Archive for the 'Defense Litigation' Category

NJ App. Div. dismisses Spill Act contribution claim due to primary jurisdiction of NJDEP.

SteveK September 1st, 2011

In Magic Petroleum, Inc. v. Exxon Mobil, the New Jersey Appellate Division dismissed, without prejudice, Magic’s claim for contribution of remedial costs against Exxon due to NJDEP’s primary jurisdiction of the remedial investigation at the plaintiff’s property. Plaintiff had been the subject of an administrative consent order (ACO) to investigate and remediate contamination at its property resulting from leaking underground storage tanks.  Plaintiff contended that the majority of the contamination came from the neighboring Exxon station and refused to comply with its obligations under the ACO until the NJDEP required Exxon to participate in the investigation. Magic litigated its obligations under the ACO through administrative proceedings, and was required to follow the order. Magic, however,  continued to refuse to conduct the investigation, insisting that the investigation should be imposed upon and shared by Exxon. The NJDEP eventually took over the investigation of the plaintiff’s property. Magic then commenced a contribution action against Exxon.

Exxon filed a motion to stay or dismiss the proceedings, without prejudice, pending the NJDEP’s investigation and remediation of the Magic property, arguing that the NJDEP’s efforts must precede any decision by the court. The trial judge dismissed the case, deferring to the NJDEP’s primary jurisdiction. The Appellate Division affirmed.  The Appellate Court noted that under the doctrine of “primary jurisdiction” a court may defer to an agency where the resolution of an issue is within the special competence of the agency. The court further noted that private contribution rights under the Spill Act require the court to allocate responsibility for remediation costs, but that the initial determination of whether a party is responsible can be decided by the NJDEP, and that “only the DEP can define the contaminants, determine the extent of the discharge, identify the authorized forms of investigative testing, and permissive methodology of cleanup.” Furthermore, “to be entitled to reimbursement and contribution under the Spill Act, a party must obtain written approval under from the DEP of the investigation and proposed remedial action.”  Accordingly, the court concluded that these decisions were within the scope of the special expertise of the DEP and should be determined prior to the case being able to proceed.

This decision demonstrates that a responsible party under the Spill Act that does not conduct investigation and remediation, but allows it to be done by the State, does so at its peril. To do so may have a significant impact in the party’s ability to pursue a contribution claim against other responsible parties, as it allows the NJDEP to determine and define the scope of the investigation, remediation, and possibly to potentially influence any future contribution claim or allocation. It is interesting to consider the effect of the Site Remediation Reform Act (SRRA) on the statements by the court that the DEP will define the contaminants, the extent of the discharge, the forms of investigation and the method of cleanup. Under the SRRA these determinations can be made by a Licensed Site Remediation Professional (LSRP), in accordance with the regulations for site investigation and remediation, referred to the Tech. Regs.  Accordingly, it is may not be that the DEP has to make these decisions. This points, again, to the importance of the party seeking contribution to address and control the response to be able to develop the information, and assert and control the contribution claim.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum, PC (www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental and defense of toxic exposure matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contactSteven A. Kunzman, Esq. who heads our Environmental and Latent Injury Litigation Department.

 

 

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NJ Supreme Court rules that a claim against insurer for bad faith can be decided by a jury.

SteveK June 15th, 2011

On June 14, 2011 the New Jersey Supreme Court ruled that a claim for bad faith against an insurer for failure to settle a case within the limits of an insurance policy is to be decided by a jury.  Wood v. New Jersey Manufacturers Insurance Co. involved a claim by Karen Wood who was bitten by a dog when delivering mail in a condominium complex. New Jersey Manufacturers (NJM) insured the owner of the dog and defended the case under the policy. Prior to trial an arbitrator assessed the damages as $600,000, and apportioned the award 90% to the owner of the dog and 10% to the condominium association.  The arbitration award was rejected by the defendant’s insurer and the matter proceeded to trial. Prior to trial NJM offered to settle the case for $300,000; however, the offer was rejected. The plaintiff did agree to settle the case at or near the policy limits of $500,000. Prior to trial both defense counsel and NJM’s claims handler recommended payment of the policy limits, but NJM’s claims committee refused to increase the offer. In accordance with the Rova Farms decision, the plaintiff placed NJM on notice that the offer was in bad faith.  The matter went to trial and  the jury awared the plaintiff damages  in the amount of $2,422,000. The jury also assessed 51% of the liability to the dog owner. The trial court molded the verdict so that the dog owner was responsible for $1,408,320.33 of the judgment. NJM paid the $500,000 policy limits. The defendant assigned her claim for bad faith against NJM to the plaintiff so that plaintiff could pursue NJM for the judgment in excess of the policy limits. Plaintiff filed a motion for summary judgment which was granted. On appeal, the defendant, NJM, argued that summary judgment was improper for a variety of reasons, including that the matter should have been decided by a jury.  The Appellate Division remanded to the trial court for more specific findings of fact and for the trial court to determine if the matter should be decided by a jury. The N.J. Supreme Court granted certification on the sole issue of whether such claims should be decided by a jury. The Supreme Court decided that this was not an issue of whether or not there is coverage under the policy as is typically contained in a declaratory judgment action, but is a “garden variety” contract action based upon the covenant of good faith and fair dealing which is contained in all contracts.  The Court determined that the claim was legal in nature, not equitable, and was, therefore, to be decided by a jury. The Court was careful to note that not every Rova Farms-bad faith case must be tried to a jury, as the parties may elect to waive the jury either by not demanding it in the first instance, or where the parties agree that a bench trial would be more fitting.

Once a jury trial is demanded in a pleading in New Jersey, both parties must consent to waive the jury demand unless there is no right to a jury for the claims. It is interesting to note that only the plaintiff demanded a jury trial in the pleadings of this case, but that it was NJM that insisted on the jury trial. NJM’s position was joined by the amici curiae Insurance Council of New Jersey, and the Property Casualty Insurers Association of America.  Whether the decision to assert the jury right was a strategic maneuver to avoid an adverse decision and keep the matter open for further negotiation, or was truly an assertion of a substantive right, the decision reveals the importance of assessing whether a jury demand should be included in the initial complaint or answer as the demand may be a significant factor in the overall handling and final trial of a case.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in insurance coverage. For additional information about the matters in this bulletin or in the firm’s insurance practice, please contact Steven A. Kunzman, Esq. who heads our Insurance Coverage Department.

 

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In NRD claim, trial Court dismisses common law causes of action of nuisance and trespass under the statute of limitations as they are not “environmental laws” and there was no “continuing tort.”

SteveK May 20th, 2011

In NJDEP v. Saint Gobain Plastics Corp. DiFrancesco, Bateman succeeded in having the State’s common law claims for natural resource damages (NRD) dismissed under New Jersey’s 10 year statute of limitations for the State’s assertion of claims: N.J.S.A. 2A:14A-1.2.  Contamination was discovered at defendant’s property in 1991. The defendant entered into an Administrative Consent Order and commenced site remediation immediately. The remedial efforts have continued to date.  The State was aware of the discharge in 1991, but did not institute a claim for NRD until 2005. Although defendant was previously held liable under the New Jersey Spill Act, the defendants sought summary judgment on the State’s common law claims for nuisance and trespass.  Judge LaConte of the Superior Court of Passaic County ruled in favor of defendant, holding that the common law claims for NRD do not constitute claims under the “State’s environmental laws” as defined in N.J.S.A.  58:10B-17.1.c., and therefore, the limitations period would not be extended for 5 years and 6 months from January 1, 2002 as provided for in section N.J.S.A.  58:10B-17.1.b. The Court concluded that since the statute extending the time for filing referred to nine specific statutes, and then referred to ,”… any other law or regulation by which the State may compel a person to perform remediation activities on contaminated property…” that the prior language demonstrated the intent of the legislature to limit the extended time period to statutes, not common law causes of action that may be used for purposes other than environmental protection.

Judge LaConte also rejected the State’s alternative theory that the continued presence and alleged migration of contaminants in the ground water constituted a continuing tort. The Court concluded that the “curative action” occurred when the seepage pit was removed in1991 and, as a result, no “new” contamination occurred. As a result, Judge LaConte ruled that “[a]lthough the effects of the discharge are still present…and may persist for decades, the alleged nuisance and trespass caused by the defendants no longer continued after 1991.” The Judge observed that if the tort was deemed to continue until the “end of remediation, long after the cause of the contamination had been removed, it would provide plaintiffs with an almost infinite amount of time to file common law causes of action.” In fact, he noted, this would even provide the State more time to file common law claims than had been extended by the legislature in N.J.S.A. 58:10B-17.1.

The decision is presently unreported. A copy can be obtained from Steven A. Kunzman, who represents Saint-Gobain in the matter.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC (www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental and defense of toxic exposure matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contactSteven A. Kunzman, Esq. who heads our Environmental and Latent Injury Litigation Department

 

 

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District Court holds the Statute of Limitations for NRD claims under CERCLA is triggered by constructive knowledge of injury by Trustee.

SteveK July 17th, 2010

On July 13, 2010, in Commissioner of the Department of Planning and Natural Resources v. Century Alumina, LLC, et.al., the Federal District Court from the St. Croix division of the Virgin Islands, held that an action to recover natural resource damages (NRD) must be commenced within 3 years of the constructive knowledge of the injury by the trustee.

The plaintiff trustee brought the claim against a number of industrial entities for the release of contaminants onto a number of industrial tracts at various times which injured the land as well as groundwater and the Caribbean Sea.  The defendants moved for summary judgment seeking dismissal of the claims under CERCLA’s limitation of actions provision, which provides that an action for NRD must be commenced within 3 years following “the date of the discovery of the loss and its connection with the release in question.” Although the statute does not state what is meant by “discovery” the court relied upon numerous prior decisions as to other statutes and other aspects of CERCLA to conclude that it is based upon the constructive knowledge of the trustee. The court went on to clarify that the knowledge of the agency, including the knowledge of any prior trustee, would be imputed to the present trustee.  Accordingly, the determination of whether there was NRD related to the discharges would require an analysis of when the trustee knew or should have known that there was an injury to the natural resource related to the discharges, which would commence the running of the time for bringing an action. With this ruling in hand, the court analyzed the facts as to each site and each defendant, dismissing some claims and allowing others to continue.

This case demonstrates that there courts will take a rational approach in considering the relationship between knowledge of a discharge of contaminants and the commencement of NRD claims. The interests of the government to pursue recovery of NRD, while important, will not allow the government to be inattentive to their statutory obligation to act promptly to seek to enforce these rights.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental and defense of toxic exposure matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contactSteven A. Kunzman, Esq. who heads our Environmental and Latent Injury Litigation Department.

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Appellate Division rejects application of collective liability to claim related to oral polio vaccine.

SteveK July 16th, 2010

On June 12, 2010, in Mereno v. American Home Products, Inc., the New Jersey Appellate Division affirmed the dismissal of a claim by Mark Moreno and his mother of defectively manufactured oral polio vaccine (OPV) which had been administered to plaintiff resulting in a brain tumor and permanent disabilities. It was claimed that the vaccine used was defective because the manufacturer failed to screen for infective Simian Virus 40 (SV40).  Since plaintiffs were unable to identify the responsible manufacturer, they named all the companies licensed to manufacture OPV at the relevant time. The Court affirmed that summary judgment was appropriate even though discovery was not complete, because the plaintiff could not show that the outstanding discovery would supply information relevant either to lead to the identity of the manufacturer or to any theory of collective liability.

In analyzing the plaintiffs’ claims of collective liability, the court first considered whether the law of New Jersey or the law of New York applied as evidence indicated that the OPV was administered in New York; however, the plaintiffs have resided in New Jersey for over 35 years. The Court reviewed the various theories of collective liability and concluded that under the laws of both states, they could not be applied in this case.  The court distinguished a New York decision applying market-share liability to the manufacturers of another drug, DES, because the injury did not result from the defective design of the drug, as with DES, but was due to the failure of a manufacturer to comply with federal regulations relevant to screening and neutralization of SV40 and “and produced a defective or deviant vaccine.” The Appellate Court, therefore, concluded that the failure of a single manufacturer to comply with proper manufacturing processes and procedures did not warrant imposition of liability on all the manufacturers of the same product.

This decision continues to reinforce the requirement of proper product identification, and the need for the plaintiff to prove causation-in-fact, and further reviews the limited grounds where a court will shift the burden to defendants to distinguish their product or actions from that of other defendants.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental and defense of toxic exposure matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contact Steven A. Kunzman, Esq. who heads our Environmental and Latent Injury Litigation Department.

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NJ App. Div. upholds $30 million mesothelioma judgment.

SteveK April 12th, 2010

On April 5, 2010 the NJ in Buttitta v. Allied Signal, Inc. et.al. the Appellate Division affirmed the largest award in an asbestos/mesothelioma case in NJ. The jury awarded the plaintiff widow and family $8,000,000 for pain and suffering, $2,000,000 for loss of consortium, $9,281,660 for loss of earnings, $2,030,544 for loss of services and $3,000,000 to each of the three children for loss of parental care and guidance. The award against Borg-Warner and the Canadian mining company, Asbestos Corporation, Ltd. (ACL), was in addition to funds collected from settling parties, General Motors, Honeywell (for Bendix brake products) and C.L. Zimmerman a distributor of ACL asbestos. (This office represented Zimmerman, which settled during trial.) Borg-Warner and ACL challenged this significant award on numerous grounds, including causation, failure of the court to exclude testimony of numerous experts, and the failure of the court to allow the defendants to submit interrogatory responses of settled parties to the jury for the purpose of allocating responsibility to those settled parties, as well as the refusal of the court to include the settled parties on the verdict sheet, also for the purpose of allocating liability. ACL also challenged the striking of its defenses based upon their inability to produce certain documents required in discovery due to Canadian laws that prohibited production of the information requested.

The decedent, Mark Buttitta, had worked as a parts picker at a GM facility in summers while a student at Colgate University. His father had also worked at the same facility while Mark was growing up. It was claimed that Mark was exposed to asbestos from the parts and the accumulated dust in the GM parts warehouse, and also from the asbestos in the dust on his father’s clothing when Mark was growing up. Mark contracted mesothelioma in his early 50’s and died leaving a wife and three daughters in their teens and early 20s. Claims were asserted against the manufacturers and distributors of asbestos containing automotive parts including brakes and clutches, as well as the companies that mined and distributed asbestos to GM for the manufacture of brakes and clutches.

The Appellate Court affirmed all of the procedural and evidentiary decisions of the trial judge and the jury award. In doing so it concluded, based upon the uncontradicted expert testimony, that mesothelioma “is associated with the ‘the smallest’ exposure to asbestos and can develop from the cumulative effects of minimal and infrequent exposure.” The Court also affirmed the ruling that the responses to interrogatories of GM, which had settled before the start of trial, were not admissible by defendants under the rules of court, which permit use of interrogatories as statements of any party, since GM was no longer a party to the litigation. Borg-Warner, the court also held, “bore the burden of presenting a basis for allocation of percentages of fault in order to reduce its individual percentages of fault, which it failed to do.” In short, there was no evidence presented at trial to support the claims against the settled parties.  Accordingly, the Court concluded that it was correct that the settling parties were not included on the verdict sheet to permit the jury to allocate percentages of liability to any party other than the remaining defendants, Borg-Warner and ACL.

A significant question raised in this decision involves the ruling prohibiting the use of the interrogatories of settled parties to prove cross-claims so that the jury can assign liability to settled defendants.  This raises questions where joint defense groups are careful not to develop independent evidence to support cross-claims. This, of course, only present a question if parties settle during or immediately prior to trial when it is too late for the remaining parties to adequately develop the necessary evidence and expert testimony. In the usual case, independent settlement is always a possibility at any time. Accordingly, defendants will need to develop a manner to develop appropriate evidence to support cross-claims in the event they become the last party in a case.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contact Steven A. Kunzman, Esq. who heads our Environmental and Latent Injury Litigation Department.

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District Court Affirms Duty To Train Employees Is Not the Responsibility of the Products Manufacturer

SteveK September 14th, 2009

In Kolokowski v. Crown Equipment, U.S. District Court in New Jersey recently confirmed that the duty to train employees rests with the employer, not the manufacturer.

The case involved a claim for injuries sustained by plaintiff while operating a walkie rider pallet truck.  In a decision granting summary judgment to the defendant, the Court first addressed whether the plaintiff’s expert was qualified to render an opinion on whether the product was defectively designed. The Court conducted a Daubert hearing, and after extensive analysis, concluded that the expert’s opinion did not satisfy the trilogy of restrictions on the admissibility of an expert: whether the expert is qualified, whether the methods employed in developing the opinion are reliable, and whether the proffered expert testimony fits with the facts of the case. The plaintiff, therefore, was unable to sustain its burden of proof on its design defect claim.

The plaintiffs also asserted a failure to warn claim, asserting that the defendant manufacturer had an obligation to provide training. The Court rejected this argument finding substantial support to the contrary in New Jersey. The Court relied upon Grier v. Cochran Western Corp. 308 N.J. Super 308 (App. Div. 1998) in which the obligation was placed squarely on the employer. The Court also noted that OSHA specifically places the duty to train operators of powered industrial trucks on the employer. 29 CFR Sec. 1910.178. The Court also countered the contention that employers lack the incentive to train employees by stating that the goals of an employer for increased productivity affecting the bottom line is a significant incentive and, further, that employers are better situated to conduct such training since they can discipline employees for failure to attend training coupled with the employers having more credibility with their employees than a “remote product manufacturer.” This, along with the plaintiff’s admissions that training would not have helped him avoid the accident, left no room for the claim of plaintiffs to be sustained. The Court therefore, dismissed all claims of plaintiffs.

 

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of companies in defense of products liability claims. For additional information about the matters in this bulletin or in the firm’s Products Liability Practice, please contact Stephen O. Davis, Esq.

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