Significant NJ Liability Litigation Cases from June 2014 to December 2014

By Betsy G. Ramos, Esq. and Charles F. Holmgren, Esq.

Affidavit of Merit (fraud) Nuveen Municipal Trust v. Withumsmith Brown, P.C., 752 F.3d 600 (3d. Cir. 2014). The plaintiff made an investment in partial reliance on an audit report and an opinion letter from the defendants, an accounting firm and a law firm; the company it invested in soon thereafter filed for bankruptcy. The plaintiff sued the defendants for fraud, but did not file an affidavit of merit. The court, applying New Jersey law, found that the plaintiffs must show a deviation from the professional standard of care even though the claims they made were for fraud rather than negligence and malpractice. Therefore, they were required to obtain an affidavit of merit. The plaintiff’s failure to do so warranted dismissal of its suit against these professionals.

Attorney Work Product (common interest rule) O’Boyle v. Longport, 218 N.J. 168 (2014). The plaintiff sued the township pursuant to an OPRA request to release a joint strategy memo and several documents to be used against the plaintiff in other litigation, which memo and documents had been shared between a private attorney and a municipal attorney. The Supreme Court held that the documents, though shared with a municipal attorney, remained the protected work product of the private attorney because of the intent to keep them confidential, in anticipation of litigation and, in furtherance of the attorneys’ common purpose of defending against the plaintiff in other litigation.

Contract (arbitration clause) Atalese v. U.S. Legal Svcs. Gp., 219 N.J. 430 (2014). The arbitration clause in a service contract for debt-adjustment services required that any dispute arising out of the contract would be submitted to binding arbitration. The Supreme Court held that the contract’s failure to notify the plaintiff that, by entering into the agreement, she forfeited her right to have her case heard in a judicial form was not clear and unambiguous to the plaintiff as to the rights she was surrendering. To be enforceable, the clause needed to clearly state that the plaintiff was choosing to arbitrate disputes arising from the contract rather than resolve them in a court of law.

Environmental law (NJ Spill Act) Magic Petroleum Corp. v. Exxon Mobil Corp., 218 N.J. 390 (2014). A property owner’s claim for contribution under the Spill Act does not need to be deferred until the DEP’s enforcement action has concluded. A property owner may proceed against responsible parties to recover sums expended to remediate the site before the DEP concludes its involvement in the site. The court may allocate liability but may not be able to issue a final damages award until the DEP action is concluded.

Evidence (impeachment by omission) Manata v. Pereira, 436 N.J. Super. 330 (App. Div. 2014). At trial, the plaintiff’s attorney attempted to impeach the defendant’s version of a traffic accident by claiming his version did not appear in the police report; a report in which the defendant claimed the officer refused to take his statement. At trial, the officer did not testify, either to authenticate the police report or confirm or deny the defendant’s claim. The court found the plaintiff’s attorney should not have been permitted to impeach the defendant’s trial testimony regarding the purported omission unless the officer authenticated the document or there were other circumstances indicating the plaintiff’s statement was initially trustworthy

Expert (standard of care)  Davis v. Brickman Landscaping, Ltd., 219 N.J. 395 (2014) Following a fatal fire in a hotel, plaintiffs filed suit on behalf of the estates of their deceased children against various defendants including the defendants’ fire inspectors that negligently failed to inform the hotel owner of the need to install a sprinkler in the storage closet beneath the staircase. The defendants’ expert contended that the inspectors complied with all applicable fire codes in conducting their inspection. The Supreme Court concluded that expert testimony was required to establish the standard of care applicable to fire inspectors. Because the plaintiff’s expert was unable to offer objective support for his opinion, his report was barred as a net opinion. Hence, the plaintiff was unable to establish the required elements of their negligence claim and the defendants were entitled to summary judgment.

Expert (adverse inference charge) Washington v. Perez, 219 N.J. 338 (2014). In this personal injury action filed by the plaintiff due to a motor vehicle accident, she claimed to have sustained aggravation of a pre-existing cervical sprain and a small herniation in a cervical disc. The defendants retained two experts, an orthopedist and a neurologist, neither of whom testified at trial. Upon the plaintiff’s request, the court gave an adverse inference charge to the jury, that the jurors could infer from their non-production that their testimony would be adverse to the defendants’ interest. The Supreme Court held that this was reversible error and that an adverse inference charge should rarely be invoked to address the absence of an expert.

Judgment (pro se party) Ridge at Back Brook, LLC v. Klenert, 437 N.J. Super. 90 (App. Div. 2014). After the defendant’s golf club dues went unpaid for years, the club sued to recover them. The defendant, representing himself pro se, failed to answer discovery and failed to present a sufficient defense of the golf club’s motion for summary judgment. The court held that the pro se defendant’s negligence in representing himself, by not understanding the motion process or other requirements of the rules governing civil practice, is entitled to the same considerations for relief as a defendant who had been represented by a negligent attorney. The court permitted the defendant to retain an attorney to file a motion for relief from the consequences of his failure to adequately represent himself.

Jurisdiction (claim against foreign company) Patel v. Karnavati America LLC, 437 N.J. Super. 415 (App. Div. 2014). Plaintiff sued the defendant manufacturer, a company located in India, for personal injuries suffered using its tablet press machine, claiming a defective design of the machine. The company sold and delivered the machine to a distributor in India, with knowledge that it would be resold to a NJ company. Regardless, the court held that there was no personal jurisdiction for this company to be sued in New Jersey.

Medicare (reimbursement of lien) Taransky v. Dept. of Health and Human Services, 760 F.3d 307 (3d Cir. 2014). In this Third Circuit case, the plaintiff argued that she was not require to reimburse Medicare for the conditional payments made for expenses incurred in her trip and fall accident. The court disagreed and found that Medicare must be reimbursed. The plaintiff had obtained an allocation order on the trial court level that none of her medical expenses were reimbursed by the settlement and used this order to claim that she was not required to reimburse Medicare out of her settlement. The court rejected that argument, finding that the release she signed specifically addressed the Medicare lien and anticipated that it would be paid. Further, the court also rejected the plaintiff’s argument that they were not recoverable from the tortfeasor under the “collateral source” rule. Finding that they were conditional payments, the court held that this rule could not bar reimbursement to the Government.

Negligence (exculpatory clause) Walters v. YMCA, 437 N.J. Super. 111 (App. Div 2014) The plaintiff, a YMCA member, fell while he was descending the stairs to the pool due to a negligently maintained stair tread. As part of his membership agreement, he signed an exculpatory or “hold harmless” provision, agreeing that the YMCA would not be responsible for any injuries he sustained at the YMCA premises or as a result of YMCA sponsored activities. The court found this clause to be unenforceable under these circumstances. A fitness club cannot insulate itself from liability through an exculpatory clause from the ordinary common law duty of care owed by all businesses to its invitees.

Negligence (Portee claim) Litwin v. Whirlpool Corp., 436 N.J. Super. 80 (App. Div. 2014). Plaintiff asserted an emotional distress claim under Portee v. Jaffee due to his stepson’s severe injury suffered in a fire. While plaintiff did not actually witness his stepson being burned in the fire, he saw his stepson leave his bedroom to go into the smoky hallway and, after plaintiff escaped, realized his stepson was still in the home. Thereafter, he saw the firefighters carry out his stepson’s body still smoldering with peeling skin. The court found these observations sufficient to permit him to pursue a Portee claim for the emotional distress he experienced in knowing his stepson was still trapped inside the burning house and it was not required that he actually observe him being burned inside the house.

Negligence (sports injury) C.J.R. v. G.A., 2014 N.J. Super. LEXIS 165 (App. Div. Dec. 8, 2014). A twelve year old broke his arm while playing in a recreational youth lacrosse game. He sued the eleven year old player on the opposing team who caused the injury. In a case of first impression, the court enunciated the standard in judging liability of a minor in causing an injury in a sporting activity. The court imposed a double layered analysis. First, the court would determine if the opposing player’s conduct would be actionable if it were committed by an adult, which requires proof of intent to inflict harm or recklessness. Second, the court would consider whether it would be reasonable to expect a minor of the same age and characteristics to refrain from the injurious physical conduct. Utilizing this test, the court found that the minor defendant breached no duty owed to the minor plaintiff.

Torts (nuisance) Traetto v. Palazzo, 436 N.J. Super. 6 (App. Div. 2014). The plaintiff sued her neighbors to stop their son from playing the drums because they were too loud. The neighbors argued that their son stopped playing before 7:00 p.m and the volume of the drumming was below the level set in a municipal noise ordinance. However, the court found that, even if the neighbors’ claims of the loudness and timing of the drumming were true, the “character, volume, frequency, duration, time and proximity (of the plaintiff) to the noise” was sufficient for the plaintiff to establish a factual issue existed as to her claim that the noise from the drums was a nuisance.

Tort Claims Act (plan or design immunity) Kain v. Gloucester City, 436 N.J. Super. 466 (App. Div. 2014). The plaintiff was injured on a pier designed and built by the U.S. Coast Guard in the 1940s and subsequently deeded to the City. The City argued that it was immune under the plan and design immunity defense under the Tort Claims Act. The court held that the Coast Guard, though not a public entity under the Tort Claims Act, qualified as “some other body” which approved the plan or design of public property and to whom the plan or design immunity of the Act applied, therefore rending the City immune from liability for the personal injury claim filed against it by the plaintiff.

Tort Claims Act (continuing tort) Wreden v. Township of Lafayette, 436 N.J. Super. 117 (App. Div. 2014). The plaintiff sued the township due to flooding on his property, which he claimed occurred as the result of the township’s construction of a retaining wall and storm water drainage from the roadway. The plaintiff served the township with a notice of tort claim due to the damage caused by the flooding. Thereafter, the retaining wall collapsed, causing more damage to the plaintiff’s property. The court found that this claim was a “continuing tort” and, thus, did not require an additional tort claim notice to be filed for the plaintiff to pursue a claim for the additional damages caused by the collapse of the retaining wall.

Workers’ Compensation (employee residing on employer’s premises) Hanisko v. Billy Casper Golf Mgmt., 437 N.J. Super. 349 (App. Div. 2014). The court held that the plaintiff’s injury, which occurred in the residence he lived in as a part of his employment at a golf course where he was on call seven days a week, was within the scope of his employment as a mutual benefit to both he and his employer. As such, his injury was compensable under the Workers’ Compensation Act, the Superior Court did not have subject matter jurisdiction, and he was barred from pursuing a civil claim.