eNotes: Liability – July 2022 – New Jersey
July 01, 2022
SIGNIFICANT CASE SUMMARIES
NJ CASE SUMMARIES
Hoelz v. Bowers v. Cominsky
New Jersey Superior Court, Appellate Division
No. A-1534-21, ___ N.J. Super. ___
Decided: June 20, 2022
The Appellate Division provides a review of three significant areas of law: (1) the recovery, from an alleged joint tortfeasor, of settlement proceeds paid pursuant to the Joint Tortfeasor Contribution Law (N.J.S. 2A:53A-1 to 5); (2) equitable estoppel; and (3) the 30 days before trial requirement of Rule 4:46-1 – Summary Judgment Motions.
The Appellate Division of the Superior Court of New Jersey provided a review of three significant areas of law, one of which is often overlooked or misunderstood. The often misunderstood concept is that of recovery of settlement proceeds from a non-settling joint tortfeasor co-defendant or third party defendant. Often overlooked is the requirement that the settlement must be reduced to judgment before a settling defendant may pursue a joint tortfeasor for alleged overpayment of his or her share of a plaintiff’s recovery. It is not enough to allege comparative negligence and joint tortfeasor liability, alone, without having incurred a judgment imposing payment in an amount alleged to be more than one’s share of responsibility.
In this case, Plaintiff Faye Hoelz was diagnosed with a right ankle fracture and left lateral malleolus fracture. Defendant Andrea L. Bowers, M.D., an orthopedic physician, ordered that short leg casts be placed on both ankles. Plaintiff was discharged from the hospital and admitted to a rehabilitation facility. Third-Party Defendant Walter Cominsky, D.O., an internist, treated Plaintiff at the Co-Third-Party Defendant rehabilitation facility. However, Plaintiff was readmitted to the hospital for bilateral gangrenous foot wounds, which resulted in amputation of her left leg and surgical anatomical correction of her right foot. Plaintiff filed suit against Bowers, who in turn filed a Third-Party Complaint against Cominsky and the rehab facility, Lutheran Crossings Enhanced Living. The Third-Party Complaint alleged that Cominsky’s negligence was a cause of Plaintiff’s injury and accordingly demanded indemnification and contribution.
Ultimately, Plaintiff’s estate reached a settlement with Bowers and dismissed the First-Party Complaint. After a partial settlement between Bowers and Lutheran Crossings, Cominsky moved to dismiss the Third-Party Complaint because the settlement between Plaintiff and Defendant was not reduced to a judgment. The Trial Court denied the Motion, interpreting the Joint Tortfeasors Contribution Law (JTCL) requirement of a “judgment” as being solely for the “purposes of notice,” further finding that Cominsky had notice of the settlement between Plaintiff and Bowers, and additional notice under the medical malpractice reporting requirements.
Cominsky appealed from the judgment of the Trial Court. Bowers argued, as the Trial Court had found, that Cominsky’s summary judgment Motion was filed after the 8th court-ordered trial date and that the return date of Cominsky’s summary judgment Motion was less than 30 days before the last scheduled trial date, in violation of Rule 4:46-1. However, the Appellate Division found that Rule 4:46-1 does not provide that the deadline for a summary judgment motion must be measured from the first trial listing. The Court noted that what would have been the 9th scheduled trial date in this case had not yet been scheduled at the time Cominsky filed his summary judgment Motion. Bowers also argued that the substantial delay in filing his summary judgment Motion should have been sufficient basis to find that Cominsky was equitably estopped from filing his motion at what was the last minute. However, the Appellate Division reviewed New Jersey’s extensive case law on the issue of equitable estoppel and agreed with Cominsky’s argument that the element of prejudice had not been met, despite Cominsky’s having waited twenty-one months after the settlement between Bowers and Plaintiff before filing his summary judgment Motion.
Cominsky further argued that, without a judgment in favor of plaintiff, the JTCL expressly precluded Defendant from seeking contributions for payments she voluntarily made under the settlement. The Trial Court noted that it would frustrate the Court’s ability to encourage settlements “if . . . doing so would . . . extinguish . . . the contribution claim.”
The Appellate Division agreed with Cominsky and reversed and remanded for entry of an order dismissing the Third-Party Complaint. The Court relied on the Supreme Court’s ruling in Young v. Latta, 123 N.J. 584, which permitted a settling tortfeasor to pursue contribution against a non-settling joint tortfeasor only if the settlement was reduced to a consent judgment.
Questions about this case can be directed to Mark Sander at (856) 334-0415 ext. 8915 or firstname.lastname@example.org.
MAC Prop. Group LLC v. Selective Fire & Cas. Ins. Co.
New Jersey Superior Court, Appellate Division
Nos. A-0714-20, A-0962-20, A-1034-20, A-1110-20, A-1111-20, A-1148-20
Decided: June 20, 2022
In this published decision regarding insurance coverage for business losses associated with the COVID-19 shutdowns ordered by Governor Murphy, the Appellate Division holds that Plaintiffs’ business losses were unrelated to any “direct physical loss of or damage to” covered properties, as required to trigger coverage; and found further that even if any of the coverage provisions in their insurance policies could be triggered, the virus exclusions in each policy would still bar coverage.
The Superior Court of New Jersey, Appellate Division, consolidated appeals in cases involving insurance coverage for business losses incurred due to shutdowns or the limiting of operations pursuant to executive orders (EOs) issued in response to the COVID-19 pandemic. The operators of various businesses filed suit against their business loss insurers, alleging breach of contract or declaratory judgment claims to obtain payment on their insurance claims.
The insurers argued that their insureds’ business losses were unrelated to any “direct physical loss of or damage to” covered property, as required to trigger coverage under the applicable insurance policies. The insurers further argued that the Court should reject the business owners’ claims for coverage under the civil authority provision of their policies, finding that these provisions were only triggered under limited circumstances not applicable in the present cases. In addition, the insurers urged the Court to find that the virus exclusions in their various policies excluded coverage for the stated losses.
The Appellate Division specifically concluded that the Trial Courts correctly granted dismissals of the business owners’ Complaints with prejudice for failure to state a claim “on the basis that plaintiffs’ business losses were not related to any ‘direct physical loss of or damage to’ covered properties as required by the terms of their insurance policies.” The Appellate Division further found that the alleged business losses “were also not covered under their insurance policies’ civil authority clauses, which provided coverage for losses sustained from governmental actions forcing closure or limiting business operations under certain circumstances.” The Court observed that the EOs neither prohibited access to Plaintiffs’ premises nor prevented Plaintiff-owners from being on their premises, but merely restricted their business activities. Further, the business owners’ premises were not selectively closed by the EOs due to damage to nearby property.
Finally, the Appellate Division held that the insurers’ denial of coverage was not barred by regulatory estoppel; and that even if Plaintiffs’ business losses otherwise satisfied the requirements of the relevant policy provisions, coverage was barred by the insurance policies’ virus exclusions and endorsements because the EOs were a direct result of COVID-19.