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The New Jersey Appellate Division Revisits the “Relation Back Doctrine”

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  In the unpublished opinion Segal v. Recovery at the Crossroads v. Gitelis, 2022 WL 701907, the Appellate Division applied the Relation Back Doctrine to a counterclaim filed well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.”

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