New Jersey Supreme Court Overturns $1,750,000 Jury Verdict and Orders New Trial Due to Plaintiff Attorney’s Improper Comments Made During Closing Arguments

July 14, 2011

On November 21, 2005, 69 year old Camille Risko slipped and fell in defendant’s automobile showroom. According to her husband, who accompanied Camille to the dealership, a plastic runner on top of the carpet was waterlogged. Plaintiff’s safety expert opined that improper placement of the plastic runner over the carpet and the lack of adequate inspections created a “false sense of security” and an unreasonably dangerous condition. The condition of the floor was disputed by defendant sales manager who denied that the carpet was wet, or that there were any plastic runners on top of the carpet.

As a result of the fall, Camille sustained a fractured arm and hip. The hip injury required surgery. She spent several weeks in a rehabilitation center where she contracted C-difficile colitis, a severe inflammation of the colon. When the condition developed into septic shock, Camille was rushed to the hospital, where she died on January 1, 2006. Camille’s husband then filed suit on behalf of himself individually, and on behalf of his wife’s estate.

Plaintiff’s medical expert concluded that the Camille’s hip fracture was caused by the slip and fall and her subsequent death from septic shock was ultimately the result of the injuries she sustained from the accident. Although the defendants contested the connection between the fall and her subsequent death, they produced no contrary medical proof or expert testimony.

The plaintiff produced an economic expert who opined that Camille would have lived for 16 more years. Additionally, the expert found that the economic loss was $143,988 in household services, $328,012 in “advice, counsel, support and companionship” and $562,307 in “passive security” constituting “sleep time and on call services” that a spouse provides. The expert defined “sleep time and on call services” as the time decedent “was there and available to plaintiff for any specific needs that may have arisen.” The defendant vigorously disputed the quantification and legitimacy of “sleep time” calculations by plaintiff’s expert. The jury awarded the plaintiff $1,210,319 for “financial losses sustained by the decedent survivors” and $539,681 for pain and suffering before her death for a total award of $1,750,000.

The trail court granted the defendants motion for new trial on liability and damages. The Appellate Division (in a 2-1 decision) reversed the trial Court’s ruling. The New Jersey Supreme Court granted certification.

In their decision, the Supreme Court highlighted some comments made by plaintiff’s counsel during summation that included:

the Eighth Amendment of the Constitution of the United States in the Bill of Rights says even prisoners of war, people we hate, are not supposed to be tortured. What [the decedent] went through was torture. They didn’t intend to put her through that. But now they have to pay for that… When you go to deliberate if someone for some reason has not disclosed that they have a prejudice about awarding money in a death case, please tell the judge because that would not be following the law…and if someone goes into the jury room and says…I don’t believe in damages of over a million dollars, because there are people that believe that, you can never have a million dollar case. Well why? Well because I just don’t believe that, it’s what’s called an arbitrary cap on damages. If someone says that in the jury room, please knock, tell [the jury attendant], ask for the judge. Because what they’re doing is ignoring the law.

At that point in the summation, the trial judge interrupted and called counsel to sidebar. The court noted, “I’m going to mistry this case right now.” The trial judge noted to plaintiff’s counsel, “You don’t tell them to knock on the door. That’s the point. That’s the deal you don’t get here. That’s my job. You don’t tell them when to knock on the door. I’m furious to say the least.” At the end of the colloquy, the Judge advised, “You finish this and I’m going to decide tonight whether I mistry this case.”

Upon receiving the Judge’s instructions to continue summation, plaintiff’s counsel apologized to the court and to the jury for his conduct and statements and completed his closing argument. There were no objections by defense counsel. The following morning the Judge did not request argument on whether to mistry the case and never asked the attorneys for suggested curative instructions. The Judge did not give a specific cautionary instruction designed to address the concerns he voice the previous afternoon and made no comment to the jury on the matter.

Following entry of the verdict, the defendant moved for a new trial on all issues. In support of this motion, defendants argued that plaintiff’s summation created “uncertainty among jurors of a free and fair deliberation that someone may be in the jury room looking to see if there was some type of undue bias.” Plaintiffs argued as to defendant’s characterization that the verdict could not be less than a million dollars and challenged defendant’s failure to object or request a curative instruction when the court reconvened the next morning. During their motion for a new trial, the court noted “What concerns me with this trial is two things; plaintiff’s counsel’s conduct and my lack of response to that. I don’t think that defense counsel needed to have an objection based on my reaction when it was stated to the jury that there was an issue of caps. Certainly, my reaction would indicate that the world was ready to explode. And I think most judges would have declared a mistrial right there.”

The trial judge continued “Very simply put, to tell the jury that if one person doesn’t believe in the million dollar case despite the fact that there is a law in NJ that we don’t have caps created what I’m going to describe as a vigilante atmosphere…the message that was sent to that jury was that if someone doesn’t believe in the million dollar case that somehow they should be turned in, that somehow they should be excised from the group. And that’s not what we do when juries are deciding…I think that’s the atmosphere that was created. Should I have instructed them that’s not the case? Yes. Did I do it? No. “The Judge concluded he was compelled to grant a new trial.

The Appellate Division reversed the trial court. The majority based its decision on the fact that defense counsel did not object to the summation and failed to request a mistrial or a corrective jury charge. The majority emphasized its displeasure with plaintiff’s suggestion of a million dollar damages floor and how jurors should conduct their deliberations, but declined to characterize those comments as inflammatory or unfairly prejudicial. The Appellate Division also found mitigating conduct in the form of the apology by plaintiff’s counsel and the court’s instruction to the jury that determining damages was entirely up to the jury.

The Supreme Court noted that a new trial should be granted only after “having given due regard to the opportunity of the jury to pass upon the credibility of the witnesses, it clearly and convincingly appears that there was a miscarriage of justice under the law.” Additionally, the Court reiterated that a motion for new trial “should be granted only where to do otherwise would result in a miscarriage of justice shocking the conscience of the court.” The Supreme Court found “We cannot tolerate the suggestion to jurors that they would be violating the law, and will be reported to the judge, if they reject the notion that plaintiff’s case could be worth more than a million dollars. The court noted that the deliberative process is the vehicle for the collective mutual decision making that reflects community views. It is therefore necessary to structure a process and create an environment so that the mutual or collective nature of the jury’s deliberations is preserved and remains intact until a final determination is reached. Counsel’s instructions to the jury that they should knock on the door and inform the judge hindered this “collective mutual decision making.” A juror who dissented from or even questioned, the quantum of damages that was being discussed may have been discouraged from voicing his or her thoughts out of fear of being reported to the judge. Although it is true that some biases should be reported to the judge such as racial bias…disagreement as to the quantum of damages does not require such action. That appeal for vigilantism, as perceived by the judge, crossed the line and introduced an “extraneous consideration for influence” which requires a new trial as to damages.

In trying case, it is essential that counsel know the boundaries of what can, and cannot be said during a closing argument. If counsel crosses that line, not only can a “good” verdict be overturned, but the parties can face the cost of paying for a re-trial.

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APPELLATE DIVISION RULES THAT HOMEOWNERS INSURER MAY OWE COVERAGE FOR INDIVIDUAL PROVIDING DAYCARE

July 6, 2011

The Appellate Division has reversed a trial court decision ordering Bay State Insurance Company to defend and indemnify its insured under a homeowners policy in connection with a personal injury lawsuit alleging that a child was injured while the company’s insured provided daycare services.  In reversing the trial court’s decision, the Appellate Division remanded this case for a plenary hearing to ascertain whether or not Bay State’s insured was watching children for a profit motive which arguably would fall under an exclusion for coverage.

The facts reveal that Carol Collins had a homeowners policy through Bay State Insurance.  Normally, Collins would watch Kristen Jennings two days a week when Kristen was not in daycare and her mother was at work.  Kristen’s mother initially approached Collins about helping care for Kristen when she was pregnant with Kristen since she knew that Collins was at home with her own children.  Collins was paid $35.00 a day when she watched Kristen.  There is a dispute with regard to the extent to which the $35.00 a day constituted compensation and to what extent it was offered to cover the everyday expenses associated with Kristen’s care.  According to Kristen’s mother and Collins, the $35.00 was to be used for items such as food, diapers and wipes for Kristen, as well as spending money for anything they did.  Kristen’s mother testified that she never considered Collins to be an employee.  Collins testified that she understood that the compensation that she received was in consideration for her time.  However, Collins also testified that she considered the $35.00 as a gift.  Ms. Collins further noted that on those occasions when the $35.00 was not sufficient to cover the costs for a day, she did not ask for additional compensation.  Also, when the expenses for the day were less than $35.00, she did not return the overage.

The factual record also revealed that around the time of the accident, Collins was paid to provide care for another child as a favor for two weeks.  Additionally, during the 2004-2005 school year, Collins took care of two other children, for a total of $40.00 a day.  However, at the time of the plaintiff’s injury, she was no longer caring for those children.  Collins further testified that she occasionally helped a friend out by watching her children.  However, she was not paid.  Instead, the friend would occasionally “slip her money” for helping her out.

The underlying accident occurred on October 30, 2006.  On that date, Collins was watching Kristen.  While walking through the parking lot of a Sam’s Club, Collins lost her balance and fell, pulling the cart in which Kristen was seated to the ground.  Kristen, in turn, sustained an injury to her leg.

Kristen, through her parents, filed a personal injury lawsuit against Collins.  Collins then forwarded the suit papers to her insurer for a defense and indemnification.  Bay State Insurance then filed a declaratory judgment action claiming that under the business exclusion, Collins was not entitled to a defense.  Specifically, Bay State focused on the following exclusionary language:

“Personal liability does not apply to bodily injury or property damage (a) which is expected or intended by the insured; (b) arising out of or in connection with a business engaged in by an insured.  This exclusion applies but is not limited to an act or omission regardless of its nature or circumstance, involving a service or duty rendered, promised, owed or implied  to be provided because of the nature of the business.”

Under the policy, business is defined to include “a trade, profession, or occupation.”

Under New Jersey law, in order to determine whether the business exclusion applies in a child care scenario, there is a two step analysis.  The first question is whether the pursuit involves continuity or customary engagement by the insured in the activity.  The second asks whether the activity involves a profit motive or whether the insured engages in the pursuit as a means of livelihood, a means of earning a living or procuring sustenance or profit.

In the trial court, Bay State Insurance moved for summary judgment declaring that its policy did not provide coverage for the claim asserted by the plaintiff.  Collins cross-moved for summary judgment.  In the trial court, it was found that Collins’ weekly watching Kristen satisfied the continuity requirement.  Accordingly, the focus of the argument was on whether or not Collins’ actions fulfilled the profit motive requirement of the second prong.

The trial court found that based on the record before it, Collins was not watching Kristen with the intentions of earning a living, procuring sustenance or profits.  The trial court focused on the fact that based on their agreement, on some days money paid would be sufficient to cover the costs incurred with watching Kristen while on other days, the money was not sufficient.  Essentially, the trial court found that Collins broke even on this transaction and as such, the second prong of the requirement was not met.

In reviewing the trial court’s decision, the Appellate Division noted that “the critical issue for the court to decide was not whether Collins took home a profit on the day she watched Kristen, but whether her intent in agreeing to watch Kristen was motivated by financial gain.  The burden is on the insured to disprove a profit motive.”  The court continued, “even though Collins did not keep a log of her daily expenses for the child, she estimated that she spent only half of the $35.00 given by the parents each day she worked…this implies that Collins earned a small income.”    Further, “Collins cared for several other children for extended periods of time, for compensation, which suggests that her arrangement with the Jennings family also was more than a favor to a friend or casual accommodation.  Although this does not by itself establish a profit motive, we find it raises a genuine issue of fact concerning Collins’ intent.”  Accordingly, the Order finding that Bay State was required to defend and indemnify Collins in connection with this matter was reversed and remanded to the trial court for a hearing to determine whether Collins had a profit motive in watching the children.

This issue is not the first time the New Jersey Courts have addressed whether or not coverage is afforded under a homeowners policy to an individual who watches children at their house.  It is likely that in the coming years, this issue will be heard more often in light of the current economic climate.  Specifically, individuals are now opening their homes to watch children to earn extra money.  As such, this is an issue which will likely be increasingly presented to insurance companies.