Opinion Summaries

In this construction site accident case, the court addresses an unresolved question of New Jersey law: When is an Affidavit of Merit ("AOM") under N.J.S.A. 2A:53A-27, supporting claims against a licensed professional, due in situations where a plaintiff’s original complaint is later amended and additional answers or other pleadings are filed?

Plaintiffs served AOMs (one from an engineer and another from an architect) more than 120 days after the defendant engineering firm filed its answer to the original complaint, but before that firm answered an amended complaint naming another defendant.

Relying in part on several federal decisions interpreting New Jersey law, the motion judge ruled the deadline for an AOM "does not come into play until the pleadings are [all] settled." Based on that reasoning, the judge deemed timely the two AOMs tendered by plaintiffs more than a year after the engineering firm had filed its original answer and first amended answer.

Declining to adopt the federal approach, this court holds the AOM statute's text and legislative purposes require the affidavit to be served within 60 days (extendable for good cause to 120 days) from the date when the licensed professional files its answer, regardless of whether the pleadings are subsequently amended to name other defendants or assert additional claims. That deadline is subject, however, to the long established AOM exceptions for (1) substantial compliance or (2) extraordinary circumstances.

The court concludes extraordinary circumstances to justify the delayed AOMs exist here, based on events stemming from the initial negotiated voluntary dismissal of plaintiffs’ claims against the engineering firm and the restoration of those claims the following year after discovery shed more light on the firm’s role in the project.

Tax Court: Nicholas L. Gentile, Jr., et al. v. Dir., Div. of Taxation,;Docket No. 013601-2017; opinion by Bedrin Murray,J.T.C., decided March 26, 2021. For plaintiff – Nicholas L. Gentile, Jr. and Doreen A. Gentile (Self-Represented); for defendant – Jamie M. Zug (Gurbir S. Grewal, Attorney General of New Jersey, attorney).

Held: Defendant’s motion for summary judgment seeking dismissal of a complaint challenging the assessment of New Jersey gross income tax (“GIT”) as to an “innocent spouse” husband is denied. Plaintiffs, a married couple filing jointly, failed to report approximately $900,000 in income for tax years 2006-2010 that the wife, an accountant, attained from criminal activity unknown to her husband. Plaintiffs urge the husband should be relieved of joint and several liability attaching to joint GIT filers under N.J.S.A. 54A:8-3.1(c), citing the equitable remedy afforded to an “innocent spouse” in 26 U.S.C. § 6015. Defendant contends no such relief is afforded a taxpayer under New Jersey law; further, plaintiffs’ joint and several liability for GIT includes profit from criminal activity under N.J.S.A. 54A:5-1(o). An audit of plaintiffs’ tax returns resulted in an assessment and civil fraud penalty being imposed after expiration of the three-year statutory period for assessing GIT under N.J.S.A. 54A:9-4(a). As such, there must be a showing that “[a] false or fraudulent return [was] filed with intent to evade tax.” Ibid. The record is devoid of proof that the husband filed a false or fraudulent return for tax years 2006-2010 with an intent to evade tax, nor is any such claim advanced by defendant. Defendant’s reliance on the absence of innocent spouse relief under New Jersey law in support of the motion is misplaced. Joint and several liability of taxpayers filing joint GIT returns does not relieve defendant of the burden to prove the statutory exemption set forth in N.J.S.A. 54A:9-4(c)(1)(B). See Anita K. Leather v. Dir., Div. of Taxation, 31 N.J. Tax 285 (Tax 2019). As the record is unsettled in this regard, defendant’s motion for summary judgment is not ripe.

This appeal raises novel questions concerning the scope of the duty owed to an adult who is not old enough to drink legally but who nonetheless drinks alcohol to excess and injures himself in a motor-vehicle accident. Plaintiff, when he was a twenty-year-old college student, attended a social gathering in a suite in a university's residential hall. He had planned to spend the night in the suite and fell asleep after becoming visibly intoxicated. He later awoke, left the suite, and was injured when a car he was driving went off the road. No one saw plaintiff leave the suite

Plaintiff and his parents appeal from a series of orders that granted summary judgment to the University, four student residential assistants (RAs), four student suitemates (the Suitemates), and three other students who attended the gathering as guests. Plaintiff contends that the University and the students had a duty to take action that would have prevented him from driving while drunk. The court holds that certain defendants had no duty, while the duty of other defendants, and a related causation issue, present questions of fact for a jury to resolve.

The three student guests had no duty to monitor the actions of plaintiff. Any duty of the Suitemates ended when plaintiff fell asleep with the plan to spend the night in the suite. The University and its student RAs are protected by the Charitable Immunity Act (CI Act), N.J.S.A. 2A:53A-7 to -11, which shields them from claims based on simple negligence. There are disputed issues of material fact concerning whether the RAs were grossly negligent or acted with willful or wanton indifference in failing to enforce the University's policies prohibiting underage drinking. There is also a related disputed issue of material fact concerning whether any breach by the RAs caused plaintiff's injuries. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings.

The Court affirms settled principles of law that require trial judges to conduct a “reasoned, thoughtful analysis” of certain factors when they consider a request for an adjournment to hire new counsel. See State v. Kates, 216 N.J. 393, 396-97 (2014); State v. Furguson, 198 N.J. Super. 395, 402 (App. Div. 1985). If a trial judge does not conduct the proper analysis, it may be necessary to reverse a conviction. But defendants are not automatically entitled to a new trial. When a reviewing court can glean or infer the relevant considerations from the record, it may evaluate the appropriate factors. The Court does not find an actual deprivation of the right to counsel of choice here, so the doctrine of structural error does not apply.

The Court finds no error, let alone plain error, in the trial court’s omission of a theft charge. Nothing in Dunbrack’s version of the events “jumps off the page” as indicative of theft. Neither Dunbrack nor Rodriguez requested an instruction on theft, and the trial court was not required to scour the record for a combination of facts to justify giving such a lesser included jury charge.

In 2018, after the New Jersey Legislature passed the Global Warming Response Act, N.J.S.A. 26:2C-37 to -68, having declared that it was in the State's interest to reduce greenhouse gas emissions, the Legislature enacted a Zero Emission Certificate (ZEC) program for eligible nuclear power plants, L. 2018, c. 16, codified at N.J.S.A. 48:3-87.3 to -87.7 (the ZEC Act). The purpose of the ZEC Act is to subsidize nuclear power plants at risk of closure, helping them to remain operational despite competition from other carbon-emitting power sources, to further New Jersey's clean energy goals.

The New Jersey Board of Public Utilities (the Board) considered ZEC applications from the Salem 1, Salem 2 and Hope Creek nuclear power plants located in Salem County. Following an extensive review of the applications, including voluminous confidential financial information about the nuclear power plants' costs and revenues, certifications that the plants would shut down in three years absent a material financial change, as well as consideration of thousands of public comments, the Board determined that all three applicants satisfied the five statutory eligibility criteria codified at N.J.S.A. 48:3-87.5(e) and should receive ZECs. The court reviewed challenges to the Board's decision by New Jersey Division of Rate Counsel as well as other interested parties. Because the Board's decision regarding the financial viability of the three plants in question is adequately supported by the record and consistent with both the ZEC Act's plain language and the legislative intent, the court affirmed.

After the municipality painted white lines on a paved area, defendant painted over the lines with black paint and then painted a new white line. She claimed the paved area was a "parking bay" on her property; the municipality claimed it was a public street.

In a trial de novo, the Law Division convicted defendant of violating a municipal ordinance that prohibited a person from unnecessarily obstructing "any . . . street, or public place in the [municipality] with any kind of vehicle, boxes, lumber, wood, or any other thing[.]"

Without addressing the property-ownership issue, the court perpended the plain-language meanings of "obstruct" and considered two Law Division decisions—one by then-Judge Virginia A. Long—interpreting that term as used in the statute prohibiting obstruction of highways and other public passages, N.J.S.A. 2C:33-7. Because defendant's actions did not block or otherwise impede passage, the court concluded she did not violate the ordinance and reversed her conviction.

Pretrial detention is not an absolute bar to receiving unemployment compensation benefits for the time following dismissal of the charges and release from detention. Based on the specific facts presented by this appeal, the UCL and N.J.A.C. 12:17-9.1(e)(10) required the Department to review the totality of the circumstances surrounding Haley’s detention and release to determine whether he “left work voluntarily.” That review did not occur here.

Because the trial court quizzed defendant on his knowledge of substantive law rather than provide the information required by New Jersey case law to confirm he was making a knowing and voluntary waiver of counsel, the denial of defendant’s request to represent himself was an abuse of discretion.

Tax Court: Nicholas L. DePace M.D. v. Dir., Div. of Taxation; Docket No. 013396-2019, opinion by Cimino, J.T.C., decided December 21, 2020. Released for publication: March 10, 2021. For plaintiff – Jack A. Myerson and Matthew L. Miller (Myerson & O’Neill, attorneys).; for defendant – Ramanjit K. Chawla, Deputy Attorney General (Gurbir S. Grewal, Attorney General of New Jersey, attorney).

Held: Under existing law, Gross Income Tax is due from both the qui tam plaintiff and the attorney representing the qui tam plaintiff on the portion of the award payable to the attorney as fees. Qui tam actions are brought by private citizens on behalf of the government alleging waste and fraud. The private citizen is entitled to an award which constitutes a percentage of the government’s recovery. While an argument can be made that only the attorney is liable for Gross Income Tax on the attorney’s fee portion of the award, a recent attempt to change the law to only tax the attorney was vetoed by the Governor. The court is constrained to respect the legislative process for which the Governor is a part.

Petitioner challenged a final agency decision of the Acting Director, Division of Medical Assistance and Health Services finding her eligible for Medicaid benefits but: (1) imposing a penalty of $496,333.33 for the value of the one-third interest in her home she transferred to her son during the five-year look - back period " established in N.J.A.C. 10:71-4.10; and (2) directing that the penalty be increased by the value of a life estate in the home she relinquished to her son at time of the transfer. The court reversed the Acting Director's decision, finding the transfer of both interests in the property to be exempt from the penalty under the child caregiver exemption established in N.J.A.C. 10:71-4.10(d)(4). The regulation has not been previously construed in a published opinion.

The exemption applies to a Medicaid applicant's transfer of an interest in her home to a child who has lived in the home for a minimum of two years and provided assistance to the applicant beyond that normally expected of a child and which delayed the parent's institutionalization. The Acting Director found the exemption did not apply because petitioner's son: (1) worked full-time outside the home four days a week; (2) did not establish that the assistance he provided to his mother before work, after work, overnight, and during the day when he was not working delayed her institutionalization; (3) used petitioner's funds to pay for home healthcare aides when he was working; and (4) did not prove his claim to have reduced his work hours when his mother's dementia progressed.

The court found that the Acting Director misapplied the regulation, given the substantial evidence in the record that petitioner's son provided assistance beyond that normally expected of a child, including bathing, clothing, feeding, toileting, and medicating petitioner daily, as well as monitoring her overnight wandering and other needs. In addition, the court held that a child's full-time employment and use of home healthcare aides paid with petitioner's funds did not negate the exemption, as the regulation did not require that a child devote his full-time and own funds to caring for his parent to qualify for the exemption. The court held that it is the qualitative nature of the care provided by the child and the resulting delay in institutionalization that are relevant to applicability of the exemption.

The plain language of N.J.S.A. 30:4-27.30(b) requires the State to produce psychiatric testimony in support of commitment when the State seeks the initial or continued commitment of a sexually violent predator. The State therefore did not meet its burden in this case by producing a psychiatrist who did not support commitment.

Following a bench trial, the judge concluded defendant 1 Memorial Drive, LLC, was the successor of defendant Amma, Corp., and entered judgment in favor of plaintiff, Amma's landlord, for unpaid rent for the balance of the lease extension. The judge concluded exceptions to the general rule that a transferee is generally not liable for the debts of the transferor, see Woodrick v. Jack J. Burke Real Estate, Inc., 306 N.J. Super. 61, 72–73 (App. Div. 1997), applied, even though he found that the only asset Amma transferred was a trademarked name, Super Supermarket. The judge made no finding as to the actual value of the trademark, which 1 Memorial had been using for nearly one year and which several other supermarkets in New Jersey used. Nevertheless, using his personal knowledge of other businesses in the city, and their recognizable business names, the judge found successor liability.

Citing several cases from other jurisdictions and treatises, the court concluded that the transfer of all or substantially all of the predecessor entity's assets is a predicate to any finding of successor liability as to the successor entity. In this case, the substantial credible evidence supported a finding that the transfer of a generic trademark was of limited value, and plaintiff failed to prove that Amma transferred any, much less all or substantially all, of its assets to 1 Memorial. The court reversed and vacated the judgment.

The trial court erroneously kept admissible evidence from the jury. The video rebutted what the prosecutor implied during cross-examination -- that defendant’s witnesses lied about their attempt to speak with the police at the scene. That video also contradicted the investigating detective’s testimony that she had thoroughly canvassed the area for witnesses. In summation, the prosecutor exploited the suppression of the video to present a false narrative and improperly suggested to the jury that the defense witnesses made no effort to give their accounts to the officers at the scene. The combination of the trial court’s erroneous evidentiary ruling and the prosecutor’s inappropriate remarks during summation had the clear capacity to cause an unjust result.

The Court agrees that the PWFA recognizes for pregnant and breastfeeding employees three distinct causes of action within N.J.S.A. 10:5-12(s): 1) unequal or unfavorable treatment; 2) failure to accommodate; and 3) unlawful penalization. The Court explains the contours of those causes of action and the necessary considerations as to each upon remand.

In this accelerated appeal arising from a municipal clerk's rejection of an initiative petition to move the school board and municipal elections to the date of the November general election, the court held that the municipal clerk violated the Faulkner Act, N.J.S.A. 40:69A-184 to -192, by repeatedly refusing to certify and file the initiative petition due to perceived minor technical noncompliance. The court also held that the municipal clerk's actions violated the right of initiative petition guaranteed by the Faulkner Act, thereby depriving the petitioners of a substantive right protected by N.J.S.A. 10:6-2(c) of the New Jersey Civil Rights Act, and entitling them to an award of reasonable attorney's fees and costs under N.J.S.A. 10:6-2(f).

This appeal requires us to determine if a police officer employed in a non-civil service municipality can be subpoenaed to testify in the municipality's case-in-chief at a departmental disciplinary hearing seeking his termination. The court concludes the subpoena violates neither fundamental fairness and due process nor statutory procedures governing discipline of a police officer in a non-civil service municipality. The court further concludes that absent an objection to a specific question, it is premature to determine whether there is a violation of the officer's Fifth Amendment constitutional right against self-incrimination. Accordingly, the court affirms the Law Division order granting the municipality's request to enforce the subpoena.

Plaintiff, the managing association for a high-rise condominium building, obtained monetary judgments by default against two companies involved in construction and inspection of the condominium building. Alleging the companies were insured under insurance policies issued by defendant, plaintiff filed a declaratory judgment complaint seeking coverage. Plaintiff appeals the Law Division order that dismissed its declaratory judgment complaint and required it to arbitrate its claim for insurance coverage.

The court reversed the order. Under the direct action statute, N.J.S.A. 17:28-2, plaintiff can sue defendant directly for coverage under the insurance policies when there is evidence the insureds are bankrupt or insolvent. However, plaintiff did not assent to the arbitration clause in the policy and therefore, it is not required to arbitrate its claims. The court reinstated the declaratory judgment complaint and remanded for further proceedings.

Plaintiff Robert Triffin appeals from an order denying his motion for reconsideration of an order, entered after a Special Civil Part trial, that dismissed his action against defendants SHS and John Sickles. Defendant SHS, a hair styling school, issued a check to one of students, codefendant Amanda Grzyb-Kelly, for living expenses. Grzyb-Kelly did not file an answer, and the judge entered default judgment against her at the conclusion of trial. Grzyb-Kelly cashed the check twice on the same day, first by electronically depositing it into her account at Wells-Fargo using photos of the front and back of the check through an application on her phone, then at United Check Cashing where it was indorsed, marked with a dated stamp, and exchanged for payment. The check was dishonored when United Check Cashing presented it for payment at defendant's bank, Bank of America. Plaintiff subsequently purchased the dishonored check, along with several others, through an assignment agreement.

Plaintiff filed a complaint pursuant to N.J.S.A. 12A:3-414(b), which entitles the holder of a dishonored check to enforce payment against the drawer. The trial judge found that N.J.S.A. 12A:3-308(b) provided a defense to plaintiff's right to payment based on the evidence that defendant had previously paid the check. Specifically, after reviewing both parties' copies of the check, the judge noted that the electronically deposited check into Wells-Fargo lacked an indorsement, whereas the check cashed at United Check Cashing was indorsed and physically relinquished. Accordingly, the court dismissed the complaint against SHS and Sickles.

In his motion to reconsider, plaintiff argued that because the check was not indorsed, negotiation and transfer, as required by N.J.S.A. 12A:3-201(b) and -203 (c), did not occur. Rather, plaintiff argued, defendant's bank made an illegitimate payment that did not satisfy defendant's obligation to pay. On reconsideration, the trial judge relied, in part, on N.J.S.A. 12A:3-414(c) and concluded the defendant's obligation to pay was discharged. N.J.S.A. 12A:3-414(c) states: "If a draft is accepted by a bank, the drawer is discharged, regardless of when or by whom acceptance was obtained." Similar to a certified check, "acceptance" in this context refers to a process by which a bank guarantees payment of a draft, N.J.S.A. 12A:3-409(a); the statute does not use the term in its colloquial sense.

The court found that N.J.S.A. 12A:4-205 eliminates the indorsement requirement for negotiation and transfer if the customer of a depository bank delivers an item for collection. Because Grzyb-Kelly was a customer of Wells Fargo, the depository bank in this case, the unendorsed check was effectively negotiated and transferred when she made the electronic deposit. Indorsement was not required. The court affirmed the trial judge's finding that defendant had successfully proved his previously paid defense.

Affirmed.

Tax Court: Washington Shopping Center, Inc. v. Washington Township;Docket Nos. 005517-2016, 002869-2017, 006408-2018, opinion by Novin, J.T.C., decided February 11, 2021, and released for publication March 2, 2021. For plaintiff – Lawrence S. Berger (Berger & Bornstein, LLC, attorneys); for defendant - Martin Allen (Di Francesco, Bateman, Kunzman, Davis, Lehrer & Flaum, P.C., attorneys).

During trial, the court concluded that plaintiff could not compel the testimony of defendant’s proposed testifying expert against the proposed testifying expert’s wishes, or without his consent. Additionally, the court determined that plaintiff offered no evidence that defendant’s proposed testifying expert witness possessed superior knowledge of the facts or that his testimony would have elicited more meaningful insight into the property than plaintiff’s testifying expert. Accordingly, the court declined to apply an adverse inference charge. The court further concluded that post-trial briefs must be confined to the facts disclosed in the trial record, or those reasonably suggested by the evidence introduced during trial. In affirming the local property tax assessments, the court found plaintiff’s expert’s highest and best use analysis flawed and his conclusion that approximately sixty-one percent of the subject property’s building area should be demolished not credible.