May 22, 2020
While “you can’t always get what you want”, we (like Mick Jagger) hope you find that you are getting what you need these days; whether it be the time and space to tackle your work, or moments of respite to enjoy the weather and appreciate your loved ones.
Part of what we all need is direction from our courts and they continue to provide it with opinions being delivered on a host of topics. In New York, the Appellate Division, First Department granted summary judgment in favor of HKMP’s clients. Arbitration, seemingly an ever popular subject, was addressed in a precedential opinion from the Third Circuit in a putative class action involving rental car companies. A split New Jersey Supreme Court affirmed that a subrogation action to recover workers’ compensation benefits arising from a motor vehicle accident is not barred by the Auto Insurance Cost Recovery Act. Professional liability cases generated a number of opinions tackling issues from the Affidavit of Merit, to whether experts offered net opinion, to the right to a jury trial on an attorney fee/retainer dispute. We hope you take the time to dig into these and the other cases reviewed in this issue.
As always, we appreciate the chance to catch up with you and we hope you enjoy this edition of HKMP’s Case Alerts.
HKMP defeated a plaintiff’s appeal in the Appellate Division, First Department, of an order which granted the firm’s clients’ summary judgment motion. The plaintiff worked at a housing facility for homeless individuals which was owned and operated by HKMP’s clients. The plaintiff was menaced with a knife by one of the residents. The plaintiff alleged the clients were negligent in permitting the assailant, who had a history of criminal conduct, to reside in the facility, and for failing to provide adequate security. HKMP demonstrated that the tenant’s history of criminal conduct related to an incident that occurred fifteen years prior to the incident. Further, the tenant had lived in the client’s facility for many years without threatening anyone or committing any violent acts. In other words, the assault by the tenant could not have been anticipated. Regarding the negligent security allegations, HKMP demonstrated the clients took numerous precautions to ensure the facility was reasonably safe. For example, the facility had surveillance cameras throughout the building, functioning locks on office doors, and panic buttons staff could push to alert security. Further, the clients contacted with a security company to provide security guards at the premises. Lastly, HKMP presented evidence that the incident lasted less than one minute, and therefore the alleged inadequate security was not a proximate cause of the incident. In other words, additional security measures could not have prevented the incident. The First Department unanimously agreed with HKMP’s arguments.
Bacon v. Avis Budget Group, Inc ., __ F.3d __ (3d Cir. 2020)
The Third Circuit issued a precedential opinion affirming the District Court’s denial of motions to compel plaintiffs, a putative class, to arbitrate claims against the defendants. Plaintiffs brought a putative class action against defendant rental car companies alleging violations of different state consumer fraud and unfair/deceptive trade statutes for charging plaintiffs for unauthorized or declined services.
Six plaintiffs signed single page rental agreements in the U.S. that had an acknowledgement section indicating the customer agreed to the charges in the agreement and in the rental jacket. The agreements were folded and placed into a “rental jacket” and handed to the plaintiffs with the rental jacket containing 31 different paragraphs including an arbitration provision. Another plaintiff rented a car in Costa Rica receiving a two-sided single page rental agreement in English and Spanish. The backside included an arbitration provision with a signature line, but the plaintiff never signed the backside and video of the transaction did not show the rental associate identifying the provision on the backside of the agreement. All plaintiffs had arranged the rentals through third-party websites which also possessed arbitration provisions.
Targeted discovery was conducted on arbitrability. Motions were then filed based upon the Federal Arbitration Act (“FAA”). The District Court denied defendants’ motion as to the U.S. Agreements and granted plaintiffs’ motion on the ground that the U.S. plaintiffs did not assent to the arbitration provision. The District Court denied both plaintiffs’ and defendants’ motions regarding the Costa Rican agreement due to a disputed factual issue of whether plaintiff was on reasonable notice of the arbitration provision. As to the motions based on the website terms, the record was insufficient so the issue could be resolved after further discovery. Defendants appealed.
The Third Circuit found it had appellate jurisdiction because the motions sought an order compelling arbitration, which was appealable to the Third Circuit under statute. The lack of finality for the orders of the two motions requiring further discovery did not deprive the Third Circuit of jurisdiction since they still implicated the FAA.
The Third Circuit found under NJ law that the U.S. agreement did not bind the plaintiffs because it “does not incorporate the rental jacket beyond doubt” due to insufficiently describing the rental jacket to incorporate it by reference. The same conclusion was reached under FL law. The Third Circuit affirmed the genuine issues of fact regarding whether the plaintiff renting in Costa Rica was on notice of the provision on the back of the document to have assented to as well as an absence of authenticated evidence to establish plaintiffs assented to arbitration provisions in renting through the various websites since the evidence presented did not show the websites when plaintiffs made their reservations. 
Minelli v. Harrah’s Resort Atlantic City , __ N.J. Super. __ (N.J. App. Div. 2020)
The Appellate Division reversed dismissal of plaintiffs’ personal injury suit against a casino and operating entities because plaintiffs’ claims were timely filed by operation of 11 U.S.C. 108(c)(2) of the Bankruptcy Code. Plaintiff filed suit for a fall at a casino more than two years after the incident alleging the defendant entities were indistinct and structured to evade responsibility. A notice of bankruptcy was filed and defendants moved to dismiss arguing the suit was time barred. The Appellate Division reversed the dismissal of the lawsuit by the trial court finding that it was based upon an erroneous conclusion that the Bankruptcy Code did not afford plaintiffs relief at least as to one of the entities still protected by the automatic stay.
New Jersey Transit Corp. v. Sanchez , Docket No. A-68-18 (082292) (N.J. 2020) (per curiam)
Plaintiff sought to recover workers’ compensation benefits paid to their employee who sustained injuries in a work-related motor vehicle accident. Plaintiff sued the defendants at fault for the motor vehicle accident pursuant to the Workers’ Compensation Act (“WCA”), N.J.S.A. 34:15-40 which authorizes employers and workers’ compensation carriers to assert subrogation claims in the event that they pay benefits to an injured employee who neither sought nor received personal injury protection (“PIP”) benefits. The trial court granted defendants’ motion finding subrogation claims were barred by the Auto Insurance Cost Recovery Act (“AICRA”). The Appellate Division reversed stating the subrogation loss arose entirely from the economic loss of medical expenses and lost wages. The WCA imposed on an employer the obligation to pay workers’ compensation benefits for an accident arising from an injured worker’s employment and N.J.S.A. 34:15-40 gives employers an absolute right to seek reimbursement. The appellate court further noted that where workers’ compensation benefits and the proceeds of a tort were recovered, that the tort recovery becomes primary so the collateral source rule would not pose an obstacle to the plaintiff’s claim. The New Jersey Supreme Court split and so affirmed the judgment of the Appellate Division. The employee was injured during a work-related event and did not seek or claim PIP benefits and instead accepted workers’ compensation from his employer. The fact that the employer then brought a subrogation action to reclaim the benefits paid fell in line with the legislature’s intention in AICRA’s collateral source rule and the WCA.
Kastrati v. Premier Endoscopy, LLC , Docket No. A-0050-19T3 (N.J. App. Div. May 7, 2020) (per curiam)
The Appellate Division applied the “law of the case” doctrine to reverse and remand the entry of summary judgment dismissing plaintiff’s case for failure to provide an Affidavit of Merit (“AOM”). Plaintiff brought a personal injury action against the defendant medical practice alleging defendant failed to properly monitor her after a colonoscopy procedure the procedure, resulting in a slip and fall causing her to break her hip. Defendant argued plaintiff’s allegations were for medical malpractice rather than ordinary negligence and moved to dismiss for failure to provide an AOM. The trial judge denied the motion, finding that an AOM was not required in an ordinary negligence case. Defendant then filed a motion for summary judgment asserting plaintiff had failed to serve a liability expert report. A second judge heard that motion and granted summary judgement, holding that the first judge should have dismissed the complaint at the outset because a “medical, professional negligence” case requires an AOM. On appeal, plaintiff argued the second judge erred by reviewing the first judge’s ruling and failing to consider that plaintiffs submitted a liability expert report before the discovery end date. The Appellate Division agreed, holding that the first judge’s decision constituted the “law of the case” so the second judge was unable to review whether the decision of another judge “of coordinate jurisdiction” was correct unless there had been a material change in the facts or available evidence, or an intervening change in the law that affected the prior decision. Here, the Appellate Division found there was no such change and the second judge’s failure to consider plaintiff’s expert report was improper. 
Michel v. Langel , Docket No. A-4054-18T3 (N.J. App. Div. May 8, 2020) (per curiam)
The Appellate Division held a snow removal contractor’s failure to add a property owner to its commercial general liability policy did not result in damage and that the contractor was not required to indemnify the owner for its own negligence. Plaintiff’s claim arose out of a motor vehicle accident in a shopping mall parking lot. It was alleged that plowed snow piles impeded the defendant-driver’s vision contributing to the accident. The owner asserted a cross-claim against the snow removal contractor for defense and indemnification. The contract between the parties required the contractor to defend and indemnify the owner from all claims arising out of the contractor’s negligence and required that the owner be named as an additional insured on the contractor’s policy. The case was arbitrated and the arbitrator found the contractor and owner each 15% liable. No party objected to the award and it was converted into a judgment. The court found that while the contractor indeed breached its duty to name the owner as an additional insured, the owner was not damaged by the breach because the owner was found independently negligent and pursuant to the contract, the contractor was not required to indemnify or insure the owner for its own negligence. Thus, the court determined that the sole intent of the contract was to protect the owner from liability for the contractor’s negligence. Here, the owner was only obligated to defend against its own negligence and pay damages arising out of its own negligence, thus the breach was harmless and the owner’s summary judgment was denied.
Estate of Doerfler v. Fed. Ins. Co ., Docket No. A-4215-18T1 (N.J. App. Div. May 14, 2020) (per curiam)
The Appellate Division affirmed the grant of summary judgment in favor of the defendant insurance carrier finding the losses claimed by plaintiffs were not covered under their homeowners’ insurance policies when their homes were destroyed by flooding during Superstorm Sandy. While providing “deluxe contents coverage,” the policies excluded damage resulting from flood from coverage as well as the mandatory NJ notification that the policies did not cover damages from flood. The policies also included surface water exclusions. Plaintiffs also procured flood insurance from a separate carrier. Plaintiffs' homes were subject to storm surge during Superstorm Sandy and their homes eventually collapsed. Plaintiff recouped from their flood insurance carriers then sought coverage under their homeowners’ policies. Plaintiffs filed a declaratory judgment action relying upon a professor of marine and coastal sciences who opined the storm surge was a “wind created and driven phenomenon.” The Appellate Division affirmed the trial court’s enforcement of the surface water exclusion rejecting plaintiffs’ contention that wind was the proximate cause of the storm surge and thus covered as wind damage under the policies. The Appellate Division found the policies “caused by” provision fulfilled the purpose of an anti-sequential clause so that there was no coverage if multiple causes, some covered and some not, occurred in a sequence of events to produce a single loss. The collapse of the homes was also insufficient basis to trigger coverage as the collapse was the “form” of the damages sustained, not the cause of the damages.
The Toscano Law Firm, LLC v. Haroldson , Docket No. A-2909-17T2 (N.J. App. Div. May 12, 2020) (per curiam)
The Appellate Division held, in part, that a client was entitled to a jury trial on his former law firm’s claim for an award of attorney’s fees pursuant to an attorney lien for work performed before the client retained new counsel and on the parties’ dispute over a retainer. The Appellate Division found that a right to a jury trial attached to the retainer dispute as a breach of contract claim such that the trial court could not deprive the defendant client of his right to a jury trial without the defendant’s consent. The quantum meruit claim for the firm’s fee was also incorrectly held to be “essentially equitable” and the panel interpreted the case law as providing in some cases for trial by jury, especially claims in a law court rather than a court of chancery. Since there was no proper waiver of a right to a jury trial under the Rules of Court (the defendant client verbally demanded a jury trial on the record in open court), the trial court erred in holding a bench trial on the attorney lien claim and handling of the retainer dispute.
Bland v. K.R. , Docket No. A-1837-18T1 (N.J. App. Div. May 15, 2020) (per curiam)
The Appellate Division affirmed the grant of summary judgment in favor of defendant doctors and their respective employers. Plaintiff was injured in a motor vehicle accident when one of the defendants was driving and drifted into the other lane colliding head-on with plaintiff. The defendant driver had been seen by various doctors prior to the accident including the defendant general practitioner and defendant neurologist. Plaintiff contended the defendant medical providers were negligent in failing to report the defendant driver’s recurrent periods of unconsciousness/impairment or loss of motor coordination to the Director of the New Jersey Motor Vehicle Commission (“MVC”) per N.J.S.A. 39:3-10.4. The Appellate Division noted the statute does not provide a basis for negligence claims against the medical defendants. Further, there was no binding case law establishing a cause of action for a violation of the statute to protect others from physical harm that could result from a driver whose condition renders the driver unsafe to drive. The court also noted an absence of evidence other than the driver’s own self-reports that she had seizures, let alone that they recurred after visiting the defendant doctors, to create a situation where the driver’s symptoms persisted or recurred despite medical treatments. With no diagnosis, no treatment, and no recurrence, there was nothing under the statute to create a duty on the part of either doctor to report plaintiff to the MVC so summary judgment was proper. Moreover, plaintiff’s claim could not be sustained as one for common law malpractice as such claims were dropped in amended complaints as plaintiff changed the theory of the case to pleading alleged negligence in failing to reporter the driver to the MVC under the statute.
Peretz v. Belnekar , Docket No. A-4953-17T1 (N.J. App. Div. May 15, 2020) (per curiam)
New Jersey Appellate Division per curiam decision affirming the denial of plaintiffs’ motion for a new trial in a medical malpractice case arising out of the death of plaintiffs’ son from an allergic reaction. Plaintiff’s son had an allergic reaction to diary and was taken by his father to the emergency room. He had been given his EpiPen by his mother but neither he nor his parents ever administered it. At the hospital, he went into cardiac arrest and sustained a permanent brain injury leaving him in a vegetative state until he died three years later. Plaintiffs sued the doctor and nurses who treated their son at the hospital and related entities.
Prior to trial, plaintiffs moved to bar defendants from blaming the decedent’s parents for not using the EpiPen. The judge reserved. At trial, plaintiffs’ experts opined that defendants failed to administer the proper dosage of epinephrine and had administered the medication in an improper manner. The EpiPen was then introduced at trial in testimony about the importance of timely administration of epinephrine. The jury was instructed the EpiPen evidence was not to be considered to assess blame to the parents; it was to be considered if the jury found any defendants negligent in considering whether the nonuse use of the EpiPen was a proximate-cause of the damage to plaintiffs’ son pursuant to Scafidi v. Seiler. The jury found one defendant 20% negligent and attributed 80% of plaintiff’s ultimate injury to his pre-existing condition. Plaintiffs were awarded $200,000 for the son's disability, impairment, and loss of enjoyment of life, $50,000 for pain and suffering, and $500,000 for the parents’ loss of care, companionship, and support. The verdict was molded by the court and judgment was entered in favor of plaintiffs. Plaintiffs’ motion for a new trial was denied.
The Appellate Division affirmed. Of note was the attention given to the Scafidi dispute. The court noted that all of the experts, including plaintiffs’, agreed (1) the decedent presented to the hospital with a pre-existing condition of an allergic reaction or anaphylaxis and asthma and (2) the pre-existing condition was a factor in assessing his lost chance for recovery so plaintiffs’ argument that Scafidi was inapplicable lacked merit. Defendants also met their burden on apportionment through expert testimony that 100% of decedent’s damages were due to his pre-existing condition and nonuse of his EpiPen. The Appellate Division viewed the jury’s 80% and 20% apportionment as reflective of a careful consideration of the evidence and comprehension of the trial court’s instructions. There was also no error by the trial court in allowing questioning about decedent’s prior allergic episodes since the information went to the severity of his allergy and the family’s routine in responding to the episodes which weighed on the defendants’ conduct and the experts’ opinions about their conduct.
On other issues, decedent’s mother lacked sufficient expertise to testify that decedent was upset or restless during the time he was in a vegetative state to support a claim of conscious pain and suffering. The father’s emotional distress claim was also properly dismissed since he did not witness the alleged malpractice by the defendants in administering epinephrine. Defendants’ nursing expert was properly permitted to testify on the standard of care as she had sufficient credentials to testify as an expert, a certified emergency room nurse, and her opinion as to the standard of care was based upon her experience as an emergency room nurse in a numerous hospitals. The damages award was not disturbed as the plaintiffs did not “clearly and convincingly” demonstrate a miscarriage of justice.
H.C. Equities, LP v. County of Union , Docket No. A-2903-18T4 ( N.J. App. Div. May 12, 2020) (per curiam)
Reversing dismissals of plaintiff’s claims against defendant public entities for purported failure to send timely notices of claims per the New Jersey Tort Claims Act (“TCA”), N.J.S.A. 59:1-1 to 12-3. The parties were engaged in a long-standing landlord-tenant dispute with prior litigation voluntarily dismissed without prejudice while the parties engaged in settlement discussions. A settlement was not reached and approximately two years later, plaintiff’s counsel sent three letters to counsel for defendants reviewing the claimant, where notices to the claimant (the plaintiff) were to be sent, identifying the public entities responsible for causing the alleged injuries (the defendants), and describing the alleged claims. Two of the letters were clear that absent a settlement, the claims outlined in the letters, and other claims, would be filed. The Appellate Division read the letters in the context of the parties’ prior dealings and prior litigation finding an absence of prejudice to the defendants as they knew of the claims, could investigate them, correct practices if needed, and were aware of the alleged damages. Thus, the court found the claims were improperly dismissed by the trial court as the plaintiff substantially complied in providing notice under the TCA to the defendant public entities of the tort claims. 
H.K.S. v. Kensey , Docket No. A-1329-18T2 (N.J. App. Div. May 18, 2020) (per curiam)
Affirming summary judgment dismissing personal injury claim arising from a motor vehicle accident (“MVA”). Plaintiff claimed that while she recovered from physical injuries, she sustained permanent psychiatric injuries. Plaintiff was treated for symptoms of anxiety, depression, and PTSD and her psychiatrist noted that plaintiff's accident had caused a re-triggering of PTSD related to prior sexual abuse. An IME concluded that plaintiff's psychiatric treatment was unrelated to the MVA. Plaintiffs’ medical records indicated complaints, such as nightmares, were related to per prior sexual trauma, not the MVA. The trial court granted defendant summary judgment finding that plaintiff had failed to meet the verbal threshold under the Automobile Insurance Cost Reduction Act. The Appellate Division affirmed dismissal noting that plaintiff’s expert based his opinion on “parroting plaintiff’s statements and the reports of other physicians” without presenting o objective medical evidence of permanent psychiatric injury or objective comparative analysis of plaintiff's pre- and post-accident condition. The expert also did not discuss the DSM diagnostic criteria, analyze plaintiff's statements, or make observations of plaintiff’s subjective claims of physical manifestations of any symptoms.
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