Under R. 4:58-3, unless, among other things, undue hardship can be shown, a defendant is entitled to recover costs and fees if the verdict is 80% of the offer of judgment or less. In the case of Reid, et al. v. Finch, et al., Judge Rothschild of New Jersey’s Superior Court, Essex County, was faced with a request for the award of counsel fees after a $40,000 offer of judgment had been made, a non-binding arbitration award of $110,000 had been issued, but the jury award was only $34,400. Since the award was 80% or less than the final offer of judgment, the defendants sought to recapture their fees and costs. In opposition, plaintiffs claimed undue hardship because, if forced to pay defendants’ fees and costs, plaintiffs would end up owing their attorneys money. In the first reported decision of its kind, Judge Rothschild ruled that the intent of the Rule was to discourage frivolous lawsuits, not misvalued lawsuits. Thus, he held that the defendants were only entitled to recover their costs and not their fees.
The case is, to my mind, yet another example of an American court refusing to adopt a true “loser’s pay” system. While some might disagree, I happen to think the court got it right. As I have often said, the US legal system is not designed to distinguish wheat from chafe up front. Rather, it’s kind of like a hot dog. The end result can be quite tasty (particularly when envisioned on a day of fasting and abstinence), but you sure as heck don’t want to know how it’s made.
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Insurance Law § 3428(d) provides that when a policy obtained through a premium finance agreement is cancelled, the insurer must return the gross unearned premiums to the finance company.
Recently, in All Island Credit Corp. v. Countrywide, a premium finance company alleged it was entitled to the pro rata return of premium not on the amount of premium that was actually paid – but on the total cost of the policy. They key facts are as follows.
Plaintiff was a premium finance company that financed an auto insurance policy issued by Country-Wide Insurance Company to Gotham Logistics. Inc. The cost of the policy was $90,522. All Island made a payment to Country-Wide for $67,891.00, but soon thereafter cancelled the policy. The time that the policy was in effect was about 25% of the year, which calculated to $22,493.91 based on the total cost of the policy. Country-Wide thus returned about $45,000 to All Island.
But All-Island claimed that because the gross value of the policy was $90,337, it was entitled to about $77,000, because the total earned premium should be deducted from the gross value. All Island argued that the phrase “gross unearned premiums” meant the value of the premiums due for the remaining period following the cancellation or termination of the policy irrespective of whether such premiums were actually paid.
But the court found that argument “illogical and contrary to the plain terms of the statute.” It held that implicit in the statue was the notion that the insurer actually received the premiums that it was obligated by law to return, as it could otherwise result in a windfall to the insurer.
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Baron Ferenc Hatvany, a member of Hungary’s richest families, was a noted art collector who, like many others, was forced to relinquish his collection to the Nazi’s during World War II.
Most of the collection remains missing, but an interesting story has emerged involving a Viennese art historian, Burkhart List, who is going to lead an expedition into an old silver mine in the Erzgebirge Mountains, near the Czech-German border, where he believes over 150 works from the collection have been stashed — which could be worth in the neighborhood of $800 million.
But according to ARTINFO, controversy has emerged because List is not acting for the Hatvany family or its foundation. List claims he is not in it for the money, but skeptics claim he is acting with the son of a former lawyer for the Hatvanys, who believes he has a claim on any newly-discovered art.
It will be interesting to see how this tale plays out. If you would like more information, please write to Mike Bono at .
A recent development in New Jersey case law has cast the doctrines of “relation-back” and res judicata in a new light.
In Walker v. Choudhary, the executor of an estate sued several doctors, the medical group with which they were affiliated, the hospital where they worked, and the company that owned it for wrongful death and medical malpractice. Although the complaint was filed and served on the named defendants within the two-year statute of limitations, the plaintiff eventually discovered that the decedent’s attending physician had not been named in the complaint.
The plaintiff was able to file an amended complaint by stating that the claims against the attending physician related back to the original complaint. However, after discovery, the lower court granted a motion for summary judgment as to the attending physician, based upon the statute of limitations. The court also granted summary judgment in favor of the medical practice group and the company that owned the hospital on the theory that they could not be separately liable if the claims against the attending physician had been dismissed. The other parties remaining in the case were voluntarily dismissed.
Upon review, the Appellate Division reversed and remanded the matter for an evidentiary hearing as to the attending physician’s knowledge of the pending litigation and whether she was prejudiced by the delay in naming her as a defendant to the action. The court also reversed the grant of summary judgment in favor of the medical practice group with which the doctor was affiliated, and the company that owns the hospital where the alleged malpractice occurred.
As to the “relation-back” doctrine, the court found that although it was likely that plaintiff’s mistake in naming the wrong party was based on failure to read the medical records, there was a genuine issue of fact as to whether the newly named party had notice of the action because other doctors at her practice were served at the office where she worked, and because she admitted in her deposition that she had conversations with them about the lawsuit around the time of service. The court ultimately determined that, on remand, an evidentiary hearing should be held to determine the scope of new party’s knowledge of the litigation and whether she would be prejudiced in her ability to defend against the action.
In addition, the court examined the doctrines of respondeat superior and res judicata as to the medical group and owner of the hospital where the doctor was employed. Because plaintiff could have sued the doctor and her employer in separate actions, it did not make sense to dismiss the action against the employer merely because the action against the doctor was dismissed. The court also stated that, for purposes of claims of respondeat superior, a dismissal of claims against an employee on the basis of the statute of limitations was not a dismissal on the merits as to the employer. The dismissal was only “on the merits” as to the employee doctor. This is a new interpretation of the principles outlined in prior New Jersey case law, and may change how dismissals with prejudice based on procedural motions such as the one here are viewed in the future.
Special thanks to Christina Emerson for her contribution to this post.
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Disclaimers of coverage based on untimely notice are always a source of controversy, and it is interesting to see how various jurisdictions deal with the issue. Recently, the Connecticut Supreme Court made new law concerning the scope of an insured’s duty to notify its insurer of a potential claim. The Court ruled that the insured cannot excuse late notice simply because he spoke with the claimant who did not indicate that he would bring a claim. A subjective belief that there would not be liability does not excuse late notice where the circumstances would have led a reasonable person to believe that he/she could potentially be liable.
In Arrowood Indem. Co. v. King, the insured’s son was driving an ATV and used a rope attached to the ATV to tow the claimant on a skateboard. The claimant fell off the skateboard and suffered severe head injuries. The insureds did not notify their insurance company of the accident because they met the injured boy’s parents and the parents did not indicate that they intended to bring a lawsuit.
The court ruled that regardless of the insureds’ belief based on the social interactions between the parents, a reasonable person would have believed that liability may have been incurred because of the severity of the injury. Therefore, the insureds failed to provide timely notice and the insurer could deny the claim as long as it proved prejudice.
Thanks to Mendel Simon for his contribution to this post.
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In Moreno v. Shanker, plaintiff was injured when he slipped and fell due to an alleged defective sidewalk condition. Under the “sidewalk law”, Administrative Code of the City of New York § 7-210, property owners are liable for injuries arising due to failure to properly maintain its abutting sidewalk in a safe condition. However, an exception is provided for properties that are one, two, or three family residences that are also owner-occupied.
The wrinkle in this case was while the owner technically “resided” at the premises at the time of the incident, it was conceded that the owner had temporarily relocated when the incident occurred due to property renovation that was converting the two-family property to a four-family property. Ten months after the incident, a final certificate of occupancy was issued indicating that the building would have four dwelling units.
The property owner moved for summary judgment under the homeowner exception to the “sidewalk law,” claiming that it was owner-occupied and a two-family residence when the incident occurred. The trial court denied the motion.
On appeal, the Second Appellate Department reversed the trial court’s decision, granted the defendant owner’s motion, and dismissed the plaintiff’s complaint. The court ruled that since the plaintiff’s incident occurred prior to the property becoming a four-family residence, the owner was entitled to the statutory exemption. The court noted that the incident occurred while renovations were taking place to convert the property from a two-family to four-family residence and the owner had relocated to accommodate the renovations did not create an issue of fact. The court looked to the status of the property at the time that the incident occurred, which showed that the property was still a two-family property, not yet a four-family property, and still owner “occupied” despite the temporary move.
Thanks to Jung Lee for his contribution to this post.
