CASE ALERTS
November 30, 2022
Wishing you and yours a wonderful holiday season. We at HKMP are so grateful to all our clients for their support and loyalty this past year.

We are also pleased to report that HKMP attorney Ross Carpenter tried an automobile negligence action to a no cause verdict in New Jersey in November 2022.

Recent United States Court of Appeals decisions reviewed in this edition include a Third Circuit decision on the Collateral Order Doctrine in the context of Federal Qualified Immunity; a United States District Court Southern District of New York ruling on an insurance exclusion finding that there was no duty to defend or indemnify in a subcontractor injury suit; a United States District Court for the District of New Jersey standing decision as to the proper plaintiff in a wrongful death matter; and a United States District Court for the District of New Jersey decision granting one hospital a dismissal and denying another hospital a dismissal in a medical malpractice action upon consideration of plaintiff’s affidavit of merit.

In the New Jersey Appellate Division there has also been activity and notable decisions including whether insurance coverage requirements under the Transportation Network Company Safety And Regulatory Act (TNCSRA) apply to food delivery services; whether an affidavit of merit is required against an assisted living facility; the affirmation that a trial court need not enter a directed verdict on proximate cause when the defendants stipulate liability; the objective standard applicability to the limitation-on-lawsuit threshold under N.J.S.A. 39:6A-8(a); the question of fact when a policyholder provides false information on an insurance application; the finding that discussions to extend a lease did not fall within the “written contract or agreement” language of an insurance policy.

The New Jersey Legislature has also been active tackling the issue of fees charged for copies of medical and billing records by hospitals and health care professionals.

Last, the New Jersey Model Civil Jury Charges were revised related to the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq., the burden of proof for elements of public defamation; the commercial landowner’s burden of removing accumulation of snow and ice in an ongoing storm with exceptions; the legal malpractice charge on duty and negligence; and claims under the Dog Bite Statute. The Committee also added new jury charges on: nursing home statutes, regulations, negligence and violations of nursing home residents’ rights; pregnancy discrimination; and the failure to accommodate employees with disability under the New Jersey Law Against Discrimination.

As always, we welcome your thoughts and hope you enjoy this issue of HKMP’s Case Alerts. May your year conclude with much joy and peace!
HKMP WINS TRIAL IN MIDDLESEX COUNTY, NJ
HKMP attorney Ross Carpenter recently obtained a no cause of action verdict for HKMP’s client in a Middlesex County jury trial. Plaintiff Paula Jones claimed HKMP’s client collided with the Jones vehicle causing her to sustain serious and permanent injuries. Ms. Jones elected the limitation on lawsuit option with her auto insurer, so she was required to prove that she sustained a “permanent injury” as defined by N.J.S.A. 39:6A-8. During trial, the court granted Plaintiff’s motion in limine to preclude any evidence of Ms. Jones’s prior and subsequent accidents and medical treatment. Despite the court’s ruling, the jury returned a defense verdict finding that Ms. Jones had not suffered a permanent injury because of the subject accident.
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
THE COLLATERAL ORDER DOCTRINE

Saint-Jean v. Palisades Interstate Park Comm’n, No. 21-1162 (3d Cir. Sep. 23, 2022)
 
The Third Circuit dismissed an appeal finding the collateral order doctrine was not satisfied. The collateral order doctrine permits a party to appeal an interlocutory ruling immediately without waiting for a final determination of the underlying case. Plaintiff was arrested and prosecuted for possession of candies that were misidentified as illegal drugs. The charges were dropped four months later, and plaintiff filed the present suit for false arrest and malicious prosecution in violation of the Fourth and Fourteenth Amendment, as well as claims alleging violations of procedural and substantive due process. The District Court partially granted defendants’ motion to dismiss, ruling sovereign immunity applied to all of the claims against the prosecutor and the government entities. The District Court rejected the officer’s defense of qualitied immunity, finding that plaintiff had plausibly alleged and demonstrated an arrest and prosecution without probable cause. The Court then permitted plaintiff to file an amended complaint to correct pleading deficiencies, which plaintiff did within the time period and before the officers appealed.

An order denying federal qualified immunity is ordinarily in the narrow class of cases included under the collateral order doctrine. The District Court, however, did not solely deny qualified immunity to the officers, but also permitted plaintiff to amend his complaint. The District Court order therefore did not satisfy the collateral order doctrine. Because plaintiff filed his amended complaint before the defendants’ notice of appeal, the Third Circuit dismissed the appeal finding the District Court’s dismissal order was not final and there was no basis for appellate jurisdiction.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK FINDS INSURANCE EXCLUSION RESULTS IN NO DUTY TO DEFEND OR INDEMNIFY IN SUBCONTRACTOR INJURY SUIT

JMG Improvements, Inc. v. Arch Specialty Ins. Co., No. 20-CV-2882 (RA) (S.D.N.Y. Nov. 3, 2022)

Plaintiffs filed suit seeking a declaratory judgment that defendant breached its insurance policy by denying coverage for a lawsuit filed by an injured employee of a subcontractor at plaintiff’s construction site. The District Court denied plaintiffs’ motions for summary judgment and granted defendants’ motion.

Plaintiff Be & Yo, general contractor, hired plaintiff JMG to perform stucco work and installation of an exterior insulation and finish system (EIFS). JMG subcontracted the work to another company, an employee of which was injured when he fell from the scaffolding on the property. JMG, insured by defendant Arch, sought indemnification pursuant to its policy.

The policy has two provisions relevant to JMG’s indemnification claim. First, the policy required that JMG obtain agreements from every subcontractor that required the subcontractor to defend, indemnify, and hold JMG harmless. Second, the policy provided an EIFS exclusion, stating there is no coverage for any claim, suit, demand, or loss that alleges bodily injury arising out of or relating to EIFS or any part thereof.

Under New York law, to state a claim for breach of contract, a plaintiff must show: “(1) the existence of a contract between itself and the defendant; (2) performance of the plaintiff’s obligations under the contract; (3) breach of the contract by that defendant; and (4) damages to the plaintiff caused by the defendant’s breach.” Diesel Props. S.r.l. v. Greystone Bus. Credit II LLC, 631 F.3d 42, 52 (2d Cir. 2011). The issue addressed by the Court is whether defendant’s denial of coverage constituted a breach of the agreement.

The Court stated exclusions must be stated in clear and unmistakable language. Plaintiffs argued that the word “alleges” requires the injured party to assert the injury was EIFS-related in the complaint. The Court found the EIFS exclusion did not require specific alleging of an EIFS-related injury. The sole purpose of the scaffolding, from which the injured party fell, was to install EIFS. The precise task performed does not change this injury was “related to” the EIFS installation, as included in unambiguous language in the exclusion.

Plaintiffs were unable to demonstrate that defendants owed them any duties or breached their contractual agreements, therefore defendants’ motion for summary judgment was granted.

DISTRICT OF NEW JERSEY ADDRESSES DETERMINATION OF THE PROPER PLAINTIFF IN WRONGFUL DEATH CLAIMS

White v. City of Vineland, et al., 1:16-cv-08308-JDW-AMD (D.N.J. Nov. 2, 2022)

The District Court addressed the question of whether children of the decedent had standing to pursue claims under 42 U.S.C. § 1983 or the New Jersey Civil Rights Act, N.J. REV. STAT. § 10:6-2 (“NJCRA”). The Court concluded the children did not have standing and issued an order dismissing their claims.

Phillip White died on his way to the hospital after an encounter with Vineland police officers. His children brought civil rights claims for excessive force, false arrest, and various related state claims. The U.S. District Judge rejected their claims, finding the children lacked standing as they did not assert any invasion of their own legally protected interests, but only brought claims based on alleged violations of decedent’s rights.

Plaintiffs argued that they had standing because federal law imports New Jersey’s wrongful death and survivorship actions. The Court rejected this argument, stating Section 1983 only provides for liability to the party injured, making it clear that only a victim or his representative can sue. 42 U.S.C. § 1983.

To determine who is a proper plaintiff, Congress has directed courts to look to state law. Both the New Jersey Wrongful Death Act and the New Jersey Survivorship Act name the administrator as the proper plaintiff when an injured party dies. Therefore, the proper plaintiff in this case would be the Administratrix Ad Prosequendum of the decedent’s estate, Ms. White.

Additionally, the Court reiterated that federal law does not permit a court to borrow an entire cause of action from state law. As Article III sets forth constitutional limits to the powers of federal courts, the Court “cannot go beyond its power and give the children ability to sue for alleged injuries to their father.”

DISTRICT OF NEW JERSEY ADDRESSES AFFIDAVIT OF MERIT IN SUMMARY JUDGMENT DETERMINATIONS

Chaudhary v. Penney, et al., 20-18529 (ZNQ)(RLS) (D.N.J. Nov. 8, 2022)

In an unpublished opinion, the District Court granted defendant Bayshore Medical Center’s motion for summary judgment and denied defendant River Medical Center’s motion in a medical malpractice action.

Plaintiff alleged pre- and post-operative care provided by defendants was rendered in a negligent and careless manner. Plaintiff brought suit, attempting to hold defendants vicariously liable for complications suffered after her total abdominal hysterectomy. Under New Jersey’s Affidavit of Merit (AOM) statute, plaintiff was required to provide an affidavit from a qualified physician attesting that defendant’s treatment fell outside the professional standard of care. N.J.S.A. 2A:53A-26 to -29. Both defendants moved for summary judgment, arguing that plaintiff’s affidavit of merit was insufficient.
At Bayshore, plaintiff received care from providers certified in emergency room medicine and diagnostic radiology. The AOM plaintiff provided was from a board-certified OB-GYN, specializing in laparoscopic and robotic-assisted surgery, the same type of surgery plaintiff underwent. Because plaintiff provided an AOM from a professional outside the scope of specialty as the two caregivers at Bayshore, the AOM does not satisfy the requirements of the New Jersey statute with regard to defendant Bayshore. Bayshore thus prevailed on their summary judgment motion.

However, the affidavit meets the requirements for the claims against Riverview, as the professional credentials parallel with the physician who performed the hysterectomy. The Court therefore denied Riverview’s summary judgment motion, finding the AOM statutorily sufficient and supportive of plaintiff’s contention that the surgeon and Riverview deviated from accepted standards of care in plaintiff’s treatment. 
NEW JERSEY APPELLATE DIVISION
INSURANCE COVERAGE REQUIREMENTS UNDER TNCSRA DO NOT APPLY TO FOOD DELIVERY SERVICES

Malzberg v. Josey, et al., No. A-2883-20 (App. Div. Sep. 27, 2022)

As a matter of first impression, the Appellate Division addressed the scope of the Transportation Network Company Safety and Regulatory Act (TNCSRA), N.J.S.A. 39:5H-1 to -27, and whether the Act, which requires “transportation network companies” to provide at least $1.5 million in underinsured motorist insurance coverage, applies to food delivery services, such as Uber Eats. Plaintiff, Scott Malzberg, was injured in a motor vehicle accident while operating his motorcycle as an Uber Eats delivery driver.

The Law Division granted summary judgment in favor of defendant James River Insurance Company, dismissing plaintiff’s claim for underinsured motorist coverage on the ground that the Act applies only to the prearranged transport of persons and not to the delivery of food. Finding that nothing in the statutory text or legislative history of the TNCSRA suggested that the Legislature intended to regulate food delivery services, the Appellate Division affirmed.

Plaintiff had enrolled with Portier, LLC to deliver food through Uber Eats. Portier had a business auto insurance policy from James River which did not provide underinsured motorist benefits. Plaintiff filed a complaint against defendant Josey, driver of the vehicle that collided with plaintiff, and James River seeking coverage from James River for plaintiff’s injuries that exceeded the limits of Josey’s personal auto insurance policy. Plaintiff claimed he was entitled to underinsured motorist benefits from James River as plaintiff was employed and insured with Portier at the time of the accident.

Plaintiff argued that food delivery drivers should be afforded the same protection under the Act as those transporting passengers, since the risk of accident and injury are the same. In the Act’s definitions, there is no reference to the delivery of food or any services apart from transporting passengers. The Court held to fall within the Act’s jurisdiction and invoke the protections of its minimum insurance coverage provisions, the app-based connection must be used to arrange a ride between a driver and a human rider.

The Appellate Division noted there is pending legislation that would supplement the TNCSRA by establishing insurance coverage requirement for businesses that digitally connect customers to a “delivery network company driver for the prearranged delivery of goods.”

AFFIDAVIT OF MERIT REQUIRED IN CLAIMS AGAINST AN ASSISTED LIVING FACILITY

Priolo v. Shorrock Garden Care Center, No. A-3032-20 (App. Div. Sep. 20, 2022) (unpub.)

In an unpublished Appellate Division decision, the court addressed a claim arising from the death of a resident at an assisted living facility who contracted COVID-19. Plaintiff alleged the defendant facility deviated from the standard of care and was negligent “in failing to implement and execute appropriate protocols and standards for managing and minimizing the existing threats and risks posed by the COVID-19 virus.”

Defendant asserted statutory defenses and objected to plaintiff’s affidavit of merit, asserting the individual from whom plaintiff filed a report was unqualified to attest to the living facility’s protocols.

The trial court granted defendant’s motion to dismiss, finding plaintiff was required to serve an AOM as defendant was a licensed person under N.J.S.A. 2A:53A-26(j) as a health care facility defined under N.J.S.A. 26:2H-2. On appeal, the Appellate Division affirmed and reiterated that plaintiff was required to serve an appropriate AOM to support its complaint.
“The person executing the AOM must meet the requirements under N.J.S.A. 2A:53A-27 and, in addition to holding a professional license, also have particular expertise in the general area or specialty involved in the action.” Plaintiff’s chosen professional was not a licensed physician, nurse, nursing home administrator, or certified assisted living administrator and therefore not qualified to offer an opinion regarding the standard of care owed to decedent from an assisted living facility.

APPELLATE DIVISION AFFIRMS JURY VERDICT AWARDING ZERO DAMAGES DESPITE STIPULATION AS TO LIABILITY

Casucci v. Valan, et al., No. A-0323-21 (App. Div. Oct. 5, 2022) (unpub.)

In 2017, Plaintiff was stopped in his vehicle when a commercial struck him from behind. Plaintiff admitted the impact was minor, but suffered from neck pain, headaches, and tingling in his hand for which he received care from an orthopedist and chiropractor. Defendants admitted liability for causing the accident and stipulated that the only issue before the jury was whether the plaintiff was entitled to damages. Medical experts for both the plaintiff and defendant testified, inferencing it was possible plaintiff’s injuries were connected to a pre-existing condition of arthritis. Plaintiff moved for a directed verdict on proximate cause, which the trial court judge denied.

Following a unanimous jury verdict of zero damages, plaintiff appealed alleging, among other things, that the trial court erred by failing to enter a directed verdict on proximate cause where the defendants stipulated liability. Noting that proximate cause is ordinarily a fact issue to be resolved by a jury, the Appellate Division found the trial court correctly determined the jury was free to reject all or some of the expert witnesses’ testimony. Based on the evidence presented, including testimony from both experts, the Appellate Division ruled that jury had ample reasonable basis to determine plaintiff did not suffer a compensable injury due to the accident. Thus, the trial judge properly denied plaintiff’s motion for a directed verdict and did not err in denying motions for a new trial or additur.

OBJECTIVE STANDARD APPLICABLE TO THE LIMITATION-ON-LAWSUIT THRESHOLD

Oguntuase v. The Estate of Antoinette J. Dangerfield, et al., No. A-3641-20 (App. Div. Oct. 20, 2022) (unpub.)

In an unpublished opinion, the Appellate Division recently affirmed an order granting defendants’ summary-judgment motion, finding plaintiff failed to meet the limitation-on-lawsuit threshold standard of N.J.S.A. 39:6A-8(a).

Plaintiff and defendant were involved in a motor-vehicle accident in May 2017. In plaintiff’s parents’ automobile insurance policy, the limitation-on-lawsuit option was selected, meaning recovery is barred for pain and suffering unless the plaintiff suffers an injury resulting in one of the six categories enumerated in the statute. Those categories are: "a bodily injury which results in death; dismemberment; significant disfigurement or significant scarring; displaced fractures; loss of a fetus; or a permanent injury within a reasonable degree of medical probability, other than scarring or disfigurement.” N.J.S.A. 39:6A-8(a).

The defendants moved for summary judgment, contending plaintiff’s injuries did not meet the lawsuit threshold standard. Plaintiff contended that her scars constitute “significant disfigurement or significant scarring” under the statute. The Appellate Division agreed with the motion judge’s determination that the scars are not significant as a matter of law and do not enable plaintiff to vault the limitation-on-lawsuit threshold.

Because plaintiff failed to meet the objective standard whether scars are sufficiently significant to satisfy the threshold, summary judgment was appropriate.

QUESTION OF FACT IN HOMEOWNER’S INSURANCE POLICY APPLICATION PRECLUDED SUMMARY JUDGMENT

Pokhan v. State Farm Fire and Casualty Company, No. A-1411-19 (App. Div. Sept. 19, 2022) (unpub.)

Plaintiff appealed from a trial court decision granting summary judgment for State Farm, alleging the motion judge improperly found facts and weighed evidence in determining plaintiff provided misinformation in her homeowner’s insurance policy.

Plaintiff applied for a homeowner’s insurance policy with State Farm and was issued a policy in 2013. In 2015, there was a fire at the plaintiff’s residence. While making her claim, plaintiff failed to mention in a recorded statement that there had been two previous claims on a homeowner’s policy with a different insurer. Plaintiff corrected those misstatements a week later.

The Appellate Division found there was a material, factual dispute regarding whether plaintiff provided the claimed false information on the insurance application, rendering summary judgment inappropriate.

State Farm was previously denied summary judgment based on this dispute of fact in 2017, before trial. The unpublished opinion notes that the same factual dispute remains. The motion judge “made findings on Pokhan’s credibility without hearing her testify.” The Appellate reversed the summary judgment order, and remanded for a retrial, noting further proceedings should occur before another judge.

INSURANCE COVERAGE UNAVAILABLE 5 DAYS AFTER POLICY EXPIRATION

Fitzpatrick v. Oradell Animal Hospital, et al., No. A-3442-20 (App. Div. Nov. 1, 2022) (unpub.)

Plaintiffs appeal from a summary judgment order in favor of Continental Casualty Company that ruled defendant insurer did not owe coverage for injuries caused by an MRI machine explosion after the lease agreement for the machine had expired.

Oradell Animal Hospital had leased the MRI machine with requirements to maintain insurance, complying with this provision by purchasing insurance from Continental. Under the policy, Continental agreed to pay sums that Oradell becomes legally obligated to pay as damages because of “bodily injury”. The lease agreement and insurance coverage ended 5 days before the machine exploded, injuring plaintiff.

Defendants sought insurance coverage from Continental for plaintiff’s claims. Continental’s motion for summary judgment was granted, as the judge found the actions leading to the injury did not arise out of Oradell’s maintenance, operation, or use of the MRI, as the machine was being commissioned when it exploded. The judge also found that the clear and unambiguous terms of the insurance policy provided a person’s or organization’s status as an insured ended when the contract for such equipment ends. Any unofficial agreement to extend the lease agreement was never memorialized in writing, thus there was no coverage available under the policy.

The Appellate Division provided further interpretation that any email exchanges or informal discussions to extend the lease did not fall within the “written contract or agreement” language in the insurance policy. Because the first lease agreement ended, and the second lease agreement was never memorialized in writing, defendants failed to demonstrate they were entitled to insurance coverage. The motion judge properly granted summary judgment to Continental, and the Appellate Division affirmed.
NEW JERSEY LEGISLATIVE UPDATE
S2253 SIGNED INTO LAW, LIMITS FEES CHARGED FOR COPIES OF MEDICAL AND BILLING RECORDS

Bill S2253 Sa (1R) was signed into law on September 22, 2022. The bill amends the current law regarding the fees charged for copies of medical and billing records by hospitals and health care professionals.

For hospitals to provide medical and billing records, the fee for reproducing the record shall not exceed $1 per page or $50 per individual admission record when the records are requested by the patient or the patient’s legally authorized representative.

For a request by an authorized third party, entities that are authorized to access the record but are not actually representing the patient, fees for the reproduction of the record are capped at $1 per page for records that are not stored on microfilm or microfiche. Reproducing records stored on microfilm or microfiche will be $1.50 per image. Fees for reproduction of x-rays and other materials that cannot be duplicated on a photocopy machine will be no more than $15 per printed image or $30 per CD or DVD, plus an administrative fee of $10. Search fees will be capped at $20 per request and not be charged to a patient requesting their own record.

For health care professionals to provide copies of treatment and billing records, fees will be limited to $1 per page or $50 for the entire record if the request is by a patient or the patient’s legally authorized representative. Requests by authorized third parties are the same as section one: $1 per page or $1.50 per image if stored on microfilm or microfiche. For authorized third parties, the current law provides that there is no cap on the total amount that can be charged in per-page fees.

Authorized fees will not be imposed on patients who do not have the ability to pay and have income at or below 250 percent of the federal poverty level or are enrolled in a state or federal assistance program, non-profit corporations representing a patient, health care practitioner, attorneys representing the patient on a pro bono basis, and patients receiving federal Social Security disability benefits.

The statement to the bill explains the definition of "legally authorized representative" is revised to clarify that the term “insurer” under the definition means an automobile insurer.

NEW JERSEY MODEL CIVIL JURY CHARGES UPDATE

The Supreme Court Committee on Model Civil Jury Charges revised several instructions.

Instructions concerning the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq., updated to use the word “disability” instead of “handicap”. The charge has also been revised to explain that unlawful employment discrimination can be predicated on claims that a non-decisionmaker’s discriminatory views can influence the decisionmaker to take adverse action against an employee, incorporating case law from Meade v. Twp. of Livingston, 251 N.J. 14 (2022).

Updates were made to the burden of proof for elements of public defamation (3.11A), relief for commercial landowners from the burden of removing accumulation of snow and ice in an ongoing storm with exceptions (5.20B), and case references added to the negligent hiring charge (5.76).

A new charge was created regarding nursing homes cases, 5.77 Violations of Nursing Home Statutes or Regulations – Negligence and Violations of Nursing Home Residents’ Rights Claims. The approved charge includes references to Federal Nursing Home Reform Amendments as well as New Jersey case law.

The Legal Malpractice charge was updated to include recent case law and additional instruction on duty and negligence.

A new charge was approved for Penalizing Employee Affected by Pregnancy for Requesting or Using an Accommodation (2.26A). This charge includes the case law in Delanoy v. Township of Ocean, 254 N.J. 384 (2021), which held that the New Jersey Pregnancy Workers Fairness Act recognizes three distinct causes of actions within N.J.S.A. 10:5-12(s) for pregnant and breastfeeding employees: 1) unequal or unfavorable treatment; 2) failure to accommodate; and 3) unlawful penalization.

Revisions were also made for the failure to accommodate employees with disability under NJLAD (2.26), guidance on the foreseeability inquiry in the context of determining whether a duty of care exists (5.10B), and that the Comparative Negligence Act applies to plaintiff’s strict liability claim under the Dog Bite Statute, and status in the care of dogs is relevant to an allocation of fault (5.60A). 
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.
Attorney Advertising Disclaimer: This publication is designed for general information only. The information presented should not be construed to be formal legal advice nor the formation of a lawyer/client relationship in a particular matter. 
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