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Be Warned About NJ WARN

Employers already know that, anytime a mass layoff or plant closing is contemplated, there are significant federal and New Jersey state law notice requirements. This past January, 2020, Governor Murphy signed into law a radical legislative amendment to the New Jersey WARN Law (known officially as the “Millville Dallas Airmotive Plant Job Loss Notification Act”) that makes it the most costly and burdensome reduction in force law soon to be in force in the United States.

Beginning on July 19, 2020, the following drastic changes will be effective under the newly revised New Jersey WARN Law.

  1. The New Jersey WARN Law will be triggered by a termination of 50 or more employees, regardless of employee tenure or hours worked, and with the aggregation of all terminations across the state, no matter where in the state the termination occurred.  Under this change, no longer will employers be able to ignore part-time employees in calculating the threshold number for coverage, and coverage is no longer limited by looking at only a single site of employment. The amendments also eliminate the previous requirement under the statute that a mass layoff would only occur if at least 33 percent of a workforce was affected.
  2. The required notice period under the NJ WARN Law will be 90, and not the current 60 days.
  3. Severance Pay will be automatic! This is the most radical of the changes made to the New Jersey WARN Law.  Under the current law, severance pay was only required if the employer failed to provide the necessary 60 days’ notice. When the revised New Jersey WARN Law is triggered, employers must pay employees one week of severance for each year of employment!  Where the employer has failed to meet the Law’s notice requirements, the severance obligation requires an additional payment of four more weeks on top of what is already statutorily required.
  4. Under the revised Law, the above required severance payments cannot be waived without state or court approval. So, any settlement of contested New Jersey WARN Law claims will need to receive either Court or state agency approval.
  5. The coverage of the New Jersey WARN Law has been expanded to include all employers with at least 100 employees, regardless of employee tenure or number of hours worked. Previously, employees with either less than six months of service, or who worked less than 20 hours per week, could be excluded from this threshold calculation.  No more. The part of the Law that requires that an employer be in operation for at least three years thankfully remains unchanged.

In light of these sweeping changes to the NJ WARN Law, employers will now need to proceed with even greater caution when contemplating a possible plant closing, mass layoff, or even just a significant layoff. Employers must be aware of and adhere to these new requirements, especially those involving the timing for issuing the required notice and the making of required severance payments. Special precautions must also be followed when seeking a release of claims in connection with any type of covered reduction in force. When the New Jersey WARN Law is applicable, the employer will now have to pay employees more than just the statutorily required amount of severance to obtain an effective release of claim. This is because, to obtain a legally effective release, the employee must be given something by the employer beyond what an employee is already legally entitled to receive.

So, you have now been warned about the amended New Jersey WARN law! Please take these precautionary words to heart!

 

Ralph R. Smith, 3rd is Co-Chair of the Employment and Labor Practice Group. He practices in employment litigation and preventative employment practices, including counseling employers on the creation of employment policies, non-compete and trade secret agreements, and training employers to avoid employment-related litigation. He represents both companies and individuals in related complex commercial litigation before federal states courts and administrative agencies in labor and employment cases including race, gender, age, national origin, disability and workplace harassment and discrimination matters, wage-and-hour disputes, restrictive covenants, grievances, arbitration, drug testing, and employment related contract issues.

Have you reached or are you approaching 70-1/2 years?

When you reach the age of 70-1/2, you are required to begin taking retirement plan distributions.  Failure to do so could subject you to a surcharge by the IRS.  This distribution must be taken by April 1 of the year following the attainment of age 70-1/2. 

These payments are called required minimum distributions (RMDs) and are normally made by the end of the year.  However, the year in which you reach 70-1/2 has a special rule that allows extra time to receive the first distribution.  This special rule is only effective for first-time distributions.  Subsequent distributions must be made by December 31 of each year.  And, yes, this could effectively result in receiving two RMDs in the same year. 

The required distribution rules apply to owners of traditional, Simplified Employee Pension (SEP) and Savings Incentive Match Plans for Employees (SIMPLE) IRAs but not Roth IRAs while the original owner is alive. They also apply to participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans.

An IRA trustee must either report the amount of the RMD to the IRA owner or offer to calculate it for the owner. Often, the trustee shows the RMD amount on Form 5498 in Box 12b. For a 2018 RMD, this amount is on the 2017 Form 5498 normally issued to the owner during January 2018.

Though the April 1 deadline is mandatory for all owners of traditional IRAs and most participants in workplace retirement plans, some people with workplace plans can wait longer to receive their RMD. Employees who are still working usually can, if their plan allows, wait until April 1 of the year after they retire to start receiving these distributions. If you reach 70-1/2 and are still employed, you should check with your plan administrator for guidance. 

Many answers to questions about RMDs can be found in a special frequently asked questions section at IRS.gov.

Appellate Court Rejects Trucker’s Injury While Dressing After Showering During Trip From California to New Jersey

Samuel Kamenette drove over-the-road trucks for Sangillo & Sons.  He was injured on October 9, 2015  in the State of Wyoming. He was driving a load from California to New Jersey.  He slept the night before in his truck, and in the morning he drove for an hour to a Flying J, part of a Pilot Flying J nationwide chain.  He purchased over 50 gallons of fuel, parked the truck, went into the Flying J, and he took a shower.  He then dressed in the shower area preparing to renew his drive.  He sat on a bench to put on his boots, but the bench collapsed causing injuries.  He alerted his employer of the injury and then drove to a clinic for treatment, obtaining pain killers, before driving back to New Jersey.

Kamenette brought a workers’ compensation claim and also settled with Pilot Flying J for $40,000 in a third party action.  He filed a motion for medical and temporary disability benefits in the workers’ compensation case, and the Judge of Compensation ruled in his favor, finding that the accident arose from the employment.  Sangillo and Sons appealed.

At trial Kamenette testified that he needed to take the shower partly because it is an appearance issue.  He represents his company.  He also said that a shower keeps him more alert. The Appellate Division rejected both rationales.  It said that Kamenetti did not testify that he had been drowsy and said that since petitioner had no deliveries to make, the appearance argument also failed.   The Appellate Division felt that his showering was therefore “indistinguishable from the showering of countless on-premises employees in their homes every day before going to work.”   The Court said:

It would not be consonant with the language or intent of the 1979 amendments to extend workers’ compensation to cover employees engaging in pre-work activities that will make them more refreshed, efficient, alert, fragrant, or attractive during the work day, such as bathing, eating breakfast, drinking coffee, exercising, or dressing.  Treating these pre-work activities as covered would contravene the requirement that the employee “engaged in the direct performance of duties assigned or directed by the employer.”

The Appellate Division further commented as follows: “Thus, had Kamenetti stayed in a motel or truck stop with a shower, showered there, and injured himself while dressing, he would be equally ineligible for compensation as an on-premises employee who slept, showered, and dressed at home.  However, he chose to stay at a ‘mom and pop’ truck stop that had no showers, and therefore had to go elsewhere to shower. The choice does not change the result.”

This statement in the preceding paragraph seems to run counter to Johnson-Tucker v. Plainfield Board of Education, No. A-5078-06T3 (App. Div. July 1, 2008).  There a petitioner attended a Board approved seminar in Georgia.  She was unable to get a room in the hotel where the seminar was located.  Before the seminar began, she went to breakfast in her hotel, and the chair she was sitting in collapsed causing injury.  The Appellate Division held that this injury was in fact work related, embracing the theory that injuries in the hotel would be compensable because getting a meal was necessary, even if the petitioner was not at the hotel where the seminar took place yet.

The Appellate Division also rejected the argument that Mr. Kamenetti’s injury was a minor deviation from employment.  The Court distinguished one case involving an off-premises compensable coffee break. In that case the injured employee was a foreman who went to the union hall to discuss a new job with a union instructor.  Since the instructor was busy, the foreman took his break and drove five miles to get a cup of coffee as there was no coffee in the union hall.  He was injured in a car accident on the way.  The Appellate Division found that case compensable on the theory that off-premises employees are entitled to the same coffee breaks as on-premises employees, but it felt it had no application to this set of facts.

In the end, the Appellate Division found that the petitioner’s shower was a “personal activity,” not a duty.  An attorney for COSH filed an amicus curiae brief, arguing that the petitioner’s shower was covered under the “Personal Comfort Doctrine,” which New Jersey recognizes.  Certain activities like going to a restroom, going on a coffee break or smoking a cigarette have historically been accepted in most states under the Comfort Doctrine.  Counsel argued that the need to take a shower for someone who drives across the country fits squarely within this doctrine.  The Appellate Division would not entertain this interesting argument because the issue had not been raised at the Division of Workers’ Compensation level.

This case is not reported but it underscores how challenging it is to differentiate what is or is not a minor deviation.  The five-mile drive for a cup of coffee was considered a minor deviation, but the Appellate Division in this case felt that the shower was purely personal and therefore a major deviation.  The case can be found at Kamenetti v. Sangillo & Sons, A-0394-16T3 (App. Div. August 8, 2018).

The post Appellate Court Rejects Trucker’s Injury While Dressing After Showering During Trip From California to New Jersey appeared first on NJ Workers' Comp Blog.

What Summer HR Projects Do You Have Planned?

Now that the warm weather is upon us and things are “slowing down” due to vacations, it’s a good time to sit back with a cool drink and carefully evaluate whether our HR practices are “up to snuff.”  If the answer to any of the following questions is “no,” your company may be risking costly complaints, investigations, litigation, and maybe even fines and penalties.

Are we implementing the recently-enacted New Jersey “Equal Pay Act?” Beginning July 1st, New Jersey’s Law Against Discrimination (“LAD”) will prohibit “pay gaps” among all protected classes covered under the law. While this law is generally intended to “fix” gaps in gender pay, the new law makes it illegal for employers to treat those in protected classes differently in terms of compensation including among others, those classes based on race, creed, color, national origin, nationality, age, pregnancy, and gender identity or expression.  You should carefully review your pay structures and seek professional advice on this new law to ensure that your company does not have unjustifiable (which is extremely fact-sensitive) discrepancies in pay among those in protected classes who perform the same work.

Are we prepared to implement the new Paid Sick Leave Law? Beginning October 29th, employers of all sizes are required to provide up to 40 hours of paid sick leave per year (one hour of sick leave for every 30 hours they work) to most employees. The allowed use of these sick days for the conditions of employees, family members, and others is very broad.  Also, “stay tuned” for new State regulations addressing implementation and enforcement of this law.

Have we recently updated our Employee Handbook/Policy Manual? An updated and accurate handbook/manual is a critical component of a company’s “HR infrastructure.” It not only keeps employees up to date on what your policies are, but it protects your company if it’s updated regularly, makes your policies clear (e.g., workplace violence will result in immediate termination) and includes the appropriate “at-will” employment disclaimer. Don’t delay this project another day!

Do we know how to address our employees’ use of medical marijuana?  In the first instance, make sure your drug and alcohol policy is updated and clear about what your policies are. While an employee’s use of prescribed medical marijuana may be a violation of your policies, employers are advised to proceed with caution in addressing these issues. The law in this area is evolving and may implicate other issues (like protection under the Americans with Disabilities Act).

Are we really sure that our “salaried” employees are not eligible for overtime? Federal and State laws are very strict about who is and who is not entitled to overtime.  The Days of Summer are an opportune time to conduct an FLSA (Fair Labor Standards Act) review of your so-called “salaried” positions to ensure that your employees (even if you call them “managers” or “confidential”) are appropriately classified and that you won’t be subject to back overtime pay, taxes, and penalties.

Do we conduct regular and accurate employee evaluations?  Performance evaluations are perhaps a supervisor’s least favorite chore. However, when done regularly and accurately, they serve as a valuable tool in rewarding performance and, as important, in addressing disciplinary measures. In employment termination litigation, the first question usually asked is, “Let’s see his/her performance evaluations!”  This is an HR issue that can’t be ignored!

Do we fully understand how to manage the FMLA and the ADA?  Dealing with the Family and Medical Leave Act and the Americans with Disabilities Act are serious challenges for employers. Is my employee entitled to FMLA? Can she take leave for one or two days every week? What type of accommodation do I have to make if he has a disability? Do I have to create a new job for him? These and other factual and legal questions puzzle employers each and every day.

Have we conducted harassment and supervisory training this year?  No matter how hard we try, employees are going to continue to “push the envelope” with inappropriate behavior in the workplace.  To protect ourselves, we need to ensure that our employees are trained on harassment and discrimination and that our supervisors are not only trained as well, but know precisely how to address discovered or reported harassment. As a company, this may be your “first line of defense” in a harassment or discrimination lawsuit.

What’s the take-a-way??  The best way to avoid costly and burdensome lawsuits, complaints, and even Federal or State investigations, fines, and penalties is to be the company that doesn’t have a “catch me if you can” attitude. Rather, be the company that takes the time to “look in the mirror” and ask for professional help to ensure that it has a culture of compliance to avoid workplace violations.

Court Interprets Two Competing “Other Insurance” Clauses to Determine Primacy of Coverages

Often there are two different insurance policies that may cover a defendant for a claim. To determine which policy is primary and which policy is excess or if the policies would be co-primary, the court must review and interpret the “other insurance” clause in both policies. In Foerster v. Meckel Enters., LLC, 2016 N.J. Super. Unpub. LEXIS 2238 (App. Div. Oct. 12, 2016), the court faced this issue in determining the primacy of coverages between 2 different policies.

The underlying claim involved a slip and fall on water by the plaintiff Glenn Foerster on the bathroom floor of the commercial space of Robert S. Foerster Optician, Inc. (RFO) rented from defendants Meckel Enterprises, LLC and Ann Arbor Associates Inc. (collectively “Meckel”). Plaintiff sued Meckel, “alleging that he informed Meckel that water was leaking from the ceiling in the bathroom, and Meckel’s failure to properly repair the leak created an unreasonably dangerous condition.”

The lease between RFO and Meckel required RFO as the tenant to purchase general liability insurance in an amount not less than $1 million and to name Meckel as an additional insured. RFO complied with these requirements by buying an insurance policy with the third party defendant Penn National Insurance (“Penn National”) and listing Meckel as an additional insured.

Meckel, however, had its own insurance policy with Citizens Insurance Company of America (“Citizens”). Both the Penn National and the Citizens policies contained “Other Insurance” provisions which addressed coverage for a claim if other insurance coverage was available for the same loss.

On the trial court level, Meckel moved for summary judgment, arguing that the Citizens policy was excess over the Penn National policy. Penn National cross-moved for summary judgment, arguing that its excess other insurance clause invalidated Citizens pro-rata other insurance clause. The trial court agreed with Penn National and granted its cross-motion for summary judgment. This appeal ensued in which Meckel contended that the trial court was mistaken in its coverage ruling.

The Appellate Division noted that both parties were in agreement that Meckel’s claim for liability coverage was covered under both the Penn National and the Citizens policies. Under well settled New Jersey law, when 2 policies providing coverage both have a clause that declares the policy to be excess over another, then both are “mutually repugnant” and are disregarded. The end result would be that the policies would become co-primary policies, with each sharing in the liability equally until the limit of the smaller policy is exhausted.

However, a further inquiry needs to be made to determine whether the “other insurance” clause contains language as to the contribution each party should make. That language could affect the coverage determination.

There are generally 3 types of “other insurance clauses”: pro rata, excess, and escape clauses. The “other insurance” clause of the Citizens policy calls for a pro rata allocation of insurance obligations when there is other primary insurance available for the claim. The policy also defines the method of sharing as a pro rata share based upon a comparison of the respective policy limits of the two policies.

On the other hand, the Penn National policy does not establish a sharing of obligations. Rather, it states that its policy would be excess insurance should another primary policy be available to cover the loss. That provision makes the Penn National policy “excess” insurance over another primary policy.

Because the Citizens policy contained language permitting pro rata sharing and the Penn National policy contained excess language only, the Appellate Division ruled that the Penn National policy was excess to the Citizens policy. The Penn National policy would only come into effect when the Citizens policy limits were exhausted. Hence, the Appellate Division upheld the trial court’s grant of summary judgment in favor of Penn National.

Court Upholds City’s Termination of Worker with Lupus Based on Doctor’s Note Prohibiting Outdoor Work

Jimmy Mathis worked as a laborer for the City of Red Bank in Tennessee. Eventually he rose to the position of Assistant to the Director of Public Works. Initially he would inspect for building code violations, handle animal control problems, oversee street projects and handle citizen requests. A written job description described his duties, which also included exposure to temperature extremes during outdoor work.

In 2011 a new Public Works Director required of Mathis more code inspections, which meant more outdoors work. The level of outdoor work continued to rise in 2012 when Mathis’s desk was moved from City Hall to the Public Works Garage. He was no longer responsible for much of his former administrative work, and those duties moved to other employees.

By 2012 Mathis began to have skin problems and saw a dermatologist, who diagnosed Lupus. He took FMLA leave and his dermatologist, Dr. Susong, noted that Mathis needed to be indoors. Mathis next sought an indefinite leave, which lasted six months. During that time, the Department continued to restructure its workflow. A code enforcement officer was hired, and the position of Assistant to the Public Works Director was eliminated.

Preparing to return to work from leave, Mathis met with the Public Works Director and City Manager. There was a dispute whether they told Mathis his job would mainly involve code work. The reality is that his job continued to evolve into outdoor work. Mathis did not request an accommodation at this juncture. He bought protective clothing and was permitted to wear ultraviolet light protective shirts. He paid for them himself, but the City eventually bought him other such shirts.

By 2013 it was clear that the protective clothing was not reducing Mathis’s symptoms. He requested a new FMLA leave. His job at this point was described mainly as mowing grass and weeding. Dr. Susong wrote a certification stating that Mathis must avoid sunlight. Asked to clarify whether Mathis could not work outside, Dr. Susong said emphatically that he must work indoors.

The City met with Mathis, who inquired about possible indoor work but he was advised that he was not qualified for the two open jobs, lacking computer skills and a CDL. On account of the strongly worded note from Dr. Susong and the absence of any vacant positions, the City terminated Mathis’s employment. Mathis sued under the ADA alleging failure to make reasonable accommodation.

The City prevailed at the federal court level, and Mathis appealed to the Sixth Circuit Court of Appeals. The Appeals Court observed that Mathis must show that he can perform the essential functions of his job with or without accommodation, but Mathis failed to do that. Mathis said he wanted to be returned to his pre-2011 work, but even that job required some outdoor work. There were days even in his pre-2011 job when Mathis would be outside four to five hours. The Court said that Dr. Susong’s note disqualified Mathis from any outdoor work.

During the course of litigation, Mathis changed his position and argued that he could handle limited sun exposure with protective clothing. After the City’s motion for summary judgment was filed, Dr. Susong watered down his initial certification which prohibited any outdoor work. The Court said that these after-the-fact changes in Mathis’s position were irrelevant. The City had the right to base its decision on the note that Dr. Susong prepared in 2013 prohibiting any outdoor work. The Court commented that essential functions of a job can and often do change. The changes in this case occurred well before Mathis’s diagnosis of lupus.

The Court concluded, “Mathis’s reasonable accommodation claim fails most plainly because the need for an accommodation was not apparent until mid-2013, when his limitations would not have allowed him to perform his desired job’s essential functions. But it also appears that no accommodation would have been available even if Mathis had requested one in early 2012, because the job he desired no longer existed.”

Mathis also argued that the City failed to engage in the interactive process. But the Court responded that before that process commences, the worker must inform the employer that a reasonable accommodation is needed. 29 C.F.R. Pt. 1630, App. In the end, the Court explained that the City really had no options once Dr. Susong wrote his note saying that Mathis could not have any outdoor exposure because Mathis was not qualified for any available indoor job.

This case points out the importance of having a good job description and the fact that jobs can and do change, adding and sometimes subtracting essential functions. The case also demonstrates the power that doctors have when they prepare medical certifications regarding restrictions at work. In this case Dr. Susong’s restriction against any outdoor work boxed the plaintiff out of his job. A late attempt by the doctor to amend his opinion during litigation but after the job termination was properly rejected by the court. What matters is what information the employer has at the time it makes its employment decision, and in this case, the doctor’s report was crystal clear in stating that Mathis could have no outdoor exposure. This case can be found at Mathis v. City of Red Bank, 2016 U.S. App. LEXIS 19423 (6th Cir. 2016).

Physician Assistants’ Enhanced Role in New Jersey requires Proper Supervision

Earlier this year, the State of New Jersey enacted amendments to the statutes governing the scope of practice of physician assistants (“PA”). Although there are likely State Board of Medical Examiner regulations forthcoming to provide further clarity on PA practice, the new statutes provide more autonomy to PA’s, which can be a both a boon and a detriment to physicians.

For example, under the new statute, PA’s can:

  1. Provide services delegated to them by the physician in addition to those listed in the regulations, appropriate to the PA’s level of experience and competence.
  2. Prescribe medications without countersignature by a physician. The supervising physician’s name no longer appears on the PA’s prescription blanks.
  3. Receive drug samples and distribute those to patients.

The increased role of PA’s requires a heightened level of communication between the physician and the PA.  The physician must fully understand the experience and competence of his or her PA and establish a routine for frequent evaluation of the PA’s performance and patient files.  In the event of a claim for medical malpractice against the PA, a claim for negligent supervision will most likely be filed against the physician also.  Under the statute, failure to properly supervise can lead to professional discipline against the physician, as well as the PA.

To learn more about this very important subject, please attend our “Hot Topics in Healthcare Law” 2016 Breakfast Series entitled “Working with Non-Physician Practitioners.”

OSHA Attacks Employer Post-Accident Drug Testing Policies

Many employers have a policy of mandatory post-injury drug testing.  Those policies must now be reconsidered and largely jettisoned. The underpinning of the new OSHA policy on drug testing is the belief that blanket post-injury drug testing policies deter proper reporting of injuries.  On May 12, 2016 OSHA published new final rules against discrimination and injury and illness reporting.  The new rule became effective August 10, 2016.  The rule itself does not mention blanket drug testing policies, but the Comments to the rule make clear OSHA’s position.

The way OSHA gets to drug testing is through Section 1904.35(b)(1)(iv) which prohibits an employer from discharging or discriminating against an employee for reporting a work-related injury or illness.  While the evidence seems threadbare that employers retaliate against employees who report work injuries by requiring post-accident drug testing, employers have to deal with the new rule, like it or not.

Here is the new standard contained in the Comments to the rule.  “To strike the appropriate balance here, drug testing policies should limit post-incident testing to situations in which employee drug use is likely to have contributed to the incident, and for which the drug test can accurately identify impairment caused by drug use.”  Employers rightly question how they will develop the expertise to know when drugs are contributing to an accident. The Comments suggest that it would not be reasonable to drug test an employee who reports a bee sting, a repetitive strain injury, or an injury caused by a lack of machine guarding or a machine or tool malfunction.  That sort of testing, in the view of OSHA, “is likely only to deter reporting without contributing to the employer’s understanding of why the injury occurred, or in any other way contributing to workplace safety.”

Another harm that OSHA sees in drug testing is that it can be perceived as punitive or embarrassing to the employee and therefore likely to deter injury reporting.  OSHA states that “this final rule does not ban drug testing of employees.  However, the final rule does prohibit employers from using drug testing (or the threat of drug testing) as a form of adverse action against employees who report injuries or illnesses.”

So how can an employer perform post-incident drug testing while at the same time convincing OSHA that it is not doing this to deter reporting of injuries or illnesses?  OSHA says that drug testing which complies with a requirement of state or federal law or regulation is fine because the motive of the employer will be considered non-retaliatory. But those examples of drug testing do not address the issues most employers face.

OSHA adds the following opaque comment: “Employers need not specifically suspect drug use before testing, but there should be a reasonable possibility that drug use by the reporting employee was a contributing factor to the reported injury or illness in order for an employer to require drug testing.”  What “reasonable possibility” means is anyone’s guess at this point in time.  Questions abound on how an employer will be able to acquire in the short window of time following an accident sufficient information to make a decision to drug test under the “reasonable possibility” standard?  A huge percentage of workers’ compensation accidents are unwitnessed, and drug use is widespread in our society generally.  One can argue that there is always a reasonable possibility that drugs may be involved in work injuries, but clearly OSHA is looking for something beyond broad generalities like this.  The Comments provide no examples of what OSHA is looking for.  The likely effect of this rule will be to deter employers from drug testing after work injuries, and ultimately this will make workplaces and workers less safe.

Employer groups will surely challenge this rule in federal court.  In the interim, employers should know that maximum penalties are now $12,000 per violation and over $120,000 for repeat violations. Given the new rule is now in effect, we recommend that employers, if they have not already done so, take a fresh look at their drug testing policies.

Plaintiff Barred from Collecting PIP Benefits Due to the Ownership of Uninsured Vehicle

Plaintiff, Vidal Padilla, was involved in a 2014 accident while operating his nephew’s car. He submitted a PIP application for his injuries to defendant Personal Service Insurance Company, which insured his nephew’s vehicle. The defendant insurance company contended that the plaintiff was barred from obtaining PIP benefits due to his ownership of an uninsured motor vehicle. The issue in Padilla v. Personal Service Insurance Co., 2016 N.J. Super. Unpub. LEXIS 1400 (App. Div. June 20, 2016), was whether the vehicle owned by the plaintiff qualified as an “inoperable” vehicle so as to avoid this exclusion for PIP coverage.

Although plaintiff owned a 1979 Chevrolet Camino pickup truck at the time of the accident, he claimed that it was not operational at that time. Plaintiff nevertheless kept the plates on the vehicle, maintained the registration but did not have insurance covering the vehicle.

Under New Jersey law, a vehicle owner is required to maintain compulsory insurance if he or she “operates or causes to be operated a motor vehicle upon any public road or highway in this State.” The New Jersey PIP statute permits an insurer to deny coverage to any person having injuries or death who “was the owner or registrant of an automobile registered or principally garaged in this State that was being operated without personal injury protection coverage.”

The carrier, relying on this statute, denied coverage, contending that the plaintiff was a “culpably uninsured driver.” The plaintiff argued that his vehicle was inoperable at the time of the accident and, hence, this exclusion did not apply to him. The plaintiff claimed that the vehicle had been in an accident that damaged its transmission and wheel well, which rendered it not operational on the accident date.

To prove that the vehicle was inoperable, however, the plaintiff would need to show an intent not to operate this vehicle. Here, the facts showed that his pickup truck was operable and he drove it around his driveway. He had it repaired so it would not be stuck and had his mechanic drive the vehicle around to determine if it needed transmission repairs. However, the court found most significant, that despite its lack of insurance, the plaintiff did keep the plates on the vehicle and kept it registered.

Based upon all of these facts, the Appellate Division found that the vehicle was “operational” at the time of the accident. Hence, the plaintiff was required to maintain PIP coverage for the vehicle. Accordingly, the carrier properly disclaimed coverage and summary judgment should have been entered in its favor, dismissing the complaint.

Res Ipsa Loquitur Not Apply for Negligence Claim Due to Injury from Eating Dessert from Fast Food Restaurant

Plaintiff Erik Lukmann claims to have been injured while biting down on an ice cream dessert purchased from Wendy’s. He bit down, felt a hard object, and spit out a coin. As a result, he broke several veneers on his teeth. In Lukmann v. Wenesco Restaurant Systems, Inc., 2016 N.J. Super. Unpub. LEXIS 1089 (App. Div. May 12, 2016), he sued Wendy’s based upon negligence and requested at the trial that the doctrine of res ipsa loquitur be charged to the jury.

Plaintiff had gone to the mall and bought lunch, including dessert, at Wendy’s. The dessert was served in a cup with a plastic dome with an opening for a utensil. Apparently, Plaintiff put his dessert in the bag with the salad he bought from Wendy’s. He paid for his meal in cash and put the coins in the bag with the salad and the dessert. After picking up his food, he then went to the movies. He ate his salad first.

Later, towards the end of the movie, Plaintiff ate his dessert. When he bit down, he felt an object hit his front tooth. He spit out the object and saw a silver coin. Upon inspection of the cup, he found 4 coins.

The case was tried before a jury. The Plaintiff requested that the jury charge include a res ipsa loquitur charge. If this doctrine had been charged, it would have allowed for an inference of defendant’s lack of due care without the plaintiff having to prove all of the elements of negligence. If this charge is given, it makes it much easier for the plaintiff to prove negligence. It essentially shifts the burden to the defendant to prove that there was no lack of due care that caused the accident. The judge denied the request, finding that this rule did not apply because it had not been shown “that the instrumentality causing the injury was within the control of the defendant at the time of mishap.”

After deliberating, the jury found no cause for action and the case was dismissed. The Plaintiff appealed the trial judge’s refusal to charge res ipsa loquitur. Upon appeal, the Appellate Division agreed with the trial court’s decision in refusing to give this charge to the jury.

To permit a charge of this doctrine, a plaintiff must be able to show that 3 conditions have been met: “(1) the occurrence itself ordinarily bespeaks negligence; (2) the instrumentality was within the defendant’s control; and (3) there is no indication in the circumstances that the injury was the result of the plaintiff’s own voluntary act or neglect.”

Here, the trial judge found that the dessert was not in the exclusive control of the defendant. The plaintiff had possession of the dessert for at least an hour or two hours after it was purchased and left the control of the defendant. And, the evidence showed that the plaintiff picked up the change and put it in the bag with the ice cream. Hence, the plaintiff was unable to rule out that the coins ended up in his dessert because he placed the coins in the bag versus Wendy’s giving him the dessert with coins inside the cup. Thus, the Appellate Division agreed that the plaintiff had not met the conditions sufficient to merit a res ipsa loquitur charge.

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