In Kuczynski v. Pomponi, No. A-0316-15T3, 2016 N.J. Super. Unpub. LEXIS 1225 (App. Div. May 27, 2016), the Appellate Division affirmed the lower court’s denial of defendant-appellant Town of Kearny’s motion to dismiss, holding that plaintiffs’ Notice of Claim was timely under the Tort Claims Act (TCA) and the “discovery rule.”
In 2013, there were three separate instances in which the toilet in the basement of plaintiffs’ home overflowed and expelled sewage. After each occurrence, the plaintiffs consulted with defendant Pomponi, a plumber, who advised plaintiffs that the sewer line was broken and needed to be replaced from the house to the curb, and, later, that there was a blockage in plaintiffs’ sewer pipe somewhere between the house and the point where the pipe connected to the town’s sewer system. Importantly, Pomponi told plaintiffs that they were responsible for the entirety of that pipe to the point where it connects to the Town’s system.
On March 25, 2014, after consulting with a second plumber who concluded that there was a blockage in the pipe between the sidewalk and the middle of the street, the area was excavated for repairs, at which time it was discovered that boulders used to fill a sink hole in the street had crushed and disconnected one of the plaintiffs’ pipes near the area where it connected with the Town’s sewer main. The Town’s plumbing inspector, who was overseeing the excavation, stated “this is our fault.” Having realized that the Town was at fault for their plumbing problems, plaintiffs served a Notice of Claim upon the Town on May 20, 2014 (56 days after first learning that the boulders used to fill sink holes had caused the plumbing issues).
The Town moved to dismiss arguing that plaintiffs’ cause of action accrued in December 2013, when Pomponi indicated to plaintiffs that there was a blockage in plaintiffs’ sewer pipes somewhere between their house and the Town’s sewer main. Accordingly, the Town argued that the May 20, 2014 Notice of Claim was untimely, having not been brought within 90 days of the accrual date.
The Appellate Division, however, was not persuaded by the Town’s arguments, instead holding that the first time plaintiffs knew or should have known the Town might be at fault for their plumbing issues was on March 25, 2014, when plaintiffs discovered that boulders the Town had used to fill a sink hole had crushed one of the plaintiffs’ pipes. Before that date, none of the experts (i.e. the plumbers retained by plaintiffs to fix the plumbing) had suggested that the Town was at fault, and there were no other facts that should have alerted plaintiffs that the Town was at fault.
Under New Jersey law, “the date of accrual will be the date of the incident on which the negligent act or omission took place.” Beauchamp v. Amedio, 164 N.J. 111 (2000). However, it is well-settled that the “discovery rule” applies to claims brought under TCA. See McDade v. Siazon, 208 N.J. 463 (2011). Under the “discovery rule”, a cause of action does not accrue until “the facts presented would alert a reasonable person, exercising ordinary diligence, that he or she was injured due to the fault of another.” Caravaggio v. D’Agostini, 166 N.J. 237 (2001). Significantly, because the cause of an injury or damages is not ascertainable by a lay person, a party may not know a third party is at fault for damages until informed by an expert. See Guichardo v. Rubinfeld, 177 N.J. 45 (2003).
Here, the Appellate Division emphasized the plaintiffs’ reliance on the opinions of the expert plumbers that advised plaintiffs they were responsible for the pipes up to the point where they connect to the Town’s main sewer lines. This decision serves as a key reminder of the judiciary’s recognition not all injuries are immediately discoverable, and that plaintiffs should not be barred from making claims where an expert is necessary to ascertain the cause of injury.
New Jersey Appellate Division Affirms No Sidewalk Liability for Religious Organization Not Engaged in Commercial Activity
In a recent decision, the New Jersey Appellate Division affirmed a Trial Court decision granting summary judgment in favor of a church that had been sued by a pedestrian-plaintiff. The Appellate Division, in Rockhill v. Grace Orthodox Presbyt. Church, 2016 N.J. Super. Unpub. LEXIS 683 (Super Ct App Div Mar. 30, 2016, No. A-1697-14T3), held that defendant Grace Orthodox Presbyterian Church (“GOPC”) was not a commercial user of its property, and, therefore, was entitled to dismissal of plaintiff’s complaint, as a matter of law.
In Rockhill, plaintiff slipped and fell on a sidewalk adjacent to GOPC’s property, sustaining personal injuries. She alleged that GOPC’s negligent maintenance of the sidewalk was a direct and proximate cause of her injuries.
In analyzing GOPC’s liability, the Appellate Division first explained that only commercial property owners are liable for injuries on the sidewalks abutting their property that are caused by their negligent failure to maintain the sidewalks in a reasonably good condition. See Stewart v. 104 Wallace St., Inc., 87 N.J. 146 (1981). By contrast, New Jersey Courts have held that residential property owners are not liable for sidewalk injuries. See Luchejko v. City of Hoboken 207 N.J. 191 (2011).
As to the issue of whether a nonprofit religious organization’s use of its property is properly deemed commercial or residential, the Court in Dupree v. City of Clifton, 351 N.J. Super. 237 (App. Div. 2002) held that “if the use is exclusively religious, e.g. if the organization uses the property solely as a parish or rectory, then the organization will not be considered a commercial landowner, and, liability will not be imposed.“ However, “[i]f the organization’s use of the property is partially or completely commercial…liability attaches despite the nonprofit status of the owners.”
In the instant case, discovery revealed that at all times prior to the date of loss, and for the approximately one-year period following the incident, GOPC used its property exclusively for the religious activities of its parish and for no commercial purposes. SeeRockhill, supra. Though GOPC did, subsequently, use its property for commercial purposes (renting the basement of the property to a youth group), the Appellate Division was not persuaded that liability should attach, and deemed that only the GOPC’s use of the premises on the date of the accident was relevant.
Importantly, the Appellate Division emphasized that the policy behind the Court’s ruling in Luchejko, supra, distinguishing residential and commercial users of property, influenced its decision in this case. In Luchejko, the Court held that the purpose of the distinction is to provide guidance and predictability for property owners. For example, it allows commercial owners to know that clearing their abutting sidewalks is a cost of doing business, and it allows residential owners to safely rely on the fact that they will not be liable unless they create of exacerbate a dangerous sidewalk condition. SeeLuchejko, supra.
Likewise, in Rockhill, the Appellate Division ruled that to hold GOPC liable would deprive the defendant of its justifiable reliance upon its status as a residential owner, and, therefore it affirmed the Trial Court's ruling granting summary judgment and dismissing plaintiff’s complaint.
United States Supreme Court Strips Subrogation Rights Of Those Who Wait To Pursue Them
On January 20, 2016, the United States Supreme Court ruled in Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, that an Employee Retirement Income Security Act of 1974 (ERISA) plan fiduciary is not entitled to the participant’s separate assets under Section 502(a)(3) as reimbursement of medical expense payments paid by the plan. 29 U. S. C. §1132(a)(3). The Supreme Court held that while Section 502(a)(3) of ERISA authorizes plan fiduciaries to file suit in order to “obtain…appropriate equitable relief…to enforce….terms of the plan,” fiduciaries are precluded from bringing suit to attach the participant’s separate assets, seeking to recover general funds, because doing so would not be seeking equitable relief.
In general, many ERISA benefit plans contain subrogation clauses which require a plan participant to reimburse the plan for medical expenses paid if and when the participant recovers money from a third party for his/her injuries. In Montanile, the petitioner participant, Montanile, was seriously injured by a drunk driver, and he received more than $120,000 for his medical expenses from his ERISA plan. Montanile subsequently filed suit against the drunk driver and obtained a settlement in the amount of $500,000. Upon receipt of the settlement funds, Montanile paid his attorneys $200,000 for their services, as well as an additional $60,000 that the attorneys had advanced to Montanile, leaving him with $240,000.
The respondent plan administrator, the Board of Trustees of the National Elevator Industry Health Benefit Plan (the Board), sought reimbursement from the settlement amount from Montanile’s attorneys, who refused the request, despite having sufficient funds to satisfy the ERISA lien of approximately $120,000. Montanile’s attorneys informed the Board that unless it objected, the settlement funds would be transferred from the client trust account to Montanile. The Board failed to object, and the settlement funds were issued to Montanile. Of note, Montanile alleges that he then spent the remainder of the money within the next six months on non-traceable assets, such as food and travel, and did not spend the money on traceable assets, such as cars or homes.
After six months, the Board brought suit against Montanile in Federal District Court under Section 502(a)(3) of ERISA, which authorizes plan fiduciaries to file suit in order to obtain appropriate equitable relief and to enforce the terms of the plan. Thus, the Board sought an equitable lien on Montanile’s settlement funds or property in Montanile’s possession, as well as an order enjoining Montanile from dissipating his settlement funds. Montanile argued that since he had spent nearly all of his settlement funds, that there was no longer an identifiable fund in existence upon which the Board could enforce the lien.
The District Court rejected Montanile’s argument that no identifiable fund existed due to his prior spending of the settlement fund, and the Eleventh Circuit affirmed the District Court’s decision, holding that the Board of Trustees was entitled to reimbursement of Montanile’s general asserts if he had previously spent his settlement money.
The United States Supreme Court disagreed, holding that when an ERISA-plan participant wholly dissipates a third-party settlement on nontraceable items, as was the case here, that the plan fiduciary, respondentmay not file suit under§502(a)(3) to attach the participant’s separate assets. The Court’s reasoned that had the Board enforced its lien immediately upon receipt of the settlement by Montanile, or even filed a lien once Montanile received the funds from his attorneys, both actions would have been equitable, and thus, the Board would have been entitled to reimbursement under §502(a)(3).
Here, however, due to the Board’s failure to object to the disbursement of the settlement money to Montanile, and failure to immediately file suit enforcing the lien upon receipt by Montanile’s attorneys, or subsequently, Montanile, once he dissipated the settlement funds, the relief sought by the Board, seeking recover out of his general assets, was no longer equitable. Therefore, due to the Board’s failure to pursue their subrogation rights in accordance with §502(a)(3) of ERISA, they were precluded from bringing suit to attach Montanile’s separate assets.
“Relationship” Discovery Directed To Plaintiff Law Firms And Doctors In Florida
“Mr. Jones, how did you come to learn of this physician?” “Objection, seeks to invade the attorney-client privilege.” Not in Florida, for now. In Worley v. Central Florida Young Men’s Christian Ass’n, Inc., 163 So.3d 1240 (Fla. 5th DCA 2015) (review pending), the Florida Fifth District Court of Appeals has held that defendants, and ultimately the jury, have the right to know whether or not a Plaintiff has been referred to a particular physician by their attorney.
Worley is now pending before the Florida Supreme Court. The Supreme Court accepted conflict jurisdiction as this holding is in direct conflict with the holding in Burt v. Government Employees Insurance Co., 603 So.2d 125 (Fla. 2d DCA 1992), where the 2d DCA held that the referral of a Plaintiff to a particular medical provider by his or her attorney is a communication protected by the attorney-client privilege.
However, Worley is another example of the trend of Florida Courts allowing exploration of the relationship between Plaintiff law firms and the physicians treating their clients. In Worley, the most expansive case on this issue to date, the Fifth DCA held, for the first time in Florida, that “after exhaust[ing] all other avenues without success, we find, contrary to the trial court’s preliminary ruling … that it was appropriate for YMCA to ask Worley if she was referred to the relevant treating physicians by her counsel or her counsel’s firm.”
Whether or not a Plaintiff has been referred to a medical provider by his or her attorney is the threshold requirement in allowing discovery into the relationship between Plaintiff attorneys and the physicians that treat their clients. This discovery includes, but is not limited to, information pertaining to past dealings between doctors and law firms and agreements regarding billing and collections for litigation patients. The rationale for allowing this kind of discovery is that “the more extensive the financial relationship between a party (or its attorney) and a witness, the more likely it is that the witness has a vested interest in that financially beneficial relationship continuing.”
Over the past few years, the Florida District Courts of Appeal have made it clear, a jury has the right to know how involved Plaintiff’s attorneys are with the doctors that treat their patients. This type of discovery has been in a state of expansion in Florida. Should the Florida Supreme Court affirm Worley, the trend will certainly continue. Defense counsel and insurance companies are routinely required to disclose the names of cases in which they referred a plaintiff to a specific doctor for a compulsory medical examination. The Courts of Florida have finally agreed that there is no meaningful difference between requiring defense counsel or insurers to disclose this information and requiring Plaintiff’s counsel to disclose the extent of the relationship between themselves and the treating physicians involved in the care of their clients.
New Jersey Supreme Court Rules that Prejudice is not Required in Disclaiming Coverage under a “Claims Made” Policy
On February 11, 2016, the New Jersey Supreme Court handed down its decision in Templo Fuente De Vida Corp., et al. v. National Union Fire Ins. Co., enforcing the insurer’s coverage denial under a “claims made” policy for the insured’s breach of the notice provision. In this case, plaintiff Templo Fuente De Vida Corp. (Templo) relied on Merl Financial Group, Inc. (Merl) as a source of funding for its purchase of property. However, upon the closing date, Merl was unable to fund the loan, and the seller terminated the purchase agreement. As a result, Templo filed a complaint against Merl, which was subsequently restructured and renamed First Independent Financial Group (First Independent). The matter was eventually settled, wherein First Independent assigned its rights and interests under an insurance policy to Templo.
First Independent purchased the policy from National Union Fire Ins. Co. (National Union), which was a $1 million “claims made” policy containing a notice provision section. That section, as a condition precedent, required First Independent to provide notice to National Union of any claim “as soon as practicable.” Although First Independent was served with Templo’s Complaint on February 21, 2006, it did not provide notice of the claim to National Union until August 28, 2006. As a result, National Union disclaimed coverage, asserting that notice of the claim was not provided “as soon as practicable” under the terms of the policy.
Templo then initiated a declaratory judgment action against National Union, seeking a coverage determination. The Court, in affirming summary judgment to National Union, upheld National Union’s disclaimer as First Independent did not provide notice as soon as practicable, and also held that National Union did not have to show prejudice. In reaching that conclusion, the Court reasoned that, if the policy language is unambiguous, the Court will not engage in a strained construction to support coverage, nor write a better policy than the one purchased. The Court then found that the policy’s notice provision unambiguously required the insured to provide notice as soon as practicable, and that First Independent's delay in providing notice of Templo’s claim was unjustified under the circumstances.
In determining that National Union was not required to prove prejudice prior to disclaiming coverage, it reasoned that the policy at issue covered “claims made,” and that First Independent was a knowledgeable entity which purchased its insurance through sophisticated brokers. As a result, the Court reasoned that National Union did not need to show prejudice prior to disclaiming coverage, and instead, the Court need only enforce the plain and unambiguous terms of the negotiated policy. The Court found that the nature of the “claims made” policy contained mutual rights and obligations, and by failing to adhere to the notice requirement, the insured foreclosed the insurer’s ability to protect its own rights and to influence how litigation proceeded. When First Independent defended Templo’s claims without notifying National Union, First Independent breached the timely notice provision contained in the policy, and National Union was within its rights to decline coverage without demonstrating appreciable prejudice.
Comparative Analysis Is Critical When Plaintiff Alleges Aggravation Of A Pre-Existing Injury
In a recent decision, the New Jersey Appellate Division held that plaintiff, who allegedly sustained an aggravation of a pre-existing injury in a motor vehicle accident, was required to present a comparative analysis of her injuries at trial, and her failure to do so should have resulted in a directed verdict for the defendant. Accordingly, the Appellate Division, in Lopez v. Larsen, 2016 N.J. Super. Unpub. LEXIS 199 (Super Ct App Div Feb. 2, 2016, No. A-0660-14T2), reversed the decision of the trial court and remanded the case for an entry of judgment in favor of the defendant.
Plaintiff alleged that she was injured in a motor vehicle accident on October 1, 2009. Her claims were subject to the New Jersey verbal threshold statute. Plaintiff stated that she sustained permanent injuries to her neck, resulting in disc herniations at C4-C5, C5-C6, a disc bulge at C5-C6, and cervical radiculopathy. During the course of discovery, however, plaintiff disclosed that she was involved in prior motor vehicle accidents in 2004 and 2006, in which she sustained injuries to her neck, back and right shoulder.
At trial, plaintiff presented her pain management physician as the only medical expert to testify as to her injuries. Plaintiff’s medical expert critically testified that there were “significant changes” between the 2004 MRI and 2009 MRI of her cervical spine. Accordingly, he opined that plaintiff’s injuries were causally related to the 2009 accident. Her physician further testified that plaintiff told him she was not involved in any prior accidents, and he formed his opinion, that she sustained a permanent injury causally related to the 2009 accident, based on this fact. The witness also admitted that the prior medical records pertaining to her 2004 and 2006 accidents could have caused him to change his opinion.
After presentation of plaintiff’s case-in-chief, defendant moved for a directed verdict arguing that plaintiff’s expert failed to provide a comparative analysis of her pre- and post-accident injuries, which was denied by the trial judge. The jury returned a verdict in favor of plaintiff and awarded $90,000.
On appeal, defendant argued that her motion for a directed verdict should have been granted because plaintiff failed to present a comparative analysis of her injuries as required under Davidson v. Slater, 189 N.J. 166 (2007). In Davidson, the Court held that a plaintiff who pleads an aggravation of a pre-existing injury must present comparative medical evidence in order to satisfy the causation element. Plaintiff argued that she satisfied this burden because her medical expert testified that there were “significant” changes in the 2004 and 2009 MRIs and that these changes are objective evidence sufficient to permit the issue of causation to be decided by a jury.
The Appellate Division found that because plaintiff’s medical expert had not been given all of the applicable medical information pertaining to the prior injuries and treatment (and had merely been presented with two sets of films and asked to opine as to the differences), plaintiff evaded her burden and her expert could not provide an opinion as to the causation of her injuries following the 2009 accident. Therefore, the Court remanded the case to the trial court to enter a judgment for the defendant. This decision is significant because of the Court’s emphasis that a comparative analysis, through expert testimony is of paramount importance in cases involving aggravation of a pre-existing injury. While causation may typically be an issue for the trier of fact, the Appellate Division’s holding makes clear that causation issues may not reach the jury until plaintiff satisfies the initial burden of providing a comparative analysis.