Insurance Law Update

WITH SUMMER AT OUR DOORSTEP, WE PRESENT OUR CURRENT ISSUE OF OUR NEWSLETTER.

WE ARE PLEASED TO REPORT THAT TONY PASQUARELLI HAS BEEN DESIGNATED AS ONE OF AMERICA’S TOP 100 CIVIL DEFENSE LITIGATORS, AND ARE PROUD OF THIS ACCOMPLISHMENT.

THIS DESIGNATION IS BY INVITATION ONLY. CANDIDATES ARE NOMINATED THROUGH A COMPREHENSIVE ANALYSIS BASED UPON PROFESSIONAL EXPERIENCE, LITIGATION EXPERIENCE, SIGNIFICANT CASE RESULTS, REPRESENTATIVE HIGH STAKE MATTERS, PEER REPUTATION AND COMMUNITY IMPACT.

LESS THAN ONE-HALF PERCENT (0.5%) OF ACTIVE ATTORNEYS IN THE UNITED STATES RECEIVE THIS HONOR

THE FOLLOWING IS OUR LIST OF CASES THAT MAY BE OF INTEREST TO OUR CLIENTS, DECIDED SINCE OUR LAST NEWSLETTER.

1. Northfield Insurance Company v. Mount Hawley Insurance Company, 2018 WL 151316 - Is an insurance company that initially denies coverage but offers its insured a courtesy defense estopped from later moving for Summary Judgment on the coverage denial?

2. Ferrante v. New Jersey Manufacturer’s Insurance Group, 232 N.J. 460 (2018) - Does the failure of Plaintiff’s counsel to advise the Plaintiff’s UM/UIM carrier of a potential UM/UIM claim until after settlement of the Plaintiff’s claim against the tortfeasor bar the UM/UIM claim against the UM/UIM carrier?

3. Kryzyalski v. Tindall, 232 N.J. 525 (2018) - Can an unidentified John Doe defendant’s negligence in a multi-vehicle accident be submitted to the trier of fact for an apportionment of liability?

4. Ellis v. Hilton United Methodist Church, 2018 WL 2305521 - Does a religious organization lose its protection under the New Jersey Charitable Immunity Act when its property has been abandoned?

5. Lee v. Brown, 232 N.J. 114 (2018) - Are a city’s electrical inspectors entitled to a qualified immunity or absolute immunity for failure to enforce building codes following a fire which resulted in the death of four residents?

6. Baez v. Paulo, 453 N.J. Super 422 (App. Div. 2018) - Will the Plaintiff be permitted to amend a pleading to substitute the names of three physicians for “John Doe” defendants after the Statute of Limitations has expired?

7. Estate of Yearby v. Middlesex County, 453 N.J. Super 388 (App. Div. 2018) - Does the Plaintiff’s failure to file an Affidavit of Merit against three nurses until 107 days after the requisite time period under NJ Court Rules bar the claims against the nurses?

8. Faircloth vs. Beville, 2018 WL 827891 - Is a commercial landlord strictly liable for a dog bite by its tenant’s dog?

9. Spataro v. The Steak Master Inc., 2018 WL 792081- Is an inexperienced golfer’s demonstration of a golf swing to the plaintiff a negligent act or a reckless act which should be submitted to the trier of fact?

10. D.G. v. B.E.A., 2018 WL 1527558 - Does an insurer owe a duty to defend an insured who committed an act of domestic violence by beating his girlfriend?

11. Morris vs. TD Bank, WL 1720652 - Is a bank liable when its teller misidentifies a customer as the bank robber immediately after the robbery has occurred?

12. Bartlett v. Push to Walk, 2018 WL 1726262 - Does the signing of a liability waiver bar a Plaintiff from pursuing a claim for a leg fracture when the plaintiff alleges gross negligence?

13. State v. McIntyre Caulfield, 2018 WL 2271432 - Can a defendant in a criminal case impose a civil reservation as part of a guilty plea in a criminal case?

14. Latest Legislative Trends - Expansion of Wrongful Death Damages

Northfield Insurance Company v. Mount Hawley Insurance Company,

2018 WL 1513162

The Appellate Division considered a Superstorm Sandy claim involving issues of estoppel and reservations of rights. The plaintiff, Northfield Insurance, the insurer of CDA Roofing Consultants, filed a Declaratory Judgment action against a number of defendants, including the developer Empress Properties and its insurer, Mount Hawley Insurance Company. CDA Roofing was hired by Empress to perform roofing work at a location in Asbury Park near the boardwalk.

Superstorm Sandy hit Asbury Park causing property damage to the roof and interior water damage to the Empress property. Northfield provided coverage to the roofer and issued a reservation of rights letter with a denial of coverage, but agreed to extend a courtesy defense to its insured. The coverage denial was based upon Northfield’s conclusion that the roof damage was caused by winds rather than the negligence of its insured.

The insurer for the owner, Mount Hawley and the defendant, Empress, filed Motions for summary judgment seeking a finding from the Court that Northfield was estopped from denying indemnification to its insured due to the fact that Northfield extended a defense to the roofing company.

The trial court granted Mount Hawley’s Motion for summary judgment finding that Northfield was estopped from denying coverage because Northfield failed to seek its insured’s consent to Northfield’s control of the defense relying on Merchant’s Indemnity Corp. v. Eggleston, 37 N.J. 114. In response, Northfield argued that the Eggleston case applied only to reservations of rights letters rather than to outright denials of coverage and that its insured, CDA was not prejudiced by Northfield’s actions. Northfield also contended that Mount Hawley lacked standing to assert estoppel.

In reversing the grant of Summary Judgment to Mount Hawley, the Appellate Division concluded that the roofer’s failure to decline Northfield’s courtesy defense created a triable issue as to whether the roofer accepted Northfield’s control of the roofer’s defense. The Court also rejected Mount Hawley’s contention that the Eggleston case required estoppel when Northfield assumed control of the defense without CDA’s consent. Further, the Court noted that Mount Hawley failed to establish that the roofer was prejudiced by the actions of its insurer or that Mount Hawley proved detrimental Reliance.

The Court further noted that the insured roofing company was defunct when Northfield denied coverage further weakening Mount Hawley’s estoppel arguments. The Court also questioned whether or not Mount Hawley had standing to assert estoppel. Based upon these numerous factual issues, the Court reversed the summary judgment order in favor of Mount Hawley and returned the case to the trial court for further proceedings.

Ferrante v. New Jersey Manufacturer’s Insurance Group,

232 N.J. 460 (2018)

The New Jersey Supreme Court reviewed the actions of a plaintiff who failed to advise his auto insurer of litigation against an underinsured driver. The plaintiff was involved in an automobile accident where the other driver was at fault. Without informing his own carrier, plaintiff filed suit, participated in mandatory arbitration and rejected an arbitration award.

The plaintiff ultimately entered into a high-low agreement with the tortfeasor, and again without knowledge of the insurer, obtained a judgment of $100,000.00 against the tortfeasor. Plaintiff then filed an underinsured motorist’s claim with NJM, his UIM carrier.

In the trial court, NJM moved to dismiss the plaintiff’s Complaint for failure to advise NJM of the underlying proceeding against the tortfeasor. NJM’s motion was granted by the trial court.

An appeal was then taken to the Appellate Division which reversed the trial court ruling, concluding that NJM must demonstrate prejudice in order to decline coverage under the UIM policy.

In a unanimous opinion, the Supreme Court reversed the Appellate Division, ruling that New Jersey case law emphasizes the importance of candor by insureds and their obligation to act in a “forthright, open and honest” manner with their carriers throughout the entire process of their claim. The Court found that the plaintiff failed to give NJM any notice of the UIM claim until after the final resolution of the underlying tort action, thereby causing an irretrievable loss of NJM’s rights to subrogation and intervention before NJM ever learned of the existence of the UIM claim.

The Court concluded that the Plaintiff violated the terms of his insurance policy, and that under a series of UM/UIM cases, including Longworth v. Van Houten 223 N.J. Super. 174 (App. Div. 1988), Rutgers Casualty v. Vassas, 139 N.J.163 (1996) and Zirger v. General Accident, 144 N.J. 327 (1996) the plaintiff/insured was required to inform NJM as soon as a law suit was filed, and not after an arbitration, the signing of a high-low agreement and a jury trial. The Court found that NJM’s right to subrogation was irreparably prejudiced and dismissed the plaintiff’s claim.

Kryzyalski v. Tindall 232 N.J. 525 (2018)

The New Jersey Supreme Court reviewed the issue of apportionment of liability of a known but unidentified John Doe defendant. The defendant’s car was behind the plaintiff’s vehicle when both were making left turns. A third vehicle driven by an unidentified driver drove to the right of both cars then cut off into the left turn lane. The defendant’s vehicle was then pushed into the plaintiff’s vehicle and the plaintiff was injured. The plaintiff later filed an Uninsured motorist claim with his insurer, alleging that the accident was caused by the unidentified driver.

At trial, the Court submitted the negligence of the John Doe driver to the jury pursuant to the Comparative Negligence Act. The jury found that the John Doe defendant was 97% negligent, while the driver of the vehicle struck by the John Doe defendant was found only 3% at fault.

The plaintiff appealed arguing that the Court should not have permitted the jury to consider apportionment of liability with the John Doe defendant.

The New Jersey Supreme Court rejected plaintiff’s contention. The Court noted that a jury could apportion fault between an identified defendant and non- identified John Doe defendant because all of the parties acknowledged that there was a phantom vehicle involved in the accident. In addition, the fact that the plaintiff’s insurer was aware of the litigation and that the plaintiff himself had received notice from the identified defendant of the assertion that a John Doe defendant caused the accident, supported the submission of the John Doe’s liability to the jury.

The Court pointed out that hit and run accidents are a frequent problem in New Jersey and that since 1968, auto insurers are required to provide UM coverage in their automobile policies. The Court concluded that parties known to be at least in part liable should be allocated their share of fault, even when unidentified. In those cases, known but unidentified parties may be allocated fault even though recovery against those parties is possible only through the plaintiff’s UM coverage.

Ellis v. Hilton United Methodist Church, 2018 WL 2305521

The Appellate Division in an unpublished opinion, considered an appeal from the trial court’s denial of a Motion for summary judgment seeking to classify the defendant church as a commercial property because it had been abandoned. The plaintiff slipped and fell on a sidewalk adjacent to the church, which was no longer an active parish.

Prior to the conclusion of discovery, the plaintiff moved to strike the Church’s charitable immunity defense and requested that the trial court find that the church was commercial property because the church had essentially abandoned the property, which would eventually lead to a potential for commercial income. The plaintiff further requested that the Court find that the church should be held to the standard of care of a commercial landowner.

The Church argued that although it was not operating as a church, neither was it operating as a commercial entity, and thus had no responsibility for maintaining the sidewalk as a commercial landowner.

The Court rejected the plaintiff’s appeal finding that there was no evidence that the church had used their property for commercial purposes at any time prior to the plaintiff’s accident. The Court concluded that the Church, an owner of non-commercial property, was protected by the Charitable Immunity statute, and not subject to commercial sidewalk liability. The plaintiff’s appeal was denied.

Lee v. Brown 232, N.J. 114 (2018)

The Supreme Court considered the liability of a public entity and its electrical inspectors arising out of a fire that destroyed a multi-unit home and resulted in the death of four residents. The plaintiffs allege that the city and its electrical inspectors were partially at fault for the fire since they had been advised of defective wiring at the home prior to the fire, and did nothing about it.

The city and its inspectors filed a Motion for summary judgment seeking dismissal of the plaintiffs’ claims based upon the absolute immunity provided to them under the New Jersey Torts Claims Act.

The Appellate Division affirmed the trial court’s finding that the city and the inspectors were entitled only to qualified immunity because the inspectors were enforcing the law, but the case did not involve a failure to enforce the law that would potentially entitle the city and inspector to absolute immunity. The Court also found that an issue of fact existed as to the electrical inspector’s “good faith”.

However, the New Jersey Supreme Court reversed the finding of the Appellate Division finding that the inspectors and the city were entitled to absolute immunity because the case involved a failure to enforce the construction code. The Court noted that the critical causative factor in this case was the inspector’s failure to contact his supervisor to arrange for an immediate power shut-off or to seek relief in court, after finding the code violations in the house. The Court found that the inspector’s failure to enforce building codes allowed the wiring problem to linger which ultimately resulted in the fire.

The Supreme Court further noted that the New Jersey Tort Claims Act effectuates the Legislature’s intent establishing immunity for government action as the rule and liability as the exception. Finally, since the Court found that the City and the inspector were entitled to absolute immunity, there was no need to consider the issue of the inspector’s “good faith”.

Baez v. Paulo, 453 N.J. Super 422 (App. Div. 2018)

In a published opinion, the Appellate Division considered whether the fictitious pleading process would permit an addition of three additional defendant physicians following the expiration of the Statute of Limitations. Three days before the expiration of the Statute of Limitations, the plaintiffs filed a medical malpractice action against two named physicians and five John Doe physicians, since the hospital records were mostly handwritten and basically illegible.

After the Statute of Limitations had expired, defense counsel sent plaintiffs an Affidavit identifying the three physicians that were involved in the plaintiff’s care. The plaintiff then moved to amend the Complaint to name the three physicians in place of the John Doe defendants.

The physicians then engaged in discovery for a year before they moved to dismiss the Complaint on the contention that the plaintiff did not file a claim within the Statute of Limitations. The trial court found that the fictitious pleading process did not permit an untimely addition of defendants after the Statute of Limitations had expired, however, since the physicians did not move for summary judgment until a year after their Answer was filed, they were equitably estopped from asserting the Statute of Limitations defense.

On appeal, the Court noted that a plaintiff relying on a fictitious pleading must demonstrate two phases of due diligence in order to gain the tolling benefits of the rule. First, a plaintiff must exercise due diligence in endeavoring to identify the responsible defendants before filing the original complaint naming John Doe parties. Second, a plaintiff must act with due diligence in taking prompt steps to substitute the defendant’s true name after becoming aware of that defendant’s identity.

On appeal, the Appellate Division areed that the fictitious pleadings process would not permit an untimely addition of defendants when the plaintiff had knowledge of their identities prior to the institution of the law suit. The Court found that two of the physicians were clearly named in the hospital chart, and thus plaintiff should have been aware of their involvement prior to the expiration of the statute of limitations. However, the Court also noted that the hospital chart erroneously named another physician as the plaintiff’s attending physician, and concluded that if one of those two doctors, was actually the plaintiff’s attending physician, the plaintiff’s case could go forward as to that particular doctor, based upon the mistake in the medical record.

The Appellate Division also rejected the trial court’s finding that the doctor’s were equitably estopped from filing a motion to dismiss based upon their failure to raise the statute of limitations defense until after discovery was concluded. The Court found that in the absence of a case management order establishing a motion deadline, it would be unfair to preclude the doctors from filing a motion to dismiss on the statute of limitations issue.

Estate of Yearby v. Middlesex County, 453 N.J. Super 388 (App. Div. 2018)

The Appellate Division reviewed the failure to file an Affidavit of Merit within the appropriate time frames.

The decedent, a mentally ill man, died strapped to a restraint chair in the Middlesex County Correction Center approximately twenty-four hours after he was arrested. His estate filed a multi-count complaint against the public entity, including three nurses employed at the Correction Center.

After suit was filed, the nurses filed a motion for Summary Judgment contending that the plaintiff failed to file the appropriate Affidavit of Merit as required by N.J.S.A. 2A:53A-27. The statute required the filing of an Affidavit of Merit within sixty days of the filing of the answer of the defendant, with an additional sixty day extension permitted on a showing of “good cause”. The trial court initially granted the nurses motion to dismiss, but later changed the ruling after plaintiff’s new counsel argued the doctrine of “substantial compliance”.

The Appellate Division rejected the Plaintiff’s argument relating to substantial compliance. Although finding that the nurses did not establish prejudice for the plaintiff’s failure to file the required Affidavit of Merit, the Court also found that the plaintiff’s prior attorney took no steps to comply with the time requirements of N.J.S.A. 2A:53A-27, and the plaintiff’s new attorney failed to provide a reasonable explanation on why there was not strict compliance with the statute.

The Court concluded that an attorney’s pattern of inattentiveness as well as ignorance of the legal requirements of the Affidavit of Merit statute provided no basis to invoke the equitable doctrine of “extraordinary circumstances” to permit plaintiff’s to prosecute a claim of medical malpractice, and reversed the trial court’s denial of the defendant’s motion to dismiss.

Faircloth vs. Beville, 2018 WL 827891

In this unpublished opinion, the Appellate Division of Superior Court again reviewed a landlord’s legal responsibility for a bite by a tenant’s dog. The plaintiff was visiting the tenants at their residence at the time of the bite.

Under the lease between the landlord and the tenant, the tenant was not prohibited from having pets. However, the landlord was unaware that the tenant had a dog, nor did he know anything about the dog.

The tenant later declared bankruptcy and the claim against the tenant was discharged in bankruptcy. The landlord filed a motion for Summary Judgment

which was granted by the trial court.

On appeal, the plaintiff argued that a landlord’s responsibility should be expanded to impose liability consistent with “premises liability law”. The plaintiff further argued that animals should be considered a hazard, and that landlords should have a duty to a tenant’s guest to protect them against this potential harm from animals.

In rejecting the plaintiff’s appeal, the Court found that a landlord’s liability is not one of strict liability but is based on “ordinary principles of negligence” finding that in the absence of proof that the landlord was aware of the dog’s vicious propensities or that the dog was inherently vicious, liability should not be imposed on the landlord.

Spataro v. The Steak Master Inc., 2018 WL 792081

In another unpublished opinion, the Appellate Division considered a grant of summary judgment in favor of the defendant. The plaintiff alleged that the defendant had hit him in the face with a golf club while he was demonstrating a golf swing at a driving range. The driving range had thirty stalls and there were numerous signs setting forth the rules of the range. The first rule set forth that only one person was permitted in an individual stall at any given time.

Both the plaintiff and the defendant were inexperienced golfers and were in the same stall when the incident happened.

The trial court granted Summary Judgment to the defendant, finding that the defendant was entitled to the heightened standard articulated by the New Jersey Supreme Court in Crawn v. Campo, 136 N.J. 494 (1994). In Crawn, supra., the Court found that in the absence of reckless or intentional conduct, there is no liability for injuries resulting from a participant’s involvement in recreational sports activities.

In affirming the grant of summary judgment on the issue of negligence, the Appellate Division found that the practice of golf swings was an inherent aspect of the recreational activity of golf.

However, the Court questioned the trial court’s factual determination that the action of the defendant was not reckless. The Court found that the trial judge erroneously usurped the role of the fact finder by making findings of fact and liability in matters of dispute between the parties. The Court noted that recklessness, unlike negligence, requires a conscious choice of a course of action, with knowledge or reason to know that it will create serious danger to others.

The Appellate Division returned the matter to the trial court for trial on the factual issues related to the claim of the defendant’s reckless conduct.

D.G. v. B.E.A., 2018 WL 1527558

The defendant sought coverage and a defense under a homeowner’s policy issued by Harleysville Insurance Company as a result of injuries inflicted on his girlfriend during a domestic violence incident. The trial court found that the defendant’s act of domestic violence was not an “accident” within the definition of an “occurrence” but rather was a particularly reprehensible act from which an intent to cause bodily injury is presumed by law.

The defendant did not dispute he physically assaulted the plaintiff or that this was an act of domestic violence. However, he claimed that he was extremely intoxicated, had no recollection of the event, and did not intentionally or knowingly cause plaintiff bodily harm.

The Appellate Division agreed with the trial Court’s finding that public policy precludes insurance coverage for acts of domestic violence. The Court noted that although there was only one incident of domestic violence in the instant case, the act was sufficiently egregious as to be “particularly reprehensible” warranting a presumption of an intent to injure plaintiff which resulted in a denial of coverage under the policy. The Court further found that voluntary intoxication was no defense, and rejected the defendant’s reliance on Burd v.s Sussex Mutual, 56 N.J. 383 (1970), noting that Burd supra. did not involve a claim of domestic violence.

The Court also found that Harleysville owed no duty to defend its insured, noting that regardless of how a claim is framed, if the operative facts constitute an assault and battery, the insurer has no duty to defend. The Court concluded that for purposes of the policy exclusion, there is no duty to defend where, the gravamen of the plaintiff’s action is that a single particularly reprehensible act of domestic violence assault resulted in liability See Harleysville Insurance v. Garitta, 170 N.J. 223 (2001)

Morris vs. TD Bank, WL 1720652

In an unpublished decision from the Appellate Division, the plaintiff appealed a grant of summary judgment to the defendant, TD Bank, arising out of a bank robbery.

At the time of the alleged incident, the plaintiff was in line behind another individual who issued a note to the teller demanding money as part of a holdup. Apparently, the alleged robber left the bank and the plaintiff stepped up to the teller window. At that point, a bank employee who saw the note called 911 assuming that the plaintiff was the robber. She informed the police of that issue. The police then arrived and questioned the plaintiff. Although the plaintiff alleged that he was arrested, the responding police officers simply indicated that when they arrived at the bank, they interviewed the plaintiff as a witness and based on his demeanor indicated that he was not under arrest. The plaintiff then alleged that he began experiencing emotional distress as a result of the incident.

After granting summary judgment to the defendant, the plaintiff appealed, but the Appellate Division rejected the plaintiff’s appeal finding that there was no cognizable claim for “negligent misidentification”. The Court further held that the plaintiff’s injury did not result from the bank’s breach of duty to maintain a safe premises and to protect the plaintiff from criminal conduct. The Court further rejected the plaintiff’s allegations that the defendant’s employees breached internal policies of the bank. The Court found that the internal policies of the bank do not create a legal duty on the part of the bank.

Bartlett v. Push to Walk, 2018 WL 1726262

In this case, the U.S District Court reviewed a claim for an injury involving a plaintiff in a wheel chair who attended the defendant fitness center for personal training and suffered a leg fracture while receiving that training from the defendants. The defendants argued that they were entitled to summary judgment based upon a liability waiver signed by the plaintiff, as well as the doctrine of charitable immunity.

The Court, citing Stelluti v. Casapenn Enterprises, 203 N.J. 286 (2010) agreed that the plaintiff’s negligence claim was barred by the liability waiver since it was not inconsistent with public policy and only released the defendants from claims related to ordinary negligence. However, the Court denied the defendant’s Motion for summary judgment as to plaintiff’s gross negligence claim.

The Court noted that the issue of gross negligence is highly dependent on context. The Court found that the plaintiff was wheelchair bound and thus highly vulnerable and thus was relying on the expertise of the defendants to avoid injury. In this case, the plaintiff complained that the defendants were encouraging him to do a kneeling technique which he had problems completing. Despite his protestations, the defendants continued to encourage the kneeling technique and he was injured while doing same.

State v. McIntyre Caulfield, 2018 WL 2271432

In this criminal case, the defendant appealed from a trial court’s denial of her request for civil reservation relating to her guilty plea. The defendant pled guilty to a second degree crime, endangering the welfare of a child, after the death of an infant in her day care home business. The defendant was willing to plead guilty but as a condition of her guilty plea, she requested a civil reservation in the civil case which was being brought against her. The defendant’s insurance company had previously disclaimed coverage in the civil action.

On appeal, the Appellate Division reversed the trial court’s denial of the defendant’s request for a civil reservation. The Court found that the purpose of New Jersey Court Rule 3:9-2, was to avoid unnecessary criminal trials. The Court found that the criminal plea process could be impeded if a defendant feared that civil litigants might attempt use a party’s guilty plea as an admission of civil liability.

The Court further held that a good faith fear that a guilty plea could lead to civil liability was sufficient to trigger the rule, especially due to the fact that the defendant’s insurance company had disclaimed insurance coverage.

The New Jersey legislature is moving towards expanding the range of damages that could be awarded under the New Jersey Wrongful Death Act.

In April, 2018, the Senate Judiciary committee voted 6-4 in recommending passage of Bill S–1766.

If the bill passes both houses of the legislature and is signed by the governor, the bill would allow surviving family members to recover damages for mental anguish, emotional pain and suffering, as well as loss of society and loss of companionship.

Presently, Wrongful Death damages are only available for pecuniary loss such as the loss of financial support for family members, actual medical and funeral costs and the economic value of the loss of companionship advice and guidance of the decedent.

The Bill remains pending in the Senate.

_____________________________________________________________________________

THIS CONCLUDES OUR NEWSLETTER.

AS ALWAYS, WE EXTEND OUR THANKS FOR YOUR CONSIDERATION AND SUPPORT.

WITH SUMMER AT OUR DOORSTEP, WE PRESENT OUR CURRENT ISSUE OF OUR NEWSLETTER.

WE ARE PLEASED TO REPORT THAT TONY PASQUARELLI HAS BEEN DESIGNATED AS ONE OF AMERICA’S TOP 100 CIVIL DEFENSE LITIGATORS, AND ARE PROUD OF THIS ACCOMPLISHMENT.

THIS DESIGNATION IS BY INVITATION ONLY. CANDIDATES ARE NOMINATED THROUGH A COMPREHENSIVE ANALYSIS BASED UPON PROFESSIONAL EXPERIENCE, LITIGATION EXPERIENCE, SIGNIFICANT CASE RESULTS, REPRESENTATIVE HIGH STAKE MATTERS, PEER REPUTATION AND COMMUNITY IMPACT.

LESS THAN ONE-HALF PERCENT (0.5%) OF ACTIVE ATTORNEYS IN THE UNITED STATES RECEIVE THIS HONOR

THE FOLLOWING IS OUR LIST OF CASES THAT MAY BE OF INTEREST TO OUR CLIENTS, DECIDED SINCE OUR LAST NEWSLETTER.

1. Northfield Insurance Company v. Mount Hawley Insurance Company, 2018 WL 151316 - Is an insurance company that initially denies coverage but offers its insured a courtesy defense estopped from later moving for Summary Judgment on the coverage denial?

2. Ferrante v. New Jersey Manufacturer’s Insurance Group, 232 N.J. 460 (2018) - Does the failure of Plaintiff’s counsel to advise the Plaintiff’s UM/UIM carrier of a potential UM/UIM claim until after settlement of the Plaintiff’s claim against the tortfeasor bar the UM/UIM claim against the UM/UIM carrier?

3. Kryzyalski v. Tindall, 232 N.J. 525 (2018) - Can an unidentified John Doe defendant’s negligence in a multi-vehicle accident be submitted to the trier of fact for an apportionment of liability?

4. Ellis v. Hilton United Methodist Church, 2018 WL 2305521 - Does a religious organization lose its protection under the New Jersey Charitable Immunity Act when its property has been abandoned?

5. Lee v. Brown, 232 N.J. 114 (2018) - Are a city’s electrical inspectors entitled to a qualified immunity or absolute immunity for failure to enforce building codes following a fire which resulted in the death of four residents?

6. Baez v. Paulo, 453 N.J. Super 422 (App. Div. 2018) - Will the Plaintiff be permitted to amend a pleading to substitute the names of three physicians for “John Doe” defendants after the Statute of Limitations has expired?

7. Estate of Yearby v. Middlesex County, 453 N.J. Super 388 (App. Div. 2018) - Does the Plaintiff’s failure to file an Affidavit of Merit against three nurses until 107 days after the requisite time period under NJ Court Rules bar the claims against the nurses?

8. Faircloth vs. Beville, 2018 WL 827891 - Is a commercial landlord strictly liable for a dog bite by its tenant’s dog?

9. Spataro v. The Steak Master Inc., 2018 WL 792081- Is an inexperienced golfer’s demonstration of a golf swing to the plaintiff a negligent act or a reckless act which should be submitted to the trier of fact?

10. D.G. v. B.E.A., 2018 WL 1527558 - Does an insurer owe a duty to defend an insured who committed an act of domestic violence by beating his girlfriend?

11. Morris vs. TD Bank, WL 1720652 - Is a bank liable when its teller misidentifies a customer as the bank robber immediately after the robbery has occurred?

12. Bartlett v. Push to Walk, 2018 WL 1726262 - Does the signing of a liability waiver bar a Plaintiff from pursuing a claim for a leg fracture when the plaintiff alleges gross negligence?

13. State v. McIntyre Caulfield, 2018 WL 2271432 - Can a defendant in a criminal case impose a civil reservation as part of a guilty plea in a criminal case?

14. Latest Legislative Trends - Expansion of Wrongful Death Damages

Northfield Insurance Company v. Mount Hawley Insurance Company,

2018 WL 1513162

The Appellate Division considered a Superstorm Sandy claim involving issues of estoppel and reservations of rights. The plaintiff, Northfield Insurance, the insurer of CDA Roofing Consultants, filed a Declaratory Judgment action against a number of defendants, including the developer Empress Properties and its insurer, Mount Hawley Insurance Company. CDA Roofing was hired by Empress to perform roofing work at a location in Asbury Park near the boardwalk.

Superstorm Sandy hit Asbury Park causing property damage to the roof and interior water damage to the Empress property. Northfield provided coverage to the roofer and issued a reservation of rights letter with a denial of coverage, but agreed to extend a courtesy defense to its insured. The coverage denial was based upon Northfield’s conclusion that the roof damage was caused by winds rather than the negligence of its insured.

The insurer for the owner, Mount Hawley and the defendant, Empress, filed Motions for summary judgment seeking a finding from the Court that Northfield was estopped from denying indemnification to its insured due to the fact that Northfield extended a defense to the roofing company.

The trial court granted Mount Hawley’s Motion for summary judgment finding that Northfield was estopped from denying coverage because Northfield failed to seek its insured’s consent to Northfield’s control of the defense relying on Merchant’s Indemnity Corp. v. Eggleston, 37 N.J. 114. In response, Northfield argued that the Eggleston case applied only to reservations of rights letters rather than to outright denials of coverage and that its insured, CDA was not prejudiced by Northfield’s actions. Northfield also contended that Mount Hawley lacked standing to assert estoppel.

In reversing the grant of Summary Judgment to Mount Hawley, the Appellate Division concluded that the roofer’s failure to decline Northfield’s courtesy defense created a triable issue as to whether the roofer accepted Northfield’s control of the roofer’s defense. The Court also rejected Mount Hawley’s contention that the Eggleston case required estoppel when Northfield assumed control of the defense without CDA’s consent. Further, the Court noted that Mount Hawley failed to establish that the roofer was prejudiced by the actions of its insurer or that Mount Hawley proved detrimental Reliance.

The Court further noted that the insured roofing company was defunct when Northfield denied coverage further weakening Mount Hawley’s estoppel arguments. The Court also questioned whether or not Mount Hawley had standing to assert estoppel. Based upon these numerous factual issues, the Court reversed the summary judgment order in favor of Mount Hawley and returned the case to the trial court for further proceedings.

Ferrante v. New Jersey Manufacturer’s Insurance Group,

232 N.J. 460 (2018)

The New Jersey Supreme Court reviewed the actions of a plaintiff who failed to advise his auto insurer of litigation against an underinsured driver. The plaintiff was involved in an automobile accident where the other driver was at fault. Without informing his own carrier, plaintiff filed suit, participated in mandatory arbitration and rejected an arbitration award.

The plaintiff ultimately entered into a high-low agreement with the tortfeasor, and again without knowledge of the insurer, obtained a judgment of $100,000.00 against the tortfeasor. Plaintiff then filed an underinsured motorist’s claim with NJM, his UIM carrier.

In the trial court, NJM moved to dismiss the plaintiff’s Complaint for failure to advise NJM of the underlying proceeding against the tortfeasor. NJM’s motion was granted by the trial court.

An appeal was then taken to the Appellate Division which reversed the trial court ruling, concluding that NJM must demonstrate prejudice in order to decline coverage under the UIM policy.

In a unanimous opinion, the Supreme Court reversed the Appellate Division, ruling that New Jersey case law emphasizes the importance of candor by insureds and their obligation to act in a “forthright, open and honest” manner with their carriers throughout the entire process of their claim. The Court found that the plaintiff failed to give NJM any notice of the UIM claim until after the final resolution of the underlying tort action, thereby causing an irretrievable loss of NJM’s rights to subrogation and intervention before NJM ever learned of the existence of the UIM claim.

The Court concluded that the Plaintiff violated the terms of his insurance policy, and that under a series of UM/UIM cases, including Longworth v. Van Houten 223 N.J. Super. 174 (App. Div. 1988), Rutgers Casualty v. Vassas, 139 N.J.163 (1996) and Zirger v. General Accident, 144 N.J. 327 (1996) the plaintiff/insured was required to inform NJM as soon as a law suit was filed, and not after an arbitration, the signing of a high-low agreement and a jury trial. The Court found that NJM’s right to subrogation was irreparably prejudiced and dismissed the plaintiff’s claim.

Kryzyalski v. Tindall 232 N.J. 525 (2018)

The New Jersey Supreme Court reviewed the issue of apportionment of liability of a known but unidentified John Doe defendant. The defendant’s car was behind the plaintiff’s vehicle when both were making left turns. A third vehicle driven by an unidentified driver drove to the right of both cars then cut off into the left turn lane. The defendant’s vehicle was then pushed into the plaintiff’s vehicle and the plaintiff was injured. The plaintiff later filed an Uninsured motorist claim with his insurer, alleging that the accident was caused by the unidentified driver.

At trial, the Court submitted the negligence of the John Doe driver to the jury pursuant to the Comparative Negligence Act. The jury found that the John Doe defendant was 97% negligent, while the driver of the vehicle struck by the John Doe defendant was found only 3% at fault.

The plaintiff appealed arguing that the Court should not have permitted the jury to consider apportionment of liability with the John Doe defendant.

The New Jersey Supreme Court rejected plaintiff’s contention. The Court noted that a jury could apportion fault between an identified defendant and non- identified John Doe defendant because all of the parties acknowledged that there was a phantom vehicle involved in the accident. In addition, the fact that the plaintiff’s insurer was aware of the litigation and that the plaintiff himself had received notice from the identified defendant of the assertion that a John Doe defendant caused the accident, supported the submission of the John Doe’s liability to the jury.

The Court pointed out that hit and run accidents are a frequent problem in New Jersey and that since 1968, auto insurers are required to provide UM coverage in their automobile policies. The Court concluded that parties known to be at least in part liable should be allocated their share of fault, even when unidentified. In those cases, known but unidentified parties may be allocated fault even though recovery against those parties is possible only through the plaintiff’s UM coverage.

Ellis v. Hilton United Methodist Church, 2018 WL 2305521

The Appellate Division in an unpublished opinion, considered an appeal from the trial court’s denial of a Motion for summary judgment seeking to classify the defendant church as a commercial property because it had been abandoned. The plaintiff slipped and fell on a sidewalk adjacent to the church, which was no longer an active parish.

Prior to the conclusion of discovery, the plaintiff moved to strike the Church’s charitable immunity defense and requested that the trial court find that the church was commercial property because the church had essentially abandoned the property, which would eventually lead to a potential for commercial income. The plaintiff further requested that the Court find that the church should be held to the standard of care of a commercial landowner.

The Church argued that although it was not operating as a church, neither was it operating as a commercial entity, and thus had no responsibility for maintaining the sidewalk as a commercial landowner.

The Court rejected the plaintiff’s appeal finding that there was no evidence that the church had used their property for commercial purposes at any time prior to the plaintiff’s accident. The Court concluded that the Church, an owner of non-commercial property, was protected by the Charitable Immunity statute, and not subject to commercial sidewalk liability. The plaintiff’s appeal was denied.

Lee v. Brown 232, N.J. 114 (2018)

The Supreme Court considered the liability of a public entity and its electrical inspectors arising out of a fire that destroyed a multi-unit home and resulted in the death of four residents. The plaintiffs allege that the city and its electrical inspectors were partially at fault for the fire since they had been advised of defective wiring at the home prior to the fire, and did nothing about it.

The city and its inspectors filed a Motion for summary judgment seeking dismissal of the plaintiffs’ claims based upon the absolute immunity provided to them under the New Jersey Torts Claims Act.

The Appellate Division affirmed the trial court’s finding that the city and the inspectors were entitled only to qualified immunity because the inspectors were enforcing the law, but the case did not involve a failure to enforce the law that would potentially entitle the city and inspector to absolute immunity. The Court also found that an issue of fact existed as to the electrical inspector’s “good faith”.

However, the New Jersey Supreme Court reversed the finding of the Appellate Division finding that the inspectors and the city were entitled to absolute immunity because the case involved a failure to enforce the construction code. The Court noted that the critical causative factor in this case was the inspector’s failure to contact his supervisor to arrange for an immediate power shut-off or to seek relief in court, after finding the code violations in the house. The Court found that the inspector’s failure to enforce building codes allowed the wiring problem to linger which ultimately resulted in the fire.

The Supreme Court further noted that the New Jersey Tort Claims Act effectuates the Legislature’s intent establishing immunity for government action as the rule and liability as the exception. Finally, since the Court found that the City and the inspector were entitled to absolute immunity, there was no need to consider the issue of the inspector’s “good faith”.

Baez v. Paulo, 453 N.J. Super 422 (App. Div. 2018)

In a published opinion, the Appellate Division considered whether the fictitious pleading process would permit an addition of three additional defendant physicians following the expiration of the Statute of Limitations. Three days before the expiration of the Statute of Limitations, the plaintiffs filed a medical malpractice action against two named physicians and five John Doe physicians, since the hospital records were mostly handwritten and basically illegible.

After the Statute of Limitations had expired, defense counsel sent plaintiffs an Affidavit identifying the three physicians that were involved in the plaintiff’s care. The plaintiff then moved to amend the Complaint to name the three physicians in place of the John Doe defendants.

The physicians then engaged in discovery for a year before they moved to dismiss the Complaint on the contention that the plaintiff did not file a claim within the Statute of Limitations. The trial court found that the fictitious pleading process did not permit an untimely addition of defendants after the Statute of Limitations had expired, however, since the physicians did not move for summary judgment until a year after their Answer was filed, they were equitably estopped from asserting the Statute of Limitations defense.

On appeal, the Court noted that a plaintiff relying on a fictitious pleading must demonstrate two phases of due diligence in order to gain the tolling benefits of the rule. First, a plaintiff must exercise due diligence in endeavoring to identify the responsible defendants before filing the original complaint naming John Doe parties. Second, a plaintiff must act with due diligence in taking prompt steps to substitute the defendant’s true name after becoming aware of that defendant’s identity.

On appeal, the Appellate Division areed that the fictitious pleadings process would not permit an untimely addition of defendants when the plaintiff had knowledge of their identities prior to the institution of the law suit. The Court found that two of the physicians were clearly named in the hospital chart, and thus plaintiff should have been aware of their involvement prior to the expiration of the statute of limitations. However, the Court also noted that the hospital chart erroneously named another physician as the plaintiff’s attending physician, and concluded that if one of those two doctors, was actually the plaintiff’s attending physician, the plaintiff’s case could go forward as to that particular doctor, based upon the mistake in the medical record.

The Appellate Division also rejected the trial court’s finding that the doctor’s were equitably estopped from filing a motion to dismiss based upon their failure to raise the statute of limitations defense until after discovery was concluded. The Court found that in the absence of a case management order establishing a motion deadline, it would be unfair to preclude the doctors from filing a motion to dismiss on the statute of limitations issue.

Estate of Yearby v. Middlesex County, 453 N.J. Super 388 (App. Div. 2018)

The Appellate Division reviewed the failure to file an Affidavit of Merit within the appropriate time frames.

The decedent, a mentally ill man, died strapped to a restraint chair in the Middlesex County Correction Center approximately twenty-four hours after he was arrested. His estate filed a multi-count complaint against the public entity, including three nurses employed at the Correction Center.

After suit was filed, the nurses filed a motion for Summary Judgment contending that the plaintiff failed to file the appropriate Affidavit of Merit as required by N.J.S.A. 2A:53A-27. The statute required the filing of an Affidavit of Merit within sixty days of the filing of the answer of the defendant, with an additional sixty day extension permitted on a showing of “good cause”. The trial court initially granted the nurses motion to dismiss, but later changed the ruling after plaintiff’s new counsel argued the doctrine of “substantial compliance”.

The Appellate Division rejected the Plaintiff’s argument relating to substantial compliance. Although finding that the nurses did not establish prejudice for the plaintiff’s failure to file the required Affidavit of Merit, the Court also found that the plaintiff’s prior attorney took no steps to comply with the time requirements of N.J.S.A. 2A:53A-27, and the plaintiff’s new attorney failed to provide a reasonable explanation on why there was not strict compliance with the statute.

The Court concluded that an attorney’s pattern of inattentiveness as well as ignorance of the legal requirements of the Affidavit of Merit statute provided no basis to invoke the equitable doctrine of “extraordinary circumstances” to permit plaintiff’s to prosecute a claim of medical malpractice, and reversed the trial court’s denial of the defendant’s motion to dismiss.

Faircloth vs. Beville, 2018 WL 827891

In this unpublished opinion, the Appellate Division of Superior Court again reviewed a landlord’s legal responsibility for a bite by a tenant’s dog. The plaintiff was visiting the tenants at their residence at the time of the bite.

Under the lease between the landlord and the tenant, the tenant was not prohibited from having pets. However, the landlord was unaware that the tenant had a dog, nor did he know anything about the dog.

The tenant later declared bankruptcy and the claim against the tenant was discharged in bankruptcy. The landlord filed a motion for Summary Judgment

which was granted by the trial court.

On appeal, the plaintiff argued that a landlord’s responsibility should be expanded to impose liability consistent with “premises liability law”. The plaintiff further argued that animals should be considered a hazard, and that landlords should have a duty to a tenant’s guest to protect them against this potential harm from animals.

In rejecting the plaintiff’s appeal, the Court found that a landlord’s liability is not one of strict liability but is based on “ordinary principles of negligence” finding that in the absence of proof that the landlord was aware of the dog’s vicious propensities or that the dog was inherently vicious, liability should not be imposed on the landlord.

Spataro v. The Steak Master Inc., 2018 WL 792081

In another unpublished opinion, the Appellate Division considered a grant of summary judgment in favor of the defendant. The plaintiff alleged that the defendant had hit him in the face with a golf club while he was demonstrating a golf swing at a driving range. The driving range had thirty stalls and there were numerous signs setting forth the rules of the range. The first rule set forth that only one person was permitted in an individual stall at any given time.

Both the plaintiff and the defendant were inexperienced golfers and were in the same stall when the incident happened.

The trial court granted Summary Judgment to the defendant, finding that the defendant was entitled to the heightened standard articulated by the New Jersey Supreme Court in Crawn v. Campo, 136 N.J. 494 (1994). In Crawn, supra., the Court found that in the absence of reckless or intentional conduct, there is no liability for injuries resulting from a participant’s involvement in recreational sports activities.

In affirming the grant of summary judgment on the issue of negligence, the Appellate Division found that the practice of golf swings was an inherent aspect of the recreational activity of golf.

However, the Court questioned the trial court’s factual determination that the action of the defendant was not reckless. The Court found that the trial judge erroneously usurped the role of the fact finder by making findings of fact and liability in matters of dispute between the parties. The Court noted that recklessness, unlike negligence, requires a conscious choice of a course of action, with knowledge or reason to know that it will create serious danger to others.

The Appellate Division returned the matter to the trial court for trial on the factual issues related to the claim of the defendant’s reckless conduct.

D.G. v. B.E.A., 2018 WL 1527558

The defendant sought coverage and a defense under a homeowner’s policy issued by Harleysville Insurance Company as a result of injuries inflicted on his girlfriend during a domestic violence incident. The trial court found that the defendant’s act of domestic violence was not an “accident” within the definition of an “occurrence” but rather was a particularly reprehensible act from which an intent to cause bodily injury is presumed by law.

The defendant did not dispute he physically assaulted the plaintiff or that this was an act of domestic violence. However, he claimed that he was extremely intoxicated, had no recollection of the event, and did not intentionally or knowingly cause plaintiff bodily harm.

The Appellate Division agreed with the trial Court’s finding that public policy precludes insurance coverage for acts of domestic violence. The Court noted that although there was only one incident of domestic violence in the instant case, the act was sufficiently egregious as to be “particularly reprehensible” warranting a presumption of an intent to injure plaintiff which resulted in a denial of coverage under the policy. The Court further found that voluntary intoxication was no defense, and rejected the defendant’s reliance on Burd v.s Sussex Mutual, 56 N.J. 383 (1970), noting that Burd supra. did not involve a claim of domestic violence.

The Court also found that Harleysville owed no duty to defend its insured, noting that regardless of how a claim is framed, if the operative facts constitute an assault and battery, the insurer has no duty to defend. The Court concluded that for purposes of the policy exclusion, there is no duty to defend where, the gravamen of the plaintiff’s action is that a single particularly reprehensible act of domestic violence assault resulted in liability See Harleysville Insurance v. Garitta, 170 N.J. 223 (2001)

Morris vs. TD Bank, WL 1720652

In an unpublished decision from the Appellate Division, the plaintiff appealed a grant of summary judgment to the defendant, TD Bank, arising out of a bank robbery.

At the time of the alleged incident, the plaintiff was in line behind another individual who issued a note to the teller demanding money as part of a holdup. Apparently, the alleged robber left the bank and the plaintiff stepped up to the teller window. At that point, a bank employee who saw the note called 911 assuming that the plaintiff was the robber. She informed the police of that issue. The police then arrived and questioned the plaintiff. Although the plaintiff alleged that he was arrested, the responding police officers simply indicated that when they arrived at the bank, they interviewed the plaintiff as a witness and based on his demeanor indicated that he was not under arrest. The plaintiff then alleged that he began experiencing emotional distress as a result of the incident.

After granting summary judgment to the defendant, the plaintiff appealed, but the Appellate Division rejected the plaintiff’s appeal finding that there was no cognizable claim for “negligent misidentification”. The Court further held that the plaintiff’s injury did not result from the bank’s breach of duty to maintain a safe premises and to protect the plaintiff from criminal conduct. The Court further rejected the plaintiff’s allegations that the defendant’s employees breached internal policies of the bank. The Court found that the internal policies of the bank do not create a legal duty on the part of the bank.

Bartlett v. Push to Walk, 2018 WL 1726262

In this case, the U.S District Court reviewed a claim for an injury involving a plaintiff in a wheel chair who attended the defendant fitness center for personal training and suffered a leg fracture while receiving that training from the defendants. The defendants argued that they were entitled to summary judgment based upon a liability waiver signed by the plaintiff, as well as the doctrine of charitable immunity.

The Court, citing Stelluti v. Casapenn Enterprises, 203 N.J. 286 (2010) agreed that the plaintiff’s negligence claim was barred by the liability waiver since it was not inconsistent with public policy and only released the defendants from claims related to ordinary negligence. However, the Court denied the defendant’s Motion for summary judgment as to plaintiff’s gross negligence claim.

The Court noted that the issue of gross negligence is highly dependent on context. The Court found that the plaintiff was wheelchair bound and thus highly vulnerable and thus was relying on the expertise of the defendants to avoid injury. In this case, the plaintiff complained that the defendants were encouraging him to do a kneeling technique which he had problems completing. Despite his protestations, the defendants continued to encourage the kneeling technique and he was injured while doing same.

State v. McIntyre Caulfield, 2018 WL 2271432

In this criminal case, the defendant appealed from a trial court’s denial of her request for civil reservation relating to her guilty plea. The defendant pled guilty to a second degree crime, endangering the welfare of a child, after the death of an infant in her day care home business. The defendant was willing to plead guilty but as a condition of her guilty plea, she requested a civil reservation in the civil case which was being brought against her. The defendant’s insurance company had previously disclaimed coverage in the civil action.

On appeal, the Appellate Division reversed the trial court’s denial of the defendant’s request for a civil reservation. The Court found that the purpose of New Jersey Court Rule 3:9-2, was to avoid unnecessary criminal trials. The Court found that the criminal plea process could be impeded if a defendant feared that civil litigants might attempt use a party’s guilty plea as an admission of civil liability.

The Court further held that a good faith fear that a guilty plea could lead to civil liability was sufficient to trigger the rule, especially due to the fact that the defendant’s insurance company had disclaimed insurance coverage.

The New Jersey legislature is moving towards expanding the range of damages that could be awarded under the New Jersey Wrongful Death Act.

In April, 2018, the Senate Judiciary committee voted 6-4 in recommending passage of Bill S–1766.

If the bill passes both houses of the legislature and is signed by the governor, the bill would allow surviving family members to recover damages for mental anguish, emotional pain and suffering, as well as loss of society and loss of companionship.

Presently, Wrongful Death damages are only available for pecuniary loss such as the loss of financial support for family members, actual medical and funeral costs and the economic value of the loss of companionship advice and guidance of the decedent.

The Bill remains pending in the Senate.

_____________________________________________________________________________

THIS CONCLUDES OUR NEWSLETTER.

AS ALWAYS, WE EXTEND OUR THANKS FOR YOUR CONSIDERATION AND SUPPORT.