Statute of Limitations

Previously, I reported on an unpublished decision, Sutton v. Babilonia, in which the issue was whether the Second Omnibus COVID 19 Order extended plaintiff’s statute of limitations.  The Appellate Division ruled in that case that this order did not extend the statute of limitations but, rather, found that the time period of March 16, 2020 to May 10, 2020 was treated as a legal holiday.  Now, in the published Appellate Division decision of Barron v. Gersten, 2022 N.J. Super. LEXIS 88 (App. Div. June 13, 2022), the Appellate Division has ruled that the Supreme Court’s Fourth Omnibus Order, issued on June 11, 2020, did not toll the statute of limitations.

Plaintiff Juan Barron was in an automobile accident on June 21, 2018.  His two year statute of limitations to file a lawsuit expired on June 21, 2020.  However, he did not file his complaint until June 29, 2020, eight days after the expiration of the statute of limitations.  The defendants filed a motion to dismiss the complaint with prejudice for the plaintiff’s failure to commence the lawsuit on a timely basis.  The defendants argued that plaintiff filed the lawsuit after the two year statute of limitations and had not pleaded any exceptions or justifications that would extend or toll the statute of limitations.

In opposition, the plaintiff argued that the Supreme Court had tolled the statute of limitations in its June 11, 2020 Fourth Omnibus Order, which had the effect of adding to the statute of limitations 55 additional days to file a complaint.  The defendants, however, contended that this order did not expand or extend the statute of limitations but it had deemed March 16, 2020 through May 10, 2020 a holiday for purposes of calculating court filing deadlines.

The motion judge granted defendants’ motion and entered an order dismissing the complaint with prejudice.  The judge found that there was no dispute that the cause of action began to accrue on June 21, 2018 and that the plaintiff filed his complaint eight days after the two year statute of limitations expired.  Further, the motion judge held that the omnibus orders of the Supreme Court did not add time to statutes of limitations, as argued by the plaintiff, but, instead, deemed the time period of March 16 through May 10 as being the same as a legal holiday for purposes of computing any statute of limitations. 

The plaintiff appealed that decision to the Appellate Division.  The Court noted that the plaintiff did not assert equitable tolling applied to the late filing of his complaint, nor did he invoke the doctrine of substantial compliance.  Instead, he argued that he filed his complaint on a timely basis because the Supreme Court had tolled the statute of limitations in its June 11, 2020 Fourth Omnibus Order.

The plaintiff did not rely on any of the Court’s prior omnibus orders but relied solely on the Fourth Omnibus Order.  The plaintiff argued that the Court’s language used in its June 11, 2020 Fourth Omnibus Order ordered something different than it had ordered in its prior omnibus orders and with that order added 55 days to the two year statute of limitations.

The Appellate Division disagreed with this argument.  It found that the Supreme Court in its Fourth Omnibus Order gave no indication that it was amending or revising its prior omnibus orders as to the computation of time.  Rather, the Court clearly stated that it was affirming the provisions of its prior orders.  Therefore, the Appellate Division found that the Court was not ordering anything new or different than it had ordered in its prior omnibus orders.

Hence, the Appellate Division found that the time period ultimately determined to be March 16, 2020 through May 10, 2020 was deemed a legal holiday pursuant to the Court’s constitutional rule making authority.  Thus, the Appellate Division affirmed the motion judge’s decision, dismissing the complaint for failure to comply with the statute of limitations.

On November 21, 2018, plaintiff Michael Sutton was involved in a motor vehicle accident with defendant Kevin Babilonia.  Plaintiff suffered injuries and retained counsel just six days before the two year statute of limitations expired.  In the case of Sutton v. Babilonia, 2022 N.J. Super. Unpub. LEXIS 792 (App. Div. May 12, 2022), the issue was whether the second Omnibus COVID-19 Order (issued by the New Jersey Supreme Court) extended plaintiff’s statute of limitations by 56 days and/or whether plaintiff substantially complied with the two year statute of limitations.

According to the Certification filed by plaintiff’s attorney, just four days before the statute of limitations was said to expire, plaintiff hired him.  After obtaining information necessary to file the complaint, the attorney attempted to file the complaint electronically.  The attorney encountered a number of problems in getting the eCourts system to accept his filing documents but, following several attempts, the attorney believed he had successfully filed the complaint in the eCourts system.  When he did not receive a docket number, after an unusually long time, the plaintiff’s attorney called the “Help Desk” at eCourts.  The eCourts representative advised him that he would get back to him.

As it turned out, the eCourts system did not accept plaintiff’s complaint.  As a result, plaintiff’s complaint was not filed until more than one month after the statute of limitations expired.  The attorney finally was successful in filing plaintiff’s complaint on December 23, 2020.

Defendant Babilonia filed an Answer in February 2021 and then filed a Motion to Dismiss the Complaint as time-barred. 

Initially, the motion judge noted that the statute of limitations ran on November 21, 2020 but that the plaintiff’s complaint was not filed until December 23, 2020.  Despite the late filing, the judge concluded that the bar of the statute of limitations did not apply because the second Omnibus Order excluded the period of March 16, 2020 through May10, 2020.  Hence, he added 56 days beyond November 21, 2020 to the statute of limitations and, accordingly, concluded that the complaint was timely filed. 

The defendant thereafter filed a motion for reconsideration which the motion judge also denied.  The judge provided an alternate basis for denying defendant’s motion, in that plaintiff substantially complied with the statute of limitations “based upon the unsuccessful efforts of their attorney and the problems he encountered with electronic filing on eCourts.” 

The defendant then filed a motion with the Appellate Division for leave to appeal.  The defendant argued that the Supreme Court’s second Omnibus Order did not serve to add 56 days to all statutes of limitations for all actions.  Further, defendant argued that the record did not support the application of the doctrine of substantial compliance to excuse the filing of a complaint beyond the deadline for the statute of limitations. 

Upon appeal, the Appellate Division noted that on April 24, 2020 the New Jersey Supreme Court issued the second Omnibus Order to address the impact of the COVID-19 pandemic on the New Jersey Court system.  This order provided that the time period of March 16 through May 10, 2020 shall be deemed the same as a legal holiday for purposes of computing the statute of limitations for matters in all courts.

The motion judge interpreted this Order to add 56 days to plaintiff’s two year statute of limitations.  The Appellate Division disagreed with the motion court’s interpretation of the order. 

Under the court rule which addresses the computation of any period of time fixed by rule or court order, it excludes a Saturday, Sunday, or legal holiday in computing the time period.  Thus, this rule makes it clear that where the statute of limitations expires on a legal holiday, the party may act on the next day that is not a Saturday, Sunday, or legal holiday. 

Thus, the Appellate Division found that the second Omnibus Order converted every day from March 16 to May 10, 2020 into a legal holiday.  The court explained that, for example, “if a plaintiff’s statute of limitations ran on April 7, 2020, a plaintiff could satisfy the statute of limitations by filing a complaint on May 11, 2020.  However, in this case, plaintiff’s statute of limitations ran on November 22, 2020, well beyond the March 16 to May 10, 2020 period.”

The Appellate Division specifically noted that the second Omnibus Order did not extend the statute of limitations for a 56 day time period as to plaintiff’s claims.  Thus, the Court found that the motion judge incorrectly found that plaintiff timely filed his complaint pursuant to the second Omnibus Order.

Additionally, the Appellate Division rejected the application of the doctrine of substantial compliance to justify the late filing of the complaint.  The Court noted that prior case law set out the following elements of substantial compliance: “1) The lack of prejudice to the defending party; 2) a series of steps taken to comply with the statute involved; 3) a general compliance for the purpose of the statute; 4) a reasonable notice of petitioner’s claim; and 5) a reasonable explanation why there was not a strict compliance with the statute.”

The Appellate Division found that the plaintiff could not satisfy all five of these requirements to support the application of the doctrine of substantial compliance.  Plaintiff failed to show that there was any evidence that the defendant received, within the statutory period, “reasonable notice of plaintiff’s claim” or even notice of plaintiff’s intention to make a claim.  Further, there was no evidence that defendant’s insurance carrier ever received notice of the pendency of any suit or an intention to make a claim within the statutory period. 

Further, Court found that there was insufficient credible evidence to satisfy the last element as to a reasonable explanation why there was not strict compliance with the statute.  The attorney failed to justify why he waited for an unspecified period of time before finally achieving the successful eCourts filing on December 20, 2020.  He failed to set forth the reasons for not appreciating a lack of confirmation of filing on November 20, for the reasons for the delay and following up regarding the filing after he contacted the eCourts Help Desk. 

Thus, the Appellate Division found that the plaintiff had failed to satisfy both the fourth and fifth elements required to apply the doctrine of substantial compliance.  Hence, the Court found that the motion court misinterpreted the second Omnibus Order and incorrectly applied the doctrine of substantial compliance.  Therefore, the Appellate Division reversed the motion judge’s order and remanded the matter back to the trial court to enter an order dismissing plaintiff’s complaint with prejudice. 

In an interlocutory appeal, the Appellate Division considered the timeliness of plaintiff’s complaint for personal injuries arising from a June 2, 2019 motor vehicle accident. The trial court had denied the defendant’s motion to dismiss the complaint due to it not being timely filed.  In Richardson v. Miller-Murden, 2022 N.J. Super. Unpub. LEXIS 573 (App. Div. April 11, 2022), the defendant sought to overturn the trial court decision that the plaintiff’s complaint filed one week after the two year statute of limitations expired constituted substantial compliance with the statute of limitations, allowing equitable tolling of the plaintiff’s claim.

Under New Jersey Law, a complaint for a personal injury must be filed within two years of the accident pursuant to N.J.S.A. 2A:14-2.  Prior to the expiration of the two year statute of limitations, plaintiff’s counsel had sent a letter of representation to the defendant’s insurance carrier on August 23, 2019 and had e-mail communications with the carrier on March 24, 2021 and May 14, 2021.  The latter communication included a large demand package.  However, plaintiff did not file her lawsuit until June 9, 2021, seven days after the statute of limitations ran on June 2, 2021.

Plaintiff’s counsel provided several reasons for the late filing, primarily arguing that he was in substantial compliance because liability was not at issue and he was negotiating the damages claim with the insurance carrier.  Also, he argued that the carrier failed to alert him that the statute of limitations was about to run.  Plaintiff’s counsel also argued that he was out of the country unexpectedly and could not file the complaint by the statute of limitations deadline.  Finally, plaintiff’s counsel further argued that he was “lulled by the carrier’s settlement discussions into believing litigation would be unnecessary.” 

The defendant, however, argued that a notice of claim to an insurance company does not toll the statute of limitations, the plaintiff took no steps to obtain an agreement tolling the statute of limitations, electronic filing does not impede an attorney who is out of the country from timely filing a complaint and, further, the pleading eventually filed was a template, 2-page document which required much less time to prepare than the large demand package sent to the insurance carrier 26 days earlier.

The trial court found that there was “substantial compliance” with the statute of limitations because the carrier had notice of the claim and there was no prejudice to defendant, as the filing occurred only a week after the statute of limitations had expired. 

The Appellate Division disagreed with this ruling.  The Court found that the plaintiff had not demonstrated substantial compliance with the statute of limitations.  Further, the Appellate Division held that notice of a claim or mere negotiations cannot serve to toll statute of limitations.  The Court noted that “the carrier had no affirmative obligation to remind plaintiff the statute of limitations was about to expire.”

The Appellate Division found nothing in the record that would support a finding of substantial compliance with the statute of limitations.  The Court noted that the plaintiff had not demonstrated that the parties were engaged in protracted settlement negotiations or the carrier had requested any specific examination or information from plaintiff.  When plaintiff’s counsel sent the large demand package to the carrier 26 days before the statute of limitations expired, he made no mention of the statute or tolling it.

Further, the Court noted that there was no general compliance with this statute – no phone call, e-mail, or letter to the carrier notifying it that counsel was out of the country and would not be able to timely file the complaint.  There was no reasonable explanation why the action ultimately taken by counsel, having substitute counsel file the pleading in his absence, could not have been taken prior to the expiration of the deadline. Because the Appellate Division found that there were insufficient facts supporting equitable tolling in this matter, it reversed the trial court decision.  The Court remanded the matter to the trial court for entry of an order dismissing the complaint.

In New Jersey, personal injury actions must be filed within two years of the accrual of the action. What happens if the complaint is filed on the last day of the statute of limitations and the defendant wishes to file a counterclaim arising out of the same incident? Is the counterclaim barred? That was the question answered by the Appellate Division in Barley v. Barley, 2017 Unpub. LEXIS 2648 (App. Div. Oct. 20, 2017).

The plaintiff Veronica Barley and defendant Arnell Barley were stepsisters with, apparently, a less than harmonious family relationship. On April 5, 2013, they had a verbal dispute that turned into a physical altercation, during which time the plaintiff claimed that defendant scratched plaintiff’s arms and tried to run her over with a car, causing plaintiff to fall and suffer injuries. However, according to the defendant, plaintiff was the aggressor and caused her injuries that required medical treatment.

On April 6, 2015, plaintiff filed a complaint against defendant for injuries suffered in the April 5, 2013 incident. Because April 5, 2015 was a Sunday, the complaint was deemed timely filed. The defendant filed a responsive pleading, which included a counterclaim for injuries she suffered in the incident.

Plaintiff filed a motion to dismiss the counterclaim based upon the statute of limitations. That motion was granted because the judge concluded that the relation-back doctrine and equitable tolling did not apply to permit the untimely counterclaim. The defendant contended that the relation-back doctrine, contained in Rule 4:9-3 should be applied in this case but that argument was rejected by the trial court. This rule provides that: “whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading.”

On appeal, the defendant argued that based upon equity and fairness, the counterclaim should be permitted to relate back to the original filing date of the complaint so as not to be barred by the statute of limitations. The statute of limitations was designed to protect defendants from stale claims but, by barring a germane counterclaim, the defendant argued that ruling would undermine the principal consideration behind the fairness of statutes of limitations to defendants – especially when the complaint is filed on the last day of the statute of limitations.

The Appellate Division examined both the relation-back rule, as well as tolling principles to determine if this counterclaim should be barred by the statute of limitations. It cited to prior case law in finding that tolling principles should apply to a counterclaim filed in the first responsive pleading. This principle would preclude plaintiff from delaying the institution of an action until the statute has almost run on defendant’s counterclaim. If the claim and counterclaim arise from the same transaction, the plaintiff would not apt to be prejudiced by the tolling of the statute because presumably he has notice of the counterclaim at the time he commences his action.

The Appellate Division ruled that, because the plaintiff delayed filing her complaint until the last day of the statute of limitations, leaving the defendant with no time within which to file a counterclaim before the running of the statute, justice required that the defendant’s germane counterclaim be protected from the bar of the statute of limitations. The Court found that either the relation-back doctrine or the tolling rationale saved the counterclaim from dismissal. Hence, the Appellate Division reversed the trial court’s decision dismissing the counterclaim.

While the New Jersey statute of limitations for a contract claim, which would include a claim against an insurance policy, is 6 years, some insurance policies contain shorter limitation periods to file a lawsuit against the carrier. In the federal court case of Majagah v. AIG Property Casualty Insurance Agency, Inc., 2016 U.S. Dist. LEXIS 14705 (D.N.J. 2016), the court interpreted such a policy provision, in which the homeowner was required to bring any action against the carrier within one year after a loss occurred.

In Majagah, the pipes in the plaintiff’s home burst on or around May 11, 2013. The plaintiff submitted a claim for water damage under his homeowners policy about 3 months later. By letter of October 14, 2013, the defendant insurance carrier disclaimed coverage, advising that the claim was not covered “due to a lack of maintenance in maintaining heat to the property.”

Thereafter, plaintiff requested an additional review of the claim. However, the insurance company once again disclaimed coverage by letter of May 15, 2014.

On July 6, 2015, the plaintiff filed suit in the Superior Court of New Jersey, Law Division, Passaic County, seeking a declaratory judgment. The defendant insurance company removed the matter to federal court and then filed a motion to dismiss, based upon the limitation of action provision in its policy.

The AIG policy limited actions against it as follows:

You also agree to bring any action against us within one year after a loss occurs, but not until thirty (30) days after proof of loss has been filed and the amount of the loss has been determined.

It was the carrier’s position that this provision required the plaintiff to file his suit within one year of the date on which the defendant denied plaintiff’s water claim. Or, at the latest, the plaintiff was required to file within one year after plaintiff’s claim was denied the second time.

Plaintiff, however, argued that he timely filed his complaint. It was the plaintiff’s position that the limitation provision is ambiguous. He argued that this clause could reasonably be read to mean that he could not file suit until the repairs from the water damage were essentially complete since only then would “the amount of loss” be “determined.”

The District Court pointed out that New Jersey law does permit the parties to modify the limitation period for a lawsuit brought for violations of an insurance policy. Thus, the issue was whether plaintiff timely filed under the terms of this policy’s provision.

Here, both parties agreed that the policy required the plaintiff to file within one year of the date of loss. Further, both parties agreed that this one year period was tolled for a period of time. While the defendant contended it was tolled until, at the latest, the date of one year from the date of the second denial letter, the plaintiff disagreed with that assessment. The plaintiff argued that the tolling should continue until all of the repairs were completed and, hence, that would be when the “amount of the loss has been determined.”

The District Court rejected plaintiff’s argument. The Court did not find the limitation provision to be ambiguous. It found that the only reasonable interpretation is that the loss has been determined at the point when the insurance company has made an offer to settle or has denied the claim.

Plaintiff’s construction of the language would essentially defeat the purpose of the 12 month limitation provision. If the plaintiff delayed making the repairs to the property, it would give plaintiff complete control over when a loss has been “determined.”

Thus, the District Court found that the loss was “determined,” at the latest, on the date when the carrier denied the claim for the second time. At that time, the defendant carrier determined the amount of the loss to be $0. Thus, the plaintiff had until May 15, 2015 to file suit. Because the plaintiff did not file suit until July 6, 2015, the Court found that the claim was time- barred and dismissed the suit.

In the recent case of Gibbs v. Camillo, 2015 N.J. Super. Unpub. LEXIS 2810 (App. Div. Dec. 7, 2015), the Appellate Division was asked to overturn the jury verdict in the amount of $1 million, awarded as compensatory damages to the plaintiff for the two herniated discs she suffered from her automobile accident. The defendant argued that the compensatory damage award grossly exceeded what the evidence justified and that the trial court erred in denying her motion for a new trial or remittitur.

The jury found that the defendant Camillo was negligent in causing an automobile collision which left plaintiff Gibbs permanently injured. The plaintiff, age 46, was a front seat passenger in a vehicle when the defendant made a left hand turn in front of her vehicle, causing the accident.

As a result of the collision, the plaintiff suffered from both neck and back pain. While the neck pain resolved after about 7 months, the back pain persisted. She treated with a neurologist, pain management doctor, physical therapist, and her primary care physician. She received 2 epidural injections and, after a severe reaction to the second injection, the third planned injection was cancelled.

A discogram revealed that the plaintiff had 2 herniated discs in her back at L4-5 and L5-S1. Her doctor performed an endoscopic discectomy, in which portions of the disc were removed to relieve the pressure on the spinal nerve. She did obtain some relief from this surgery.

At the trial, the plaintiff testified that she still had spasms and back pain, which she described as constant and horrific. On a scale of 1 to 10, she stated that her pain was a 7. The pain interfered with her sleep and caused vertigo episodes.

Plaintiff testified about how the pain interfered with her quality of life. It impeded her ability to care for her young son, as well as performing simple housekeeping tasks and made her personal grooming more difficult. Her doctor testified that her injuries would never completely heal and that her back problems, which did not exist before the accident, were caused by her car accident.

The Appellate Division noted that the case law requires a presumption that a jury verdict is correct. The trial judge is not to interfere with the quantum of damages awarded by a jury unless “it is so disproportionate to the injury and resulting disability shown to shock his conscience and to convince him that to sustain the award would be manifestly unjust.”  The trial judge is to grant a new trial and set aside a jury award, if it “clearly and convincingly appears that there was a miscarriage of justice under the law.”

The defendant cited to the case of He v. Miller, 207 N.J. 230 (2011), in support of her argument to remit an award. In He, the plaintiff suffered two cervical herniated discs and the jury awarded $1 million. The judge remitted it to $200,000 and the Appellate Division upheld the remittitur. Ironically, the plaintiff refused to accept the remitted amount, the case was retried, and upon retrial, the new award was $500,000, which was affirmed upon appeal.

The Appellate Division held that the He case did not establish a benchmark for automobile accident cases involving herniated discs and chronic pain. The trial judge in the Gibb case expressed no doubts as to the authenticity of the plaintiff’s complaints. As an experienced trial attorney, he did not find the amount of the award shocking. He considered the plaintiff’s life expectancy and did not find the award excessive in light of the plaintiff’s back pain and vertigo and how her injuries affected her quality of life.

The Appellate Division deferred to the trial court’s “feel of the case” and concluded that the award was not so disproportionate to plaintiff’s injuries that it clearly and convincingly constituted a miscarriage of justice. Thus, the court found no basis to award a new trial due to the $1 million jury verdict.

In New Jersey, claimants must file a lawsuit for any personal injuries suffered within 2 years of the date of the accident or their claim will be barred based upon the statute of limitations. Plaintiff Francis Suero was injured on January 13, 2010 when he was driving his vehicle and it was rear-ended by defendant Jennifer Gable-Schmidt, who was insured by State Farm Insurance Co. However, plaintiff failed to file suit until February 3, 2012, more than 2 years after the accident. The issue in Suero v. Gable-Schmidt, 2015 N.J. Super. Unpub. LEXIS 2703 (App. Div. November 24, 2015) was whether the plaintiff’s claim was barred due to the statute of limitations or whether the statute of limitations was tolled based upon State Farm’s conduct.

Two weeks after the accident, the plaintiff’s counsel sent a letter of representation to State Farm. He sent the police report and advised State Farm that he would send all medicals and bills as soon as the name of the adjustor became available. On February 15, 2010, State Farm acknowledged receipt and, in a separate letter, State Farm requested that plaintiff’s counsel supply a list of all treating medical providers, some information regarding plaintiff’s insurance policy and a completed medical authorization form. On February 22, 2010, plaintiff’s counsel sent a completed medical authorization but supplied no additional information or otherwise corresponded with State Farm.

Plaintiff’s counsel claimed that he did not believe he needed to send any further information to State Farm because in his extensive experience in negotiating claims with State Farm, State Farm would use the medical authorization to obtain whatever medical records were needed. Further, he certified that he spoke with State Farm’s adjustor some time in the fall of 2011 and “reasonably believed” State Farm was still investigating the claim. After the statute of limitations expired, the plaintiff’s attorney called State Farm to find out why he did not get an offer and was told for the first time that State Farm would not make any payment on the claim.

The defendant moved to dismiss the complaint based upon the statute of limitations. Initially, the motion was denied without prejudice. The motion was refiled seven months later and, at that time, was again denied.

On appeal, the plaintiff argued that State Farm should be equitably estopped from asserting the statute of limitations as a defense. However, the defendant argued that State Farm’s correspondence and conduct did not lull plaintiff into believing the case would be settled so as to estop defendant from asserting the statute of limitation as a defense. Further, defendant pointed to the lack of information provided to State Farm in the 2 year period, except for the police report and an executed medical authorization.

The Appellate Division noted that, as set forth in prior case law, the doctrine of equitable tolling of limitations has been applied only in narrowly defined circumstances. Although an insurer may not lull the other party into believing that he has time to file, its only duty is to act in good faith. In examining State Farm’s conduct here, the court found that State Farm’s words and conduct cannot reasonably be seen as having “lulled” plaintiff’s counsel into believing that he was relieved from filing a timely complaint.  State Farm sent two letters and received virtually none of the information it requested. Plaintiff’s counsel’s subjective belief that his experience in settling claims with State Farm relieved him of any further responsibility was not sufficient to estop the defendant from asserting the statute of limitations as a defense.

Further, the absence of prejudice to the defendant is not, by itself, a sufficient reason to estop defendant from prevailing on this defense. Hence, the Appellate Division reversed the trial court and dismissed the complaint.