By Betsy G. Ramos, Esq.

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

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

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

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

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

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

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

When the mode of operation doctrine applies in a personal injury case, it makes a case more difficult to defend because it eliminates the plaintiff’s burden of proof in establishing that the proprietor had notice of the dangerous condition. In the recent case of Novick v. Glass Gardens, Inc., 2014 N.J. Super. Unpub. LEXIS 2873 (Dec. 12, 2014 App. Div.), the plaintiff argued that the mode of operation rule should apply in the context of a fall due to milk leaking from a milk carton at the checkout aisle of the supermarket.

The plaintiff was shopping at a supermarket and claimed to have slipped on a wet surface of the floor near the checkout aisle and fell onto his right knee. In the supermarket’s incident report, the assistant manager noted a small amount of milk on the floor that was caused by a customer on line that had a gallon of milk on its side, which had leaked onto the floor. The first time he noticed the milk carton was when he was assisting the plaintiff after the fall.

The defendant supermarket filed a motion for summary judgment, arguing that the plaintiff failed to produce any evidence that defendant had any prior knowledge of the wet substance that caused him to fall. More specifically, the defendant argued that the plaintiff failed to present any evidence that the defendant had (1) either actual or constructive knowledge of the existence of the dangerous condition and (2) failed to take reasonable measures to address and correct this dangerous condition.

The plaintiff argued that when the nature of the defendant’s business created the hazard, the inference of negligence exits and it shifts the burden to the defendant to submit evidence of due care. Therefore, the plaintiff contended that the mode of operation doctrine should apply.

After considering the arguments, the trial court judge granted defendant’s motion for summary judgment and dismissed the case.

The Appellate Division considered the applicability of the mode of operation doctrine under the facts of this case. As the court had explained in another recent case “the mode of operation doctrine is an extension of the general principle that when a proprietor creates a dangerous condition, notice, actual or constructive, of that dangerous condition is not required.” The court further noted that a mode of operation charge is appropriate in a self-service area when loose items are reasonably likely to fall to the ground.

Under the facts of this case, however, the Appellate Division ruled that they did not present a rational basis to apply the mode of operation doctrine and relieve the plaintiff from the burden of establishing that the defendant had actual or constructive knowledge of the milk prior to the slip and fall. Ultimately, the court affirmed the dismissal of the case.

A dispute arose between a chiropractic provider, Complete Care, and an automobile insurer, GEICO, over personal injury protection (“PIP”) benefits. The insured, Walter Jones, was injured in an auto accident in 2007 and treated by Complete Care. When GEICO stopped paying his bills, Jones assigned his right to receive PIP benefits to Complete Care. In Complete Care v. GEICO, 2014 N.J. Super. Unpub. LEXIS 2858 (App. Div. Dec. 11, 2014), both parties tried to appeal the trial court’s rulings to the Appellate Division.

GEICO appealed the trial court’s decision, which was to remand the matter back to the DRP to put in the record findings as to the medical necessity for the treatment. Complete Care cross-appealed, arguing that the trial court erred in rejecting its position; that all of the treatments of Jones should have been compensable until the IME was furnished.

The Appellate Division, however, dismissed both the appeal and the cross-appeal for lack of appellate jurisdiction. The Alternative Procedure for Dispute Resolution Act (“APDRA”) makes it clear that the trial court’s appeal of an award entered under this statute is the final appeal. PIP arbitration is to be conducted under the procedures in this statute, and the DRP is governed by the Act. The pertinent statutory provision of the Act, N.J.S.A 2A:23A-18(b), specifically states: “There shall be no further appeal or review of the judgment or decree.”

In only “rare” circumstances would an appeal be permitted in an APDRA matter. Here, there was nothing momentous, legally or factually, about this case. The sums in dispute were relatively small. There were no significant issues of public policy. The trial court judge did not act outside of the proper boundaries of the APDRA. Hence, the Appellate Division found that the entire appeal should be dismissed.

A recent New Jersey civil procedure rule amendment now requires that plaintiffs serve HIPAA authorizations along with their answers to interrogatories. Pursuant to R. 4:17-4, a plaintiff seeking damages for personal injuries shall serve contemporaneously with his or her answers to interrogatories, an executed form authorizing disclosure to the opposing party or parties, for purposes of litigation, of the plaintiff’s medical records pursuant to HIPAA, as to each health care provider named in his or her answers to interrogatories excluding non-treating expert witnesses.

This rule change is not well known, although it became effective September 1, 2014. Plaintiffs’ attorneys are not providing these authorizations as required because they are apparently unaware of this rule change. We recommend including a reminder at the inception of the case when an answer is filed or supplemental interrogatories are served.

This rule change does not require HIPAA authorizations to be provided for the plaintiff’s pharmacy, family doctor (unless that family doctor is named as a treating physician), or any providers that provided treatment for prior or subsequent accidents. Defense counsel will continue to be required to prepare these other HIPAA authorizations if they wish to obtain these records.

The law is well settled that a beneficiary of charitable works who is injured while attending an immunized event is barred from recovering for a bodily injury negligence claim against the charitable organization. However, what about when the “beneficiary” is dropped off at a church by her daughter to attend an event and the daughter is injured? Is that church protected under the Charitable Immunity Act, N.J.S.A. 2A:53A-7, for the daughter’s injury? That is the question that the Appellate Division decided in Pollard v. Jerusalem Baptist Church, 2014 N.J. Super. Unpub. LEXIS 2834 (App. Div. Dec. 8, 2014).

Plaintiff Elvina Pollard was injured when she fell down the stairs at the Jerusalem Baptist Church. At the time of her accident, the Church was hosting an usher’s council meeting. While she was not attending the meeting, the plaintiff dropped her mother off to attend the meeting. The plaintiff slipped and fell down the Church’s stairs when she returned to pick up her mother.

The Church claimed it was immune from liability based upon the Charitable Immunity Act. Under the Act, the Church would be immune if (1) the entity was formed for non-profit purposes; (2) it is organized exclusively for religious, charitable, or educational purposes, and (3) it was promoting such objectives and purposes at the time of the injury to the plaintiff, who was then a beneficiary, to whatever degree, of its charitable works.

Plaintiff disputed the last factor as to whether she was a beneficiary of the Church’s religious or charitable work. The appeals court noted that one is considered to be a beneficiary if she receives, in some way, a benefit from the functioning of the entity at the time of the accident. Prior case law has bestowed beneficiary status upon the individual if, for example, they were accompanying a child or others to an immunized activity, even if they do not intend to participate in that activity. Further, beneficiary status does not depend upon whether the claimant personally received a benefit from the works of the charity but, rather, whether the institution was engaged in the performance of its charitable objectives when the injury occurred.

The Appellate Division pointed out that the Act has been liberally interpreted to provide immunity. Thus, the court found that plaintiff’s presence on the premises was sufficient to bestow beneficiary status upon her. Her presence was clearly incident to the accomplishment of her objectives, ensuring her mother could participate in the ushers’ council meeting, as well as spending time with her mother. Further, the Church was engaged in a religious activity at the time of the accident. Consequently, the Appellate Division found the Church to be immune from liability for the plaintiff’s injuries suffered in the accident and upheld the dismissal of the lawsuit.

Plaintiffs Alexander and Moinica Bardis suffered a loss on December 26, 2009 when the right basement wall of their 20 year old single family home collapsed. They filed a property loss claim against their homeowner’s policy with Cumberland Insurance Group (“Cumberland”). After investigation, Cumberland determined that the loss was not the result of a peril or cause of loss covered by its policy and issued a declination letter. The plaintiffs filed suit in Bardis v. Cumberland Insurance Group, 2014 N.J. Super. Unpub. LEXIS 2414 (App. Div. Oct. 8, 2014), seeking coverage under Cumberland’s policy for this loss.

Cumberland denied the loss, alleging that the collapse was a result of surface and subsurface ground water, weight of ice, sleet, snow and collapse, which is excluded under the policy. Plaintiffs, however, claimed that the basement wall collapsed due to hidden decay and chimney weight deterioration, which is covered by the policy. Although the trial court struck the plaintiff’s expert report as a net opinion, plaintiffs argued that the wall’s collapse, after having stood for so long evinced a gradual decline in strength over the 20 years since its construction, which is consistent with hidden decay, a covered loss.

While the trial court judge granted summary judgment to the defendants, finding no coverage under the policy, the Appellate Division disagreed.

First, the Appellate Division pointed out that there is no definition of the term “hidden decay” in the policy. Using the definition in the dictionary for “hidden decay,” which included a gradual decline in strength, the court used this ordinary meaning in interpreting this term. This approach is consistent with the principle of construing insurance contracts according to the reasonable expectation of the insured. The appeals court found that, arguably, the plaintiffs could have reasonably expected that their homeowner’s policy would cover a gradual decline in strength of their basement wall, followed by its sudden collapse.

The Appellate Division found that based upon the facts of the case, the loss could have been caused by a hidden decay (covered loss) or it could have been caused by improper construction methods (excluded loss). Based upon this fact issue, coupled with the insured’s likely reasonable expectation of coverage for the collapse of a basement wall, the appeals court reversed the trial court’s decision and remanded the matter back to the trial court for trial on these issues. This matter would need to be decided by a jury.

In Seven Caesars, Inc. v. Dooley House, 2014 N.J. Super. Unpub. LEXIS 2222 (Sept. 11, 2014 App. Div.), Seven Caesars was a subcontractor  to Dooley House which entered into a contract with the City of Camden to rehabilitated the Hogan House. After the contract was underway, the City maintained that Dooley House was not complying with the terms of the agreement and declined to release any further installment payments. Seven Caesars sued the City of Camden due to its failure to release those funds. The City argued that this suit should be dismissed because Seven Caesars, a Delaware corporation, had its corporate charter revoked in Delaware, making it ineligible to transact business in New Jersey and unable to file suit in New Jersey.

Seven Caesar’s corporate status had lapsed in Delaware because of its failure to file an annual report and pay the annual franchise tax. As a result, New Jersey revoked its registration certificate to do business in the state. Under N.J.S.A. 14A:13-11(1), a foreign corporation transacting business in the state may not maintain any action in any court of the state until it obtains a certificate of authority. After filing this lawsuit, Seven Caesars  did restore its corporate status in Delaware and was able to produce a certificate of authority showing New Jersey restored its corporate registration.

Thus, the Appellate Division had to decide whether a foreign corporation whose certificate of authority to conduct business in New Jersey had expired, can cure that lapse and, upon issuance of a newly issued certificate of authority, retroactively validate a complaint filed when it had lost authority to do business.

The court noted that N.J.S.A. 14A:13-11(1) is jurisdictional as it defines the right of a foreign corporation to use the state courts. This statute specifically restricts access to those foreign corporations transacting business in New Jersey if they fail to comply with the provisions of the Act and register to do business in the state.

Thus, the Appellate Division found that the lapse in valid corporate status deprived Seven Caesars of its ability to file suit. Curing the defect and obtaining a retroactive certificate to conduct business will not retroactively validate the prior action. Therefore, the Appellate Division held that its suit should have been dismissed.

Plaintiffs Mohammad were injured in an automobile accident in Philadelphia. Plaintiffs reside in North Bergen, New Jersey and defendants in Bensalem, PA. Plaintiffs filed suit in Bergen County in Mohammad v. Cohen, 2014 N.J. Super. Unpub. LEXIS 2688 (App. Div. Nov. 14, 2014) and defendants moved to dismiss based upon the lack of personal jurisdiction. The trial court granted the motion and dismissed the case with prejudice, finding that there was no way to cure the jurisdictional deficiency. The plaintiffs then moved for reconsideration and requested a transfer to the Philadelphia Court of Common Pleas. That motion was denied and the plaintiffs appealed this decision.

The plaintiffs conceded the lack of personal jurisdiction. Thus, the Appellate Division found no basis to reinstate the case.

The plaintiffs argued, however, that the case should be transferred to the Pennsylvania state court. The plaintiffs analogized this matter to a child custody suit or the federal courts’ ability to transfer venue amongst the district courts.

The Appellate Division found that neither provided a legal basis for a transfer. Unless there is an authorizing statute permitting the transfer between sovereign jurisdictions, such as in child custody cases, a transfer would improperly interfere  Pennsylvania’s sovereign powers. The appeals court stated that it cannot require a sovereign court take up a New Jersey case or take any action that would impair that state’s ability to enforce its statute of limitations.

However, the Appellate Division did reverse the trial court’s order to dismiss with prejudice and held that the dismissal should be without prejudice. Because this dismissal was based upon a procedural ground, i.e., lack of personal jurisdiction, the plaintiffs should have been given the opportunity to cure this deficiency. Additionally, if the dismissal was with prejudice, it incorrectly signals to other sovereign courts that the dismissal was on the merits, likely precluding litigation in another jurisdiction.

In Rihanna Corp. v. Certain Underwriters at Lloyd’s of London, 2014 N.J. Super. Unpub. LEXIS 2216 (App. Div. Sept. 11, 2014), the plaintiff insureds sought payment under a certain business owner’s insurance policy for a fire loss suffered by Rihana Restaurant. The defendant insurance company (“Lloyd’s”) denied coverage, citing a limitation provision in its policy, which precluded suit filed more than one year from the date of loss. The trial judge granted summary judgment, agreeing that the claim was properly rejected under the policy. The plaintiffs argued in this appeal that the court should have relaxed the one year limitation period and reversed the disclaimer of coverage.

In Rihana, suspicions arose as to whether the fire was intentionally set. Lloyd’s issued a reservation of rights letter. Thereafter, it disclaimed coverage of the fire claim due to “concealment, misrepresentation, or fraud.” It also disclaimed because the insured refused to submit  to a statement under oath. The insured refused because he was being investigated by the police for arson.

The plaintiffs filed a declaratory judgment action, seeking compensation under the policy. Lloyd’s filed a summary judgment citing to the limitations period in the policy, which required that any suit or action for recovery under the policy be brought within 12 months after the inception of the loss.

The suit limitation clause in the policy mirrored the standard contract provisions required to be included in every New Jersey fire insurance policy. The primary purpose of the statute of limitations is to provide defendants a fair opportunity to defend and to prevent plaintiffs from litigating stale claims.

This statute has been interpreted to allow suits filed within 12 months from receipt of the insurer’s denial of the claim, rather than the date of loss. Other cases make clear that the defendant’s conduct is relevant to the applicable statute of limitations.

However, in this case, the Appellate Division noted that even assuming the suit limitation was tolled because of the defendant’s delayed notification of the decision to deny coverage, the complaint was not filed within one year after the insured was notified that coverage was disclaimed. Inexplicably, the insured waited for 2 years after the claim was rejected to file suit. Thus, the court found no basis to justify relaxation of the suit limitation period and affirmed the dismissal of the lawsuit.

Plaintiff Rajnikant Patel claimed to be injured at work while working on a tablet press machine manufactured by the defendant Karnavati Engineering, Ltd. (“Karnavati”), a corporation located in India.  In Patel v. Karnavati America, LLC, 2014 N.J. Super. LEXIS 139 (App. Div. Oct. 9, 2014), the defendant Karnavati claimed that the court in New Jersey had no personal jurisdiction over it and, as a result, the plaintiff’s complaint should be dismissed.

Karnavati filed a motion to dismiss on that basis, which was denied by the trial court judge. Karnavati then appealed, claiming the judge’s finding of minimum contacts led to an erroneous legal conclusion.

The defendant, which manufactured the machine, was incorporated and operates in India. It did not ship the machine to the United States. Further, it has no contacts with the State of New Jersey. It is not registered to do business in the State; does not advertise in New Jersey; has never solicited business from or paid taxes to the State; has never attended any trade shows and has never sent any employees to New Jersey. Additionally, Karnavati has never owned any real or personal property in New Jersey, had any bank accounts in the State or maintained insurance for products liability conduct in the State.

Karnavati sold the machine to GlobePharma, Inc. (“Globe”), which had its place of business in New Brunswick. The machine was sent by sea to Globe, which took possession of it in Mumbai, India. Globe thereafter sold the machine to plaintiff’s employer Neil Laboratories, a company located in New Jersey.

The trial judge concluded that New Jersey courts had jurisdiction because there was a sufficient showing that the machine was made for and sold to a New Jersey company, for the purpose of being used in New Jersey. The judge reasoned that Karnavati has availed itself of this jurisdiction and, therefore, the New Jersey courts had personal jurisdiction over Karnavati.

The Appellate Division disagreed with the trial court’s decision. No one disputed that Karnavati lacked sufficient continuous contacts with New Jersey to warrant an exercise of general jurisdiction. The trial judge, however, believed that the facts supported an application of specific jurisdiction.

The defendant contended that the single sale of a product to an independent corporation in India, even if accompanied by the knowledge the product will be delivered to a user in New Jersey, is insufficient to allow the application of long-arm jurisdiction. The Appellate Division agreed with this position, that such single sale failed to provide the requisite facts to justify the exercise of jurisdiction.

The plaintiff failed to identify specific actions by Karnavati which demonstrated its desire to conduct business in New Jersey. The appeals court refused to conclude that the sale of this single machine to Globe for resale in New Jersey showed Karnavati’s purpose availment of business opportunities that support the exercise of personal jurisdiction in New Jersey. The Appellate Division found these acts were insufficient to support the conclusion that Karnavati’s conduct surrounding the sale of this machine “constituted purposeful acts for which Karnavati would be on notice that it would be subject to suit in New Jersey.” Hence, the appeals court reversed the trial court’s decision and dismissed the lawsuit as to Karnavati.