CASE ALERTS
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Spring 2023
They say spring is on its way. That may appear in doubt here in the Northeast or out in California, but fear not, sunny days are indeed ahead!
 
One bright spot can be found in a Second Department decision in New York affirming the grant of summary judgment dismissing the case in favor of HKMP’s client, a property owner. Kudos to HKMP Partner Stephen Donohue for that win!
 
In this issue of HKMP’s Case Alerts, we also present a Third Circuit decision holding the common knowledge doctrine negated the need for expert testimony in a matter involving a roller coaster and a District of New Jersey opinion granting a motion to dismiss certain claims against an insurance carrier and an insurance broker.
 
Importantly, we report on the decisions of the New Jersey Supreme Court finding allocation of fault applies in breach of contract cases, not just negligence matters and, in another matter, that the Daubert standard should apply to expert testimony in criminal cases representing a further march towards Daubert’s adoption under New Jersey law.
 
Finally, see our discussion of New Jersey Appellate Division decisions holding that an alleged sexual abuse victim still had to satisfy the Tort Claims Act’s medical treatment expense threshold to recover damages for pain and suffering; declining to extend Glassman’s judicial estoppel holding to cases involving joint tortfeasors; the bar to coverage involving an uninsured vehicle per N.J.S.A. 39:6A-4.5 did not apply to a motorist killed outside an uninsured car in a subsequent accident; and enforcing an arbitration provision in a contract between a municipality and an insurer.
 
As always, we welcome your thoughts and hope you enjoy this issue of HKMP’s Case Alerts. 
HKMPP PARTNER STEPHEN DONAHUE
 PREVAILS IN SECOND DEP'T
Figueroa v. Figueroa, 2023 N.Y. Slip Op. 00986 (N.Y. App. Div. 2023)
In an action to recover damages for personal injuries, plaintiff appealed from an order granting summary judgment dismissing the complaint as to HKMP’s client. Plaintiff sustained injuries after riding on a motorcycle as a passenger. Co-defendant, the operator of a motorcycle, swerved the motorcycle to avoid a collision and struck property owned by HKMP’s client. HKMP established the claims should be dismissed by demonstrating the placement of defendant’s property was not a proximate cause of the accident. The Second Department found the Supreme Court properly granted defendant’s motion for summary judgment and affirmed. 
UNITED STATES DISTRICT COURT OF APPEALS, THIRD CIRCUIT
EXPERT TESTIMONY NOT REQUIRED FOR CERTAIN INJURIES ON ROLLER COASTERS
 
Huzinec v. Six Flags Great Adventure, LLC, No. 21-1950 (3d Cir. Feb. 1, 2023) (non-precedential)
Plaintiff suffered serious injuries on a roller coaster at Six Flags after a patron dropped a cell phone which hit plaintiff on the head during the ride. Plaintiff alleged Six Flags acted negligently by failing to enforce its loose objects policy and the policy itself was unreasonable because of the risk that patrons might unsecure their phones during the ride.
 
The Third Circuit vacated the District Court’s grant of summary judgment to Six Flags which was predicated on a finding the plaintiff’s expert was not competent to testify at to the standard of care. The District Court erred by concluding plaintiff needed an expert to establish the standard of care about safety policies because the injury plaintiff suffered was not a result of the mechanical operations of the ride, but rather someone dropping a cell phone that hit him on the head. The Court concluded that an average person could understand the risk created by permitting patrons to carry unsecured cell phones on a roller coaster, so the matter was remanded for trial.
UNITED STATES DISTRICT CURT, DISTRICT OF NEW JERSEY
DISMISSAL OF PROFESSIONAL MALPRACTICE SUIT
 
Law Office of Bauman v. The Hanover Ins. Co., Civil Action 22-4551 (D.N.J. Feb. 27, 2023) (unpub.)
In an underlying action, plaintiffs were named as defendants in a legal malpractice case. Plaintiffs maintained a professional liability insurance policy with the carrier defendant for two years. The defendant insurance carrier denied coverage for the underlying action. As a result, plaintiffs filed suit against the carrier and against their insurance broker seeking declaratory judgment against the carrier and breach of contract by the carrier and, in the alternative, that the broker was negligent for failing to procure proper insurance while knowing the nature of plaintiffs’ business and insurance needs; plaintiffs also argued the broker breached its contract to provide the requisite coverage to plaintiffs that would have covered the underlying legal malpractice action.

The carrier and the broker moved to dismiss the complaint. The carrier argued plaintiffs failed to allege any facts concerning the terms of the policy, how it was breached, and failed to allege damages due to the breach. The carrier also argued that the underlying claim concerned transfer, payment or delivery of funds caused or induced by a fraudulent misrepresentation which was excluded under the policy. The broker argued the negligence claim must be dismissed for lack of factual allegations regarding any duty owed and the breach of contract claim must be dismissed for failing to allege a valid contract existed, the terms, and how it was breached.

In an unpublished opinion, the District Court granted the motions to dismiss. The court found the claim for declaratory relief against the carrier should be dismissed as it sought damages duplicative of the compensatory damages sought in the breach of contract claim. The breach of contract claim against the carrier was also dismissed because while plaintiffs pleaded the existence of a policy, they did not identify the specific language or policy provisions that were allegedly breach. The court rejected a general allegation of refusing to perform under the policy as insufficient to state a claim for relief against the carrier. Further, given the specific exclusion cited by the carrier, the court noted any inferable bad faith claim was also dismissed since the exclusion raised genuine questions of whether the claim was covered. As to the broker, the court noted that it obtained the policy at issue for plaintiffs and there was no claim the policy was void or materially deficient, so plaintiffs did not state a plausible claim of negligence by merely claiming coverage was “insufficient.” Further, breach of contract was not a recognized claim against an insurance broker under New Jersey law for alleged failure to provide adequate coverage, the proper cause of action would be for negligence. Thus, all of the claims were dismissed without prejudice.
NEW JERSEY SUPREME COURT
JURY MUST ALLOCATE PERCENTAGES OF FAULT IN FRAUD AND BREACH OF CONTRACT CASES
 
Liberty Ins. Corp. v. Techdan, LLC, __ N.J. __ (2023)
Plaintiff Liberty Insurance brought an action asserting claims against all defendants for fraud under the Insurance Fraud Protection Act (IFPA), workers’ compensation premium fraud under N.J.S.A. 34:15-57.4, common-law fraud, breach of contract and civil conspiracy. Defendants denied liability and pled as an affirmative defense that plaintiff’s claims were barred in whole or in part by the doctrine of contribution or comparative fault.
 
Plaintiff issued a workers’ compensation policy for three years. Thereafter, according to the allegations in the case, it was discovered that the defendants misrepresented their relationship and provided fraudulent payroll records to lower their insurance premiums. The trial court determined that all defendants should be jointly and severally liable for the $756,990 awarded as compensatory damages. The Appellate Division held the trial court erred when it imposed joint and several liability, rather than directing the jury to allocate fault in accordance with the Comparative Negligence Act (CNA).
 
The New Jersey Supreme held the trial court should have charged the jury to allocate percentages of fault to each defendant with the judgment molded based on the jury’s findings and trebling any portion of the compensatory damages award to defendants who were found to have engaged in a pattern of insurance fraud under the IFPA. The trial court’s failure to apply the CNA warranted a new trial on remand so that a new jury would apportion percentages of fault. The Court held trial courts must charge the jury to allocate percentages of fault, even where only breach of contract, fraud and certain statutory claims are alleged, not just in negligence, products liability or malpractice cases.
 
DAUBERT TEST ADOPTED AS EVIDENCE STANDARD IN CRIMINAL CASES
 
State v. Michael Olenowski, __ N.J. __ (2023)
The New Jersey Supreme Court reconsidered the appropriate standard to evaluate the admissibility of expert evidence under N.J.R.E. 702. The underlying appeal involved whether testimony from a trained Drug Recognition Expert (DRE) is admissible at trial. Issues of this type have been analyzed under the test outlined in Frye v. United States, 293 F. 1013 (D.C. Cir. 1923), which delineates a standard of general acceptance of the expert testimony in the relevant scientific community. Over time, the court has moved away from the Frye test. The Supreme Court held that the Daubert test instead offered a superior approach to evaluate the reliability of expert testimony. The Court remanded the matter to assess the reliability and admissibility of the DRE evidence under Daubert.
PUBLISHED NEW JERSEY APPELLATE DIVISION DECISIONS
ABUSE CLAIMS SUBJECT TO TORT CLAIM ACT’S MEDICAL EXPENSE THRESHOLD
 
C.W. v. Roselle Board of Education, __ N.J. Super. __ (App. Div. 2023)
The Appellate Division recently considered whether plaintiff, an alleged victim of sexual abuse by a teacher, was barred from seeking pain and suffering damages under the Tort Claims Act (TCA), N.J.S.A. 59:1-1 et seq., because he had not incurred the requisite amount of medical expenses. Plaintiff asserted he met the medical expense threshold because a psychologist concluded he would likely need future psychological treatment, and a rational fact finder could conclude continued treatment and therapy would exceed the threshold. 

The Appellate Division found any claim of costs for future medical treatment was speculative and the need for medical treatment was not related directly to the sexual abuse. No evidence was presented of the cost of past, present, or future medical expenses as incurred because of the sexual abuse by the teacher. Plaintiff, therefore, did not meet the monetary threshold under the TCA to defeat summary judgment on his claims of pain and suffering. The Appellate Division concluded to obtain pain and suffering damages under the TCA, a plaintiff must demonstrate the permanent loss of a bodily function, even when the injury only manifests itself in psychological symptoms, and that medical treatment expenses were in excess of $3,600.
 
Although the Legislature has made recent amendments to the TCA regarding sexual abuse claims, it did not eliminate the statutory threshold regarding medical expenses. Therefore, the trial court’s order barring plaintiff from seeking pain and suffering damages was affirmed though plaintiff was not foreclosed from other available damages under the statute.
 
JUDICIAL ESTOPPEL LIMITED TO SUCCESSIVE, NOT JOINT TORTFEASORS
 
Adams v. Yang, __ N.J. Super. __ (App. Div. 2023)
In a medical malpractice matter, defendants appealed from an order denying defendants’ motion to bar the standard of care opinions of plaintiff’s expert at trial. After plaintiff’s decedent died of gastric cancer in August 2013, plaintiff filed a complaint alleging negligence in the care and treatment of decedent. Plaintiff’s expert opined that co-defendant Yang, who settled prior to trial, did not deviate from the standard of care. On appeal, defendants argued that Glassman v. Friedel should be extended to cases involving a settling joint tortfeasor. Glassman implicates judicial estoppel to preclude a plaintiff from disavowing the negligence of an initial tortfeasor who settled in a later action against a successive tortfeasor. The trial court found Glassman did not extend to cases involving only joint tortfeasors.

The Appellate Division concluded Glassman is expressly limited to successive tortfeasors and an extension of its holding to joint tortfeasors was not warranted. Glassman's “assignment of damages to a preceding event is not possible where, as here, plaintiff seeks to establish fault as to a single, indivisible injury where two or more persons are subject to common liability.” A joint tortfeasor may still seek an allocation of liability against the settling codefendant at trial as the right of contribution assures that a joint tortfeasor can seek a remedy for the fault allocated to a settling codefendant. Thus, the Appellate Division held it was unwarranted to invoke the extraordinary remedy of judicial estoppel and affirmed the trial court’s order.
 
OPERATION OF VEHICLE DETERMINATIVE FOR UNINSURED MOTORIST STATUTE
 
Memudu v. Gonzalez, __ N.J. Super. __ (App. Div. 2023)
The Appellate Division addressed the novel issue of whether the statutory bar set forth in N.J.S.A. 39:6A-4.5(a) precludes plaintiff’s Wrongful Death and Survivor Acts claims stemming from the second of two separate accidents occurring a half hour apart at the same location, the latter of which resulted in the death of decedent. The court concluded the statutory bar pursuant to N.J.S.A. 39:6A-4.5(a) is not implicated because decedent was not operating his vehicle at the time of the second accident.
 
Decedent’s vehicle was rear-ended on the New Jersey Turnpike, resulting in a disabled vehicle partially in the left travel lane and partially on the shoulder. While waiting for the police, decedent returned to his vehicle to search for his cell phone. A different vehicle crashed into the front passenger side of decedent’s vehicle. Decedent was observed face down on the road outside of the vehicle and pronounced dead at the scene.
 
Defendants asserted N.J.S.A. 39:6A-4.5(a) barred plaintiff’s claims as decedent’s uninsured vehicle was involved in a double impact motor vehicle accident. The statute deprives an uninsured motorist of the right to sue for any loss caused by another, regardless of fault. Aronberg v. Tolbert, 207 N.J. 587 (2011).
 
The Appellate Division concluded decedent was not operating his uninsured vehicle for the purposes of the statute and the trial court correctly denied defendants’ motion for summary judgment. While decedent was operating an uninsured vehicle at the time of the first accident, he was killed in the second accident more than thirty minutes after the first accident, when neither he nor anyone else was “operating an uninsured vehicle.” Thus, the Appellate Division rejected defendants’ expansive reading of N.J.S.A. 39:6A-4.5(a) and found the statutory bar inapplicable and did not preclude plaintiff’s wrongful death and survivor claims.
 
PARTY SOPHISTICATION CONSIDERED IN ARBITRATION ENFORCEABILITY
 
County of Passaic v. Horizon Healthcare Services, Inc., __ N.J. Super. __ (App. Div. 2023)
The Appellate Division recently affirmed enforcement of an arbitration provision in a dispute between the County of Passaic and Horizon Healthcare Services. The County alleged Horizon had breached their contract by failing to implement reimbursement rates. Horizon moved to compel arbitration based on a stipulation in a written agreement between the parties. The County, relying on Atalese v. U.S. Legal Services Group, L.P., asserted the provision was unenforceable as it lacked the explicit waiver of access to the courts. The Appellate Division rejected this argument as the County is a sophisticated contracting party with sufficient bargaining power to resist the agreement to arbitrate, whereas Atalese applies to an employee or consumer lacking sufficient bargaining power.
As always, if you have any questions regarding any of the cases in this issue of Case Alerts, or if HKMP can be of service to you, then please contact us at info@hkmpp.com or 973-912-5222.
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