Opinion Summaries

Defendant’s statements in the courtyard and stationhouse were both properly suppressed. Under the totality of the circumstances, the courtyard statements must be suppressed because the Miranda warnings given in the courtyard were lacking and could not have apprised defendant of his rights such that any waiver and agreement to speak to police was knowingly, voluntarily, and intelligently made. By the time defendant arrived at the police department and was given full Miranda warnings, he had already admitted to the very crime that the officers were investigating. Defendant had “let the cat out of the bag” with his admissions, see State v. Carrion, 249 N.J. 253, 275-76 (2021), so the psychological pressure of having already confessed was not cured by the administration of Miranda warnings prior to the interview at the station.

Plaintiff information technology firm brought multiple claims against defendants, its former employee and the law firm that hired him as its in-house technology specialist.  Among other claims, plaintiff alleged the former employee breached his non-compete agreement with plaintiff by taking the job with the law firm, a long-term client of plaintiff.  Plaintiff also alleged the law firm tortiously interfered with the non-compete agreement between plaintiff and its former employee.  After a trial, the Chancery Division enforced the non-compete agreement and found the law firm had tortiously interfered with the agreement between plaintiff and its former employee.

The Chancery Division entered judgment against defendants for damages, including awarding of attorney's fees against the law firm as damages for its tortious interference.  Defendants appealed.

On appeal, the court held the Chancery Division properly awarded attorney's fees as damages for the law firm's tortious interference with contractual relations as an exception to the American Rule, pursuant to DiMisa v. Acquaviva, 198 N.J. 547 (2009).

LOCAL PROPERTY TAX

Tax Court:  Levy v. City of Long Branch, Docket No. 000448-2021, opinion by Sundar, P.J.T.C., decided May 5, 2023.  For plaintiff - Michael I. Schneck (Schneck Law Group, LLC, attorney) and Robert E. Spiotti (Spiotti & Associates, PC, attorney); for defendant – Shaun Peterson (Hoagland, Longo, Moran, Dunst & Doukas, LLP, attorney).

Held: Parties reached a global settlement agreement as to plaintiff’s complaint in the Tax Court for tax year 2021 and his petition before the county board of taxation for tax year 2022. The stipulation in the Tax Court matter was silent on the Freeze Act’s application. The stipulation in the County Board matter included plaintiff’s express waiver of the Freeze Act. Based on the four corners of the Tax Court stipulation, the court found that plaintiff did not waive application of the Freeze Act in the Tax Court matter.  Based on the record, the court found that plaintiff’s waiver of the Freeze Act in the County Board matter did not extend to, nor would be implied in settlement of the Tax Court matter. The court was unpersuaded that the only base year in a multi-year settlement must be the last year of the value judgment. The court was also unpersuaded that, without more, the County Board’s judgment is proof of a change in value for Freeze Act purposes.  
The court granted plaintiff’s motion for application of the Freeze Act to tax year 2023 based on the Tax Court’s final value judgment for tax year 2021.

(15 Pages)

Defendant appeals an order entered in the Family Part permitting the Division of Child Protection and Permanency to use expunged records obtained from the Monmouth County Prosecutor's Office in a Title 9 litigation concerning the alleged abuse and neglect of his son.  Defendant argues the trial court erred by authorizing the Division to utilize records that were expunged, sealed automatically, and precluded any subsequent use.  We conclude the Division was permitted to use the expunged records pursuant to N.J.S.A. 2C:52-19 because the statute allows the release and use of expunged records upon good cause shown and affirm.

The Court endorses and applies the two-factor test of State v. Lentz, 463 N.J. Super. 54, 70 (App. Div. 2020), authorizing delayed warrantless searches of a person incident to that person’s arrest so long as both (1) the delay itself and (2) the scope of the search were objectively reasonable. The totality of circumstances here establishes such reasonableness, particularly given the officers’ observation and video footage showing that defendant appeared to be removing some substance from his fingers and rubbing his clothing while he was being interviewed, as well as the risk that biological evidence would dissipate during the delay while the warrant application was processed.

N.D. had apparent authority to consent to the officer’s search of the storage trailer. However, the exigent-circumstances exception to the warrant requirement does not justify the officer’s search of the black bag or his seizure of the weapons in that bag, and the denial of defendant’s motion to suppress constituted error.

          Registrants filed motions to terminate their Megan's Law registration requirement under N.J.S.A. 2C:7-2(f), arguing the fifteen-year offense-free requirement on juveniles adjudicated delinquent of qualifying Megan's Law offenses did not apply.  The court affirmed the denial of registrants' motions to terminate their Megan's Law obligations because both juveniles were age fifteen or older at the time of their sexual offenses and N.J.S.A. 2C:7-2(f) applies to every person required to register under Megan's Law, including juveniles.

STATUTE OF LIMITATIONS, RESPONSIBLE PERSON LIABILITY FOR GROSS INCOME TAX-ER AND SALES AND USE TAX.

Tax Court:  Gill v. Director, Division of Taxation, Docket No.004035-2021, opinion by Fiamingo, J.T.C., decided May 1, 2023.  For plaintiff  - Maria L. Dooner; for defendant Lindsey R. Curewitz (Matthew Platkin, Attorney General of New Jersey, attorney). 

HELD:  Plaintiff moved to apply the limitations period for assessment of tax to imposition of responsible person liability for gross income tax withholding under N.J.S.A. 54A:9-6(f) and (g) and for sales and use tax under N.J.S.A. 54:32B-2(w).  Director opposed and moved to uphold notification of responsible person status issued beyond limitation periods of the Gross Income Tax Act and Sales and Use Tax Act.  The court ruled that the notification of responsible person for purposes of imposing the penalty assessed by N.J.S.A. 54A:9-6(f) and/or (g) for gross income tax employer withholding required by N.J.S.A. 54A:7-1 et seq. was subject to the limitations period applicable to assessment of gross income tax.  The court ruled that no limitations period applied to the notification of responsible person liability for Sales and Use Tax, as such tax by statute was assessed against the responsible person upon the filing of the return by the seller.

21 pages
 

     In this class action matter arising out of a contract dispute, plaintiffs appeal from a July 15, 2022 order granting defendants' motion to stay proceedings against Verizon and to compel arbitration in accordance with the arbitration agreement appearing in the Verizon Customer Agreement.  In an oral opinion of the same date, the trial judge first severed a limitation on damages provision from the agreement before enforcing the arbitration clause.  In reaching its decision, the court did not discuss any provision of the agreement other than the limitation on damages and severability clause.  Nor did the trial judge address why the reasoning of MacClelland v. Cellco P'ship, 609 F. Supp. 3d 1024 (N.D. Cal. 2022), which found the exact same arbitration clause unenforceable as permeated with unconscionability, should not apply with equal force here. 
     Exercising de novo review, the court held that the arbitration agreement is unenforceable in its entirety as it is permeated by provisions which are unconscionable and violative of New Jersey public policy.  The court affirmed the trial judge's determination striking the agreement's limitation on damages, reversed the order staying the proceedings and compelling arbitration, and remanded for proceedings consistent with its decision.
 

     Pursuant to N.J.S.A. 18A:66-36 (Section 36), a member of the Teachers' Pension and Annuity Fund (TPAF) who has "completed [ten] years of service" and has "separated voluntarily or involuntarily from . . . service[] before reaching service retirement age" is eligible to receive deferred retirement benefits, provided the separation was "not by removal for conduct unbecoming a teacher or other just cause."  N.J.S.A. 18A:6-7.1 permanently disqualifies teachers and other school employees who have been convicted of certain crimes from employment in all school systems under the supervision of the Department of Education. 
     Petitioner had accumulated eleven years of service credit when his teaching certificate was revoked by the State Board of Education based on a disqualifying criminal conviction under N.J.S.A. 18A:6-7.1. The conviction was the result of crimes he committed while employed at a mortgage company before he became a teacher and were unrelated to his position as a teacher.  The TPAF Board denied the petitioner's application for deferred retirement benefits, reasoning his separation from membership in the pension plan was based upon a "removal for conduct unbecoming a teacher."  
     The court reversed, relying on In re Hess, where the court held that under the equivalent Public Employees' Retirement System statute forfeiture of deferred pension benefits was "conditioned on an involuntary removal due to misconduct related to employment." 422 N.J. Super. 27, 37 (App. Div. 2011).  And, Masse v. Board of Trustees, Public Employees' Retirement System, where the Court distinguished between removal based on misconduct and forfeiture of pension rights "unrelated to [the employee's] service."  87 N.J. 252, 263 (1981). 

     In 2017, a malware/cyberattack infected Merck's computer and network systems.  Prior to that date, someone had gained access to the computer systems of a Ukrainian company that had developed an accounting software called M.E. Doc used by Merck and other companies in Ukraine.  The malware was delivered into the accounting software.  Ultimately, over 40,000 machines in Merck's network were infected, resulting in "massive disruptions" to Merck's global operations.  The malware spread to at least sixty-four different countries, including Russia.  
     Merck sought coverage for its losses under defendants' "all risks" property insurance policies.  Defendants denied coverage under the "Hostile/Warlike Action" exclusion included in all their policies.  Although defendants conceded the word "warlike" might not be applicable, they asserted the word "hostile" should be read in the broadest possible sense, as meaning "adverse," "showing ill will or a desire to harm," "antagonistic," or "unfriendly."  Defendants contend that any action that "reflects ill will or a desire to harm by the actor" falls within the hostile/warlike action exclusion, as long as the actor was a government or sovereign power.
     The court found the plain language of the exclusion does not support defendants' interpretation.  The exclusion of damages caused by hostile or warlike action by a government or sovereign power in times of war or peace requires the involvement of military action.  The exclusion does not state the policy precluded coverage for damages arising out of a government action motivated by ill will. 
     The court also considered the history of the war exclusion, which has been included in policies for more than a century.  The few applicable cases reaffirm that similar exclusions have never been applied outside the context of a clear war or concerted military action.
     The court concludes the exclusion did not include a cyberattack on a non-military company that provided accounting software for commercial purposes to non-military consumers, regardless of whether the attack was instigated by a private actor or a "government or sovereign power."  Defendants could not assert the exclusion to bar coverage for Merck's losses.
 

         In this medical malpractice litigation, plaintiff, individually and as executrix of her late husband's estate, moved to compel defendants to permit her expert to conduct an onsite inspection of decedent's electronic medical record (EMR).  Plaintiff contended that pursuant to Rule 4:18-1, she had the right to inspect and examine the "metadata" associated with the EMR, which exceeded more than 2,000 pages and had already been produced in PDF format by defendants.  Plaintiff agreed that defendants would control the log in to the computer system and the mouse guiding the expert's review.  Plaintiff also agreed not to access the system through the use of thumb drives or discs to copy any information.  Plaintiff also sought production of an "audit trail" of the EMR for nearly a full year after decedent's discharge.

         Defendants objected, arguing the discovery request was unduly burdensome and posed security risks and the risk of exposing other patient's EMR.  They argued that plaintiff should identify specific entries in the record for which she sought metadata, and they would produce it, subject to assertions of confidentiality or privilege.  Defendants also objected to producing the audit trail, claiming it, too, was unduly burdensome and irrelevant.

         The Law Division judge granted plaintiff's motion, and the court granted defendants leave to appeal.

         The court concluded that plaintiff was entitled to access metadata in decedent's EMR pursuant to Rules 4:10-2(f) and 4:18-1, and that defendants bore the burden of demonstrating the discovery request was unduly burdensome.  The court agreed with the motion judge's conclusion that defendants failed to do so, and the proposed inspection was reasonable.  The court affirmed that portion of the judge's order granting the inspection as modified by reasonable restrictions, including a time limit for the inspection of four hours.

         The court, however, reversed that portion of the judge's order requiring defendants to produce a post-discharge audit trail that extended beyond the date of the last entries made to decedent's EMR, finding plaintiff failed to demonstrate the potential for relevant information from such a broad request. 

Plaintiff appeals from the order of the Superior Court, Chancery Division, Family Part, Camden County's dismissing her domestic violence complaint against defendant.  The Family Part found plaintiff failed to satisfy her burden under the second prong of Silver v. Silver, 387 N.J. Super. 112 (App. Div. 2006).  On appeal, plaintiff argued the trial court misapplied the facts to the law regarding Silver's "second inquiry."

The court concluded plaintiff satisfied her burden under both prongs of Silver, and also held the Family Part erred when it considered whether plaintiff's current husband and defendant's father could protect her in the future, when the proper focus of a Silver "second inquiry" should be on defendant's likelihood to continue his course of abusive behavior, not whether external factors exist which might thwart defendant's efforts to continue the abuse.

The court reversed and remanded to the Family Part for entry of a final restraining order against defendant.

          The court affirms the New Jersey Commissioner of Education's final agency decision finding petitioner Stephanie Angus is entitled to sick leave under N.J.S.A. 18A:30-1 during the period the Board of Education of the Borough of Metuchen excluded Angus from working in her position as a tenured teacher, pursuant to a directive from the New Jersey Department of Health, because of her exposure to a person who tested positive for COVID-19.  The court determined Angus qualified for sick leave under N.J.S.A. 18A:30-1's plain language, which in part defines sick leave to include an absence from an employee's "post of duty . . . because he or she has been excluded from school by the school district's medical authorities on account of a contagious disease." 

          The court rejected the Board of Education's claim N.J.S.A. 18A:30-1 qualifies an employee for sick leave when the employee is excluded from school "on account of a contagious disease" only where the employee personally suffers from the disease.  The court reasoned the Board's interpretation is not supported by the statute's plain language.  The court also determined acceptance of the Board of Education's interpretation of N.J.S.A. 18A:30-1 would render the exclusion-from-work-on-account-of-a-contagious-disease sick leave qualification superfluous because the statute otherwise separately defines sick leave to include an employee's absence from work where the employee suffers a personal disability due to an illness.  

At issue in this appeal is whether a warrant is required to seize a vehicle pursuant to the plain-view exception.  The court granted the State leave to appeal from a Law Division order, which suppressed evidence seized from a motor vehicle that police believed defendant used during the commission of a fatal shooting.  The motion judge essentially reasoned police improperly impounded the car because probable cause did not arise spontaneously prior to the warrantless seizure.  The judge suppressed the evidence seized, following issuance of a warrant to search the car, as fruit of the poisonous tree.

The State argued police were permitted to seize the vehicle pursuant to the plain-view exception to the warrant requirement while they awaited issuance of the search warrant.  The State further contended the "unforeseeability and spontaneity" requirement espoused in State v. Witt, 223 N.J. 409 (2015), applies to the automobile – not the plain-view – exception to the warrant requirement. 

The court concludes the motion judge mistakenly conflated the discrete rules for the warrantless search and seizure of an automobile, and erroneously reintroduced the inadvertence prong of the plain-view exception to the warrant requirement, eliminated by our Supreme Court in State v. Gonzales, 227 N.J. 77 (2016).  The court therefore reverses the Law Division order and remands for further proceedings. 

Plaintiff Delaware River Joint Toll Bridge Commission (Commission) is a bi-state entity created by an interstate compact between the State of New Jersey and the Commonwealth of Pennsylvania and approved by the United States Congress.  In this matter, arising out of a construction project to replace the Scudder Falls Bridge that connects the two states, the court considered whether the Commission was authorized to approve, use, and enforce a project labor agreement (PLA) as a mandatory requirement in its bid specifications.  

This mandate required all bidding contractors and subcontractors to enter into a PLA with certain named unions affiliated with the local building and construction trades councils, recognizing those unions as the sole and exclusive bargaining representatives of the bidder's project workforce.

Defendant George Harms Construction Co. was prevented from bidding on the project because it was a party to a collective bargaining agreement with United Steel Workers (USW), which was excluded from the PLA.  Harms threatened to seek an injunction if the Commission did not add USW as a signatory union to the PLA.

Only one company bid on the project, submitting a bid $69 million over the projected cost of the project and $71 million more than Harms' projected bid.

The Commission sought a declaratory judgment permitting it to award the contract, including the PLA, to the successful bidder.  Harms answered and asserted numerous counterclaims, including a violation of competitive bidding laws.  The trial court dismissed the complaint as moot (the project was completed during the litigation) and granted summary judgment to the Commission on the counterclaims.

The court preliminarily determined the issue was not moot because of the importance of interstate compacts and the high likelihood that the Commission would use a PLA in a future contract.

The issue, then, was whether the Commission had the authority under its compact to approve and use a PLA in its bidding process.  The compact itself is silent on PLAs.  Therefore, the panel looked to the two states' treatment of PLAs.

The court engaged in an extensive analysis of the case law and legislative history in New Jersey and Pennsylvania regarding PLAs.  Currently New Jersey has a statute governing PLAs, N.J.S.A. 52:38-1 to -7.  Pennsylvania does not have any legislation.  The case law, emanating from the Commonwealth Court disfavors PLAs unless the project involves "extraordinary circumstances" and the PLA treats union and nonunion contractors evenly.  Therefore, New Jersey and Pennsylvania do not have parallel or substantially similar state legislation or common law regarding the use of PLAs.

The court concluded the Commission did not have the power to create and authorize use of the mandatory PLA for its project because: (1) there is no express authority for unilateral action in the compact; (2) New Jersey and Pennsylvania have not enacted complementary or parallel legislation and do not have similar common law on PLAs; and (3) the Commission has not consented to exercise of single-state jurisdiction.

The court affirmed the dismissal of the declaratory judgment complaint, albeit for different reasons than articulated by the trial court.  The court reversed the dismissal of the counterclaims and remanded to the trial court.

Section 543(a)(1) of the Cable Act does not preempt the proration requirement in N.J.A.C. 14:18-3.8. The regulation does not regulate “rates for the provision of cable service,” but rather prevents cable companies from charging for cable service that customers have cancelled. The regulation does not set the “rate” that companies can charge. It simply protects cable users from paying for service they no longer want. Furthermore, contrary to Altice’s alternative argument, neither Altice nor its predecessor sought or received a BPU waiver from prorating cable bills.

     Plaintiff filed a products-liability complaint against defendant, alleging the invisible tooth aligners he purchased on-line damaged his teeth and resulted in lasting injuries.  Defendant moved to dismiss the complaint, citing an arbitration provision that was embedded in the first of three hyperlinked underlined documents that appeared in different colored font.  The hyperlinked document, entitled "Informed Consent," included not only the arbitration agreement but also explanations of the benefits and risks of using the aligners, representations by plaintiff regarding his oral health, and his consent to the treatment.  Users could not proceed to open an account and order the aligners unless they clicked on a box next to the three hyperlinked documents, "I Agree," and another button, "FINISH MY ACCOUNT."
      The Law Division denied defendant's motion, relying extensively on our recent decision in Wollen v. Gulf Stream Restoration & Cleaning, LLC, 468 N.J. Super. 483 (App. Div. 2021).  The court reversed, drawing distinctions between the "browsewrap" agreement at issue in Wollen, and the "clickwrap" agreement in this case.  See, e.g., Skuse v. Pfizer, Inc., 244 N.J. 30, 55 n.2 (2020) ("Contracts that require 'that a user consent to any terms or conditions by clicking on a dialog box on the screen in order to proceed with the internet transaction' are sometimes called 'clickwrap' agreements," and "are 'routinely enforced by the courts.'"  Skuse, 244 N.J. at 55 n.2 (first quoting Feldman v. Google, Inc., 513 F. Supp. 2d 229, 236 (E.D. Pa. 2007); and then quoting HealthPlanCRM, LLC v. AvMed, Inc., 458 F. Supp. 3d 308, 334–35 (W.D. Pa. 2020)).

     The court determined an insured's satisfaction of its deductible or copayment obligation under a standard automobile policy does not operate to also reduce the $15,000 statutory Personal Injury Protection (PIP) limits of liability.  In reaching its decision, the court examined the policies' declaration pages, PIP policy provisions, and the incorporated Buyer's Guide, and concluded Travelers did not clearly express to reasonable insureds, like plaintiffs, that the limits of liability would be reduced if their claims exceeded $15,000.  The court also evaluated the legislative history of New Jersey's no-fault scheme and determined its decision did not violate the Legislature's overarching goal of reducing the costs of auto insurance.  
     Further, the court held absent legislative and regulatory approval, defendant was likely precluded from providing less than $15,000 of PIP medical expense benefits, regardless of the clarity of its policies or declaration pages.  Finally, the court distinguished our previous decision in IMO Industries Inc. v. Transamerica Corp., 437 N.J. Super. 577, 622 (App. Div. 2014), as that case involved a commercial general liability policy between sophisticated parties and relied in part on Benjamin Moore & Co. v. Aetna Co., 179 N.J. 87, 93 (2004), which involved a commercial general liability policy whose express language clearly indicated to the insured that the insurer's limit was reduced by the policy's deductible.  

The Court reverses as to all three issues and remands for a new trial. The Court prescribes a framework for trial courts to assess requests for access to internal affairs records and provides guidance for the application of that framework on remand in this case. Because the defense argues Officer Lee discharged his firearm first, defense counsel could potentially be allowed to explore Officer Lee’s history of past shootings on cross-examination. On remand, defendant will be entitled to access the internal affairs file as outlined in the Court’s opinion, and that evidence may be used to cross-examine Officer Lee subject to any objections pursuant to N.J.R.E. 403 or 404(b). Detective Green’s testimony was based entirely on his lay opinion from watching the video, which was impermissible under N.J.R.E. 701. The video was already in evidence, so the jury was able to view the video and determine for themselves what the video showed. Finally, applying the factors in N.J.R.E. 609(b)(2), it was error for the trial court to admit defendant’s remote convictions because the State did not meet its burden of establishing that the probative value outweighed the prejudicial effect of admitting the old convictions.