Clear Arbitration Provision, Negotiated By Sophisticated Party While Represented By Counsel Deemed Enforceable

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

The headline of this post is a little like "Dog bites man." But, given the recent trend in New Jersey of "man bites dog" type cases where courts have invalidated arbitration provisions that once seemed unambiguous (look here, here, and here for examples), the headline should make more sense.

In Columbus Circle NJ LLC v. Island Construction Co., LLC, the Appellate Division enforced an arbitration provision contained in a construction contract. Plaintiff was a single-member LLC that retained defendant to build a $1.9 million home on the bay in Avalon, New Jersey. Plaintiff's representative circulated an initial draft contract for the project that used the standard American Institute of Architects (AIA) forms. These forms contain a provision entitled "BINDING DISPUTE RESOLUTION," which, as the name suggests, requires the parties to choose "the method of binding dispute resolution" for any claims between them that are not resolved by mediation. In the draft it circulated, plaintiff's representative checked off "Arbitration pursuant to Section 15.4 of AIA Document A201-2007," rather than "Litigation in a court of competent jurisdiction." Before it was signed, the attorney for the LLC's sole member reviewed the draft and proposed changes, as did defendant, but none of these changes appear to have altered the dispute resolution provision.

During construction, disagreements arose between the parties regarding the cost of the project, leading both parties to terminate the contract. When mediation apparently failed, defendant filed a demand for arbitration. Three months later, plaintiff sued in state court. Defendant successfully moved to dismiss plaintiff's complaint and compel arbitration, and Plaintiff appealed.

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Not An Open-Ended Issue: Judge’s Failure To Ask Open-Ended Questions During Voir Dire Is Reversible Error.

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

In 2006 and 2007, the Administrative Office of the Courts issued directives addressing jury voir dires. The directives require, among other things, that trial judges ask jurors at least three open-ended questions that are designed to elicit a narrative response to which "appropriate follow up questions [can] be asked." These questions must be "posed verbally to each juror to elicit a verbal response." The purpose of this requirement is to "ensure that jurors verbalize their answers so the court, attorneys and litigants can better assess the jurors' attitudes and ascertain any bias or prejudice, not evident from a yes or no response, that might interfere with the ability of that juror to be impartial." The importance of the Administrative Office's directives was highlighted in two recent decision from the Appellate Division, both of which overturned verdicts rendered by jurors who were not asked at least three open-ended questions during voir dire.

In Heredia v. Piccininni, plaintiff sued after being injured in an automobile accident. Before trial, defendant stipulated liability, thus the only issue for the jury was damages. In advance of jury selection, Plaintiff submitted the following open-ended questions to be asked during voir dire:

What are your feelings regarding the proposition that accidents resulting in serious damage to a vehicle may result in no bodily injuries and accidents resulting in little damage to a vehicle may result in serious bodily injuries?

Describe by way of an example an experience in your life that illustrates your ability to be fair and open-minded in this case.

Who are the two people that you least admire and why?

What would you do about the homeless situation?

What would you do about those without medical insurance?

The court did not include any of plaintiff's proposed questions in the list of questions used during voir dire. Instead, the trial judge asked each juror "multiple biographical questions required by the [Administrative Office]," including how they received their news, what their favorite television shows were, what bumper stickers they had on their cars, and how they spent their time. None of these were open-ended questions. Plaintiff's counsel used two of her six peremptory challenges during jury selection and, at the end of the process, advised the court that the jury was satisfactory.

After trial, the jury returned a verdict of no cause on plaintiff's non-economic losses (e.g., pain and suffering damages) but awarded plaintiff her economic damages, representing the full value of her outstanding medical bills. Plaintiff appealed, arguing, among other things, that the trial judge failed to ask any open-ended questions during voir dire.

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What Happens when a jury concludes that “John Doe” was 97% responsible for an accident

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

It is not uncommon for lawsuits to include fictitious defendants, usually identified as John Doe or Jane Doe. When the identity of the fictitious defendant is discovered, the complaint is amended to include the real name of the party. But what happens when a case goes all the way to trial with John Doe alongside actual, real life defendants, and the jury concludes that Mr. Doe was almost entirely responsible for the accident that was the subject of the lawsuit? This is exactly what happened in Krzykalski v. Tindall.

In Krzykalski, plaintiff was driving his car in front of defendant's car. Both slowed down to allow an emergency vehicle to enter the road. When they started up again, a third car, driven by an unknown driver, passed both of them on the right and cut in front of them to make a left turn. Plaintiff was able to avoid hitting the unknown driver, but defendant rear ended plaintiff. Plaintiff sued both drivers, one by name and one as "John Doe." At trial, the jury found both defendants liable, but apportioned 97% of the responsibility to John Doe. Therefore, only about $3,000 of the jury's $107,890 verdict in plaintiff's favor was attributable to the named defendant.

Plaintiff appealed, arguing that the jury should not have been able to consider, much less apportion, John Doe's liability. He argued that (1) under New Jersey's Comparative Negligence Act, a jury is only allowed to apportion liability between defendants based on each "party's" negligence, but (2) New Jersey courts have held that a fictitious defendant is not a "party" to a lawsuit, therefore (3) a jury cannot apportion any liability to a fictitious defendant. The Appellate Division held that this argument had "the appearance of some syllogistic logic," but, unfortunately for plaintiff, did not find it persuasive.

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Does a judge have to explain the “empty chair” to the jury when there was never anyone sitting there in the first place?

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

A recent trial court decision, Hernandez v. Chekenian, dealt with a minor, but significant, twist on a common scenario involving the so-called empty chair defense. This defense does not literally involve an empty chair. Rather it refers to the situation when defense counsel argues to a jury that someone else, someone not sitting at the defense table, is to blame for plaintiff's injuries. That party is usually, but not always, missing because they settled with the plaintiff.

The New Jersey model jury charges contain two settling co-defendant instructions. One is very short, and simply notifies the jury that a defendant settled and that "[t]he effect of that settlement on the parties still [t]here is of no concern to you at the present time and you should not speculate about that." The second is more detailed. It similarly notes that the jury should not "speculate as to the reasons why the plaintiff and defendant settled their dispute" and "should not be concerned about the amount, if any, that may have been paid to resolve the claim," but then instructs the jury to consider "whether or not the settling defendant was negligent and a proximate cause of the accident," and, if it does, to then "apportion fault in terms of percentages among/between the settling defendant(s) and the remaining defendant(s)."

Hernandez involved a three-car, chain reaction crash. Plaintiff was the passenger in the middle car. He sued the driver and owner of the first car, the driver and owner of the middle car (in which plaintiff was a passenger), and the driver of the third car. Prior to trial, plaintiff dismissed the claims against the driver and owner of the first car and the claims against the owner of the second car. He then settled the claims against the driver of the middle car. That left only the claims against the driver of the third car for trial. Counsel for the one remaining defendant requested that the court give the jury a settling co-defendant charge.

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Reminder to Judges: No talking to jurors during deliberations

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

All lawyers know, or should know, that you are not allowed to have ex parte communications with a judge. A similar prohibition applies to judges, who are prohibited from having ex parte communications with jurors after the jury is empaneled. The unforgiving nature of this prohibition was at the forefront of Weber v. Patel, a recent unpublished Appellate Division decision.

Weber was a personal injury case. After hearing the evidence, the jury deliberated for approximately 90 minutes before purporting to return a 4-2 defense verdict. The judge responded: "Not a valid verdict. Five to one or six to zero. You've got to go back." The jury deliberated for a few more hours that day but went home without reaching a verdict. They returned the next morning at which point the judge had an ex parte conversation with them. According to the judge, one of the jurors asked the judge what would happen if they remained deadlocked. The judge responded that he would "worry about that in three days."

The judge told counsel about this conversation after it happened, but then confided that he would not really let the jury deliberate for three more days. Instead, he indicated that if the jury did not reach a verdict by the end of that day, he would likely find the jury "hung" and declare a mistrial. A little more than one hour after the judge spoke with the jurors, however, they returned a unanimous defense verdict.

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