Nov 30, 2020

November 2020 Client Litigation Alert

By Brian R. Lehrer, Esq.

A.         Homeowner Liability – Service of Alcohol

In a case involving an underage adult who served alcohol to social guests at his home, the Supreme Court recently held that the underage adult defendant could be held civilly liable to a third-party drunk driving victim if he facilitated the use of alcohol by making his home available as a venue for underage drinking, regardless of whether he was the leaseholder or titleholder to the property, if the guest causing the crash became visibly intoxicated in his home and it was reasonably foreseeable that the intoxicated guest would leave the residence to operate a motor vehicle and cause injury to another. Estate of Narleski, et al. v. Gomes, et al., - N.J. – (2020).

Defendant, Mark Zwierzynski, was 19 years old when he permitted underage adult friends to bring alcohol into his home which they consumed while his parents were not there. Ultimately, two of his friends left the home severely intoxicated and the driver lost control of the vehicle, crashed into a concrete road divider and ejected his passenger who was killed.

Under New Jersey statutes and case law, a social host over the age of twenty-one has a duty not to serve alcohol to a visibly intoxicated guest, either an adult or a minor, if it is reasonably foreseeable the guest is about to drive. See generally, N.J.S.A. 2A:15-5.5-5.8. However, this case presented a variation because Zwierzynski was over the age of eighteen but under the age of twenty-one, and therefore an underage adult.

The Court held that an underage adult defendant may be held civilly liable to a third-party drunk driving victim if the defendant facilitated the use of alcohol by making his home available as a venue for underage drinking regardless of whether he owned the property, if the guest causing the crash became visibly intoxicated in the defendant’s home and if it was reasonably foreseeable that the visibly intoxicated guest would leave the residence to operate a motor vehicle and cause injury to another. 

B.                 Torts – Special Employee and Intentional Wrongs

In a case involving a job-related injury, the Appellate Division recently upheld the dismissal of plaintiff’s Complaint holding that plaintiff was a “special employee” of the defendant and that the defendant’s conduct did not constitute an intentional wrong so as to overcome the worker’s compensation bar of N.J.S.A. 34:15-8. Hocutt v. Minda Supply Co., 464 N.J. Super. 361 (App. Div. 2020).

Plaintiff, Carlton Hocutt, was injured in a forklift accident while working at defendant Minda Supply Co.’s warehouse. He sued claiming the company was negligent in directing him to ride as a passenger in a forklift in violation of federal workplace safety regulations. 

Minda used the services of an employee leasing agency, Express. The staffing agreement between Minda and Express provided that Express was responsible for paying the loaned workers and Minda reimburses Express for those wage payments. The staffing agreement also authorized Minda to hire a loaned worker after a set period of time. 

The trial Court dismissed plaintiff’s Complaint on the grounds that he was a “special employee” of Minda, which was Hocutt’s “special employer,” under Kelly v. Geriatric & Medical Services, Inc., 287 N.J. Super. 567 (App. Div. 1996). Essentially, Kelly outlined a five pronged test to assist Courts in determining whether a worker is a special employee for the purposes of eligibility for worker’s compensation benefits, which would bar the assertion of a third-party claim for damages against the special employer.

The Appellate Division upheld the dismissal. The Court found that plaintiff had made a contract of hire with the special employer and, therefore, the Court found that plaintiff impliedly consented to a special employee-employer relationship because he accepted the offer from Express to work at Minda’s warehouse and return to work the next day and accepted instructions from a Minda supervisor.

The Court then analyzed whether defendant had committed an intentional wrong which would overcome the worker’s compensation bar. It was a common practice at the warehouse for a worker to ride on the forklift, standing on either the front or the back of the forklift while it was moving. This practice violated federal workplace safety regulations. The Court concluded that defendant’s conduct was not sufficiently egregious to rise to the level of an intentional wrong. Therefore, the Appellate Division upheld the dismissal of plaintiff’s Complaint.

C.                 Assault – Scope of Duty/Proximate Cause

In a case involving the sexual assault of a special needs student, the Appellate Division recently held that the trial Court had improperly held that the defendant did not hold a duty to protect the student from a sexual assault and that a remand was necessary to determine the scope of the duty owed to the child. S.H. & L.H. v. K&H Transport, Inc., et al., - N.J. Super. – (App. Div. 2020)

In S.H., a seventeen-year-old special needs student was being driven home in a school van when she told the driver it was okay for him to drop her off at a cemetery near her apartment. The driver claimed not to know the extent of the child’s disabilities but had been told that she was a special needs student and that he would have to be very careful with her.

The dropped the student off at the cemetery and ultimately she was sexually assaulted by some boys she knew from school. The trial Court agreed with the defendant bus company that plaintiff’s allegation of sexual assault and her sexual promiscuity were not foreseeable and there was no duty on the part of the bus company to guard against the injuries. The Appellate Division reversed.

The Appellate Division noted that the existence and scope of a tort duty are legal questions. The Court further noted that foreseeability of injury as a determinate of a duty of care is distinguishable from foreseeability as a determinate as to whether a breach of duty is a proximate cause of an injury. The trial Court had held that the lack of foreseeability of a sexual assault after plaintiff was dropped off severed proximate cause from legal duty as a matter of law, in addition to the assault being unreasonably foreseeable so as to give rise to a duty.

The Appellate Division held that there was no question that the bus company owed a duty of reasonable care to the student and her mother to deliver the student safely home from the school. The difficult question was the scope of that duty. While the Appellate Division noted that legal responsibility for the consequences of an act cannot be imposed without limit, the foreseeability as a determinate of duty was impacted by the extent of the student’s disability and the trial Court erred in resolving that question on disputed facts. The defense noted that plaintiff was permitted to leave school at lunch, went to the mall by herself and had keys to her apartment. The plaintiff countered that the student was a mentally challenged vulnerable girl with the mind of a sixth or seventh grader in spite of being seventeen-years-old.

The Court was careful to note that it was not holding that probable harm to one in the position of this injured plaintiff should reasonably have been anticipated from the defendant’s conduct. The Court held that on remand the judge would have to decide, either on an undisputed factual record on a renewed motion or after hearing evidence at trial whether the bus driver had a duty, which a jury might determine from the evidence was breached, to take steps to protect the child from unsupervised contact with peers who would take advantage of her limited intellectual functioning and acquiescent nature to engage her in an unconsented sexual contact.

D.                 LAD – Catholic School and Termination for Pregnancy

In a case involving the New Jersey Law Against Discrimination, the Appellate Division recently held that knowledge or mere observation of an employee’s pregnancy alone is not a permissible basis to detect violations of the school’s policy and terminate an employee. Crisitello v. St. Theresa School, - N.J. Super. – (App. Div. 2020)

Plaintiff, Victoria Crisitello, was an unmarried lay teacher at St. Theresa’s – a parochial school. Plaintiff was fired after the school learned that she was pregnant while unmarried.

In an earlier opinion, the Appellate Division had concluded that the First Amendment of the United States Constitution did not bar plaintiff’s action for discrimination under the LAD. The Appellate Division had remanded the case to the trial Court for discovery as to the issue of defendant’s treatment of all “similarly situated” employees who defendant knew were in violation of its ethics code. 

Defendant required all of its “lay faithful” teachers to abide by a code of conduct that was not contrary to the teachings of the Catholic Church. The defendant’s handbook contained numerous provisions aligning with the Church’s teachings, but it was undisputed that none of the policies or provisions of the handbook expressly identified premarital sex as a prohibited conduct. 

Ultimately, plaintiff advised the school’s principal that she was pregnant. The school then fired plaintiff for engaging in premarital sex. They told her that she was being terminated because she was pregnant and unmarried. It was undisputed that plaintiff’s termination related only to the fact that she was pregnant and undisputed that defendant never made any inquiry of any employee as to whether they were pregnant, unmarried, engaged in premarital sex, divorced or otherwise violated any of the Church’s doctrines. 

The trial Court again dismissed plaintiff’s Complaint. The Appellate Division reversed. The Appellate Division acknowledged its earlier unpublished opinion which had upheld defendant’s right to terminate a teacher under the Law Against Discrimination whose employment was conditioned upon adherence to its religious principles.

The Appellate Division noted that recent Supreme Court decisions addressed and upheld the ministerial exception to the First Amendment that protects religious institutions from employment discrimination suits. Our Lady of Guadalupe Sch v. Morrissey-Berru, 591 U.S. – (2020). However, neither party contended that plaintiff’s core duties as a lay teacher fit within the exception.

What the Appellate Division did find was that summary judgment was not properly granted because a jury could conclude that plaintiff’s termination could violate the LAD. She had asserted a claim of pregnancy discrimination and the LAD prevents an employer from discriminating against an employee based on her pregnancy. Plaintiff was a member of a protected class under the LAD.

Plaintiff had satisfied her burden under New Jersey law by establishing a prima facie case of unlawful discrimination. Viscik v. Fowler Equip., 173 N.J. 1 (2002). The defendant then had to produce a legitimate non-discriminatory reason for the adverse employment action – which it arguably did by demonstrating that plaintiff’s employment included an enforceable agreement that she would not engage in premarital sex. The plaintiff then had to show that defendant’s stated reason for termination was merely pretextual – which plaintiff did by producing evidence that no effort was made to determine whether any employees other than a pregnant lay teacher violated any of the proscriptions contained in the defendant’s code of ethics or its handbook. The Appellate Division pointed out that while plaintiff acknowledged that premarital sex was contrary to the tenets of the Church, it was undisputed that neither the defendant’s code of ethics nor its handbook contained any express prohibition against premarital sex despite prohibiting numerous other behaviors and conduct.

E.                  Motor Vehicle Insurance – Step-Down Voided by Statute

In a case concerning an accident involving a commercial dump truck, the Appellate Division recently held that the step-down provision in the dump truck’s policy was voided by the commercial motor vehicle’s carrier’s obligation to provide minimum insurance coverage in the amount of $750,000.00 because the truck was engaged in intrastate or interstate commerce at the time of the accident. Rafanello v. Taylor-Esquivel, et al., - N.J. Super. – (App. Div. 2020).

Plaintiff, Ronald Rafanello, was rear-ended by a dump truck operated by defendant, Taylor-Esquivel, in West Orange in the course of his employment with NAB. NAB leased the dump truck from Intek Auto-Leasing, Inc. At the time of the accident, Taylor-Esquivel was hauling a load of dirt to Newark. 

The NAB truck was insured by third-party defendant, American Millennium Insurance Company (AMIC). The policy provided liability coverage of $750,000.00 per accident but included a step-down provision which provided for a maximum coverage of $35,000.00 for liability arising from incidents involving an individual who was not listed as a covered driver under the policy. Taylor-Esquivel was not listed as a covered driver on the policy.

Plaintiff, Rafanello, had underinsured motorist (UIM) insurance with Encompass Insurance in the amount of $250,000.00. The issue was whether he could seek coverage under his UIM policy or whether AMIC was obligated to provide coverage to the defendant in the amount of $750,000.00 despite the step-down clause. 

The Appellate Division pointed to N.J.S.A. 39:5B-32 and N.J.A.C. 13:60-13:60-2.1 which clearly established a separate statutory scheme for commercial motor vehicles having a registered weight of 10,001 pounds or more, like the NAB dump truck involved in the accident. The State adopted a statutory scheme that mirrors the Federal Motor Carrier Safety Act which mandated minimum coverage of $750,000.00. The Court noted that the legislature expanded upon the federal mandate by expanding the law to cover all motor vehicles engaged in interstate and intrastate commerce transport and cargo and, therefore, held that AMIC must provide the minimum coverage of $750,000.00 and the step-down provision was not triggered.

DISCLAIMER: This Alert is designed to keep you aware of recent developments in the law. It is not intended to be legal advice, which can only be given after the attorney understands the facts of a particular matter and the goals of the client.