Dog (Bite) Days of Summer, Part I: Owners Usually, But Not Always, Strictly Liable For Dog Bites

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

As dog owners in New Jersey know, or should know, they are usually strictly liable for injuries suffered by anyone bitten by their dogs. New Jersey does not follow a "one free bite rule." Instead, under New Jersey law: "The owner of any dog which shall bite a person while such person is on or in a public place, or lawfully on or in a private place, including the property of the owner of the dog, shall be liable for such damages as may be suffered by the person bitten, regardless of the former viciousness of such dog or the owner's knowledge of such viciousness."

There are, however, exceptions to this rule. For example, trespassers, who are obviously not "lawfully on or in a private place," cannot sue under the dog bite statute. A different exception was at play in Carpentiero v. Pocknett, where a dog groomer was bitten in the face by a dog while bathing the dog. In that case, defendant brought her dog to Katie's Pet Depot, where plaintiff, an independent contractor, worked as a part-time pet groomer. Plaintiff testified that had she been advised that the dog was old and had arthritis, she would have "muzzled the dog prior to grooming." But she was never told that, therefore she did not muzzle the dog, and, while she was bathing the dog, she was bitten in the face.

Continue reading “Dog (Bite) Days of Summer, Part I: Owners Usually, But Not Always, Strictly Liable For Dog Bites” →

Climbing A Light Pole Is Incidental To Fixing The Light At The Top, Therefore Property Owner Not Liable For Independent Contractor’s Injuries

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

On this blog I have occasionally written about the duty owed by landowners to, among others, visitors and trespassers and folks walking along a landowner's sweetgum-spiky-seed-pod-riddled sidewalk. In Pisieczko v. The Children's Hospital of Philadelphia, the Appellate Division addressed a similar situation — the duty owed by a landowner to an independent contractor performing work on its property.

In Pisiaczko, plaintiff was an independent contractor who worked for defendant "doing odd jobs, such as repairing different fixtures, changing lights, and installing tiles." In this capacity, he was hired by defendant to repair lights, which were "affixed to wooden poles" and located in one of defendant's parking lots. Defendant provided no guidance or supervision to plaintiff. Before beginning his work, plaintiff pushed on one of the wooden poles to make sure it was sturdy. When it did not move, he took a ladder, leaned it against the pole, and extended it to approximately two feet below the light fixture. He secured the ladder with straps around the pole. Unfortunately, while plaintiff was on the ladder testing the fixture, the pole broke. Plaintiff jumped off the ladder from about 20 feet to avoid falling into barbed wire. He injured his heel in the process.

Plaintiff sued. He alleged that the pole was rotten inside, which caused it to break. (The parties agreed that the rot was not visible before the pole broke.) Defendant moved for summary judgment, arguing that it was not liable for plaintiff's damages because the decision to place the ladder against the pole was incident to the specific work plaintiff was hired to perform. The trial court agreed and granted the motion. Plaintiff appealed.

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Another Reminder That Even When You Win You Still Lose Under The New Jersey Consumer Fraud Act

by: Peter J. Gallagher

The Appellate Division issued an unpublished decision today that again emphasizes the power (some might say, inequity) of the New Jersey Consumer Fraud Act. In Logatto v. Lipsky, plaintiffs hired defendant to build an addition on their home and perform other renovations. Although defendant prepared a written proposal with cost estimates, he never prepared a written contract. After the project was 90% complete, and plaintiffs had paid him $247,500, defendant notified plaintiffs that actual expenses exceeded the proposed costs, and therefore he required an additional $78,469.37 to complete the project. Plaintiffs refused and, when the parties could not come to a resolution on the issue, defendant left the job. Plaintiffs then sued defendant under the Consumer Fraud Act for the costs of completion of the project, and defendant counterclaimed for $50,000 in unpaid costs. Both parties moved for summary judgment, but both motions were denied.

The case was tried to a jury. After plaintiffs put on their evidence, they moved for judgment on liability in connection with their Consumer Fraud Act Claims. The trial court granted the motion, finding that there were technical violations of the Act (failure to have a signed contract and change orders). However, the trial court left the question of whether plaintiffs had suffered an "ascertainable loss," a requirement under the Consumer Fraud Act, to the jury. The jury ultimately returned a verdict in favor of defendant, finding that plaintiffs did not suffer any ascertainable loss. After the verdict, however, plaintiffs moved for, among other things, fees and costs under the Consumer Fraud Act. The trial court denied the motion, but the Appellate Division reversed the trial court and remanded the issue back to the trial court for disposition of the fee motion.

You may be asking yourself – how is this possible? How can a defendant prevail at trial but still be responsible for the plaintiffs' legal fees? What happened to the "American Rule"? The answer to all of these questions is, the New Jersey Consumer Fraud Act. Under the Act, as it has been interpreted by the New Jersey Supreme Court — in cases like Cox v. Sears Roebuck & Co. and Weinberg v. Sprint Corp. — plaintiffs can recover costs and fees if they prove that a defendant committed an unlawful practice, even if the victim cannot show any ascertainable loss. While a plaintiff cannot recover treble damages under the Act without an ascertainable loss, it can still recover its costs and fees. What this means is that if a plaintiff survives summary judgment and presents a prima facie case of ascertainable loss, it will be able to recover its costs and fees even if, as in the Logatto case, it ultimately loses on the merits at trial.

This case, like seemingly every other decision handed down in connection with the Consumer Fraud Act, should be a cautionary tale for any business or entities that sell products or provide services that are covered by the Act.

When Do Condominium Associations Have Standing To Sue Under The Consumer Fraud Act?

by: Peter J. Gallagher

In a recent decision, the Appellate Division restated and clarified the rules regarding when a condominium association has standing to sue a developer. In Belmont Condominium Association v. Geibel, an association sued the sponsor/developer/contractor of the Belmont, a seven-story, thirty-four unit condominium in Hoboken, asserting common law fraud and negligence claims along with statutory claims under both the New Jersey Consumer Fraud Act (“CFA”) and The Planned Real Estate Development Full Disclosure Act (“PREDFDA”). The claims arose out of the allegedly faulty construction of the Belmont, and certain pre-construction statements from the developer, including that it had “overseen the building and renovation of Over 400 Single Family & Condominium Homes.” (Although largely irrelevant to the issues addressed by the Appellate Division, it turned out that the Belmont was actually the first building that the developer’s owner and general manager had ever constructed.) As it relates to the faulty construction, the association alleged that the building was “plagued by water leaks” almost immediately after construction was complete. These leaks impacted both the individual units and the common elements. After years of repairs that did not correct the problem, the association sued the developer. The association argued that construction defects were the cause of the water filtration, while the developer blamed the problems on poor and inadequate maintenance.

Among other things, the developer in Belmont argued that the association lacked standing to bring claims under the CFA. At the outset, the Appellate Division observed that New Jersey courts take a liberal approach to standing, and have historically given wide recognition to suits by condominium associations. It then analyzed the language of the New Jersey Condominium Act (“NJCA”) to determine whether the association had standing. As it related to claims arising out of damage to the common elements, the Appellate Division held that the association had standing to sue because the NJCA vests condominium associations with the “exclusive right”(emphasis in original) to sue a developer for defects pertaining to the common elements, and generally prohibits individual unit owners from doing so.

The Appellate Division rejected the developer’s argument that the association lacked standing because it could not demonstrate reliance by the original purchasers on any of the alleged misstatements. On this point, the Appellate Division noted that reliance is not an element required to sustain a claim under the CFA. The Appellate Division also rejected the developer’s argument that the association could only recover damages for the unit owners who actually sustained damage as a result of the developer’s alleged misrepresentations. The Appellate Division held that because the NJCA allows associations to sue for damages to the common areas sustained by “any or all” of the unit owners, it was entitled to recover all of the damages necessary to repair any damages, not a prorated amount based on the number of unit owners who identified damages.

However, the Appellate Division held that the association lacked standing to sue for damages to the individual units because the NJCA only vests it with authority to sue or be sued in connection with damages to common elements. In Belmont, the damages associated with individual units all related to the windows, which the Appellate Division held were “personal to the unit owners,” and therefore not part of the Belmont’s common elements. On this point, the Appellate Division reviewed the definition of common elements contained in both the NJCA and the master deed for the Belmont, neither of which identified windows as common elements. Once the Appellate Division concluded that the windows were unit elements, not common elements, its decision on standing was a simple one because it had already concluded that an association has standing to sue for damage to common elements, but lacks standing to sue for unit elements.

NUB-ish! Arbitrator’s Preliminary Decision On Construction Lien Is Not Law Of The Case

by: Steve P. Gouin

In the recently decided Seavey Construction Inc. v. St. Peter, the Appellate Division reversed the Law Division and its construction of the New Jersey Construction Lien Law, N.J.S.A. 2A:44A-1, et. seq. (the Lien Law”).

Under the Lien Law, before a contractor may file a construction lien stemming from a residential project, he must file a Notice of Unpaid Balance and Right to File Lien (“NUB”) and Demand for Arbitration of the NUB with the AAA. This added step is intended to prevent contractors from filing meritless lien claims against unsuspecting homeowners. An arbitrator will be assigned to make certain determinations regarding the NUB, such as whether it was filed correctly and states a valid lien claim and whether the homeowner has any valid setoffs or counterclaims. Once the arbitrator renders his decision, the contractor may file his lien, but may be required to post a bond, to the extent the arbitrator determines that the homeowner’s claims have merit.

In Seavey, the arbitrator ruled in favor of the contractor on the NUB arbitration. In doing so, it found the homeowner’s counterclaims to be invalid. Subsequently, the contractor filed a complaint in the Law Division seeking to foreclose on its lien. The homeowner’s answered and asserted the same counterclaims that the arbitrator had found to be invalid. The trial court dismissed these counterclaims, on the grounds that the arbitrator had already found them to be invalid.

On appeal, the Appellate Division held that the arbitrator’s determination merely established a “prejudgment lien” which still need to be confirmed in litigation brought pursuant to the lien law. The arbitrator’s decision does not, as the trial division held, absolve the contractor of the burden of proving the validity of its lien claims at trial. Moreover, it does not prevent the homeowner’s from raising the same counterclaims as were asserted during arbitration of the NUB. The Court noted that, to do so, would require the parties “to have completed discovery for all non-lien causes of action within” the thirty day period provided by the Lien Law for the arbitrator to render a decision.

The Appellate Division also reversed the trial court’s grant of summary judgment on the contractor’s breach of contract and unjust enrichment claims, which the trial court had granted based on the arbitrator’s decision. The Appellate Court noted that the trial court improperly treated the arbitrator’s decision as one entitling the contractor to a money judgment. Rather, pursuant to the Lien Law, the Appellate Division held that the arbitrator’s decision, while confirming the validity of the NUB and the underlying lien claim, is not to be used for res judicata or law of the case purposes.