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This blog, written by Litigation Department Shareholder and Hiring Shareholder Charles F. Holmgren, Esq., focuses on liability litigation cases decided in New Jersey courts.

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Expert Needed for Condominium Owner to Recover for Water Damage

Plaintiff, Harrison JC, LLC, a limited liability company, owned Unit 302 in Harrison Bridge Plaza, a 4-story condominium with commercial units on the first floor and residential units on the remaining floors.  Plaintiff Harrison bought the unit in February 2010 and had leased it to various tenants.  The unit experienced water seepage and leakage from the ceiling of its unit on 11 occasions from April 2014 through March 2021.  Plaintiff sued the unit owners above its unit, as well as the condominium association, HB Association, and Patrician Associates Management, the manager of the condominium association for the damage resulting from the leaks.  The issue in Harrison JC, LLC v. Harrison Bridge Plaza Condominium Association, 2024 N.J. Super. Unpub. LEXIS 1895 (App. Div. Aug. 7, 2024) was whether the plaintiff could pursue its claim for property damage from the water seepage and leakage without the retention of an expert.

The units above the plaintiff’s unit were owned by Claudia Santos and Joel Costas, Unit 401, and Ying Zi Zhu, Unit 403.  Per the Master Deed, unit owners’ responsibilities were limited to the interior of the walls, ceilings, and floor surfaces of their units.  The common elements, including roofs, parking lot and lobby, were owned and controlled by HB Association and were managed and maintained by defendant Patrician under a contract.

Plaintiff Harrison filed a lawsuit, claiming that it suffered property damage, loss of rental income, and out of pocket expenses when its unit experienced water seepage and leakage from the ceiling of its unit.  It is undisputed that the leaks happened and that all but the final leak was repaired.  Plaintiff claimed that the leaks originated in either Unit 401, Unit 403, or the common elements of the building.  It sued HB Association based upon negligence and its duty to maintain and repair the common elements of the building.  It sued Patrician based upon a breach of a contractual obligation to maintain and repair the common elements of the building and, last, it sued the unit owners for negligence for creating or failing to repair the leaks in their units that damaged plaintiff’s unit. 

However, plaintiff failed to retain an expert to offer any opinion with respect to the cause or origin of any of the leaks. At the close of discovery, all defendants filed for a summary judgment.  They argued that plaintiff was unable to establish liability without an expert opinion.  Plaintiff, in opposing the motion, argued that an expert opinion was not necessary under the doctrine of res ipsa loquitur.

The trial court granted summary judgment to each of the defendants.  It found that plaintiff was unable to establish liability without an expert report and found the doctrine of res ipsa loquitur did not apply to plaintiff’s claims and that “the jury could not be left to speculate as to the cause and origin of the leaks and whether defendants’ negligence was the cause of damage to plaintiff’s unit.”

This decision was appealed.  Plaintiff argued that the court should have taken judicial notice that water flows downward, and water does not normally come through the ceiling of a residential unit unless there is some defect or negligence in the area above the unit causing the leak and that the doctrine of res ipsa loquitur should have relieved plaintiff of its obligation to produce an expert report to prove negligence as to HB Association and Patrician.

The Appellate Division noted that the doctrine of res ipsa loquitur, if properly evoked, would enable a plaintiff to make out a prima facia case of negligence by allowing for the inference of negligence from undisputed facts.  However, the doctrine would only be applicable where “(a) the occurrence itself ordinarily bespeaks negligence; (b) the instrumentality was within the defendant’s exclusive control; and (c) there is no indication in the circumstances that the injury was the result of the plaintiff’s own voluntary act or neglect.”  Finally, the doctrine would not be applicable where the injured party fails to exclude other possible causes of the injury.

The Appellate Division agreed with the trial court decision that the doctrine of res ipsa loquitur was inapplicable to the facts of this case.  The Court found that “it is not within the common knowledge of the average juror that the acts of HB Association and Patrician, as the entities with control of the common elements of the building, were more likely than not the cause of the leakage in plaintiff’s unit.”  The Appellate Division found that without expert testimony to opine as to the origin and cause of the leaks, “jurors would be left to speculate as to whether HB Association and Patrician’s conduct negligently caused damage to plaintiff’s property.”  Finally, the Appellate Division noted that the design and maintenance of this condominium and the origin and cause of leaks in the building would not be matters within the ken of the average juror.

Further, the Court found that the plaintiff failed to produce evidence of the location of the leaks in its unit.  The leaks could have derived from the common areas, the units above Plaintiff’s unit, or from plaintiff’s unit as a result of acts by plaintiff’s tenants.  The Court found that expert testimony was necessary to prove that the leaks originated in an area within the exclusive control of HB Association or Patrician.  Without such expert testimony, a jury could not exclude plaintiff or its tenants as the negligent actors in causing the leaks without engaging in speculation.

Thus, the Appellate Division agreed that the doctrine of res ipsa loquitur was inapplicable to the plaintiff’s claim.  Because the plaintiff did not produce an expert report to offer an opinion as to the cause or origin of the leaks, the Appellate Division affirmed the trial court decision, dismissing the lawsuit.

Landowners Liability Act Bars Claim for Fall in County Park

Plaintiff Andris Arias fell in a hole and was injured while rollerblading on a paved pedestrian pathway in Van Saun County Park in Paramus.  The Park, owned by the County of Bergen, consisted of 130 acres of land.  The issue in Arias v. County of Bergen, 2024 N.J. Super. LEXIS 74 (App. Div. June 14, 2024) was whether the County had immunity under the Landowners Liability Act for this accident.

Under the Landowners Liability Act, certain owners, lessees and occupants of property owe no duty to persons injured while using property for recreational activities and are immune from suit.  N.J.S.A. 2A:42A-3.  This immunity is available to public entities.  The immunity is not available to persons or entities if there is a “willful or malicious failure to guard, or to warn against, a dangerous condition, use, structure or activity.” 

The plaintiff argued that the County was not entitled to immunity under this Act because the Park was located in a residential, suburban neighborhood and, therefore, did not qualify as “premises” protected by the Act.  The County, however, argued that the focus of the Act was the dominant character of the land and the Park, as a property containing recreational lands, was exactly the type of premises that the Act was created to protect. 

Here, the trial court granted defendant’s motion to dismiss, which order was appealed to the Appellate Division.  The Appellate Division upheld the dismissal of the complaint.  It found that under the “dominant character of the land analysis, it was undisputed that the Park offered the general public access to picnic areas, playgrounds, pavilions, athletic fields, wooded areas, bicycling and wooded paths, and the dog park – without charging a fee.”

The Court noted that the Park’s “dominant character as an open space for sport and recreational activities renders the Park the type of property entitled to protection” under the Landowners Liability Act.  Thus, it agreed with the trial court judge that the Park was a “premises” as defined by the Act and that the County was entitled to Landowners Liability Act immunity from this accident.  The Appellate Division also agreed that the motion was not premature and affirmed the trial court decision, dismissing the lawsuit. 

Appellate Division Rules That Department of Transportation and State of New Jersey Were Not Liable for Injury Caused by Pothole

By: Uyen Nguyen, Law Clerk
Edited By: Betsy G. Ramos, Esq.

Plaintiff Josef and Stefani Langel filed a complaint against Defendants New Jersey Department of Transportation (DOT), State of New Jersey, county, municipal, and private entities, alleging that Defendants’ failure to provide proper warning and repair a pothole in the roadway caused his injuries when he was thrown off his bike. The issue in Langel v. State DOT, 2024 N.J. Super. Unpub. LEXIS 1490 (App. Div. July 10, 2024) was whether Defendants DOT and the State of New Jersey were liable for the injuries Plaintiff Josef Langel sustained from the pothole.

On March 16, 2019, Josef Langel rode a bicycle on Sylvan Avenue, a section of Route 9 West, in Englewood Cliffs, NJ. He hit a pothole in the roadway, causing him to be thrown off his bike and sustain injuries. Plaintiff and his friends were on a bike trip from New York City to Piermont, NY. Plaintiff claimed that he rode the same route six months before the accident. However, Plaintiff never noticed the pothole before the accident, nor made any complaint about the road conditions to any state entities.

Ronald Gallucci, a DOT crew supervisor who oversaw the maintenance of Route 9 West, testified that he had neither received any complaints, nor seen the pothole that injured the Plaintiff. He stated that his maintenance crew inspected the roadway every other day for potholes. According to Gallucci, if the DOT had received a complaint about the potholes, he or his crew would have inspected the area.

William Falato, a DOT equipment operator, also testified that he was familiar with the area where the accident occurred and had never seen the pothole before. According to this witness, if the pothole had been there for a substantial period, he or his crew would have noticed it due to its large size. He also recounted instances where his crews inspected an area and saw no potholes, but within days later, DOT received a complaint that a pothole had formed.

Englewood Cliffs Patrol Officer Marc Krapels, who responded to Plaintiff’s accident, also testified that he had not seen the pothole before. Krapels stated that from his experience patrolling the area, a pothole could form at any time, since the town is located on a cliff. DOT also provided complaints it received on February 27, 2019 regarding potholes in areas surrounding where Plaintiff hit the pothole. However, the records indicated DOT did not receive any complaint about the pothole that Plaintiff hit.

Meanwhile, Plaintiff obtained a report from expert engineer Richard Balgowan, who indicated that the pothole had been present for at least a year before Plaintiff’s accident. However, Balgowan admitted that he did not inspect the location until April 23, 2021, which was more than two years since Plaintiff’s accident, and the pothole had been repaired by then.

On August 1, 2022, Defendants filed a motion for summary judgment claiming they were entitled to discretionary immunity under the NJ Tort Claims Act (TCA), N.J.S.A. 59:2-3. Defendants maintained that their conduct in maintaining the roadway was not palpably unreasonable, and Plaintiff’s expert report was a net opinion. On the other hand, Plaintiff cross-moved for summary judgment, arguing that defendants were not entitled to discretionary immunity. Plaintiffs claimed Defendants had actual and constructive knowledge of the dangerous conditions, and their actions or omissions were palpably unreasonable. Plaintiff also argued that their expert report was not a net opinion.

The Law Division granted the summary judgment in favor of Defendants DOT and the State of New Jersey, denied Plaintiff’s summary judgment, and dismissed the complaint with prejudice. Ultimately, Plaintiff moved for reconsideration. Plaintiff’s motion for summary judgment and reconsideration was denied because they had failed to establish that Defendants had actual or constructive notice of the pothole. On appeal, the Appellate Division reviewed whether the trial judge had abused his discretion in denying Plaintiff’s motions for reconsideration.

Under the TCA, a public entity is liable for injuries caused by a dangerous condition if it has actual or constructive notice of its existence. To establish actual notice, Plaintiff must show that the public entity has actual knowledge of the existence of a condition and knew or should have known of its dangerous character. Defendants can still be liable, even though they didn’t have actual notice if Plaintiff can establish that they have constructive notice of the dangerous condition. To establish constructive notice, Plaintiffs must show that the dangerous condition had existed for a period of time and was of such an obvious nature that Defendants should have discovered it if they exercised due care.

To show actual knowledge, Plaintiff offered a photograph of the pothole that had been paved over at some point. However, Plaintiff failed to prove that the repair was performed before the accident. Thus, Plaintiff could not prove that Defendants had actual notice or knew about the pothole before his accident. Regarding constructive notice, Defendants’ witnesses all testified that a pothole could have formed within a few days or even overnight. Plaintiff could not show that the pothole had existed for a period of time despite its obvious nature, and DOT failed to exercise due care to discover it. Thus, Plaintiff was also unable to establish Defendants had constructive notice of the pothole.

Furthermore, the Appellate Division held that the expert’s opinion Plaintiff provided was a mere conclusion. Applying the standard established by the NJ Supreme Court in Pomerantz Paper Corp. v. New Community Corp. regarding the admissibility of expert opinions, the Court concluded that the expert’s opinions in this case were a mere conclusion because Plaintiffs’ expert witness could not “give the why and wherefore” to support his opinion. Furthermore, the fact this expert did not inspect the pothole in person two years after the accident did not weigh in favor of Plaintiffs.

Under discretionary immunity, a public entity is not liable for the exercise of discretion unless a court concludes that its procedures or policies are palpably unreasonable. Although the Law Division did not rely on this doctrine as a basis to grant Defendant’s motion, the Appellate Division applied the doctrine in this case and held that the DOT Assistant Commissioner’s decisions in inspecting roadway and repairing potholes were entitled to discretionary immunity. Thus, Defendants are not liable for Plaintiff’s injuries because their conduct in maintaining the roadway and making repairs was not palpably unreasonable.

Hence, the Appellate Division affirmed the summary judgment granted to the Defendants, dismissing the Complaint.

Appellate Division Finds Coverage Under Loading and Unloading Doctrine for Donut Shop Sued in Serving Customer Hot Tea Through Drive Through Window

By: Victoria M. Adeleke, Law Clerk
Edited by: Betsy G. Ramos, Esq.

Plaintiffs Bridgewater Donuts, LLC and Tamar, Inc. filed a lawsuit against defendant Geico Indemnity Co. seeking coverage under an automobile liability policy issued to Susan Mendelsohn-Hall. Mendelsohn-Hall alleged she suffered injuries when hot tea spilled on her at the Dunkin’ Donuts drive-through, leading to a lawsuit against Plaintiffs. Plaintiffs then sought coverage under Mendelsohn-Hall’s auto policy issued by Geico, invoking the “loading and unloading” doctrine. However, Geico denied coverage, prompting this legal dispute. The issue in Bridgewater Donuts, LLC v. Geico Indemnity Co., 2024 N.J. Super. Unpub. LEXIS 1505 (App. Div.  July 9, 2024) was whether Plaintiffs qualified as additional insured under Mendelsohn-Hall’s auto policy under the loading and unloading doctrine.

Mendelsohn-Hall had a New Jersey Family Automobile Insurance policy that provided coverage for bodily injury sustained by a person arising out of the ownership, maintenance or use of the automobile. The policy defined the persons insured to include Mendelsohn-Hall and any other person using the auto with her permission.

On the day of the accident, Mendelsohn alleged she was scalded by hot tea as it was delivered to her at the drive thru window by plaintiffs’ employees and that her injuries were proximately caused by plaintiffs’ negligence.  

Plaintiffs filed a complaint against Defendant Geico, seeking a declaratory judgment that they were additional insureds under Mendelsohn-Hall’s policy. Defendant moved for summary judgment, arguing plaintiffs had not been using Mendelsohn-Hall’s vehicle when she sustained her injuries and, therefore, were not additionally insured as users of the automobile. The trial court granted Geico’s motion for summary judgment and dismissed Plaintiffs’ complaint. The trial court determined that Plaintiffs did not qualify as additional insureds under Mendelsohn-Hall’s auto policy because her injuries were not directly attributable to the loading of the tea by plaintiffs into her vehicle.

The Appellate Division reversed. The appellate court first explained that N.J.S.A. 39:6A-3 requires that automobile owners have auto insurance that covers loss arising out of the ownership, maintenance, operation and use of an automobile. The Court then explained that unloading and loading had always been a verified use of the vehicle under the statute, and implicit in this requirement is the obligation to provide omnibus liability coverage to all persons who use the named insured vehicle by participating in its loading or unloading.

The Appellate Division relied on the N.J. Supreme Court case of Penn Nat’l Ins. Co. v. Costa, where the Court found that to determine whether an injury arises out of the use of a motor vehicle thereby triggering coverage, that there must be a substantial nexus between the injury suffered and the asserted negligent use of the motor vehicle. Use of a motor vehicle has been interpreted broadly to include the acts of loading and unloading the automobile.

The Appellate Division found that in Bridgewater Donuts, LLC, the record supported a finding of the requisite substantial nexus. The Appellate Division pointed to the undisputed fact that plaintiffs’ drive-up window was available to customers to purchase and pick up their items and load the items into their car. Plaintiffs’ employee loading the hot tea she had purchased into her vehicle was integral to the completion of the transaction between Mendelsohn-Hall and plaintiffs. Therefore, the Court determined her injuries bore a substantial and not incidental nexus to Plaintiffs’ alleged negligent use during the loading process under her automobile policy.

Thus, the Court reversed the trial court’s order granting summary judgment to defendant Geico and denying Plaintiffs’ motion for summary judgment and remanded the case back to the trial court for further proceedings.

The Enforcement and Application of Shortened Limitations Period Clauses in Insurance Policies

In the State of New Jersey, breach of contract claims are subject to a 6-year statute of limitations.  However, this often changes in the context of homeowners’ insurance policies.  Often, those policies contain provisions which provide that any suit against the insurer must be initiated within one year of the date of loss.  Other policies provide that any suit against the insurer must be initiated within one year of the insurer’s denial of the claim.  

The enforceability of shortened limitations clauses contained in insurance policies was first addressed in Weinroth v. N.J. Mfrs. Ass’n Fire Ins. Co., 117 N.J.L. 436 (E. & A. 1937).  In Weinroth, the Court upheld a provision in an automobile insurance policy which required that any suit against the insurer be brought within 90 days of the insurer’s denial of coverage.  Because the insured did not file suit until 106 days after the insurer denied coverage, his claim was dismissed. 

Thirty-one years later, the Appellate Division applied Weinroth’s holding in the context of a homeowners’ insurance policy.  In Staehle v. American Employers’ Ins. Co., 103 N.J. Super. 152 (App. Div. 1968), the homeowners’ insurance policy at issue provided that any suit against the insurer must be commenced within twelve months of the inception of the loss.  Because the insured did not initiate suit until 1 year and 6 days after the loss, the Court affirmed the grant of summary judgment in favor of the insurer.  In doing so, the Court noted that “the New Jersey rule [enforcing shortened limitations clauses] seems to be the one followed in the majority of the states.” 

Since Weinroth and Staehle, the courts of New Jersey have continued to enforce 1-year limitations provisions contained in insurance policies and other contracts.  See, e.g., Azze v. Hanover Ins. Co., 336 N.J. Super. 630, 636 (App. Div. 2001) (noting that the 6-year statute of limitations for contract actions “may be shortened by the terms of an insurance contract”); Peloso v. Hartford Fire Insurance Co., 56 N.J. 514 (1970) (enforcing a 1-year limitations period contained in a fire insurance policy); PPG Indus., Inc. v. American Home Assur. Co., 2007 N.J. Super. Unpub. LEXIS 1494 *27 (App. Div. 2007) (quoting Weinroth and noting “the validity of suit-limitation clauses in insurance policies has long been recognized in this state”).

In calculating the limitations period under an insurance policy, it is important to note that the shortened limitations period does not necessarily run uninterrupted from the date of loss.  This is particularly so where the insurer spends some time investigating the claim before issuing a denial.  This situation was addressed in Azze, citing the Supreme Court of New Jersey’s prior decision in Peloso.  There, the Azze court noted as follows:

In Peloso…the Court determined that contractual limitation provisions should not be read literally, with the one-year period running uninterrupted from the date of the loss.  According to the Court, such a reading of these provisions would be unfair, because it would allow, in effect, a ticking away of the limitations period while the insurance company investigated the loss.  Peloso stated that:

The fair resolution…is to allow the period of limitation to run from the date of the casualty but to toll it from the time an insured gives notice until liability is formally declined.  In this manner, the literal language of the limitation is given effect; the insured is not penalized for the time consumed by the company while it [investigates the loss]; and the central idea of the limitation provision is preserved since an insured will have only 12 months to institute suit.

The Azze court noted that “from the passage above, it becomes evident that between the time the insured gives notice of loss and the time that the insurance company formally denies coverage, the statutory period is tolled,” or paused.

A case I recently handled provides a good example of how this is applied in practice.  As in the above-referenced cases, the homeowners’ policy at issue required any lawsuit to be initiated within one year of the date of loss.  The loss at issue occurred on May 20, 2022.  However, the homeowners did not report the loss until March 22, 2023 (306 days later).  Our client, the insurer, investigated the loss and issued a partial denial letter on May 1, 2023 (40 days after the loss was reported).  Thereafter, the homeowners did not file a lawsuit until July 26, 2023 (432 days after the date of loss).

Utilizing the above-referenced timeline, we argued that even after accounting for the tolling of the limitations period during the 40 days the insurer investigated the claim, it still took the homeowners 392 days to file suit (432 total days – 40 days to investigate and issue a denial = 392 days).  Because that 392-day period exceeded the 1-year limitations period set forth in the policy, we argued that the homeowners’ lawsuit was barred.  The Court agreed and granted our Motion for Summary Judgment, dismissing the case. 

The above example demonstrates that the proper calculation of a limitations period requires strict identification of the date of loss; the date the loss is reported; the date a clear, formal denial is issued; and the date a lawsuit is ultimately filed.  Under appropriate circumstances, a policy’s shortened limitations period can be used to defeat an untimely filed lawsuit at the outset, saving time and resources.

Court Rules That Commercial Landowner Has No Duty to Pre-treat Commercial Sidewalks Despite Actual or Constructive Knowledge of an Impending Storm

Defendant Hillside Estates, Inc. owned and managed Winding Woods Apartments in Sayreville, New Jersey.  Plaintiff, Hsi Rung Niu-Wang, was a tenant in the complex.  After plaintiff left her apartment to go to work, she walked towards her car and fell on black ice in the parking lot. The issue in Niu-Wang v. Hillside Estates, 2024 N.J. Super. Unpub. LEXIS 1436 (App. Div. July 3, 2024) was whether defendant apartment complex owner could be liable for plaintiff’s injuries because they failed to pre-treat the apartment complex’s walkways and parking lots in light of the knowledge of an impending storm.    

This apartment complex consisted of over 130 buildings with separate parking lots for most of the buildings. Plaintiff was a resident in one of the buildings. The day before her accident, the National Weather Service issued a winter weather advisory for Middlesex County, warning the residents about a freezing rain “with the potential to cause ice accumulation on sidewalks, roads, and bridges in affected areas.”

In the early morning hours of the day of her accident, freezing rain coated parts of the complex’s exposed walkways and parking lots with a thin layer of ice. Defendant apartment complex conceded that they did nothing to prepare the walkways and parking lots for the storm beforehand.  Furthermore, they did not take any steps to address the icy conditions of their walkways and parking lots after the freezing rain began.

At about 7:45 a.m. on the morning of her accident, as the freezing rain continued to fall, plaintiff left her apartment to go to work.  She walked towards her car with one foot on the grass and another on the walkway.  When she eventually stepped onto the parking lot, she slipped on a patch of black ice, falling and breaking her left ankle. There was no dispute that the black ice that caused plaintiff’s fall was formed that morning when the drizzle froze as it hit the ground.  There was also no dispute that plaintiff’s injury occurred during the freezing rainstorm.

The defendant apartment complex filed for a summary judgment dismissal, which was granted.  The trial court judge found that there was “no independent duty that should be imposed upon commercial landlords to anticipate weather events and plan against them.”  The trial court judge ruled that the issue was dealt with in the Pareja v. Princeton International Properties case where the NJ Supreme Court specifically rejected a duty to pre-treat when it adopted the ongoing storm rule.

Nevertheless, plaintiff appealed the trial court decision and contended that defendant owed her a duty of reasonable care to maintain the parking lot in a reasonably safe condition.  She argued that the trial court judge misapplied Pareja because “the ongoing storm rule does not preclude the imposition of liability based upon defendant’s lack of action prior to a storm.”  Plaintiff contends that the ongoing storm rule in Pareja did not address whether defendant had a duty to have salted or sanded the parking lot before the storm began.

The Appellate Division rejected this argument. It noted that the NJ Supreme Court, in adopting the ongoing storm rule, concluded that a commercial tenant had a duty to address snow and ice accumulations in the parking lots and pathways only after a reasonable time following a storm. Moreover, the Appellate Division noted that the Pareja court specifically rejected “the notion that all a landlord needed to do to avoid liability was spread salt.”

In the case within, the facts were not disputed, such as that there was no ice or precipitation present before the storm. On the contrary, it was conceded that the ice formed during the storm. 

The Appellate Division found that it was bound by the NJ Supreme Court’s Pareja precedent that “commercial landowners do not have the absolute duty, and the impossible burden, to keep sidewalks on the property free from snow or ice during an ongoing storm.”  More specifically, the Appellate Division noted that in adopting the ongoing storm rule, “the Supreme Court specifically declined to exclude liability where landowners had actual or constructive knowledge of an impending storm.”  Hence, the Court affirmed the trial court decision, dismissing the lawsuit.

NJ Supreme Court Rules that Former Trustee Cannot Recover Attorneys’ Fees and Costs Against Condominium Board Under an Ambiguous By-Law Indemnification Clause

By: Uyen Nguyen, Law Clerk
Edited by: Betsy G. Ramos, Esq.

The plaintiff, Patrick Boyle, a condominium owner and former trustee of the condominium association board, claimed that he was entitled to recover attorneys’ fees and costs against the defendant condominium association, reimbursing him for fees expended to successfully challenge his removal from the board. The issue in Boyle v. Huff, 257 N.J. 468 (2024) was whether an indemnification clause in a condominium association’s bylaws allowed plaintiff to recover attorneys’ fees and costs in his first-party claim against the association.

Plaintiff was the owner of approximately 750 units of the Ocean Club Condominium (OCF Condominium) in Atlantic City. He also served as a trustee of the Ocean Club Condominium Association (Association), a nonprofit organization managed by a Board of Trustees (Board). The Board, consisting of 7 condominium owners, oversees the OCF Condominium affairs and enforces the Association’s bylaws. On August 16, 2020, the Board expelled Boyle as a trustee for alleged acts of misconduct. In response, he filed a complaint and order to show cause against the Board, challenging the removal.

In his original claim, plaintiff sought a declaratory judgment, requesting the trial court to conclude that his removal was improper and reinstate his role as a trustee. The trial court granted the request and Boyle was reinstated as a trustee on December 11, 2020. Further, the trial court held that the Board violated the bylaws and N.J.A.C. 5:26-8.12(a) and (d) for failure to provide Boyle with adequate notice of the scheduled vote. Later, Boyle filed an amended complaint, adding a claim for indemnification for his attorney’s fees incurred in his lawsuit challenging his removal.

In April 2021, plaintiff filed a third amended complaint, bringing a derivative claim on behalf of the Association, alleging that the trustee defendants had breached their fiduciary duty. After being defeated in the Board’s election in August 2021, he moved for summary judgment, requesting injunctive and declaratory relief and partial summary judgment on the indemnification clause, seeking reimbursement of his attorney’s fees and costs.

The trial court held that the plain language of the bylaws entitled plaintiff to recover attorneys’ fees and costs. Consequently, the trial court awarded plaintiff legal fees and costs of $516,811.80 and required defendants to pay plaintiff in thirty days. Plaintiff moved to reconsider the award amount, and defendants moved for a stay of thirty-day payment requirement. Because the trial court did not schedule a hearing for the stay request before the thirty-day deadline, defendant submitted a motion for a stay of the deadline to the Appellate Division.

The Appellate Division granted defendants’ motion for a stay, and simultaneously, the trial court granted plaintiff’s motion for reconsideration. The trial court awarded the plaintiff a final judgment of $563,031.80. Defendants then filed a notice of appeal from the final judgment and summary judgment with the Appellate Division.

In an unpublished decision, the Appellate Division held that the indemnification provision covered the attorney’s fees and costs incurred by plaintiff in his first-party claims against the Association. However, the Appellate Division reversed the trial court’s award, finding that Plaintiff is not entitled to attorneys’ fees and costs incurred in pursuing his derivative action claim.

Defendants further appealed the decision to the NJ Supreme Court. The Court granted defendants’ petition for certification. To determine whether plaintiff could be indemnified for attorney’s fees and costs, the Court employed the canon of contract construction in Kieffer v. Best Buy to interpret the indemnification provision in the Association’s bylaws. In that case, the Supreme Court held that an ambiguous indemnification provision would be “strictly construed against the indemnitee.” Furthermore, because the issues in this case were concerned with attorney’s fees, the Court also relied on the American Rule. Under the American Rule, without statutory or judicial authority or express contractual language, parties are responsible for paying for their own attorney’s fees.

After reading the indemnification provision in the Association’s bylaws in its totality, the Court concluded that the indemnification provision only indemnified trustees for costs incurred when other unit owners initiate an action against them in their capacity as trustees in absence of any willful misconduct or bad faith actions on their parts. The Court held that the indemnification provision was ambiguous and must be construed against plaintiff. The Court referred to the American Rule, stating that absent express contractual language, there must be affirmative indicia of the intent to indemnify parties for their attorneys’ fees. Due to ambiguity in the indemnification clause, the Court refused to adopt the Appellate Division’s presumption that the indemnification clause allowed plaintiff to recover for attorneys’ fees incurred from his first-party party claims against the Association.

Accordingly, the Court held that the indemnification provision did not cover the attorney’s fees and costs incurred by plaintiff in his first-party claims against the Association, reversing the Appellate Division decision.

New Jersey Supreme Court Imposes Duty Upon Owner of Vacant Commercial Lot to Maintain the Public Sidewalk Abutting the Property

Plaintiff Alejandra Padilla allegedly tripped, fell, and suffered injuries on the sidewalk that abutted the vacant commercial lot in Camden owned by the defendants Young Il An and Myo Soon An.  This property had been purchased more than 25 years previously but no building was ever constructed.  The issue in Padilla v. Il An, 2024 N.J. LEXIS 575 (June 13, 2024) before the Supreme Court was whether the owner of a vacant commercial lot had a common law duty to maintain the abutting public sidewalk in reasonably good condition.

On September 11, 2019, plaintiff allegedly was injured while walking on the public sidewalk abutting the vacant commercial lot located on Westfield Avenue in Camden, New Jersey that was owned by the defendants.  According to her deposition, plaintiff suffered several injuries from the fall, including a broken foot and injured arm, and underwent surgery for her injuries.  She claims to suffer continuing symptoms, including migraines, pain, and memory loss.

The lot abutting this public sidewalk had been owned by the defendants 27 years before plaintiff’s fall.  According to defendant Young Il An, they bought the lot intending to construct a building there but due to economic conditions, they gave up that plan.  They also did not purchase liability insurance to cover the lot because, according to the defendant, insurance companies did not really want to insure it.  After the fall, the defendants did have the sidewalk abutting the subject lot repaired. 

Plaintiff sued defendants based upon their alleged negligence in failing to reasonably maintain the sidewalk abutting the subject lot.  At the trial court level, the defendants were successful in obtaining a summary judgment dismissal.  The trial court held that the defendants did not owe a duty of care to plaintiff, relying on the Appellate Division’s decision in Abraham v. Gupta.  In the Abraham case, the Appellate Division held that “the liability imposed on commercial property owners to reasonably maintain abutting sidewalks does not apply to sidewalks abutting vacant lots.”  The trial court’s rationale was that the defendants did not have a duty to maintain the sidewalk because it abutted a vacant lot that was not generating any income.

This summary judgment dismissal in the Padilla case was appealed to the Appellate Division, which affirmed the trial court’s judgment.  The Appellate Division ruled that Abraham remained good law as applied to the subject lot and declined to impose any duty upon the defendant vacant lot property owner to maintain the abutting sidewalk in a safe condition.

Plaintiff filed a petition for certification on the issue of whether owners of vacant commercial lots owe a duty of care to pedestrians to reasonably maintain the sidewalks abutting those lots.  The New Jersey Supreme Court granted the plaintiff’s petition, bringing this issue before the Supreme Court.

Plaintiff urged the Supreme Court to reverse the Appellate Division’s decision, contending that the Abraham case should be reversed.  Plaintiff contended that the Stewart v. 104 Wallace Street, Inc. case which imposed a duty of care upon commercial properties, as opposed to residential properties, to maintain the abutting public sidewalk, did not distinguish among types of commercial properties or consider whether those properties had active businesses on them.  Plaintiff further argued that imposing a duty of care would be fair because the subject lot was capable of generating income. 

The Supreme Court noted that in the four decades since the Stewart case, the New Jersey courts “have adhered to the rule imposing liability on commercial landowners.”  The issue in this case was whether that liability should be extended to commercial landowners of vacant lots.  The Court adopted a bright-line test, concluding that a duty should be imposed on owners of vacant commercial lots to maintain the abutting sidewalks in reasonably good condition.

The Court noted that there would be “something profoundly unfair about commercial property owners purchasing vacant lots and having no responsibility whatsoever from maintaining the area where the general public traverses.”   Hence, the Court ruled that all commercial landowners, including owners of vacant commercial lots “must maintain the public sidewalks abutting their property in reasonably good condition and can be held liable to pedestrians injured as a result of their negligent failure to do so.”

The Court explained that once “an individual or an entity purchases a lot in a commercially zoned area, meaning the only use to which that land can be put as commercial, the purchaser has begun a commercial endeavor and intends to make money.”  The Supreme Court rejected any type of profitability test to determine whether a duty should be imposed upon a commercial landowner, finding that profitability would be a difficult task to determine.  Thus, it found that a bright-line rule that commercial property owners owe a duty “is the most workable rule to protect the general public and ensure consistency in our courts.” 

Accordingly, the Supreme Court reversed the Appellate Division’s decision, which had affirmed the trial court’s order granting summary judgment to the defendant property owners and remanded the case back to the trial court for further proceedings.

Experienced Trucking Employee Permitted to Offer Lay Opinion on Standard of Care for Transporting a Sealed Container of Food-Grade Substance

Plaintiff Mecca & Sons Trucking Corp. sued J.B. Hunt Transport, Inc. over a shipment it claimed was damaged while in the possession of J.B. Hunt.  Because the seal on the food-grade shipment was broken, the customer had rejected the shipment.  The issue in Mecca & Sons Trucking Corp. v. J.B. Hunt Transp., Inc., 2024 N.J. Super. Unpub. LEXIS 990 (App. Div. May 30, 2024) was whether Mecca’s employee of 40 years could offer an opinion on the standard of care for transporting a sealed container of a food-grade substance across the country.

Mecca had been hired by ADM Logistics to transport and deliver 20 sacks of Fibersol, which is a soluble dietary fiber used in foods, drinks, and supplements, in a sealed container from New Jersey to Illinois.  The sacks of Fibersol were made of polyurethane and tied at the top so the Fibersol would not fall out.  Further, the Fibersol was packed inside a shipping container sealed with an exterior lock.  The seal has a specific lock to stop unauthorized personnel from accessing the load and attached to the seal is a number that corresponds to a pickup number.  Mecca’s employee testified that “seals are common in the industry and are not to be broken under any circumstances by another other than the receiver at the time of delivery, and if the seal is broken, the load was tampered with.”

When the defendant J.B. Hunt took possession of the shipment it received, it received a bill of lading and acknowledged receipt of the shipment at the point of origin in good order.  The bill of lading referenced the seal number.   J.B. Hunt transported the sealed container via train from New Jersey to Landers, Illinois where it arrived still sealed.  An inspection of the container in Landers showed that the seal remained intact.  The container remained in J.B. Hunt’s possession for 4-5 days in its yard in Landers before another entity who was not a party, F&S Logistics, attempted to deliver the shipment to its final destination.

When the container arrived at its final destination, the customer, Parke Toll, rejected the delivery because the container seal was broken, although none of the 20 sacks of Fibersol were examined or determined to have been opened or compromised, nor were their contents tested for damage or adulteration.  Although the bill of lading did not contain express language that the seal must be intact upon delivery, according to the customer, it was its policy, as an entity that deals with food products to attempt to always maintain a good seal record and reject shipments that arrive with a broken seal.  Therefore, the truck was resealed and returned to defendant’s truck yard.  The entire shipment of Fibersol was deemed unusable and eventually destroyed. 

Plaintiff Mecca filed a claim with J.B. Hunt’s cargo claims office “for product integrity compromised” due to the broken seal on the shipment which had precipitated a complete loss of the Fibersol.  J.B. Hunt denied the claim. 

Mecca filed this lawsuit against J.B. Hunt, claiming breach of contract and negligence for the cargo loss and damage.  At the trial court level, J.B. Hunt filed for a summary judgment and the contract claim was dismissed but the negligence claim was not dismissed. 

The trial court found that the negligence claim was based upon J.B. Hunt’s failure to deliver the Fibersol with an intact seal.  Further, the trial court noted that the record contained evidence indicating that if the seal was broken upon delivery, that goes against the industry standard. 

To establish the industry standard, plaintiff Mecca presented the testimony of its employee Andre Zielinski with 40 years’ experience in the industry to establish the requisite standard of care.  He testified that the seal was a lock and you place a specific lock on a load from stopping an unauthorized personnel to enter into the load.  The seal is common in the industry and, if it is broken, that means the load was tampered with.  At that point, the receiver can choose to either accept the load or refuse the load because it is not intact.  His opinion was based upon his many years in the shipping industry in which he worked as a traffic manager or variations of that title.

On the eve of trial, the defendant made a motion in limine to bar Zielinski’s deposition testimony on the standard of care because he had not been named as an expert witness.  The court granted that motion, ruling that he could not provide an opinion on the standard of care because plaintiff had failed to name him as an expert.  However, the court ruled that Zielinski could testify as a fact witness based on his personal observations about the seal.

The matter proceeded to a bench trial and the court did find that the seal was intact when that Fibersol arrived in Landers.  It further found that, while the container was in the defendant’s yard for 4-5 days, the seal had been broken by a J.B. Hunt driver prior to the receipt of the delivery to the customer. 

However, the court found that the negligence claim was predicated on a standard of care owed by J.B. Hunt as a transport company, which standard was too complex to be determined without expert testimony.  The trial court judge found that plaintiff was required to establish the appropriate standard of care through an expert. Because the plaintiff had failed to establish the standard of care owed by J.B. Hunt, the Court dismissed the complaint.

This appeal ensued.  Plaintiff argued that the trial court made a mistake in prohibiting its longtime employee, with his many years of experience in the shipping industry, from opining on the standard of care.  Further, plaintiff argued that the trial court made a mistake by determining expert proof was required to establish damages.  The Appellate Division agreed with both of these arguments. 

Initially, the Court noted as follows: “A trial court’s decision to admit or exclude evidence generally is entitled to deference absent a showing that the court abused its discretion such that the decision was so wide off the mark as to constitute a manifest in justice.”

Further, the Appellate Division stated that the courts “have required expert testimony to establish the standard of care in negligence actions or the underlying facts concern scientific, technical, or other specialized knowledge that will assist the trier of fact to understand the evidence or to determine a fact in issue.”  Under the lay opinion evidence rule, N.J.R.E. 701, “a party to an action with expertise gained through such personal experience may express an opinion of the sort ordinarily provided by an expert.”

The Appellate Division noted that Zielinski’s testimony was admitted by the court but that the trial court did not accept it to establish the appropriate standard of care.  The Court found that this decision was an error by the trial court.  Because Zielinski’s undisputed testimony that he had been in the shipping industry for about 40 years, had been an employee by a few companies, mostly major freight forwarding companies, where he worked as a traffic manager or the like, his testimony about the seal was based on facts known to him in his professional role as plaintiff’s employee.  Because of his extensive professional experience and personal knowledge about the facts of the case, the Appellate Division found that Zielinski was qualified to opine on the requisite standard of care on this negligence claim.  Further, the Court found that Zielinski was not required to be designated as an expert witness or to prepare a report to testify as to the standard of care.

Accordingly, the Appellate Division remanded the matter back to the trial court for reconsideration of the trial evidence consistent with its opinion.

Quarry Landowners Found to Be Immune From Liability for Injuries Motor Biker Suffered While on Their Land

By: Victoria M. Adeleke, Law Clerk
Edited by: Betsy G. Ramos, Esq.

Plaintiff Bryan Callahan sued defendants Tri-Borough Sand and Stone, Eureka Stone Quarry, Inc., and James D. Morrissey, Inc. for severe injuries suffered by Bryan when he struck a steel cable riding his dirt bike on the quarry grounds owned by defendants. The defendants successfully filed a motion for summary judgment, obtaining a dismissal of the lawsuit. The issue in Callahan v. Tri-Borough Sand and Stone, 2024 N.J. Super. LEXIS 42 (App. Div. May 20, 2024) was whether the defendants committed willful misconduct by not lowering the steel cable or were immune from liability under N.J.S.A. 39:3C-18. 

This statute provides immunity to property owners for accidents involving certain types of vehicles, including dirt bikes, unless the owner provides express consent for the vehicle to be operated on the property. But, there is an exception to this immunity for the willful or malicious creation of a hazardous condition by the property owner.

The day of the incident, a Sunday afternoon, while the quarry was closed, the plaintiff and his friend rode their dirt bikes on the defendants’ property for several hours before the plaintiff struck a steel cable elevated three feet from the ground. The plaintiff stated he was riding at about 45 mph when he struck the cable. The cable was part of the machinery used to dredge the quarry. The plaintiff claimed he had ridden his dirt bike on the defendants’ property many times before and always checked for hazards. Plaintiff admitted he never received express consent from defendants to ride on their property. However, plaintiff contended that other people, including his mother, had operated ATVs on the defendants’ property since the 1990s and were never told riding was prohibited.

The defendants filed a summary judgment motion, asserting they were immune from liability under N.J.S.A. 39:3C-18 because Bryan did not have permission to be on their land and their erecting of the cable was not willful or malicious. The plaintiff opposed the motion and sought leave to file an amended complaint to assert that the cable created a hazardous condition that constituted willful and wanton conduct and eroded their immunity. The trial court granted the defendants’ summary judgment motion, finding that the defendants did not erect the cable to deter or harm dirt bike riders but for a separate and distinct business purpose.

On appeal, due to the lack of case law under N.J.S.A. 39:3C-18, the Appellate Division applied a similar statute, the Landowner’s Liability Act (LLA), N.J.S.A. 2A:42A-1 to -10. The LLA is a similar act intended to shield liability for private owners of rural and semi-rural lands used by the public for sports and recreational activities. Under this statutory provision, like N.J.S.A. 39:3C-18, landowners “owe [] no duty to keep the premises safe for entry or use by others for sport and recreational activities.” N.J.S.A. 2A:42A-3(a). Additionally, landowners did not need to “give warning of any hazardous condition of the land or in connection with the use of any structure or by reason of any activity on such premises to persons entering for such purposes.” N.J.S.A. 2A:42A-3(a). But, the LLA does not limit liability “for willful or malicious failure to guard, or to warn against, a dangerous condition, use, structure or activity.” N.J.S.A. 2A:42A-4. 

In the LLA case of Krevics v. Ayars, the Law Division declined to extend immunity to the defendants because they acted willfully when they allowed the placement of a cable across a motorbike trail on their property they knew the public used. Conversely, the Appellate Division extended immunity to the defendants in Lauber v. Narbut because the hazard was directly related to their use of the property. Additionally, the record in Lauber v. Narbut lacked evidence that the defendants erected the hazard willfully or maliciously.  

Applying this law, in Callahan, the Appellate Division agreed with the trial court’s decision. The Appellate Division found that the record contained no evidence that the defendants acted maliciously or willfully in failing to lower the cable when the plaintiff did not have permission to enter. The plaintiff’s testimony that the public had been riding on the quarry since the 1990s was circumstantial. The evidence fell short of showing that defendants knew motor bikers were riding on the quarry and acted willfully or maliciously in erecting the cable.

Further, the court found that the cable served a separate and legitimate purpose. The defendants’ expert testified that the cable was essential to the dredging operation at the property. This expert stated that although there were no warning signs about the cable, only employees were allowed in the area and were made aware of the danger of the cable at training.

Thus, the Appellate Division affirmed the trial court decision, dismissing the suit and rendering the plaintiff’s motion to leave to file an amended complaint moot.

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