New Jersey Supreme Court Finds Affidavit of Merit is not Required in Vicarious Liability Cases

The Supreme Court of New Jersey recently addressed whether under the affidavit of merit (“AOM”) statute N.J.S.A. 2A:53A-26 to – 29, a plaintiff must submit an affidavit of merit in support of a vicarious liability claim against a health care facility based on the negligent conduct of a non-licensed employee. Haviland v. Lourdes Med. Ctr. of Burlington Cty., 2022 N.J. LEXIS 309 (Apr. 12, 2022). Ultimately, the Court held that the AOM statute does not require an AOM in a case where a plaintiff asserts only vicarious liability against a healthcare facility for the negligent acts of its non-licensed agents or employees. Id. at *25.

The AOM statute requires plaintiffs in professional negligence actions by a licensed person in their profession, to submit an affidavit from a licensed professional attesting to the merits of the plaintiff’s claims. Id. at *14-15. The statute goes on to explicitly limit the term “licensed person” to sixteen professions and “a healthcare facility.” Id., N.J.S.A. 2A:53A-26.

In Haviland, Plaintiff presented to the Lourdes Medical Center for a radiological examination following surgery on his left shoulder. Id. at *9. According to Plaintiff, during the examination an unidentified radiology technician (“John Doe”) asked him to hold weights, which was contrary to the physician’s instructions. Id. Holding the weights caused Plaintiff to sustain an injury to his newly repaired left shoulder. Id. The new injury required a surgical procedure two months later. Id. A year later Plaintiff filed a complaint alleging that John Doe and Lourdes Medical Center were careless, negligent, and “deviated from accepted standards of medical care.” Id. at *9-10. In its Answer, Defendant contended that since it was a healthcare facility, Plaintiff was required to submit an AOM. Id. The trial court notified Plaintiff that it needed to produce an AOM, however Plaintiff advised the court that since it was proceeding against Defendant solely on a vicarious liability theory, an AOM was not required. Id. Defendant filed a motion to dismiss for failure to submit an AOM, which the judge granted. Id. at *10-11. Plaintiff appealed this decision and the Appellate Division reversed the trial court’s decision, finding that an AOM was not required under the circumstances presented. Id. at *11.

The New Jersey Supreme Court affirmed the Appellate Division’s decision and found that the AOM statute does not require plaintiffs to submit an AOM in cases where the plaintiff only asserts vicarious liability against a healthcare facility for the negligent acts of non-licensed employees. Id. at *25. In arriving at its decision, the Court looked at previous decisions from the Appellate Division which, when dealing with similar legal questions, focused “on the nature of the underlying conduct responsible for the plaintiff’s injuries.” Haviland v. Lourdes Med. Ctr. Of Burlington Cty., 2022 N.J. LEXIS at *24-25. Additionally, the Court sought to stay consistent with the statute’s legislative history by pointing out that during the initial drafting process the professions listed under the bill were only nine, then it was amended three times to expand the definition of “licensed person,” yet it never included “radiology technician” as one of them. Id. at *25. The Court also noted that Plaintiff does not dispute that had he raised direct claims against the hospital for negligent hiring, training, or supervision of the non-licensed employee, he would have been required to submit an AOM under the AOM statute. Id. at *25-26.

Update to Grieving Families Act

On June 2, 2022, the New York Senate and Assembly passed Bill S74A, also known as the Grieving Families Act (GFA), amending the law concerning the payment and distribution of damages in wrongful death actions. Governor Hochul will likely sign the bill into law. The current law, passed in 1847, precludes close family members from compensation for their non-economic loss in wrongfull death suits.

Section 1 of the legislation extends the time permitted to bring a wrongful death action to three years and six months compared to the two years now, thus giving families sufficient time to grieve before assembling evidence for a case. 

Section 2 permits recovery for emotional loss when a tortfeasor is found liable for causing a death.

Section 3 permits recovery by close family members, which may include but are not limited to, a spouse or domestic partner, children, grandparents, stepparents, and siblings. Whether someone is a close family member is an issue for the factfinder to decide based upon the specific circumstances relating to the person’s relationship with the decedent.

Section 4 replaces the term “distributes” with “persons for whose benefit the action is brought” since current law permits only the distributees of the estate to recover.

Section 5 states that the act shall take effect immediately and apply to all pending actions and actions commenced on or after such date.

Proponents argue the current law’s language is too narrow because it measures the worth of family members solely by their value as wage earners.  Furthermore, it precludes emotional damages.  At least 41 other states compensate family members for emotional loss.  Proponents further argue this bill assists family of the deceased and deters the negligent and reckless behavior, that leads to needless deaths.

Critics argue signing the bill into law could significantly increase the number of wrongful death cases. Furthermore, civil complaints alleging wrongful death could contain several plaintiffs on behalf of the decedent. The increase in plaintiffs per lawsuit may drastically extend the life of a case and will increase litigation costs, settlement demands, and verdicts.  In addition, some fear the bill could cause more economic harm than good to New Yorkers as a whole.

Callahan & Fusco will continue to monitor the status of Bill S74A and any corresponding court decisions on this issue.

Recent Updates to Florida's Proposal for Settlement Law

On May 25, 2022, the First District Court of Appeal of Florida recently reversed a final judgment awarding over $1 million in attorney's fees and taxable costs to plaintiff under §768.79, Fla. Stat. State Farm Auto. Ins. Co. v. Lightfoot, Nos. 1D20-2285, 1D20-2303, 2022 Fla. App. LEXIS 3559, at *3 (1st DCA May 25, 2022). In State Farm Auto. Ins. Co. v. Lightfoot the Defendant in an automobile negligence action sought to reverse a final judgment awarding over $1 million in attorney’s fees and taxable costs to Plaintiff.  The Defendant appealed asserting the rejected Proposal for Settlement (“Proposal”), which was the basis for the award, was not made in good faith.  The Proposal in question required Defendants to pay $1.3 million in cash within 30 days.

The First DCA reasoned the legislature enacted section §768.79, Fla. Stat., to “deter parties from rejecting presumably reasonable settlement offers by imposing sanctions through costs and attorney's fees.”  Section 768.79 allows a court to reject fees if it determines that a proposal was not made in good faith.  Good faith turns on whether the offeror “had a reasonable foundation to make [his] offer and made it with intent to settle the claim made against [him by the offeree] if the offer had been accepted.” Gawtrey v. Hayward, 50 So. 3d 739, 743 (Fla. 2d DCA 2010).  The burden of showing a proposal was not made in good faith falls on the offeree. Id. The First DCA clarified that the holding does not require the offeror to consider the offeree’s finances and ability to pay before tendering a proposal for settlement.  The holding in Lightfoot could provide case specific grounds to challenge a successful Proposal for Settlement on the grounds that the proposal was not made in good faith based on the defendant’s inability to pay and restrictive payment conditions.

On May 26, 2022, the Supreme Court of Florida amended Florida Rule of Civil Procedure 1.442, which governs Proposals for Settlement.  The amendment to the Rule provides that “nonmonetary terms” are now expressly excluded from Proposals for Settlement.  Most significantly, the rule amendment now prevents inclusion of a term that the Plaintiff must execute a General Release as part of the acceptance of the Proposal for Settlement.  Setting forth nonmonetary terms in a Proposal will now give the offeree a basis to invalidate it, preventing the offeror from recovering attorney’s fees and removing any settlement leverage.  Requiring a General Releases has routinely been included as a term by defendants serving proposals for settlement.  The inability to negotiate a General Release as a Proposal for Settlement term similarly means no inclusion of other significant, and often necessary, terms, including but not limited to, confidentiality terms; agreements to defend, indemnify or hold harmless as to hospital/Medicare/other liens; or other case-specific terms that may need to be included in a Release.

While Proposals for Settlement are rarely, if ever, accepted by a plaintiff in personal injury cases, the risk to the plaintiff that they could be forced to pay an award of attorney’s fees sometimes provides helpful settlement leverage.  The new amendment makes a seemingly small yet significant change that will impact defendant Proposals for Settlement going forward.  The amended rule takes effect on July 1, 2022, but because Florida law provides that Proposals for Settlement are generally to be held open for 30 days, the Rule amendment is already effective as of June 1, 2022.  The new Rule amendment may end up eliminating the Proposal for Settlement as a tactical option in many cases for defendants going forward.

Where Fraud and Legal Malpractice Intersect with New Jersey Estate Planning

The New Jersey Appellate Division affirmed the lower court’s decision which granted the defendants’ Pre-Answer Motion to Dismiss the plaintiff’s amended complaint, pursuant to R. 4:6-2(e), for professional negligence, legal malpractice, breach of fiduciary duty, fraud, and other causes of action. See Dreher v. Ross et al., No. A-3805-19, 2022 N.J. Super. Unpub. LEXIS (App. Div. April 22, 2022). Specifically, the Appellate Court, affirming for substantially the same reasons stated by the lower court, adds that the plaintiff failed to specify a misrepresentation fraud claim against the defendants and failed to properly brief and assert a claim for legal malpractice from the drafting of plaintiff’s mother’s estate planning documents as well as the eventual administration of plaintiff’s mother’s estate.

In Dreher, the plaintiff filed suit against the attorney and his firm for fraud and legal malpractice in the drafting of her mother’s estate planning documents (a Will and Power of Attorney), advice provided to her brother who was listed as the plaintiff’s mother’s Executor and Attorney-in-Fact, as well as the overall administration of her mother’s estate; this litigation followed a settlement in or about March of 2018 of plaintiff’s Will Contest Litigation in the Chancery, Probate Part.  The estate planning documents drafted by defendants did not specifically name the plaintiff in the Power of Attorney and plaintiff’s mother’s Will only devised twenty percent of her mother’s estate to plaintiff while plaintiff’s brother was devised the remaining eighty percent.  Plaintiff’s amended complaint included an amended fraud claim as well as allegations for professional negligence, legal malpractice, and breach of fiduciary duty, which were previously dismissed with prejudice.  Further, the lower court dismissed plaintiff’s amended complaint as several claims were disallowed by prior order, therefore dismissed with prejudice, but the lower court again dismissed the fraud claim without prejudice for lack of specificity.

In New Jersey, fraud—specifically fraudulent misrepresentation— allegations must be pled with specificity and particularity, whereby the plaintiff failed to establish in her amended complaint how the defendants made a material representation to the plaintiff and how the plaintiff relied upon said representations.  Plaintiff only alleged that her mother’s attorney failed to disclose the attorney or his firm’s representation of plaintiff’s mother; the defendants had no duty to disclose their representation of the plaintiff’s mother.  Moreover, the Appellate Division, arguing the alternative, that even if the defendants made a material misrepresentation, the plaintiff failed to specifically state the effect of the misrepresentation on her. 

The Appellate Division also addressed the plaintiff’s claims for legal malpractice.  Plaintiff did not maintain an attorney-client relationship with the defendants, so the Appellate Division addresses the claims as a non-client suing the defendants.  The Appellate Division notes that “a duty to a non-client third party depends on balancing the attorney’s duty to represent clients vigorously, with the duty not to provide misleading information on which third parties foreseeably will rely.”  The Appellate Division and the lower court found the defendants only represented the plaintiff’s mother and brother and owed no duty to the plaintiff.  Moreover, the Appellate Division also found that plaintiff failed to allege that defendants rendered any negligent advice regarding the mother’s estate planning documents or the mother’s estate administration.

From a defense perspective, Dreher teaches us the importance of being aware of a client’s desires when drafting an estate plan as the language of the drafted documents will confer duties, obligations, and rights upon an Attorney-in-Fact and an Executor of a Will to avoid any material misrepresentations upon a potential non-client.  Additionally, awareness of the documents will prevent any potential legal malpractice for advice given directly to the client, their family members named in the drafted documents, or the administration of an estate. Therefore, it is important to have an estate plan drafted by a professional, like those at Callahan & Fusco, LLC, familiar with New Jersey Estate Practice to avoid legal malpractice in the drafting of such important documents to protect one’s family from future frustrations and litigation.

Connecticut Passes Law Instilling New Requirements Upon Pedestrians and Motorists

On October 1, 2021, Connecticut Governor, Ned Lamont, signed into law Public Act 21-28 (the “Act”), extending the language concerning pedestrian actions when utilizing a marked, uncontrolled cross walk (a crosswalk without a traffic signal to indicate a safe pedestrian crossing or one monitored by a traffic control officer).  The Act defines a pedestrian crossing the roadway with a crosswalk as “when the pedestrian (1) is within any portion of the crosswalk, (2) steps to the curb at the entrance to the crosswalk and indicates his or her intent to cross the roadway by raising his or her hand and arm towards oncoming traffic, or (3) indicates his or her intent to cross the roadway by moving any part of his or her body or an extension thereof, including, but not limited to, a wheelchair, cane, walking stick, crutch, bicycle, stroller, carriage, cart or leashed or harnessed dog, into the crosswalk at the entrance to the crosswalk”

This new Act puts the onus of crossing the roadway on the pedestrian.  The pedestrian must signal his intent to cross the roadway in a manner that is clear and obvious to drivers already established on the roadway.  Motorists as a result, appear to be required to be on the lookout for pedestrians and their body language when approaching intersections with uncontrolled crosswalks.  Further, a violation of this law will result in a possible infraction issued to the pedestrian.

In a recent matter, a commercial vehicle approached an uncontrolled crosswalk that connected two sides of a pedestrian/bike trail.  The commercial vehicle allegedly yielded at the crosswalk and the driver looked several times both ways to see if there were any pedestrians either already established in the crosswalk or demonstrating an intent to cross.  When the driver did not see anyone, the driver proceeded to enter the crosswalk.  As he began to proceed, a jogger appeared to dart in front of his vehicle and was knocked over and injured.  The vehicle was equipped with a dash camera that recorded the whole incident.  The video was provided to the police for their investigation.  Upon reviewing the footage, the police determined that the jogger had made no indication to the driver that he intended to cross the roadway.  Nor would the driver exercising ordinary care have been able to have noticed the jogger prior to proceeding through the crosswalk.  The jogger was issued a citation for violating the Act and found at fault for the accident.

The interpretation of the Act has not yet been settled by the courts.  Given that the language proposed by the legislature presents a potentially subjective interpretation, it will be an exercise in judicial discretion to see how the courts will interpret what may be the standard for a pedestrian in an uncontrolled crosswalk that he or she made a sufficient indication to motorists of their intent to cross the roadway via a crosswalk.  Will the courts interpret the Act as indicating a higher burden on pedestrians to signal motorists?  Or will the courts see this Act as placing another requirement on motorists to divine the intent of a pedestrian as to whether the pedestrian is signaling an intention to cross the roadway?  As with any recent law, it will take time before the courts take up the issue.  If the courts see this as putting a higher burden on the pedestrian, we may be able to shift liability onto the pedestrian in future civil litigation or at least lead a jury to place a higher contribution for any associated injuries resulting from a motor vehicle accident with pedestrians.

Florida’s Supreme Court Decides that Plaintiffs Can Only Admit at Trial the Discounted Amounts of their Medical Bills Paid by Medicare

It has long been a hotly contested issue in Florida personal injury cases whether a plaintiff who is Medicare eligible and has had the benefit of Medicare paying part or all of his medical expenses can board the full or “gross” amount of the expenses at trial, even if Medicare paid for them. The leading Florida cases were Thyssenkrupp Elevator Corp. v. Lasky, 868 So. 2d 547 (Fla. 4th DCA 2003) and Cooperative Leasing, Inc. v Johnson, 872 So. 2d 956, 960 (Fla. 2d DCA 2004), out of Florida’s Fourth and Second District Courts of Appeal, respectively. The Thyssenkrupp court held that, “when a provider charges for medical service or products and later accepts a lesser sum in full satisfaction by Medicare, the original charge becomes irrelevant because it does not tend to prove that the claimant has suffered any loss by reason of the charge.” Less than a year later, the Second District Court held similarly in Johnson. See Cooperative Leasing, 872 So. 2d at 960. “[T]he appropriate measure of compensatory damages for past medical expenses when Plaintiff has received Medicare benefits does not include the difference between the amount that the Medicare providers agreed to accept and the total amount of the Plaintiff’s medical bills.”).

However, other districts and circuit judges within those districts would routinely disagree with the Thyssenkrupp/Johnson rationale. Often, trial court judges ruled that plaintiffs could board the full amount of expenses, even if they were paid at significantly lower amounts before trial by Medicare.

On April 28, 2022, The Florida Supreme Court handed down a significant opinion in Dial v. Calusa Palms Master Ass'n, Inc., 47 Fla. L. Weekly S115b (Fla. Apr. 28, 2022). The Supreme Court reviewed the Second District Court of Appeals decision in Dial v. Calusa Palms Master Ass’n, Inc., 308 So. 3d 690 (Fla. 2d DCA 2020), in which the Second District Court certified the following question of great public importance:

Does the Holding in Joerg v. State Farm Mutual Automobile Insurance Co., 176 So. 3d 1247 (Fla. 2015), prohibiting the introduction of evidence of Medicare benefits in a personal injury case for purposes of a jury’s consideration of future medical expenses also apply to past medical expenses?

Id. at 692

The Dial case arose from a negligence action, in which Elaine Dial sought to recover past medical expenses due to injuries she sustained when she tripped and fell on property owned by Calusa Palms Master Association, Inc. Prior to trial, the trial court granted the Association’s motion in limine and ordered that Dial was precluded from introducing as evidence at trial the gross amount of her past medical expenses and limited her to introducing only the discounted amounts paid by Medicare. After the jury awarded Dial $34,641.69 in past medical expenses, Dial appealed the ruling and argued that the Florida Supreme Court’s holding in Joerg v. State Farm Mutual Automobile Insurance Co., 176 So. 3d 1247 (Fla. 2015) allowed her to admit into the evidence the full amount of her past medical expenses.

In 2015, the Florida Supreme Court in Joerg specifically addressed whether the exception to the collateral source rule applied to future benefits provided by social legislation, such of Medicare. The Court further concluded that future Medicare benefits are both uncertain and a liability, due to the right of reimbursement that Medicare retains.

Now, in deciding Dial, the Supreme Court has distinguished future Medicare benefits and held that they are to be treated differently from past expenses paid by Medicare. The Florida Supreme Court answered the Second District Court’s certified question in the negative and approved the Second District’s approach of precluding evidence of gross medical expenses and limiting plaintiffs to introducing only the discounted amounts paid by Medicare. Dial v. Calusa Palms Master Ass'n, Inc., 47 Fla. L. Weekly S115b (Fla. Apr. 28, 2022).

Following this ruling, the practical approach is for the defendant to move in limine before trial to preclude the plaintiff “from introducing as evidence the gross amount of her past medical expenses and limit her to introducing only the discounted amounts paid by Medicare.” Dial v. Calusa Palms Master Ass'n, Inc., 47 Fla. L. Weekly S115b (Fla. Apr. 28, 2022).

A few things of note. First, often a Medicare-eligible plaintiff will have a health insurance supplement. In those cases, the supplement is paid for and, therefore, not an unearned benefit or a benefit “to all,” like Medicare is. In those cases, the Medicare-paid expenses will be treated differently from those covered by the supplement and, potentially, can be admitted in their gross amount.

Second, the Dial opinion specifically concerns Medicare. However, its rationale may and, in the proper circumstances, should apply to other unearned benefits, such as Medicaid and worker’s compensation benefits.

Dial is another win for the defense side in Florida, following previous victories in the legislature’s adoption of the Daubert standard and the Supreme Court’s adoption of the federal standard for summary judgment.