Booze And Boating Don’t Mix (But They Do Lead To An Interesting Discussion Of Negligent Entrustment)

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

Some sets of facts just seem tailor-made for a potential lawsuit. Climbing up a ladder with a chainsaw to cut your neighbor’s tree limbs that are hanging over your lawn comes to mind. Also on that list, a day out on a boat with your friends from the local bar, more than a few beers, and a jet-ski. Those were the basic facts in Votor-Jones v. Kelly. In that case, what started out as a fun day out at sea for a group of friends became a very bad day for plaintiff and an opportunity for the court to opine on the rarely-invoked tort of negligent entrustment.

In Kelly, plaintiff was “one of seven employees and patrons of Kelly’s Tavern invited on a social trip organized by the tavern’s owner and plaintiff’s boyfriend.” While plaintiff described the event as a “bar outing,” it was not the more formal, “large scale ” “customer appreciation days” that the bar had organized in the past. Instead, it was “small and planned the night prior at the suggestion of the boat’s operator.” Each attendee was required to bring their own food and alcohol. To that end, plaintiff and her boyfriend testified that, on the morning of the cruise, they went to the bar and fulled their cooler with approximately 24 beers and a bottle of wine. The group had a total of four or five coolers like this on the boat.

The attendees had a “tacit agreement” that they would not drink until 4pm, but some apparently ignored this agreement. One defendant acknowledged that she was drinking prior to boarding the boat and plaintiff testified that she saw this woman have “at least three beers on the dock” before the cruise began. Once the cruise started, this same woman was seen with a beer in her hand and was described by plaintiff as being “loud,” “boisterous,” and “excited.” Plaintiff conceded that she did not know if the woman was drunk, but did see her “wobbling on the boat, as was everyone else.”

Continue reading “Booze And Boating Don’t Mix (But They Do Lead To An Interesting Discussion Of Negligent Entrustment)” →

Borrower Cannot Abandon Germane Defense To Foreclosure And Later Sue For Damages Based On That Defense

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

It is always helpful when a court lets you know up front what its decision is all about. This was the case in Adelman v. BSI Financial Services, Inc., where the Appellate Division began its decision as follows: "A defendant in a foreclosure case may not fail to diligently pursue a germane defense and then pursue a civil case against the lender alleging fraud by foreclosure." Definitely not burying the lede (or is it burying the "lead"?).

In Adelman, plaintiff was the executrix of the estate of her deceased husband, Norman. Before they were married, Norman entered into a loan with his lender that was secured by a mortgage on his home. Three years later, the loan went into default, and six months after that, the lender filed a foreclosure complaint. Norman offered no defense to the complaint, and default was entered. Three months after that, he began discussing the possibility of a loan modification with the lender. However, Norman's chances for a successful modification ended when he could not make the first payment under the proposed modification and when a title search revealed five other liens on the property.

Months later, final judgment of foreclosure was entered. Norman did not object to the entry of final judgment. One year after that, the property was sold at sheriff's sale, and nine months after the sale, the lender filed a motion to remove Norman from the property. Only then, for the first time, did Norman argue, in a motion to stay his removal from the property, that the foreclosure was improper because the loan modification cured the default. The court denied this motion. Plaintiff appealed but then withdrew the appeal. Ultimately, shortly after Norman passed, and more than five years after the loan went into default, plaintiff vacated the property.

Continue reading “Borrower Cannot Abandon Germane Defense To Foreclosure And Later Sue For Damages Based On That Defense” →

Exception To The Rule: Ambulance Service Providers Are “Learned Professionals” And Not Subject To New Jersey’s Consumer Fraud Act

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

New Jersey's Consumer Fraud Act ("CFA") is generally recognized as one of the strongest consumer protection laws in the country. It prohibits "any unconscionable commercial practice, deception, fraud, false pretense, false promise or misrepresentation" that leads to an "ascertainable loss." But, certain "learned professionals" — doctors, lawyers, hospitals, etc. — are insulated from liability under the CFA. In Atlantic Ambulance Corporation v. Cullum, the Appellate Division added ambulance service providers to the list of "learned professionals" who are not subject to the CFA.

In Atlantic Ambulance, defendants received services from plaintiff, an ambulance service provider. After they failed to pay the bills for those services, plaintiff sued. In response, defendants filed a counterclaim alleging that they were overbilled by plaintiff in violation of the CFA. Defendants sought to bring their counterclaim as a class action on behalf of themselves and all other similarly situated people who were allegedly overcharged during a six-year period.

After five years of discovery, defendants moved for class certification. The trial court denied the motion for a number of reasons, only one of which is relevant for this post. Plaintiff argued that defendants could not maintain a cause of action under the CFA because they did not pay their bills, therefore they had not suffered any "ascertainable loss." The trial court agreed, expressly rejecting defendants' argument that an excessive bill from plaintiff, by itself, was enough to prove an ascertainable loss. Defendants appealed.

Continue reading “Exception To The Rule: Ambulance Service Providers Are “Learned Professionals” And Not Subject To New Jersey’s Consumer Fraud Act” →

Court Approves Service Of Complaint Via Facebook, No Word On How Many “Likes” It Received

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

Facebook is useful for a lot of things — humble bragging about your children, posting professionally taken candid photographs of your smiling family, announcing your engagement/marriage/pregnancy/baby's gender to several hundred of your closest friends, etc. In K.A. v. J.L., a New Jersey court added another item to this list. After observing that courts in other jurisdictions were almost evenly split on the issue, the court allowed plaintiffs in that case to serve defendant via Facebook. (When it researched the issue, I assume the court reviewed one of my prior posts about two New York courts that also allowed service via Facebook.)

K.A. involved very unusual facts. Plaintiffs sued defendant to "enjoin defendant from holding himself out as the father of their [adopted] son." Defendant, who was not the son's biological father of record, sent the son a friend request over Facebook. The son declined. Defendant then reached out to the son over Instagram, claiming that he was the son's biological father. Defendant allegedly informed the son that he knew where the son was born, and disclosed both the identity of the son's birth mother and that the son had "biological siblings at large." (Plaintiffs allege that defendant also sent a Facebook friend request to the son's sister, who, like the son, declined the invite.) Defendant also "incorporated a picture of [the son] into an image comprised of three separate photographs, each featuring a different person," and purportedly claimed that the collage was a picture of his children. Defendant shared this picture with the public on his Facebook account. Plaintiffs believe defendant obtained the image of the son from the son's Facebook account.

Plaintiffs claimed that defendant was a "complete stranger to them," and that they had no contact with him prior to the events that led to the litigation. Plaintiffs' counsel attempted to serve cease and desist letters on defendant at his last known address via certified and regular mail. The certified letters were returned as unclaimed, but the letters sent by regular mail were never returned. Plaintiffs then sued, seeking an injunction preventing defendant from contacting their son or claiming to be his father. They sought permission from the court to serve the complaint on defendant via Facebook.

Continue reading “Court Approves Service Of Complaint Via Facebook, No Word On How Many “Likes” It Received” →

Final Chapter In The Case Of The Missing Double Eagle Coins

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

One of the more interesting cases I have written about is Langbord v. U.S. Dept. of Treasury, which I described in a June 2015 post as follows:

It's not every day that you find a case that starts with Depression-era monetary policy, ends with a relatively obscure federal statute, and in between tells the tale of the alleged theft of a coin considered to be "the most valuable ounce of gold in the world." Did I mention that the case also involves both Presidents Roosevelt, King Farouk of Egypt and the Sept. 11, 2001, terrorist attacks? A case recently decided by the U.S. Court of Appeals for the Third Circuit, Langbord v. U.S. Dept. of Treasury, has all of this and more.

Langbord involved the 1933 Double Eagle gold coin. It is a $20 gold piece that was designed by famed artist Augustus Saint-Gaudens after he was commissioned by President Theodore Roosevelt to help beautify American coinage. Almost a half million Double Eagles were minted, but none were ever officially released into circulation. Shortly after they were minted, newly-elected President Franklin D. Roosevelt, seeking to stem a run on the banks, issued Executive Order 6102, which made it illegal to "hoard" large amounts of gold. Accordingly, the U.S. Mint was ordered to stop issuing gold coins and to melt down any gold coins in its possession, including the Double Eagle. As part of this process, two Double Eagles were sent to the Smithsonian Institution for posterity, but the rest were supposed to have been melted down.

As you might have guessed, not all of the remaining coins were melted down. According to the government, approximately 20 of them ended up in the hands of a coin dealer who worked with a corrupt cashier at the US Mint to smuggle them out before they could be melted down. Over the years, it was alleged, he sold several of these coins. But, after his death, his family found 10 of them in his safety deposit box and offered to return them to the government. They requested the same terms as the government had agreed to several years earlier with a different individual who came into possession of another one of the coins. The government originally seized that coin after luring the dealer into a sting conducted at the Waldorf Astoria in New York City, but later, after the dealer sued, agreed to sell the coin at auction and split the proceeds with him. At auction, it sold for almost $7.6 million, more than twice the world record for any coin sold at auction at the time. Plaintiffs in Langbord were looking for the same arrangement for their coins. The government agreed in principle but asked to authenticate the coins first. Plaintiffs agreed and sent the coins to the government for authentication. However, after authenticating them, the government refused to return them, arguing that they were stolen and were rightfully the property of the U.S. government.

Continue reading “Final Chapter In The Case Of The Missing Double Eagle Coins” →