Unenforceable Clause In Arbitration Agreement Does Not Void Agreement

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

Arbitration (pd)One of my children's preschool teachers was fond of saying, "you get what you get and you don't get upset." (Not to my little angel, of course, but to other children.) In Curran v. Curran, the Appellate Division basically applied this admonition to the parties to an arbitration agreement, holding that they got what they intended out of the agreement, therefore they could not argue, after the fact, that an unenforceable provision in the agreement voided the entire agreement.

In Curran, plaintiff filed for divorce from defendant. With the advice of counsel, the parties entered into a consent order to refer all issues incident to their divorce to arbitration under the New Jersey Arbitration Act. In the consent order, the parties acknowledged that any arbitration award that was entered could only be set aside or modified by a court under the limited grounds set forth in the Arbitration Act — e.g., the award was procured by fraud, corruption, or undue means, the court found evidence of "evident partiality" by the arbitrator, the arbitrator exceeded his or her powers, etc.  But the parties also included a handwritten provision, which provided: "The parties reserve their rights to appeal the arbitrator's award to the appellate division as if the matter was determined by the trial court." This is the provision that would cause all of the problems.

After the arbitrator entered a preliminary award, plaintiff requested reconsideration. The arbitrator then issued a comprehensive award setting forth his findings of fact and conclusions of law. Plaintiff filed a motion in the Law Division for an order modifying the award, citing eight alleged "mistakes of law" made by the arbitrator. Plaintiff also argued that the intent of the handwritten provision was not to allow for direct appeal to the Appellate Division, but was instead was evidence that the parties intended a more searching review of the award that what would normally be allowed under the Arbitration Act. The trial court agreed, holding that the paragraph itself was unenforceable because it purported to "create subject matter jurisdiction by agreement." The trial court noted that "[t]he authority of a court to hear and determine certain classes of cases rests solely with the Constitution and the Legislature." But the trial court agreed with plaintiff that the handwritten provision demonstrated the parties' intent to provide for "a little more review" than what would normally be allowed under the Arbitration Act. Therefore, the trial court "in essence act[ed] as the Appellate Division of the arbitrator." It performed a comprehensive review of the arbitrator's decision and affirmed the award. 

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What Do eBay, The “40 Year-Old Virgin,” And The Litigation Privilege Have In Common?

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

Jonah hillNot much, but please keep reading.

In the movie, the 40-Year-Old-Virgin, an almost unrecognizable Jonah Hill has a very small, but funny, part. He plays a customer at the “We Sell Your Stuff On Ebay” store, which is owned by Steve Carell’s character’s love interest, played by Catherine Keener. According to IMDB.com, Hills plays “Ebay Customer,” who is, to say the least, having trouble understanding how the store works. He wants to buy some "wonderful" shoes that he found at the store. Keener's character explains that she does not actually sell any of the items in her store at the store, she sells them on eBay. Hill's character just doesn't get it, eventually telling Keener's character that he just wanted to buy the shoes and take them home, but that she was "making it extremely difficult" for him to do so.

The recent Appellate Division decision, XCalibur Communications v. Karcich, involved a dispute over the sale of the plaintiff’s merchandise on eBay. No word on whether any of those sales involved shoes like the ones Hill’s character was looking to buy, but the decision helps clarify the scope of the litigation privilege, which is broader than many people think. 

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Let Sleeping Dogs Lie . . . Just Not In A Hallway Where They Might Create A Dangerous Condition?

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

Sleeping dog (pd)When is a sleeping dog a dangerous condition? This is the burning question that the Appellate Division answered in Parella v. Compeau.

In Parella, plaintiff attended Christmas dinner at a friend's house along with approximately 20 other guests. After the second course, she got up from her chair to put her dish in the kitchen sink and check on her child who was in an another room. To do so, she had to walk behind several seated guests. She did not have to ask anyone to move until she got to the last guest in the row. That guest moved her chair in and plaintiff made a move familiar to anyone who has been to a crowded holiday dinner — she "lifted [her] glass and plate, turned her back to the wall and shuffled her feet to pass behind [the] chair." "As she cleared the chair, plaintiff turned right to enter the hall toward the kitchen, and fell." 

What caused her fall was a "tan, fairly large dog" that was "lying in the hallway, past the threshold of the dining room." The dog did not belong to defendants, the owners of the house and the hosts of the party, and was one of two dogs in the house for the party. When plaintiff fell, the wine glass she was holding broke, cutting her finger and severing a tendon. Plaintiff sued, alleging that defendants failed to warn of her of a dangerous condition — the dog — in their home. The trial court granted summary judgment to defendants and plaintiff appealed.

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“This Eight Dollar Dish Will Cost You A Thousand Dollars In Phone Calls To The Legal Firm Of That’s Mine, This Is Yours . . . .”

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

One of my favorite scenes from "When Harry Met Sally" occurs when the late, great Bruno Kirby, and the late, great Carrie Fisher, whose characters are just moving in together, are arguing about a wagon wheel table that Kirby's character wants to put in their apartment. Then they ask Billy Crystal's character for his opinion about the table. Big mistake. Crystal had just run into his ex-girlfriend and her new boyfriend. After a few seconds, Crystal launches into a rant about how things may be wonderful for Kirby and Fisher now, but a few years from now they will break up and will spend hours and hours, and thousands of dollars fighting over a "stupid, wagon wheel, Roy Rogers, garage sale coffee table."  

I was reminded of this scene when I read the Appellate Division's decision in Maciejczyk v. Maciejczyk. Instead of a wagon wheel coffee table, however, the parties in that case were fighting over a water filtration system. Regardless, they proved Crystal's point.

 

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Dismissal With Prejudice Too Harsh A Remedy For Expert’s Unavailability

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

Gavel (pd)There is often tension between a court's need to effectively manage its docket and the overriding objective that a lawsuit be resolved on its merits and not because a party (or its counsel) misses a deadline. Courts establish deadlines. If they are ignored, can the court — as a sanction, and in the interest of managing its docket — dismiss the lawsuit with prejudice? According to the Appellate Division in a recent unpublished decision, Trezza v. Lambert-Wooley, the answer to this question is "no," unless the noncompliance was purposeful and no lesser remedy was available to the court. 

In Trezza,plaintiffs sued defendants for medical malpractice. Three years after the lawsuit was filed, the court set a peremptory trial date. This was rescheduled when the court did not reach the case on the trial date. The trial did not take place on the rescheduled date or a subsequent rescheduled date, both times because defendant's designated trial counsel was unavailable. Thereafter, the Presiding Judge issued a sua sponte order scheduling trial for approximately four months later and setting forth "specific and stringent terms as to the course and conduct of the case relative to trial." The order mandated that: (1) the trial date would not be adjourned to accommodate the parties' or counsels' personal or professional schedules; (2) counsel was required  to monitor the schedules of their parties, witnesses, and experts, and if one or more were not going to be available on the trial date, arrange for a de bene esse deposition ahead of trial; and (3) if designated trial counsel was not available on the trial date, alternate counsel would have to be found, whether or not from the same firm.

Five days before the scheduled trial date, plaintiff's counsel requested that the trial be carried for four days due to the unavailability of plaintiff's liability expert, which he only learned about a few days prior to the request. Defendants' counsel consented to the request. The judge assigned to the case considered the request but, in light of the Presiding Judge's order, determined that he did not have the authority to grant the adjournment. He sent the parties to the Presiding Judge, who denied the request and directed the parties to proceed to trial. "Predicated upon the terms of the order, the age of the case, and plaintiff's expert's unavailability, the judge [then] dismissed the complaint with prejudice." Plaintiffs appealed.

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Court Awards Attorney Almost $100,000 Less Than He Requested In New Jersey Consumer Fraud Act Case

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

Legal fees (pd)I recently wrote about Garmeaux v. DNV Consepts, Inc., a case in which the Appellate Division held that, under New Jersey's Consumer Fraud Act, successful plaintiffs can, in certain circumstances, recover legal fees they incurred in connection with both the prosecution of their affirmative claims and the defense against any counterclaims. If the facts relevant to a counterclaim are "inextricably caught up with," and related to the common core of, the facts relevant to an affirmative CFA claim, then legal fees can be awarded for both claims. In another recent decision, Riccardi v. Bruno, the Appellate Division addressed a similar issue but arrived at a result that was less favorable to plaintiff than the result in Garmeaux.

In Riccardi, plaintiff purchased a home from one of the defendants. The home had been damaged in a fire and required "extensive renovations" before being put on the market. (Although it was not listed as having been fire damaged, the certificate of occupancy issued by the township at the closing noted "rehab after fire.") After the closing, plaintiff allegedly discovered numerous problems with the house, including mold, burnt and fractured joists, and damaged foundation walls. He sued the seller and several related entities (architect, contractor, home inspector, etc.), alleging breach of contract and a violation of the CFA.

Default was entered against several defendants for failing to answer the complaint, and the claims against several others were dismissed either by summary judgment or at the close of plaintiff's case in chief. The jury then determined that the two remaining defendants — the prior owners of the property — violated the CFA. The jury's verdict was based on a "knowing concealment, suppression, or omission of a material fact with the intent that other would rely upon that fact." (The decision does not identify the fact that was omitted.) The jury found no cause of action under the CFA based on an unconscionable commercial practice, fraud, false pretense, false promise , or misrepresentation. And, it awarded plaintiff only $4,500, which was "attributable to the cost to repair a damaged window frame and to dispose of buried construction litter."

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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)

John doe (pd)
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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