Justia New Jersey Supreme Court Opinion Summaries

Plaintiff Elmer Branch brought a putative class action against his employer, defendant Cream-O-Land Dairy, on behalf of himself and similarly situated truck drivers employed by defendant, for payment of overtime wages pursuant to the New Jersey Wage and Hour Law (WHL). The WHL created an exemption from an overtime compensation requirement for employees of a “trucking industry employer.” In response to plaintiff’s argument that defendant failed to pay truck drivers as mandated by N.J.S.A. 34:11-56a4(b)(1), defendant argued that it was exempt from that provision as a trucking industry employer under N.J.S.A. 34:11-56a4(f). Defendant also asserted that it was entitled to invoke the absolute defense set forth in N.J.S.A. 34:11-56a25.2 because it had relied in good faith on three matters in which the Department had investigated its operations and concluded that it was a “trucking industry employer.” The trial court viewed those decisions to satisfy N.J.S.A. 34:11-56a25.2’s standard for the good-faith defense and granted summary judgment dismissing plaintiff’s claims. The Appellate Division reversed, finding that none of the determinations on which defendant relied met the requirements of the good-faith defense under the plain language of N.J.S.A. 34:11-56a25.2. The Appellate Division also rejected defendant’s invocation of a 2006 Opinion Letter by the Director of the Division that for certain employees of trucking industry employers, N.J.S.A. 34:11-56a4 “establishes their overtime rate at 1 1/2 times the minimum wage” because defendant did not represent that it had relied on that letter when it determined its overtime compensation. The New Jersey Supreme Court concurred with the Appellate Division that none of the decisions identified by defendant satisfied the requirements of the good-faith defense under the plain language of N.J.S.A. 34:11-56a25.2. The Court acknowledged, however, the dilemma faced by an employer such as defendant, which repeatedly prevailed in overtime disputes before subordinate Department employees but was unable to seek a ruling from the Commissioner of the Department of Labor and Workforce Development (Commissioner) because each of those disputes was resolved without further review. This matter was remanded to the trial court for consideration of defendant’s argument that it was a trucking-industry employer within the meaning of N.J.S.A. 34:11-56a4(f), and for determination of whether defendant complied with the applicable WHL overtime standards in compensating its employees. View "Branch v. Cream-O-Land Dairy" on Justia Law

Pfizer’s Human Resources Department sent an e-mail to Pfizer employees at their corporate e-mail addresses announcing Pfizer’s five-page Mutual Arbitration and Class Waiver Agreement (Agreement) and included a link to that document. The e-mail also included a included a link to a document that listed “Frequently Asked Questions,” including “Do I have to agree to this?” to which the response indicated, “The Arbitration Agreement is a condition of continued employment with the Company. If you begin or continue working for the Company sixty (60) days after receipt of this Agreement, it will be a contractual agreement that binds both you and the Company.” The “FAQs” document also encouraged any employee who had “legal questions” about the Agreement “to speak to [his or her] own attorney.” Pfize terminated Amy Skuse's employment in August 2017, and Skuse filed a complaint alleging that Pfizer and the individual defendants violated the Law Against Discrimination by terminating her employment because of her religious objection to being vaccinated for yellow fever. Defendants moved to dismiss the complaint and to compel arbitration. Skuse opposed the motion, contending that she was not bound by Pfizer’s Agreement, arguing that she was asked only to acknowledge the Agreement, not to assent to it, and that she never agreed to arbitrate her claims. The trial court dismissed Skuse’s complaint and directed her to proceed to arbitration in accordance with the Agreement. The Appellate Division reversed, identifying three aspects of Pfizer’s communications to Skuse as grounds for its decision: Pfizer’s use of e-mails to disseminate the Agreement to employees already inundated with e-mails; its use of a “training module” or a training “activity” to explain the Agreement; and its instruction that Skuse click her computer screen to “acknowledge” her obligation to assent to the Agreement in the event that she remained employed for sixty days, not to “agree” to the Agreement. The New Jersey Supreme Court reversed, finding the Agreement was valid and binding, and held the trial court was correct in enforcing it. View "Skuse v. Pfizer, Inc." on Justia Law

The Ridgefield Park Board of Education (Board) and the Ridgefield Park Education Association (Association) negotiated a collective negotiations agreement (CNA) covering 2011-2014 that went into effect three days after the New Jersey Legislature enacted Chapter 78. The 2011-2014 CNA expired before the employees achieved full implementation of the premium share set forth in N.J.S.A. 52:14-17.28c (Tier 4). After the 2011-2014 CNA expired, the Board and the Association negotiated a CNA covering 2014-2018, which, like its predecessor, stated that employees would contribute 1.5% of their salary towards health insurance or the minimum set forth by statute, regulation, or code. During the 2014-2015 school year, the employees contributed to the cost of their health care at the full premium share required by Tier 4. The Board and the Association disputed Chapter 78’s impact on employee contributions for the CNA’s remaining three years. The Board contended that Chapter 78 preempted any negotiated term for those contributions and that the Association’s members were required to contribute to their health benefits at the Tier 4 level for the duration of the CNA. The Association contended that Chapter 78 did not preempt the 1.5% contribution rate set forth in the 2014-2018 CNA. PERC held that the health insurance premium contribution rate set forth in the 2014-2018 CNA was preempted by Chapter 78 and granted the Board’s request for a restraint of binding arbitration as to that issue. The Appellate Division reversed, determining that adherence to Chapter 78’s plain language would bring about an “absurd result” contravening legislative intent, and required the employees to contribute only 1.5% of their salaries for the three contested years. The New Jersey Supreme Court reversed, finding the health insurance premium contribution rates paid by the Association’s members were preempted by statute and therefore non-negotiable. PERC’s construction of Chapter 78 comported with the statute’s language and the Legislature’s stated objective to achieve a long-term solution to a fiscal crisis. View "In the Matter of Ridgefield Park Board of Education" on Justia Law

Nineteen-year-old Mark Zwierzynski permitted underage adult friends to consume alcoholic beverages in his home. Nineteen-year-old Brandon Narleski and twenty-year-old Nicholas Gomes left the home severely intoxicated. Shortly afterwards, Gomes lost control of his vehicle and crashed. Narleski died at the scene. Gomes’s blood alcohol concentration was twice the legal limit. The issue this case presented for the New Jersey Supreme Court's review was whether the common law imposed a duty on underage adults -- over the age of eighteen but under twenty-one -- to refrain from making their homes a safe haven for underage guests to consume alcoholic beverages and, if so, what the standard for liability would be if an underage guest, who becomes intoxicated, afterwards drives a motor vehicle and injures or kills a third party. The Court held 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 was a leaseholder or titleholder of 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. The Appellate Division was reversed, the trial court's grant of summary judgment to Zwierzynski was vacated, and the matter remanded for further proceedings. View "Estate of Brandon Narleski v. Gomes" on Justia Law

Dr. Dominick Lembo employed Arlene Marchese in his dental practice as his office manager, and Karen Wright, a dental hygienist. Sometime before December 2011, Marchese and Wright unlawfully took possession of numerous checks totaling several hundred thousand dollars, forged Lembo’s indorsement on the checks, and deposited the proceeds from the forged checks into their personal accounts at TD Bank. In February 2015, Lembo filed a complaint against TD Bank, alleging that “TD Bank knew or should have known that Marchese and/or Wright were not permitted to negotiate checks made payable to [Lembo].” The complaint also alleged that by permitting them to negotiate checks with forged indorsements, TD Bank “aided and abetted Marchese and Wright in their fraudulent scheme and conduct.” The complaint did not assert that Lembo had a banking relationship with TD Bank. And Lembo did not file an action for conversion under the Uniform Commercial Code (UCC) within the three-year limitations period. Had Lembo done so, TD Bank would have been strictly liable for depositing or cashing those checks, subject to the defenses in N.J.S.A. 12A:3-405 or N.J.S.A. 12A:3-406. The trial court granted the Bank's motion to dismiss, finding that the UCC governed Lembo's remedies against the Bank, and “common law negligence is not such a remedy” in the absence of a “special relationship” between Lembo and the bank. The court also rejected Lembo’s argument that the Uniform Fiduciaries Law (UFL) provided an affirmative cause of action against the bank. The Appellate Division reversed, reading into the complaint the basis for an affirmative UFL claim, and remanded to allow Lembo to amend the complaint to assert such a claim. The New Jersey Supreme Court concluded the Appellate Division misconstrued the purpose of the UFL, finding the Legislature enacted the UFL not to create an affirmative cause of action against a bank but to provide a defense when the bank is sued for failing to take notice of and action on the breach of a fiduciary’s obligation. "The UFL confers a limited immunity on a bank, unless the bank acts in bad faith or has actual knowledge of a fiduciary breach." The Supreme Court found no affirmative cause of action arose under the statute; whether a UFL claim was adequately pled was therefore moot. Recognizing the predominant role the UCC plays in assigning liability for the handling of checks, the Supreme Court also found Lembo had no “special relationship” with the bank to sustain the common law causes of action. View "Lembo v. Marchese" on Justia Law

In 2005, U.S. Home Corporation entered into a contract to purchase two contiguous tracts of land, one of which was owned by West Pleasant-CPGT, Inc. Under the contract, West Pleasant and the other landowner were to gain certain approvals permitting development of the properties. Pursuant to the contract, U.S. Home paid advances to the landowners totaling over $1.5 million. As security for the advances, West Pleasant executed a mortgage and note on its property; the other landowner did not. When a contract dispute arose in 2006, U.S. Home sought to terminate the contract and get a return of its total advance. U.S. Home prevailed in arbitration and was awarded a judgment in the full amount of the advance, plus interest. The Appellate Division affirmed the judgment in 2009. When the judgment was not satisfied, U.S. Home commenced foreclosure actions against the properties. The foreclosure proceedings were stayed when West Pleasant and the other property owner filed for bankruptcy. In West Pleasant’s bankruptcy action, U.S. Home moved to dismiss and for relief from the automatic stay. West Pleasant and U.S. Home executed a Consent Order, in which West Pleasant dismissed its bankruptcy proceeding, waived a fair market valuation and its right to object to a sheriff’s sale of its property, and released U.S. Home from any claims in law or equity. U.S. Home never proceeded with any deficiency action against either landowner. Nonetheless, the landowners commenced the affirmative litigation that gave rise to this appeal, seeking a declaration that the arbitration award was fully satisfied, as well as compensation “in the amount of the excess fair market value of the properties obtained by defendant[] U.S. Home over the amount of its outstanding judgment.” The second property owner then assigned its rights to West Pleasant. After trial, the court valued the second property as worth almost $2.4 million and West Pleasant’s property as worth almost $2 million. The court ordered U.S. Home to pay the fair market value of the West Pleasant property, plus interest, and extinguished the arbitration award on the second property. On appeal, the Appellate Division determined that West Pleasant had waived its right to a fair market valuation on its property but that it was owed a fair market value credit for the second property. The Appellate Division remanded the matter to the trial court for recalculation of damages. The New Jersey Supreme Court reversed, finding use of fair market value credit by this debtor to obtain a money judgment against a creditor, in the absence of a deficiency claim threatened or pursued or any objection being raised at the time of the sheriff’s sales, was "inconsistent with sound foreclosure processes and, moreover, inequitable in the circumstances presented." The judgment of the Appellate Division was reversed and the matter remanded for further proceedings. View "West Pleasant-CPGT, Inc. v. U.S. Home Corporation" on Justia Law

Plaintiff Regina Little asserted claims on her own behalf and on behalf of other New Jersey owners and lessees of 1997, 1998, 1999, and 2000 Kia Sephia vehicles distributed by defendant Kia Motors America, Inc., alleging that those vehicles had a defective brake system. The central question in this appeal was whether the trial court properly permitted plaintiff’s theory of damages based on the cost of brake repairs to be asserted classwide, supported only by aggregate proofs. The jury determined that defendant had breached its express and implied warranties and that the class had sustained damages. The jury found that the class members had suffered $0 in damages due to diminution in value but that each class member had sustained $750 in damages “[f]or repair expenses reasonably incurred as a result of the defendant’s breach of warranty.” The trial court granted defendant’s motion to decertify the class as to the quantum of damages each individual owner suffered. The parties cross-appealed. The Appellate Division reversed the trial court’s post-trial determinations, reinstated the jury’s award for out-of-pocket repair costs based on plaintiff’s aggregate proofs, and remanded for an award of attorneys’ fees. The appellate court held that, notwithstanding the jury’s rejection of plaintiff’s diminution-in-value theory, the trial court should have ordered a new trial on both theories of damages, which it found were not “fairly separable from each another.” Although aggregate proof of damages can be appropriate in some settings, the New Jersey Supreme Court considered such proof improper as presented in this case. The trial court erred when it initially allowed plaintiff to prove class-members’ out-of-pocket costs for brake repairs based on an estimate untethered to the experience of plaintiff’s class. The trial court properly ordered individualized proof of damages on plaintiff’s brake-repair claim based on the actual costs incurred by the class members. Thus, the trial court’s grant of defendant’s motions for a new trial and for partial decertification of the class were a proper exercise of its discretion. View "Little v. Kia Motors America, Inc." on Justia Law

Defendant Javier Torres signed a promissory note (Note) secured by a residential mortgage (Mortgage). Torres defaulted on the Note. CitiMortgage, Inc., discovered that it had lost the original Note but had retained a digital copy setting forth its terms. CitiMortgage assigned the Mortgage and its interest in the Note to plaintiff Investors Bank (Investors). In this appeal, the issue presented for the New Jersey Supreme Court's review was whether Investors could enforce the Note. The Supreme Court affirmed the trial court: Investors Bank could enforce the note. Relying on two statutes addressing assignments, N.J.S.A. 2A:25-1 and N.J.S.A. 46:9-9, as well as common-law assignment principles, the Court held Investors had the right as an assignee of the Mortgage and transferee of the Note to enforce the Note. The Court construed N.J.S.A. 12A:3-309 to address the rights of CitiMortgage as the possessor of a note or other instrument at the time that the instrument was lost, but not to supplant New Jersey assignment statutes and common law in the setting of this appeal or to preclude an assignee in Investors’ position from asserting its rights according to the Note’s terms. Read together, "N.J.S.A. 12A:3-309, N.J.S.A. 2A:25-1, and N.J.S.A. 46:9-9 clearly authorized the assignment and entitled Investors to enforce its assigned Mortgage and transferred Note." View "Investors Bank v. Torres" on Justia Law

Plaintiff Henry Sanchez filed a class action seeking relief based on the Retail Installment Sales Act, N.J.S.A. 17:16C-1 to -61 (RISA). He contended the “initiation fee” charged in defendant Fitness Factory’s gym membership contract, among other provisions, violated RISA. The trial court dismissed Sanchez’s complaint, finding that RISA did not apply to the contract because it was a contract for services. The Appellate Division affirmed. While acknowledging that RISA applied to some services contracts, the Appellate Division found that RISA applied only to contracts that contained a financing arrangement. The New Jersey Supreme Court determined that by its own terms, RISA applied to services contracts. Further, in the statute as written, there was no requirement that a contract include a financing arrangement to be covered by RISA. Judgment was reversed and the matter remanded for further proceedings. View "Sanchez v. Fitness Factory Edgewater, LLC" on Justia Law

Plaintiff Arthur Whelan filed suit against seven defendants, who allegedly manufactured or distributed products integrated with asbestos-containing components. Whelan claimed he was exposed to asbestos dust while working on those products, including their original asbestos-containing components or asbestos-containing replacement components. Defendants contended that Whelan could not establish that his exposure to asbestos was the result of any product they manufactured or distributed, disclaiming any liability for Whelan’s exposure to asbestos-containing replacement parts that they did not manufacture or distribute, even though the parts were incorporated into their products. Whelan countered that it made no difference whether he was exposed to defendants’ original asbestos-containing components or a third party’s asbestos-containing components -- defendants’ duty to warn and liability attached to both. The trial court granted summary judgment in favor of defendants. The Appellate Division reversed, determining that defendants had a duty to warn about the dangers of the asbestos-containing replacement components necessary for the continued functioning of their products and that defendants could be held strictly liable for the failure to do so, provided Whelan suffered sufficient exposure to the replacement components to contribute to his disease. After Whelan appealed, the Appellate Division issued Hughes v. A.W. Chesterton Co., 435 N.J. Super. 326 (App. Div. 2014), which held that a defendant had a duty to warn, regardless of who manufactured the replacement components, because under the facts of that case, “it was reasonably foreseeable . . . that the gaskets and packing would be replaced regularly with gaskets and packing that contained asbestos.” The Appellate Division found that Whelan had “presented sufficient evidence detailing his exposure to asbestos,” either from defendants’ original or replacement components or from a third party’s replacement components, to withstand summary judgment. Thus, the Whelan panel reversed the summary judgment order and left the disputed issues of fact to be resolved by a jury. Finding no reversible error in the appellate panel's judgment, the New Jersey Supreme Court affirmed. View "Whelan v. Armstrong International, Inc." on Justia Law