liable for the damage to plaintiff’s vehicle.

Whole Foods appealed this decision.

The Appellate Division stated that its prior decisions concerning the duty of a commercial tenant to its business invitees in a multi-tenant shopping center guided its resolution of this appeal. The Court noted that the general rule under this prior case law established that “when a commercial tenant in a multi-tenant shopping center has no control or contractual obligation to maintain a parking lot shared with other tenants, the common law does not impose a duty upon the tenant to do so.” This rule is “especially true where, as is the case here, the property owner assumes responsibility to maintain and secure the common areas of the shopping center in its lease with the tenant.”

The Appellate Division found that Whole Foods did not assume control of the parking lot by directing its employees to park in a specified area. Further, it had no contractual right or apparent ability to control that portion of the lot. There were no signs or other markings limiting that area to Whole Foods’ employees. Also, the record showed that Silbert requested Whole Foods and the other tenants to instruct their employees to park away from spaces near the stores to permit customer access.

The area where plaintiff was directed to park was not immediately adjacent to Whole Foods’ leased space. Whole Foods “was not readily able to remedy known dangers in the area in which plaintiff’s vehicle was damaged.” The Appellate Division found that Silbert had a contractual obligation and right to provide security in the parking lot and that it would be “unrealistic” for Whole Foods to provide security in the limited area of the lot to which it directed its employees to park.

A finding that Whole Foods did not have a duty to protect plaintiff’s vehicle from vandalism would not leave plaintiff without a remedy. The trial court had found Silbert liable based upon its contractual obligation. Accordingly, the Appellate Division reversed the trial court’s decision as to Whole Foods and remanded the matter back to the trial court to mold the judgment to allocate all liability for plaintiff’s damages to Silbert.

Plaintiff Kim Yazujian sued PetSmart for an injury that occurred due to a slip and fall at one of their stores. The case was tried before a jury and the jury found PetSmart not liable. Plaintiff appealed on the basis that the trial court judge abused its discretion in excluding his retail safety expert from testifying at trial. In Yazujian v. PetSmart, 2018 U.S. App. LEXIS 9607 (3d Cir. April 17, 2018), the federal appeals court (United States Court of Appeals for the Third Circuit), was asked to set aside the trial on the basis that the District Court judge had made a mistake in excluding plaintiff’s expert from testifying at the trial.

The plaintiff had slipped on a puddle of water and fell inside the PetSmart store. The plaintiff intended to have Robert Loderstedt, a purported retail management and store safety expert testify on his behalf. The defendant challenged his qualifications and the District Court conducted a hearing to determine whether he was qualified to testify. The District Court found his methodology was flawed and that the jury would not benefit from his testimony. Hence, the Court barred him from testifying.

The Court relied on Rule of Evidence 702 as to the need for expert qualifications, as well as the standard set forth in the Supreme Court case of Daubert v. Merrell Dow Pharms. Inc., 509 U.S. 579 (1993), in determining if the expert was qualified to testify. Under Daubert, the Supreme Court made clear that the expert’s opinion “must be based on the methods and procedures of science rather than on subjective belief or unsupported speculation.”

Here, the District Court found that Mr. Loderstedt had “no academic background in retail safety, no formal training in retail management or safety, and no retail work experience other than a job as a stock clerk more than 50 years prior.” He was relying on his time training under a person who he claimed to be an expert in retail safety, his review of over one hundred retail store manuals, and his visits to retail stores.  He conceded that there are no formal industry standards in the area of retail safety. He sought to offer an opinion on his view of the industry best practices that were based upon his review of unspecified retail manuals. He conceded that his methods were not subject to peer review and there was no evidence that this method was tested, accepted, or used by other experts in the field of retail safety. He did not even review the safety manual or policies of the PetSmart store at issue in this case.

Thus, the Third Circuit agreed with the District Court that Mr. Loderstedt was not qualified as an expert in retail safety and that is testimony “was the product of methods and principles that were not reliable.” The appeals court found that his testimony would have constituted “no more than his subjective belief or unsupported speculation.” Thus, the Third Circuit affirmed the judgment of the District Court barring the plaintiff’s expert from testifying at trial.

Plaintiff Robert Ferrante was injured in an automobile accident in which the other motorist (“the tortfeasor”) caused the accident. Without informing his automobile insurance company, New Jersey Manufacturers (“NJM”), Plaintiff filed a lawsuit against the tortfeasor, participated in mandatory arbitration, rejected the award and asked for a trial de novo, refused a settlement offer, tried the case before a jury, and finally reached a proposed settlement with the tortfeasor. The issue before the New Jersey Supreme Court, in Ferrante v. New Jersey Manufacturers Insurance Group, 2018 N.J. LEXIS 477 (2018), was whether the Plaintiff’s failure to provide any notice of these proceedings to NJM, causing NJM’s subrogation rights to be lost, barred his underinsured motorist (“UIM”) claim against NJM.

The tortfeasor had a $100,000 liability limit on his insurance policy. At arbitration, Ferrante’s damages were set at $90,000. However, he rejected that award and requested a trial de novo. Prior to trial, Ferrante was offered $50,000, which he rejected. He entered into a high-low agreement with the tortfeasor prior to trial with the range of damages set at a low of $25,000 and a high of $100,000. The jury awarded the plaintiff $200,000 in damages and the trial court entered an award of $100,000 based upon the high-low agreement.

Following the judgment, for the first time, Ferrante sent NJM a Longworth letter, stating that he was seeking UIM benefits. Plaintiff had a $300,000 UIM coverage with NJM. (Under the Longworth case, an insured who receives a settlement offer from a tortfeasor must notify his UIM carrier, who can then decide whether to allow the insured to accept the offer or provide the insured with the same amount in exchange for the assignment of the subrogation right against the tortfeasor.)  He advised NJM that the tortfeasor was willing to settle for $100,000. However, Plaintiff failed to mention any of the proceedings. Not knowing what had transpired, NJM told Ferrante to accept the offer and then they proceeded to litigate the UIM claim. During pretrial discovery in the UIM matter, NJM learned for the first time of Ferrante’s past dealings with the tortfeasor.

At that point, NJM sought to dismiss the complaint, arguing that Plaintiff violated Longworth by failing to notify NJM of any of the proceedings with the tortfeasor. The trial court granted the motion. On appeal, the appellate panel split their decision, with the majority reversing, finding that a remand was necessary to determine if NJM was actually prejudiced by the lack of notice. The dissent, however, disagreed that NJM must prove prejudice and found that Plaintiff’s failure to give notice to NJM during the initial suit caused NJM to lose its subrogation rights.

Upon appeal to the Supreme Court, in a published decision, the Court agreed with the Appellate Division’s dissenting opinion. The Court found that due to the complete absence of notice to NJM at any point during years of litigation, NJM may refuse to pay UIM benefits to the Plaintiff. No determination of prejudice need be made because NJM never had the opportunity to exercise its subrogation rights. By delaying notification to NJM, Ferrante violated the terms of his policy, which required him to advise NJM as soon as the lawsuit was filed – not after an arbitration, a high-low agreement, and a trial. His policy also required him to notify NJM of a tentative settlement and give NJM 30 days to pay the insured the tortfeasor insurance carrier’s offer in order to preserve its subrogation rights against the tortfeasor. By failing to do so, Ferrante clearly extinguished NJM’s subrogation rights. At a minimum, Plaintiff should have notified NJM of the trial, permitting it to participate and potentially mitigate its damages. For all of these reasons, the Supreme Court reversed the Appellate Division’s majority decision and affirmed the trial court’s ruling dismissing the UIM complaint against NJM.

The plaintiff (an attorney) sued his former client, defendant Shai Harmelech, to collect on an unpaid legal bill. In the course of that lawsuit, the trial judge asked the parties if they would be interested in participating in a mediation to resolve the dispute. In response to the court’s request, Harmelech sent an email to his lawyers, calling plaintiff some rather “choice” names and rejected the offer to participate in mediation. He accidentally copied the plaintiff on the email. The issue in MacNaughton v. Harmelech, 2018 N.J. Super. Unpub. LEXIS 127 (App. Div. Jan. 19, 2018) was whether that email sent by defendant to his lawyers could be subject to a defamation action or whether his statement was protected by the litigation privilege.

Plaintiff W. James MacNaughton, a New Jersey attorney, had represented defendant in a lawsuit in Chicago. Harmelech disputed the plaintiff’s legal bill and, ultimately, MacNaughton sued defendant to collect his fee.

The trial judge in the collection lawsuit asked whether the parties were interested in pursuing mediation. At the same time, the defendant learned that the plaintiff was apparently reaching out to his other creditors to force him into involuntary bankruptcy.

Upon learning of plaintiff’s actions, Harmelech sent an email to his attorneys asking that they not agree to mediation and referenced plaintiff’s actions in trying to force him into bankruptcy. In his email, he said to his lawyers that plaintiff is “[not] to be trusted,” he was trying to put him in involuntary bankruptcy, and “[a]s you can see he is a liar thief and no good drunk.”

Unfortunately, Harmelech also copied plaintiff on this email – which resulted in this defamation action. The defendant tried to obtain a dismissal of the defamation action through summary judgment. While that motion was denied, the court held a hearing under Rule of Evidence 104 to rule on the defendant’s claim that the litigation privilege would protect his statement made to his attorneys.

Under New Jersey law, there is a litigation privilege that is an absolute privilege to any communication: “(1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action.” Hawkins v. Harris, 141 N.J. 207 (1995).

After holding the Rule 104 hearing and hearing the testimony of the parties, the trial court judge concluded that the statement was protected by the absolute privilege and dismissed the complaint.

The plaintiff appealed, contending that not all of the prongs of the Hawkins test were met. Hence, he argued that the statements made by the defendant should not be protected by the litigation privilege and that he should be able to sue the defendant for defamation. Specifically, he claimed that the third and fourth prongs of the test were not met and that the litigation privilege should not extend to statements in which “there are no safeguards for abuse.”

The Appellate Division, rejected these arguments and affirmed the trial court’s decision, dismissing the case. The Court noted that it has been the long-standing law of this State to protect statements made in judicial or quasi-judicial proceeds that have some relation to the case. This privilege is based upon the public policy that persons should be permitted “to speak and write freely without the restraint of fear of an ensuing defamation action.” Further, the Court stated that the privilege extends beyond statements made in the courtroom during a trial, extends to “all statements in connection with the judicial proceeding,” and “certainly protects a litigant engaged in a private conference with an attorney regarding litigation.”

The Appellate Division found that this email “falls squarely” within those statements protected by the litigation privilege. Whether defendant had a genuine belief in the alleged defamatory statement made was irrelevant. The Court ruled that “[a]ll that matters is that he made the statement to his lawyers in the course of directing them in the conduct of the case.”

Even though the statement was made in a private conversation, the Appellate Division also rejected the argument that there would be no safeguard for abuse. A court retains judicial oversight based upon its “inherent power to sanction a party for behavior that is vexatious, burdensome and harassing.”

Plaintiff Sharon Seamon filed a lawsuit against her insurance company State Farm Insurance Company for underinsured motorist benefits (“UIM”) for injuries she suffered in an automobile accident. At trial, the jury awarded her $375,733.36 for her injuries. The issues in Seamon v. State Farm Insurance Co., 2017 N.J. Super. Unpub. LEXIS 3069 (App. Div. Dec. 14, 2017), were whether the trial court should mold the verdict to reflect State Farm’s UIM policy limits of $100,000, in light of plaintiff’s bad faith claim against State Farm for its refusal to settle her case within its policy limits and whether the plaintiff is entitled to be paid her attorney’s fees in light of her $85,000 offer of judgment.

In Seamon, plaintiff settled with the other driver for his $15,000 policy limits and then filed a UIM claim with State Farm. The claim did not settle and, hence, plaintiff filed this lawsuit against State Farm. Utilizing the Offer of Judgment court rules, R. 4:58-1 to 6, each party filed an offer to take judgment in the case. State Farm filed an offer to take judgment in the amount of $30,000 and plaintiff filed an offer to take judgment in the amount of $85,000. Pursuant to the Offer of Judgment rule, depending on the verdict, a party filing an offer of judgment may be entitled to an award of attorney’s fees.

Neither side accepted the other’s offer of judgment. The plaintiff’s case proceeded to trial and was decided by a jury, who awarded her $375,733.36 in damages. The judge molded the verdict to reflect the underlying tortfeasor’s policy of $15,000 and entered judgment in the amount of $360,000 plus interest.

At that point, State Farm filed a motion to mold the verdict to reflect its policy limits of $100,000 (asking that the judgment be reduced to $85,000). Plaintiff filed a motion to amend the complaint to add a bad faith claim against State Farm and asked for counsel fees under the Offer of Judgment rule. State Farm contended that plaintiff’s offer of judgment must be compared to the judgment after molding which, thus, would defeat her right to obtain fees under the Rule. (To recover fees, the verdict would need to be 120% of the offer or more.) Although State Farm opposed the plaintiff’s motion to assert a bad faith claim, it conceded that plaintiff did have the right to file a new complaint asserting bad faith against State Farm.

At the trial court level, while denying the plaintiff’s motion to amend to assert a bad faith claim against State Farm, the trial court judge also held that he had discretion not to mold the verdict. Because he found that State Farm engaged in a “scorched earth” approach to settlement, he refused to mold the verdict to $85,000 and awarded attorney’s fees to plaintiff, based upon the non-molded verdict. The trial court awarded the plaintiff $37,500 in fees.

State Farm appealed both rulings.

First, as to the issue of molding, the Appellate Division reversed the trial court’s decision. It held that, based upon prior case law, the trial court was required to mold the verdict to reflect the plaintiff’s UIM policy limits. The trial court did not have discretion as to whether or not to mold the verdict. Further, as for the bad faith issue, the Court found that the trial court should not have decided this issue “without requiring plaintiff to file the complaint and without giving both sides a full and fair opportunity to litigate that issue.”

However, the Appellate Division agreed with the trial court as to the plaintiff’s entitlement to attorney’s fees under the Offer of Judgment rule. The Court noted that the Offer of Judgment rule, R. 4:58-2(b), was amended as of September 1, 2016, to state that in an uninsured or underinsured motorist case, in applying the rule,  the judgment should be molded only to adjust it for any comparative negligence of the plaintiff.

This amendment was enacted to address an ambiguity in the Offer of Judgment rule in a UM/UIM case.  Under the old version of the rule, it was not clear whether the jury’s verdict or the molded judgment was the trigger for sanctions. The amended version of the rule made clear that the right to relief would be based upon the monetary award by the jury or non-jury verdict, without first molding to reflect the plaintiff’s policy limits.

Even though this rule went into effect after the verdict was entered in this case, the Appellate Division found that the new rule applied because it was “curative” in nature and reflected a clarification of the old rule. Under the case law, “curative acts” can be applied retroactively where “they are designed to remedy a perceived imperfection in or misapplication of a statute and ‘not intended to alter the intended scope or purposes of the original act.’”

Thus, the Appellate Division agreed with the trial court as to the plaintiff’s right to a fee award, although on a different basis as found by the trial court. However, it found that the plaintiff’s fee application was deficient. It did not contain the information required to support a fee award. Hence, the Court remanded the matter back to the trial court for the plaintiff to submit a conforming fee application, upon which the trial court can make the appropriate findings in determining the award.

Plaintiff, Kathleen Leggette, a Virginia resident, was visiting her daughter at Princeton University and, while crossing the street, she was struck by a New Jersey driver. She was insured by Government Employees Insurance Company (“GEICO”) and claimed that GEICO should provide personal injury protection (“PIP”) coverage to pay for her bills under the Deemer Statute. In Leggette v. Government Employees Insur. Co., 2017 N.J. Super. LEXIS 63 (App. Div. May 30, 2017), the plaintiff contended that under the Deemer Statute, GEICO should be “deemed” to provide standard PIP coverage while her vehicle was in this state.

Plaintiff’s vehicle was registered in Virginia and she was only in New Jersey to visit her daughter. After parking her car in a Princeton University parking lot, she began crossing the street towards her daughter’s dormitory and she was struck by a car. She incurred $113,825 in bills.

Plaintiff settled her claim with the driver of the automobile but then commenced this action to compel GEICO to provide PIP coverage to pay for her medical bills. She alleged that, GEICO, who was authorized to write insurance in New Jersey, was legally obligated by the Deemer Statute to provide minimum standard automobile insurance policy PIP benefits to her when her out-of-state vehicle was used in New Jersey.

GEICO, however, argued that it should not have to provide PIP benefits because she was injured as a pedestrian and was not using or operating her vehicle at the time of her accident. Thus, it contended that the provisions in the Deemer Statute were not triggered.

The trial court judge agreed with GEICO and dismissed the plaintiff’s claim. This appeal ensued, which resulted in a published Appellate Division decision.

The Deemer Statute was enacted in 1985 as part of the State’s no fault automobile insurance plan. It provided insurance coverage for New Jersey residents injured in accidents caused by out-of-state drivers whose insurance coverage was less than New Jersey’s statutory requirements. It also provided out-of-state drivers with New Jersey’s no fault PIP benefits but, in exchange, out-of-state drivers would be subject to the lawsuit threshold, should they decide to sue for their injuries.

The Deemer Statute requires an insurer, who is authorized to write insurance in New Jersey, to provide PIP benefits for an out-of-state driver “whenever the automobile or motor vehicle insured under the policy is used or operate in this State…” The Appellate Division focused on that language, however, to find that there must be a causal connection between the use or operation of the vehicle and the accident.

Here, plaintiff had left her vehicle, locked the doors, walked away from it and was crossing the street when she was struck by a vehicle. At the time of the accident, her use of her vehicle had ended. The Court rejected the plaintiff’s interpretation of the Deemer Statute that merely driving a vehicle into New Jersey would trigger this statute. Rather, the Court found that there must be a substantial nexus between the out-of-state vehicle and the accident for which benefits are sought. Because the negligent act that caused the plaintiff’s injury was not related to her use of the vehicle, the Appellate Division ruled that the Deemer Statute was not applicable to extend PIP coverage to her to pay for her medical bills.

Plaintiff James Engle fell on a public sidewalk in front of a residence owned by Melissa and Michael Larkin and sued them for the injuries he suffered from his fall. The defendant Michael Larkin owned a business, Paradise Pavers Pond Landscaping, LLC, and plaintiff asserted that it was operated out of this residence. In Engle v. Paradise Pavers Pond Landscaping, LLC, 2017 N.J. Super. Unpub. LEXIS 943 (App. Div. April 18, 2017), the issue on appeal was whether the occasional “use” of the residential property by Larkin’s business converted the premises to a commercial property for purposes of determining liability to the plaintiff for this fall.

The law is well settled in New Jersey that residential landowners with property abutting a public sidewalk are generally immune from liability for an injury that occurs on this sidewalk – unless they caused or contributed to the defect that caused the fall. However, commercial landowners with a business that abuts a public sidewalk do not share this immunity and may have liability for a fall on the sidewalk caused by a defect in the sidewalk. Thus, for purposes of assessing liability under New Jersey sidewalk law, the first step is to determine if the adjoining property is “residential” or “commercial.”

In Engle, the plaintiff argued that the defendant Larkin’s use of this residence for his business qualified this property to be classified as a commercial property. The facts showed that Larkin randomly would put his business sign on his lawn to try to generate business, he routinely parked one of his truck’s in the residence’s driveway (because he used it to go to and from his work), he had a dedicated phone line for his business at his residence, and used his home address for his business address for purposes of his website.

However, his business had no particular business location and, while he used his home address for purposes of receiving mail, he rarely met customers at his home. Typically, he would meet with customers at their home. Further, Larkin leased a yard where he kept his other company trucks and materials.

Based upon these facts, the Appellate Division found that they did not demonstrate that the residence was being used for commercial purposes. Its predominant use remained residential. The incidental commercial use of this property was insufficient to convert the residential use of this property into being classified as a commercial property for purposes of assessing liability under sidewalk law. Hence, the Appellate Division upheld the immunity granted to the defendants and found that the defendants were not responsible for the injuries suffered in this fall.

Plaintiff Ann McInroy sued Village Supermarket, Inc. for injuries from a slip and fall in its supermarket. Defense counsel scheduled an exam with an IME doctor to examine the plaintiff for her claimed injuries. After 2 missed appointments, the IME doctor sent defense counsel a bill for $375, representing the missed appointment fee for these two no show appointments. In the published Law Division decision of McInroy v. Village Supermarket, Inc., 2016 N.J. Super. LEXIS 164 (Law Div. Aug. 26, 2016)(approved for publication Feb. 14, 2017), Judge Savio ruled that this fee must be paid by plaintiff.

In this case of first impression, Judge Savio was asked to rule on a motion brought by defense counsel seeking an order compelling reimbursement of a missed appointment fee charged by a physician to perform an IME. He noted that the court rules do not provide the court with express authorization to compel the payment of missed appointment fees.

However, failure to appear for a properly noticed IME is a discovery violation. Under Rule 4:19, a defendant is entitled to an order compelling the IME to take place. Because the failure to appear for an IME is a discovery violation, it is within the court’s discretion to impose a sanction that will erase the prejudice to the non-delinquent party.

Plaintiff was unable to establish that she missed the appointments for any reason that should not have been foreseen. She failed to notify the doctor either time that she would not be able to appear. Defense counsel’s notice made it clear that if the appointment was not kept and not cancelled within 14 days before the scheduled appointment, a missed appointment fee of $375 would be charged.

The court was unsympathetic to the plaintiff’s argument that it would be a hardship to require a person whose sole source of income was Social Security Disability to pay the fee. Judge Savio found it was plaintiff’s sole fault in missing the exam and she should not be excused from paying the fee due to her financial circumstances.

It was reasonable for the doctor to charge the fee because he set aside time to meet the plaintiff and conduct the exam. That was time that could have produced other revenue for him. Because the defendant had no control over whether the plaintiff appeared for the IME, the court determined that it would be a just and reasonable discovery sanction to require the plaintiff to pay the missed appointment fee.

While this case is only a Law Division case, it is a published case. Thus, it can be cited for precedent in moving to compel the payment of a missed appointment fee. To ensure reimbursement, defense counsel should be certain to (1) provide 45 day notice of the exam as required under Rule 4:19 and (2) clearly state the IME doctor’s policy concerning cancellations and the amount charged for a missed appointment.

Sometimes a civil defendant may face potential criminal prosecution for the same events upon which the defendant was sued. As part of the civil litigation, the defendant may be called to provide testimony at deposition or trial that could be self-incriminating. Naturally, the defendant would not want to testify and may avoid doing so by asserting his or her Fifth Amendment privilege against self-incrimination. However, by refusing to testify, the defendant may hurt his or her civil defense. Thus, the defendant is between a rock and a hard place. Is the defendant’s predicament grounds for obtaining a stay of their civil litigation? What if the defendant has not yet been charged with a crime but rather merely faces the possibility of future criminal prosecution? This article probes these issues.

There is no constitutional authority preventing a defendant in a criminal case from having to make the difficult decision whether to assert their Fifth Amendment privilege in a related civil case against them. See State v. Kobrin Sec., Inc., 111 N.J. 307, 313 (1988). “That the exercise of the privilege may pose difficult choices for litigants poses no obstacle… to the continuation of the civil litigation. ‘Rather, the alleviation of tension between constitutional rights has been treated as within the province of a court’s discretion in seeking to assure the sound administration of justice.” Kobrin Sec., 111 N.J. at 313.

A court may find that staying the civil litigation would unjustifiably delay or deny the civil plaintiff’s compensation and remedy due. Notably, it is not the civil plaintiff’s burden to prove their right to proceed with civil litigation. Rather, the defendant must demonstrate how the burdens imposed by the civil litigation outweigh the public interest in swift proceedings. Thereafter, “[t]he trial court shall… exercise its discretion to mete out justice in both the civil and criminal litigations.” Kobrin Sec., 111 N.J. at 316.

The following are factors a court may consider in determining whether to stay civil litigation because of a defendant’s pending criminal prosecution:

1. Whether the defendant has been criminally charged or merely faces the possibility of being criminally charged. See National Freight, Inc. v. Ostroff, 133 N.J. Super. 554 (Law Div. 1975).
2. If the civil litigation and criminal prosecution are nearly identical in scope, this would tend to favor staying the civil litigation during the criminal prosecution. Kobrin Sec., 111 N.J. at 314. However, “the fact that a man is indicted cannot give him a blank check to block all civil litigation on the same or related underlying subject matter.” Id.
3.  “[W]hether refusing to stay discovery would impose undue hardship on a defendant and would thereby expose to unnecessary adverse consequences the defendant exercising the constitutional privilege.” Kobrin Sec., 111 N.J. at 314.
4.  “[W]hen relief is sought to prevent continued injury to the public, such as that caused by the continued dissemination of unapproved drugs, the civil proceeding should not be stayed except in the most unusual circumstances.” Id.

If the defendant has not yet been charged with a crime but rather merely faces the possibility of future criminal prosecution, the defendant is less likely to obtain a stay of their civil proceeding. See National Freight, Inc. v. Ostroff, 133 N.J. Super. 554, 559 (Law Div. 1975). In National Freight, over 100 criminal complaints had issued out of municipal court charging the defendant with larceny, embezzlement, forgery, and conspiracy to defraud the plaintiff. However, the defendant had not yet been indicted by a grand jury. Thereafter, the plaintiff filed a civil complaint against the defendant. The criminal and civil complaints against the defendant shared the same factual basis. The defendant moved to stay the civil proceedings against him until the criminal proceedings against him concluded, claiming that to allow the plaintiff’s civil complaint to proceed would compromise his Fifth Amendment right against self-incrimination. The court denied the defendant’s motion, allowing the plaintiff’s civil complaint to proceed. In holding so, the court relied upon the fact that the defendant had not been indicted and may never be indicted. The court recognized “the interests of the other parties will be jeopardized by a delay of the civil suit,” and that “[t]o compel other parties to sit supinely by while their rights or possibility of recovery are eroded is to invite contempt for the law as well as to permit any guilty party to secrete or dissipate the fruits of his wrongdoing.”

In summary, a defendant facing both criminal prosecution and civil litigation is not entitled to a civil stay simply to avoid having to decide whether to assert their Fifth Amendment privilege against self-incrimination. Furthermore, if the defendant has not yet been charged with a crime but merely faces the possibility of future criminal prosecution, the defendant is less likely to obtain a stay of their civil litigation.

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