Do you need a distraction from the virtual meetings, juggling kids back in school, or from the news? Well we’re here to help with decisions covering a host of topics: a precedential Third Circuit decision on environmental contribution claims; a New Jersey Appellate Division opinion addressing personal jurisdiction in a legal malpractice action filed against an out-of-state attorney; several different unpublished insurance coverage decisions; and, last, an interesting unpublished decision on the need for expert testimony in a professional malpractice claim against an insurance producer.
We hope these cases are of interest. As always, we appreciate the chance to catch up with you and we hope you enjoy this issue of HKMP’s Case Alerts.
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Zahl v. Eastland, __ N.J. Super. __ (App. Div. 2020)
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The Appellate Division affirmed the trial court’s denial of defendant’s motion to dismiss for lack of personal jurisdiction in this legal malpractice action. Plaintiff, a New Jersey resident, alleged that the defendant attorney (a Mississippi resident) and his firm (also located in Mississippi) committed malpractice and improperly billed plaintiff during representation in a lawsuit filed in federal District Court for the District of New Jersey alleging that New Jersey officials and governmental offices engaged in RICO activities against plaintiff. Prior to filing the underlying federal court suit, plaintiff and defendant engaged in ongoing discussion of the matter and eventually executed a retainer agreement. For purposes of timing, plaintiff retained a separate attorney to file the initial complaint in the federal lawsuit, however defendant was later admitted pro hac vice to serve as co-counsel with a licensed New Jersey attorney to prosecute plaintiff's complaint. Defendant certified that he would be bound by the local rules of New Jersey's federal district court and would make the necessary payments to the Client Security Fund if admitted. He actively engaged in drafting pleadings and, on one occasion, participated in a phone conference with the federal judge overseeing the litigation. Furthermore, defendant’s representation of plaintiff was consummated by a retainer agreement. Considering the totality of the circumstances, the Court concluded that defendant had sufficient minimum contacts with New Jersey to permit the Law Division to exercise specific personal jurisdiction over him and his associated firms for the subsequent malpractice action.
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NJDEP v. Am. Thermoplastics Corp., __ F.3d __ (3d Cir. 2020)
The Third Circuit issued a precedential opinion finding a polluting party’s settlement with the State of New Jersey did not protect that party from lawsuits seeking contribution for federal expenditures by the EPA on the same site under CERCLA, 42 U.S.C. 9601 et seq.
From 1948 until 1981, the Combe Fill South Landfill Superfund Site (the “Site”) functioned as a municipal landfill. In 1978, Carter Day purchased and ran the Site through its subsidiary until it closed in 1981. During this period, the subsidiary hired Compaction to conduct operations at and transport hazardous materials to the Site. In 2011 Compaction filed a third-party complaint seeking contribution from Carter Day, after Compaction (and other parties) entered a global consent decree with the U.S. and NJDEP in 2009 for $62.6 million for cleanup costs. Carter Day asserted a settlement agreement made with NJDEP discharged all claims against Carter Day with respect to the Site. The District Court read Carter Day’s settlement with NJDEP to pertain to the entire Site; hence, it precluded contribution suits against Carter Day by other potentially responsible parties (PRPs) under Section 113(f)(2) of CERCLA, regardless of whether the other PRPs sought recovery for federal or state liability.
The Third Circuit disagreed. Citing the spirit of CERCLA, the Third Circuit sought to avoid a ruling that would run counter to the statute’s two main goals of ensuring prompt and effective clean-ups and making sure that PRPs bear their respective approximate share of the responsibility. Carter Day’s agreement with NJDEP expressly precluded claims related to the Site made by NJDEP but did not contemplate federal claims. Moreover, NJDEP was responsible for only 10% of the financial costs related to the Site, so it would be a miscarriage of justice to allow Carter Day to avoid contribution on a federal claim as it would otherwise “creat[e] perverse incentives” for a PRP to try and resolve claims only with NJDEP in hopes of barring other PRPs from federal contribution claims. The Court noted its decision encouraged PRPs to settle with both State and Federal governments. Thus, the District Court’s order granting Carter Day summary judgment was reversed, and the matter remanded for further proceedings.
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Singh v. Chestnut, Docket No. A-5482-18T4 (N.J. Super. Ct. App. Div. Oct. 20, 2020) (per curiam)
The Appellate Division upheld a trial court decision finding that N.J.S.A 17:28-1.1(f) did not elevate plaintiff, a gas station attendant, to the status of a “named insured” under defendant Penn Nation’s policy to allow him to recover for his injuries under a commercial automobile liability policy issued to his employer. Plaintiff was working at the gas station when a defendant driver drove away without removing the nozzle from his vehicle, and the nozzle struck plaintiff in the face, causing him to sustain certain injures. Plaintiff settled with that defendant for the maximum amount under that driver’s policy. Plaintiff believed, however, that his damages exceeded the driver’s policy’s limits so he filed an amended complaint asserting claims for underinsured motorist (UIM) coverage against his employer’s insurance carrier, Penn National.
Plaintiff unsuccessfully argued to the trial court and on appeal that N.J.S.A. 7:28-1.1(f) elevated him to “named insured” status under Penn National’s policy. The Appellate Division noted that the statute was intended to address the amount of UM or UIM coverage available to a business entity’s employees who are entitled to coverage under the entity’s commercial liability policy. The statute did not apply where, as in this case, the employee was not entitled to such coverage under the policy in the first instance. Since plaintiff was not a named insured under the policy, he would be entitled to UM or UIM coverage only if he was injured while occupying or operating a vehicle covered under the policy or temporary substitute for a covered vehicle. Because plaintiff was not operating a vehicle when injured, the statute did not confer insured status upon him.
Washington v. Progressive Ins. Co., Docket No. A-2422-19T1 (N.J. Super. Ct. App. Div. Oct. 7, 2020) (per curiam)
The Appellate Division held that plaintiff did not qualify for coverage under a policy issues by his auto insurer because coverage under New Jersey’s Deemer Statute, N.J.S.A. 17:28-1.4 demands a “substantial nexus” between an out-of-state vehicle and the accident for which benefits are sought. Plaintiff drove his car from his home in New York state to North Bergen, NJ. After shopping and exiting a store, plaintiff walked in a crosswalk toward his parked car when he was struck by another driver and injured. Plaintiff applied for PIP benefits under his New York policy and defendant paid PIP benefits on plaintiff's behalf, ultimately exhausting the policy’s $50,000 limit. Plaintiff the filed a complaint against his carrier alleging the Deemer Statute required reformation of his policy to provide coverage up to New Jersey's mandatory PIP policy limit of $250,000. The Appellate Division affirmed that the Deemer Statute did not apply because plaintiff was a pedestrian at the time of the accident rather than operating or occupying his vehicle. Since the statute was inapplicable, plaintiff was not entitled to additional PIP benefits.
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B. PROFESSIONAL MALPRACTICE |
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Issa v. Lloyds of London, Docket No. A-1346-19T2 (N.J. Super. Ct. App. Div. Nov. 4, 2020) (per curiam)
The Appellate Division affirmed the dismissal of plaintiff’s malpractice claims against its insurance producer, its shareholder, and an independent contractor of the producer. Plaintiff alleged malpractice in failing to obtain proper insurance policies to cover an underlying claim arising from plaintiff’s jewelry store being robbed. Plaintiff’s carrier had denied coverage which plaintiff alleged was due to the producer defendants not obtaining the right endorsements and misrepresenting the coverage procured from the carrier. Plaintiff brought a breach of contract claim against the carrier and malpractice claims against the producer defendants contending they failed to obtain the proper endorsements to have provided coverage for his claim as well as claims for misrepresentation about the coverage, fraud, and Consumer Fraud Act claims.
The trial court found plaintiff failed to cooperate with the carrier during its investigation and failed to provide the carrier information, so the carrier was granted summary judgment. Plaintiff sought to continue to pursue his claims against the insurance producer defendants but did not serve expert reports against the producer defendants, so the trial court granted summary judgment to defendants for lack of expert testimony.
The Appellate Division affirmed dismissal in a per curiam opinion. Expert testimony was needed to discuss the differences between various types of endorsements, their impact on coverage, and how the carrier’s coverage denial would have been avoided if a different endorsement was procured. Such topics were beyond the ken of the average juror. Moreover, the fraud and misrepresentation claims were offshoots of the producer defendants’ action in process and procuring coverage so expert testimony was still needed as to those claims to address whether the defendants’ conduct was a proximate cause of the carrier denying coverage.
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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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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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