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

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

Beware of dog (pd)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.  

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Winning Bidder At Sheriff’s Sale Entitled To Recoup Some, But Not All, Of His Deposit After Sale Is Vacated

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

Auction (pd)A recent decision from the Appellate Division drives home (1) the duty of sellers at sheriff's sales to announce all material information about the property being sold at the sale, (2) the duty of bidders at sheriff's sales to perform independent due diligence about the property notwithstanding that announcement, and (3) the flexibility of Chancery Division courts to fashion remedies when both fail to fully satisfy their obligations.

In Wells Fargo Bank Bank, N.A. v. Torney, plaintiff foreclosed on property owned by defendant, obtained final judgment against defendant, and proceeded to sheriff's sale. In advance of the sheriff's sale, plaintiff submitted its "sheriff's sale package" to the Camden County Sheriff. Included in the package was a short form property description (required under N.J.S.A. 2A:61-1), which, among other things, disclosed that the property was subject to a $94,000 first mortgage. The existence of this prior mortgage was also disclosed in the conditions of sale attached to the short form property description, and in the Affidavit of Consideration submitted by plaintiff in connection with the foreclosure. Finally, the short form property description also contained the following disclaimer: "all interested parties are to conduct and rely upon their own independent investigation to ascertain whether or not any outstanding interest remain[s] of record and/or have priority over the lien being foreclosed and, if so[,] the correct amount due thereon."

Edward Shuman, who would eventually be the winning bidder at the sheriff' sale,  learned about the sale through the sheriff's website, which did not mention the prior mortgage. Also, at the sheriff's sale, plaintiff did not announce, as part of its "general announcements," that the property was subject to a prior mortgage. And, on the "printed condition of sale, the box next to 'subject to a first mortgage' was not checked." Shuman claims that he did not know about the prior mortgage when he placed his winning bid on the property, and did not learn about it until later that day when he inquired about the existence of any tax liens on the property. Once he learned about the mortgage, he contacted plaintiff and requested that the sale be vacated and his deposit returned. When plaintiff refused, Shuman filed a motion seeking the same relief. 

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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)

Parking lot lights (pd)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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Back to Basics: Personal Guaranty Not Enforceable Without Consideration

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

Gas pump
Sometimes the most basic things can cause the biggest problems. One of the first lessons learned in the first year of law school is that a valid contract requires consideration – some benefit flowing to each side of the deal. In M. Spiegel & Sons Oil Corp. v. Amiel, the Appellate Division reminded us how failing to satisfy this basic requirement can derail an otherwise seemingly straightforward matter.

In Spiegel, defendants were two individuals who formed an LLC that operated two gas stations. The LLC purchased fuel oil from plaintiff. By March 2012, however, the LLC allegedly owned plaintiff more than $1 million for fuel oil deliveries, therefore plaintiff stopped making deliveries. Shortly thereafter, plaintiff entered into an agreement with the LLC pursuant to which the LLC agreed to make regular monthly payments to plaintiff to resolve its debt. As part of the agreement, the LLC entered into a promissory note with defendants for the full amount of the debt. Defendants were never asked to, and never agreed to, provide a personal guaranty in connection with the promissory note. But, shortly after the promissory note was signed, plaintiff asked defendants to sign a personal guaranty, which they did.  

The LLC eventually defaulted on the promissory note, and plaintiff sued defendants to recover on the personal guaranty. Both sides moved for summary judgment. The only fact issue that either side raised was whether there was adequate consideration for the personal guaranty. Plaintiff asserted that the personal guarantee was provided to induce plaintiff to continue to supply fuel oil to the LLC’s gas stations, therefore there was adequate consideration and the guaranty should be enforced. Defendants countered that, by the time the personal guaranty was presented to them, the LLC had already made arrangements to purchase fuel oil from a new supplier and therefore the personal guaranty was void for lack of consideration.

The trial court granted plaintiff’s motion and denied defendants’ cross-motion, holding that the guaranty was “clear and direct,” and that the “‘forbearance of the plaintiff to forego collection of the full amount’ and to ‘span out a payment plan’” provided adequate consideration. Defendants appealed and the Appellate Division reversed.

 

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Enforcement Action Against Rating Agency Allowed To Proceed

        by: Peter J. Gallagher (@pjsgallagher)

In an interesting decision issued today, Judge Katz (Essex County) denied a motion to dismiss filed by the ratings agency Standard & Poor's ("S&P") in an enforcement action brought against S&P by the New Jersey Attorney General. In Hoffman v. McGraw-Hill Financial, Inc., the Attorney General alleged that S&P violated the Consumer Fraud Act ("CFA") by misrepresenting to New Jersey consumers that S&P's analysis and rating of structured finance securities was independent and objective. The opinion contains decisions on both procedural personal jurisdiction issues and substantive CFA issues that all litigators should find interesting.

[Lawsuits against ratings agencies are nothing new. Several years ago, I wrote an article about these lawsuits and, at the time, the relative success the rating agencies had defending against them. (If you did not save your copy of the article, click here for another copy.) Historically, the rating agencies argued that their ratings were proetced under the First Amendment, but at least one court rejected this argument in the context of a motion to dismiss in a lawsuit that eventually settled.]

 

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