“Just Remember, When You Control The Mail, You Control . . . Information.”

 by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

 Mailbox

Whenever it snows, we shovel out a little area in front of our mailbox because we heard that if the mail carrier cannot easily get to your mailbox, then he won't deliver your mail. This has always annoyed me, but not so much that I ever thought of suing our mailman. The same cannot be said of the plaintiff in Finnemen v. Pollard, who filed a federal lawsuit against his mail carrier for refusing to deliver his mail because his mailbox was broken.
 
The facts in Finnemen are a little sketchy, as plaintiff appeared pro se. Plaintiff's mail carrier, Defendant Maurice Pollard, told plaintiff that he would no longer deliver mail to plaintiff because plaintiff's mailbox was broken. When plaintiff went to the post office, defendant, Jamar (no last name), allegedly told defendant, Janine (also no last name), that plaintiff's mail could not be delivered because of the broken mailbox. Plaintiff claims that this was "a lie" but does not contest that his mailbox was broken. Regardless, Plaintiff alleged that defendants tampered with his mail because, when he visited the post office, he was sometimes able to pick up his mail and sometimes there was no mail for him to pick up. Plaintiff sued under Section 1983, alleging that his civil rights had been infringed by the individual defendants.
 
Defendants moved to dismiss the complaint, and the motion was granted. The district court held that plaintiff "fundamentally alleged" who participated in the alleged scheme to tamper with his mail, but not "how it was done or even how it amounts to tampering with his mail." For example, the district court noted that plaintiff failed to allege that his mailbox was in working order and that the re-routing of his mail was therefore part of a scheme, or that any mail was not turned over to him, or that it was delayed in reaching him. The court relied on another mail tampering case (who knew there was more than one) to hold that the allegations in the complaint did not "nudge his claim . . . across the line from conceivable to plausible" as required under the Federal Rules of Civil Procedure. Although not immediately apparent from the complaint, the district court also held that, to the extent plaintiff was alleging discrimination — "that he has been required to pick up his mail where others have not — he failed to state a claim under this theory as well because he had not alleged that he was treated differently than others or that there was not a rational basis for that treatment.
 

Continue reading ““Just Remember, When You Control The Mail, You Control . . . Information.””

Rova Farms – From Born to Run to Bad Faith

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

SpringsteenI am in the middle of reading “Born to Run,” Bruce Springsteen’s memoir. I am about one-third of the way through and so far, so good. I just finished reading about “the only full-scale truly scary bar brawl [of Bruce and the band’s] club lives.” It happened in Rova Farms, a “Russian social club on the outskirts of town.” (In Springsteen’s life, like in his songs, the important things always seem to happen on the outskirts of town.) The brawl started right before the band broke into “Santa Clause is Coming to Town,” and ended with the police being called and several people being taken out on stretchers.

Like nearly all New Jersey lawyers, I know Rova Farms as a thing – a “Rova Farms letter” or a “Rova Farms claim” – not a place. It was interesting to read a story about the place behind the thing. For the uninitiated, Rova Farms Resort v. Investors Ins. Co. of America, was a case involving a visitor to Rova Farms who was injured, not in a bar brawl, but from diving into a shallow portion of a lake on the resort. He sustained serious spinal cord injuries and was paralyzed. The resort’s insurance carrier refused to tender the full, $50,000 policy limit to settle the claim. The case went to trial and the jury returned a $225,000 verdict. The resort then sued its carrier for the full amount of the judgment, alleging that it acted in bad faith by not settling the claim within the policy limits.

The New Jersey Supreme Court agreed, holding that an insurer’s bad-faith failure to settle within policy limits renders it liable for the full amount of the judgment, including any portion in excess of the policy limits. As a result of this decision, defendants in New Jersey will usually send a “Rova Farms letter” to their carriers when a plaintiff offers to settle a case within policy limits. The letter puts the carrier on notice that, if it does not settle within the policy limits, the insured will look to the carrier to pay the entire judgment. Of course, the obligation to do so only arises when the carrier acts in bad faith, but, needless to say, this letter tends to change the dynamic between insured and insurer.   

Back to Bruce . . . As far as New Jersey courts are concerned, Rova Farms is far more popular than Springsteen. The case has been cited more than 3,800 times in New Jersey alone. A search of all state and federal court opinions for Bruce Springsteen yields 87 hits, and only 5 of those are from New Jersey courts. Local hero indeed.

A Rare Narrowing Of The Consumer Fraud Act’s Scope: Medical Malpractice Insurance Not Covered

 by:  Peter J. Gallagher (@pjsgallagher)

It is not every day that a New Jersey court limits the scope of the New Jersey Consumer Fraud Act (“CFA”), so when one does, it is worth writing about. Anyone who litigates in New Jersey knows about the CFA and, depending on whether you are on the plaintiff’s side or the defendant’s side, either loves it or hates it. (I am mostly on the defendant’s side, but occasionally find myself representing a plaintiff, so my relationship with the CFA is “complicated.”) Because it is remedial legislation, the CFA is liberally construed to afford the greatest protection to consumers. This philosophy has led courts to apply the CFA (and its treble damages and prevailing party’s attorney fees) to a seemingly ever growing, and very rarely contracting, variety of disputes. In fact, many years ago, the New Jersey Supreme Court observed that: “The history of the Act is one of constant expansion of consumer protection.”

With this in mind, we turn to the Law Division’s published decision in Khan v. Conventus Inter-Insurance Exchange. That case was a putative class action in which plaintiff, a doctor, alleged that defendant violated the CFA in connection with the sale of medical malpractice insurance and the administration of the policy after it was purchased. Plaintiff purchased a policy from defendant and, as part of her initial membership, was required to make a one-time contribution, equal to the first year’s premium, to defendant’s surplus fund. (Defendant is not a traditional insurance carrier, but is instead a “non-profit physician member-owned risk sharing exchange.”) Plaintiff elected to make this contribution in installments over a ten-month period, with the understanding that if she cancelled her policy before the final payment was made, she would still be responsible for the full surplus fund contribution. Plaintiff eventually cancelled her policy before the ten-month period passed and defendant demanded that she immediately pay her entire surplus fund contribution rather than allowing her to pay it off in installments as originally agreed upon by the parties. Plaintiff sued alleging that this attempt to accelerate the surplus fund payment was a breach of contract and a violation of the CFA. She sought to bring her claims as a class action.

Before addressing whether plaintiff could sustain a class action and be appointed class representative, the court first had to decide whether the CFA applied to “transactions involving the purchase and sale of medical malpractice insurance.” Because the court held that it did not, it never had to reach the class certification issues.

 

 

Continue reading “A Rare Narrowing Of The Consumer Fraud Act’s Scope: Medical Malpractice Insurance Not Covered”