Litigation Quarterly Newsletter

A quarterly newsletter analyzing litigation cases and trends in New Jersey, Pennsylvania and New York.

On March 9, 2022, the New Jersey Appellate Division had occasion to address, reaffirm and further clarify New Jersey’s “Relation Back Doctrine.”  In the unpublished opinion Segal v. Recovery at the Crossroads v. Gitelis, 2022 WL 701907, the Appellate Division applied the Relation Back Doctrine to a counterclaim filed well past the applicable statute of limitations that the Court found to be germane to the timely filed Complaint.

Third-Party Defendant Michael Gitelis (hereafter “Gitelis”) was admitted to the Recovery at Crossroads facility after showing signs of violent and erratic behavior. However, on or about December 6, 2017, he signed his against medical advice (hereafter “AMA”) discharge from the facility. After becoming agitated and threatening self-harm, Gitelis left the Crossroads facility by stealing an employee’s vehicle. Local police were alerted and eventually found Gitelis walking along the side of a local road and requesting a “second chance” for treatment at Recovery at Crossroads. He was once again admitted.

Thereafter, Gitelis continued to engage in threatening behavior and demanded he be discharged a second time. As the Appellate Division noted, upon Gitelis’ second discharge:

it should have been abundantly clear that he required a police escort lest he pose a danger to himself and/or others. No police nor law enforcement were contacted[,] despite Mr. Gitelis … displaying threatening behavior towards other people, and a lawful duty to do so was required by the New Jersey Duty to Warn Law, and/or be involuntarily committed as required by law.

Gitelis would go on to steal yet another vehicle and “went on a rampaging crime spree, during which he attacked and seriously injured [Plaintiff Segal] in an attempt to rob her on December 7, 2017, while in Brooklyn, New York.” Plaintiff was reportedly seriously and permanently injured as a result of the attack by Gitelis.

Plaintiff, Eileen Segal, filed her Complaint stemming from these December 7, 2017 events on December 3, 2019, only four days before the expiration of the Statute of Limitations on her claims. The Complaint named Recovery at the Crossroads, Behavioral Crossroads Recovery, LLC, Behavioral Crossroads, LLC and Deena Lefkovits (hereafter “Crossroads Defendants”) as Defendants, but omitted naming Gitelis among the Defendants. Instead, Plaintiff merely alleged that Gitelis was admitted as a patient at the Crossroads facility on or about December 4, 2017 until he was discharged pursuant to signing his AMA for a second time on December 7, 2017.

On April 24, 2020, the Crossroads Defendants were granted leave to file a Third-Party Complaint against Gitelis, which was filed on May 1, 2020. After the Court dismissed the Third-Party complaint for lack of prosecution, the Court signed a Consent Order on March 19, 2021, reinstating the Third-Party Complaint and permitting Gitelis to file an Answer.

On April 1, 2021, Gitelis filed his Answer to the Third-Party Complaint, setting forth eleven separate defenses and a counterclaim against the Crossroads Defendants. The allegations in the counterclaim “closely mirrored the allegations set forth in Plaintiff’s complaint, alleging that the [Crossroads Defendants] failed to screen Gitelis for mental illness and involuntary commitment, resulting in his discharge at a time when he was a danger to himself and to others.” Gitelis also alleged that the Crossroad Defendants “violated the standard of care for facilities … trained to evaluate and treat mental health issues as well as substance abuse issues” and as a result, the Crossroad defendants “caused injury to [Gitelis] and others.”

After the Crossroads Defendants filed their Answer to Gitelis’ counterclaim, they promptly filed a Motion for Summary Judgment, asserting that the counterclaim was barred by the statute of limitations. Gitelis opposed the motion, asserting that his counterclaim was timely in the context of the litigation pursuant to the “relation back” principles set forth in New Jersey Court Rule 4:9-3.

The Trial Court denied the Motion for Summary Judgment and listed several factors leading to its decision. Among its reasons for denying the Motion, the Court noted:

(1) plaintiff’s original complaint was timely filed; (2) plaintiff’s complaint alleged that the Crossroad defendants failed to screen Gitelis for mental illness and involuntary commitment, leading to his discharge and the subsequent injury of plaintiff; (3) the counterclaim pled by Gitelis ‘relates back [to] the claims of the original complaint as both arise from the same conduct and occurrences’; and (4) because the counterclaim ‘relates back’ to the date of plaintiff’s complaint, it is not barred by the statute of limitations.

The Trial Court also found that genuine issues of material fact existed regarding Gitelis’ counterclaim and that a rational fact finder could resolve this matter in his favor. The Crossroads Defendants were then granted leave to file an interlocutory appeal.

On appeal, the Crossroads Defendants argued that the Trial Judge erred in denying their Motion for Summary Judgment, asserting that the “Relation Back Doctrine” did not apply because Gitelis’ counterclaim was affirmative in nature, and therefore was not a “germane” counterclaim. As such, Crossroads Defendants concluded that the two year Statute of Limitations bars Gitelis’ counterclaim. The Appellate Division disagreed, indicating that:

Rule 4:7-1 provides that, ‘a pleading may state as a counterclaim any claim against the opposing party whether or not arising out of the transaction or occurrence that is the subject matter of the opposing party’s claim.’

Comments to Rule 4:7-1 provide support for the motion judge’s decision by stating:

Although this rule does not expressly so state, ordinarily a germane counterclaim will not be barred by the statute of limitations if the complaint itself is timely. A germane counterclaim is conceptually akin to an amended pleading that states a claim or defense arising out of the same conduct, transaction, or occurrence as the original claim, and R. 4:9-3 expressly provides for relation back in that situation. The only difference is the identity of the party raising the germane claim, and it would seem to make little functional difference whether a party amends his own pleading to add a germane claim or if the adverse party responds with a germane claim. The policy of the statute of limitations is no more offended in one case than the other.

See Pressler & Verniero, Current N.J. Court Rules, cmt. 2 on R. 4:7- 1 (2022).

Thus, the Appellate Division held that for a germane counterclaim to “relate back” to the filing of the original Complaint, “the following conditions must be met: (1) the original complaint must have been timely filed; and (2) the counterclaim must ‘arise out of the same conduct, transaction, or occurrence as the original claim.’” See also R. 4:7-1, at cmt. 4; R. 4:9-3.

The Appellate Division explained that in Molnar v. Hedden, 260 N.J. Super. 133 (App. Div. 1992), rev’d on other grounds, Molnar v. Hedden, 138 N.J. 96 (1994), in an opinion by Judge Pressler, the filing of a germane counterclaim is permitted after the expiration of the statute of limitations under the “relation-back” doctrine.  Id. at 140. Judge Pressler opined that:

the ‘relation back’ doctrine could permit the filing of a counterclaim after the expiration of the statute of limitations:

Application of our well-settled and liberal jurisprudence dictates that a counterclaim arising out of the same transaction as pleaded by the complaint and therefore meeting the test of R. 4:9-3 – that is to say, a litigation component embraced by the entire controversy doctrine – is eligible for the relation back principle of the rule and consequently for protection from the limitations bar.

However, after the Supreme Court reversed Molnar on other grounds, this left in question whether a germane counterclaim “relates back” to the original complaint when that counterclaim was filed outside the applicable limitations period. Molnar, 138 N.J. at 105. The Supreme Court in Molnar specified that “Because we find nothing to which defendant’s amendment can relate back, we save such a determination for a case that provides the proper factual support.”

Therefore, the Appellate Division in Segal was satisfied that this case provided the proper factual support found lacking by the Supreme Court in Molnar. Plaintiff’s timely-filed Complaint remained pending when Gitelis filed his first responsive pleading asserting his counterclaim. Gitelis’ counterclaim was clearly “germane” to the claims set forth in Plaintiff’s Complaint, where she asserted causes of action arising out of “the failure of the Crossroads Defendants to respond appropriately to the dangerous and threatening behavior exhibited by Gitelis during his two stays at their facility, including the failure to notify the police after Gitelis’ second departure from their facility.”

Satisfied that it could now affirm the New Jersey Supreme Court’s reasoning in Molnar with the proper factual background in place, the Appellate Division found that Gitelis’ counterclaim was germane to Plaintiff’s Complaint and applied the relation back doctrine accordingly. Thus, this unpublished opinion will be useful precedent in articulating the factors which a party must establish in order to invoke the “Relation Back Doctrine.”

In October 2017, a Southeastern Pennsylvania Transportation Authority (SEPTA) bus struck Hayley Freilich as she was walking within the crosswalk at the intersection of Broad Street and Vine Street in Philadelphia, Pennsylvania. The collision would cause Freilich to suffer permanent bodily injuries necessitating extensive medical treatment.  Nearly five year after the collision and subsequent lawsuit filed against SEPTA, Freilich’s cause of action continues on as her originally stipulated damages of approximately $7 million dollars has been reduced to a mere $250,000 despite SEPTA’s admission of negligence.

The original dispute in Freilich v. Se. Pa. Transp. Auth. concerned whether or not SEPTA was negligent in causing Freilich’s injuries. In a stipulated verdict, the parties reached an agreement whereby SEPTA admitted that its driver was negligent in causing Plaintiff’s injuries and the parties stipulated to award Freilich $7,000,000.

However, following the award, SEPTA filed a post-trial motion to mold the verdict, citing the Sovereign Immunity Act (hereafter “the Act”). The Act provides for limitations on liability for “Commonwealth parties” when those parties have acted in a negligent manner. Notably, the Act provides that liability may be imposed on the Commonwealth and the defense of sovereign immunity is inapplicable to claims for damages caused by:

The operation of any motor vehicle in the possession or control of a Commonwealth party. As used in this paragraph, motor vehicle’ means any vehicle which is self-propelled and any attachment thereto, including vehicles operated by rail, through water or in the air.

42 Pa. C.S.A. § 8522(b)(1)

The Act further provides that while liability may be imposed on the Commonwealth for the negligence of one of its motor vehicle operators, a plaintiff’s recovery against that Commonwealth party will be limited. 42 Pa. C.S.A. § 8528(b) specifically mandates that “damages arising from the same cause of action or transaction or occurrence or series of causes of action or transactions or occurrences shall not exceed $ 250,000 in favor of any plaintiff or $ 1,000,000 in the aggregate.” Id.

With this statutory precedent governing in Pennsylvania, in March of 2022, Judge Crumlish, the post-trial motion judge, granted SEPTA’s motion to mold the verdict and reduced Freilich’s damages to $250,000 in accordance with 42 Pa. C.S.A. § 8528(b). Despite agreeing that the reduction was a “profound economic inequality,” Judge Crumlish explained he had a “prescribed role” based on the Act and was without judicial discretion. He noted that unless and until the Pennsylvania Supreme Court accepted the case and reached a different conclusion, he was bound by precedent.

It has long been argued that Pennsylvania’s statutory damages cap for Commonwealth parties is too low and does not provide adequate redress for the negligence of Commonwealth actors. In fact, in Zauflik v. Pennsbury School District, the Pennsylvania Supreme Court invited the State legislature to review the Act and consider raising the statutory limits on damages. Again, in 2019, the Supreme Court extended this invitation following its decision in Grove v. Port Authority of Allegheny County. There, the Court recognized the difficulties presented by the $250,000 damages limit and its tendency to be inequitable and bordering on unconstitutional in some cases where damages should vastly exceed $250,000.

In an effort to increase the $250,000 limit, Freilich’s counsel sought certiorari in 2018 from the State Supreme Court, but the Court declined to grant the petition. Freilich’s counsel recently appealed to the State Supreme Court aiming to increase the current limit prescribed for all cases of this nature. Freilich’s counsel feels as though her case is the exact situation that the Pennsylvania Supreme Court in Grove feared and that her Constitutional rights have been violated leaving her without proper redress in the wake of steep medical bills and attorneys fees. For now, Freilich and all similarly situated plaintiffs can only wait patiently for the State legislature to accept the Pennsylvania Supreme Court’s invitation to act and raise the limit of statutory damages.

Carol Frie was walking from the parking lot toward the mall when she stepped onto the sidewalk from the parking lot surface. While she did not know what element of the sidewalk caused her fall, she stated that it was “unkempt.” In Frie v. Fairlane Village Mall, 2020 Pa. Super. Unpub. LEXIS 2848 (Sept. 9, 2020), the issue in the appellate court was whether Ms. Frie, who could not specifically identify the portion of the sidewalk that caused her fall, raised a genuine issue of material fact to defeat the Mall’s motion for summary judgment.

In October, 2014, Ms. Frie parked her car in the parking lot of the Fairlane Village Mall in Pottsville, Pennsylvania, and walked across the parking lot towards the Mall. She testified that she was looking straight ahead as she stepped onto the sidewalk and she fell due to, what her answers to interrogatories stated broadly stated was “unkempt property.” She reported the incident to an employee of the Mall’s manager who took photographs of the area at which Ms. Frie said she fell. Ms. Frie agreed the photos showed the area she fell. The employee said that she took photos of that specific area because that was where Ms. Frie pointed; the employee noticed a “little lip” in the sidewalk in the area where Ms. Frie pointed and she felt she needed to show how much of a lip existed by taking a close up photograph. She then stated that she wrote in an incident report that Ms. Frie had told her she “tripped over the uneven sidewalk and fell;” “uneven sidewalk” being the employee’s own words. The employee said Ms. Frie only pointed to the sidewalk in general and the employee, finding the “little lip,” assumed it was the cause of her fall. Ms. Frie agreed with this assertion.

On these facts, the trial court granted the Mall’s motion for summary judgment. The court relied on case law that states, though property owners have a duty to keep their sidewalks in a reasonably safe condition for travel for the public and business invitees, in order to establish liability, someone who falls on a sidewalk “must prove what actually caused the accident, not what might possibly have caused it.” The court found that because Ms. Frie could not identify the cause of her accident, she could not prove what actually caused her fall.

The appellate court reversed this decision. The appellate court found that the trial court failed to apply the proper standard on summary judgment, to construe the record in the light most favorable to the plaintiff, Ms. Frie. The appellate court saw that the employee’s claims that Ms. Frie showed her where she tripped, the photographs of the uneven sidewalk, the incident report that stated Ms. Frie tripped over an uneven sidewalk and, especially, Ms. Frie’s agreement with everything the employee had stated required a jury to determine whether the uneven sidewalk caused Ms. Frie’s fall or that Ms. Frie could not specifically identify the “little lip” as the cause of her fall. This is a broadly important determination because, despite case law specifically requiring a plaintiff to identify what caused their fall, a general claim can present a factual issue as to what portion of the sidewalk caused a fall in order to defeat a summary judgment motion.

The Supreme Court of New Jersey recently considered “whether a Consumer Fraud Act (“CFA”) claim can be based, in part or exclusively, on a claim that also might be actionable under the Products Liability Act (“PLA”).”  Stated differently, can a CFA claim be maintained where a PLA claim could also be asserted?  In Sun Chemical Corp. v. Fike Corp., 243 N.J. 319 (2020), the Court held that where a CFA claim alleges express misrepresentations, such a claim may be asserted notwithstanding the plaintiff’s ability to assert a separate claim under the PLA.

In 2012, Sun Chemical Corporation (“Sun”), an ink manufacturing business, installed a dust collection system at its facility.  Sun then purchased an explosion isolation and suppression system (the “Suppression System”) from Fike Corporation and Suppression Systems Incorporated (collectively, “Fike”) to prevent and contain potential explosions in the dust collection system.  On the first day the Suppression System was operational, a fire occurred in the dust collection system and an alarm on the Suppression System’s control panel activated, but was not audible.  An explosion sent a fireball through the ducts of the dust collection system, injuring seven Sun employees and damaging Sun’s facility.

Sun brought a single-count complaint under the CFA alleging that Fike made oral and written misrepresentations about, inter alia, the ability of the Suppression System to prevent explosions.  The District Court granted Fike’s summary judgment motion, finding that Sun’s claims would be governed by the PLA, and that it could not avoid the requirements of the PLA by crafting its claims under the CFA.  On appeal, the Third Circuit determined there was no New Jersey case law which sufficiently addressed this issue.  As such, it certified its questions to the Supreme Court of New Jersey, which reformulated and accepted same.

The Supreme Court noted that the CFA explicitly states “the rights, remedies and prohibitions” contained therein are “in addition to and cumulative of any other right, remedy or prohibition accorded by the common law or statutes of this State.”  N.J.S.A. 56:8-2.13.  Citing its prior decisions in Lemelledo v. Beneficial Management Corp. of America, 150 N.J. 255 (1997) and Real v. Radir Wheels, Inc., 198 N.J. 511 (2009), the Court stated there is a “presumption that the CFA applies to a covered activity,” which presumption can be overcome only when a court is satisfied “that a direct and unavoidable conflict exists between application of the CFA and application of the other regulatory scheme or schemes.”

Beginning its analysis with the CFA, the Court noted that Act prohibits deceptive, fraudulent, misleading, and other unconscionable commercial practices in connection with the sale of any merchandise or real estate.  In contrast, the PLA imposes liability upon manufacturers or sellers for a product’s manufacturing, warning, or design defects.  Under the PLA, a claimant can recover damages against the manufacturer or seller where the product causing the harm was not reasonably fit, suitable or safe for its intended purpose.

Based on the above analysis, the Court found the CFA and PLA are intended to govern different conduct and provide different remedies for such conduct.  The PLA governs the legal universe of products liability actions, while the CFA applies to fraud and misrepresentation and provides unique remedies intended to root out such conduct.  As such, the Court concluded there is no direct and unavoidable conflict between the two statutes.

With regard to the circumstances under which CFA and PLA claims may be simultaneously asserted, the Court noted that if a claim is premised upon a product’s manufacturing, warning, or design defect, that claim must be brought under the PLA, with damages limited to those available under that statute; CFA claims for the same conduct are precluded.  However, nothing prohibits a claimant from seeking relief under the CFA for deceptive, fraudulent, misleading, and other unconscionable commercial practices in the sale of the product.  Stated differently, if a claim is based on deceptive, fraudulent, misleading, and other unconscionable commercial practices, it is not covered by the PLA and may be brought as a separate CFA claim.  Under those circumstances, PLA and CFA claims may proceed in separate counts of the same suit, alleging different theories of liability and seeking dissimilar damages.

Importantly, the nature of the plaintiff’s damages does not determine whether the cause of action falls under the CFA or PLA.  Rather, it is the theory of liability underlying the claim that determines the recoverable damages.  The Court thus held that “a CFA claim alleging express misrepresentations — deceptive, fraudulent, misleading, and other unconscionable commercial practices — may be brought in the same action as a PLA claim premised upon product manufacturing, warning, or design defects.  In other words, the PLA will not bar a CFA claim alleging express or affirmative misrepresentations.”

Not every intersection accident is a ‘he said/she said’ toss up for the jury to decide.

The First Department recently held that summary judgment dismissal was properly granted to the defendants, vehicle owner and operator, in an intersection accident where plaintiff’s vehicle was controlled by a stop sign, in the case of Yahaira Lugo v. Daytona Auto Sales, Inc., et al, 123 N.Y.S.3d 496, 2020 N.Y. Slip Op. 03199 (1st Dep’t 2020).  The defendants’ evidence established that the cause of the accident was the negligence of the driver of plaintiff’s vehicle, who failed to obey a stop sign in violation of New York’s Vehicle and Traffic Law Sect. 1142, which statute mandates that the driver of a vehicle approaching a stop sign shall stop and yield the right of way to any vehicle which has entered the intersection from another roadway or which is approaching so closely as to constitute an immediate hazard during the time when such driver is moving across or within the intersection.

In affirming the order granting dismissal, the court in Lugo cited to its prior decision in Namisnak v. Martin, 244 A.D.2d 258, 260, 664 N.Y.S.2d 435 (1st Dep’t 1997) for its reasoning that defendants, with the right-of-way at the intersection where the collision occurred were “entitled to anticipate that other vehicles will obey the traffic laws that require them to yield”.  Id.

The Lugo Court rejected plaintiff’s contention that the defendants’ vehicle may have been driving over the posted speed limit as being insufficient to raise a triable issue of fact as to comparative negligence, since there is no evidence it could have contributed to the accident.  Lugo, 123 N.Y.S.3d 496.

Established precedent is that a “presumption of negligence” arises from a failure to yield the right of way at a stop sign, and that bare speculation that another driver was “going fast” is not enough to overcome the presumption of negligence or to create and issue of fact for trial.  Murchison v. Incognoli, 5 A.D.3d 271, 773 N.Y.S.2d 299 (1st Dep’t 2004).  In another similar stop sign case, one driver’s statement that he may have been driving “five miles over the posted speed limit of 30 miles per hour” was insufficient to raise an issue of fact as to comparative negligence since there is no evidence that it could have contributed to the collision.  Martinez v. Cofer, 128 A.D.3d 421, 8 N.Y.S.3d 212 (1st Dep’t 2015).

The cases highlight how following the rules of the road, and obeying stop signs in particular, can lead to favorable rulings and victory in court.

Two recent trial court decisions highlight Pennsylvania’s premises liability law regarding trivial defects. Kreitzer v. Madison Acquisitions, LLC, PICS Case No. 20-0425 (C.P. Lawrence April 9, 2020) and Jenkins v. Krenitsky’s Supermarket Corp., PICS Case No. 20-0424 (C.P. Lackawanna April 15, 2020) both involved defendant-property owners who moved for summary judgment arguing lack of notice and that any alleged defect was trivial thereby negating liability. In Kreitzer, the plaintiff fell due to an uneven sidewalk. The alleged defect was a one and a half inch change in elevation in the sidewalk. In Jenkins, the plaintiff fell in a pothole near the entrance of a supermarket. The plaintiff described the pothole as approximately two feet long and deep enough that both of her feet could be in the hole.

Both motions were similar in that both defendants argued there was no actual or constructive notice of any alleged defect. Additionally, both argued that any alleged defect was so trivial as to not warrant liability. In Kreitzer, the plaintiff argued that there was construction underway around the area of the fall that should have placed the defendant on notice of the change in elevation of the sidewalk. In Jenkins, the plaintiff argued that potholes do not form overnight and that it was right by the entrance so its existence should have been known through reasonable care. Interestingly, the defendant in Jenkins admitted that they had no policy to inspect the parking lot for defects and no regular inspections were conducted. In both cases, the defendants’ motions were denied as the courts found factual issues in each case for a jury to decide liability.

In Pennsylvania, “a sidewalk defect may be so trivial that a court must hold, as a matter of law, that the property owner was not negligent in allowing its existence.” Shaw v. Thomas Jefferson University Hospital, 80 A.3d 540, 542 (Pa. Cmwlth. 2013).  In Shaw, the plaintiff fell due to an uneven sidewalk in front of Thomas Jefferson University Hospital in Center City, Philadelphia. The change in elevation between sidewalk segments was allegedly between two and two and a half inches. The Commonwealth Court of Pennsylvania reversed the trial’s court granting of summary judgment to the hospital as it found the question whether the sidewalk defect was trivial was for a jury. Ultimately, there is no bright-line rule to determine what would constitute “trivial” to impose liability. “Each case presents a unique set of circumstances that must be evaluated on an independent basis.” Id. at 545.

In both Kreitzer and Jenkins, the trial courts held that neither circumstance could be decided at the summary judgment stage and must be submitted to a jury. Specifically, in Jenkins the court held that the defect was not obviously trivial due to its size since the plaintiff was able to place both feet in the pothole, but held that the ultimate question was still a matter for a jury.

The Pennsylvania courts have not created a hardline rule in determining what is considered trivial. There is no hardline rule regarding size, length, or depth of a defect that would absolve a property owner of liability. It may be impossible for the courts to establish any hardline rules regarding the size of a defect to be considered trivial for summary judgment purposes due to all circumstances of an incident that must be considered. Regardless, a property owner still should have proper policies and procedures in place for inspections of its property to show evidence that reasonable care was used.

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