Can I sue for anything? What are the limits of bringing a law suit in New Jersey?
Dean v. Harrah’s Casino Decided December 13, 2018 New Jersey Appellate Division Unreported Decision
Submitted by New Jersey Personal Injury Lawyer, Jeffrey Hark
This is a great case to review to learn what a plaintiff’s attorney must do in order to first establish s/he has the facts and law on his side to bring a law suit. If the facts are debated, that is OK. However, if there are no factual dispute and no law to support the actual law suit, then the claim should not be brought. This case addresses that type of claim.
Facts:
Plaintiff, a customer at Harrah’s Resort Atlantic City, was injured when she was knocked over by an unidentified minor running through the casino. The incident was captured on a security camera, but no one was able to identify the minor or his parent who was with him at the time. Plaintiff incurred substantial medical expenses from her fall. Plaintiff sued the casino, arguing that it breached a hypothesized duty to detain the minor who may have caused her fall and the minor’s parent so that they could be identified for a potential future lawsuit.
Procedural History
The defendant casino sent two “safe harbor” letters to plaintiff’s counsel pursuant to Rule 1:4-8(b)(1), placing plaintiff on notice that defendant regarded the lawsuit to be frivolous and demanding it to be withdrawn. Plaintiff nonetheless elected to continue to pursue the case. After discovery ended, the case was heard by a two-member non-binding arbitration panel in Atlantic County pursuant to Rule 4:21A-1(a)(2). The panel recommended a “no-cause” disposition.
Plaintiff rejected the arbitration result and demanded a trial de novo. Defendant then moved for summary judgment, on the basis that plaintiff lacked a viable cause of action, even viewing the facts in a light most favorable to her. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). After considering plaintiff’s opposition,1 the court granted summary judgment and dismissed the complaint with prejudice.
Defendant then moved for sanctions under Rule 1:4-8 and N.J.S.A. 2A:15- 59.1(b)(2). Plaintiff opposed that motion, asserting the litigation had been appropriately pursued based on existing law or “a non-frivolous argument for the extension, modification, or reversal of existing law or the establishment of new law.” R. 1:4-8(a)(2).
Legal Standard
First the Appellate court reviewed its ability to overturn a trial judge’s exercising of his/her discretion and vacate the judge’s ruling. It stated the standard of review. “Our scope of review of the trial court’s sanctions ruling is limited. As the briefs of both parties agree, appellate courts generally are to review an award of sanctions under Rule 1:4-8 and N.J.S.A. 2A:15-59.1 by evaluating whether the trial court abused its discretion. See, e.g., McDaniel v. Man Wai Lee, 419 N.J. Super. 482, 498 (App. Div. 2011); see also Masone v. Levine, 382 N.J. Super. 181, 193 (App. Div. 2005). This deferential standard is appropriate, given the high volume of cases litigated in our civil trial court, and the perspective and day-to-day experience our civil judges have in distinguishing colorable claims from untenable ones.” Applying this deferential standard of review, we discern no abuse of discretion, nor any error of law, in the trial court’s determination.
The Statute:
2A:15-59.1. Frivolous causes of action
- a. (1) A party who prevails in a civil action, either as plaintiff or defendant, against any other party may be awarded all reasonable litigation costs and reasonable attorney fees, if the judge finds at any time during the proceedings or upon judgment that a complaint, counterclaim, cross-claim or defense of the nonprevailing person was frivolous.
(2) When a public entity is required or authorized by law to provide for the defense of a present or former employee, the public entity may be awarded all reasonable litigation costs and reasonable attorney fees if the individual for whom the defense was provided is the prevailing party in a civil action, and if there is a judicial determination at any time during the proceedings or upon judgment that a complaint, counterclaim, cross-claim, or defense of the nonprevailing party was frivolous.
b. In order to find that a complaint, counterclaim, cross-claim or defense of the nonprevailing party was frivolous, the judge shall find on the basis of the pleadings, discovery, or the evidence presented that either:
(1) The complaint, counterclaim, cross-claim or defense was commenced, used or continued in bad faith, solely for the purpose of harassment, delay or malicious injury; or
(2) The nonprevailing party knew, or should have known, that the complaint, counterclaim, cross-claim or defense was without any reasonable basis in law or equity and could not be supported by a good faith argument for an extension, modification or reversal of existing law.
c. A party or public entity seeking an award under this section shall make application to the court which heard the matter. The application shall be supported by an affidavit stating in detail:
(1) The nature of the services rendered, the responsibility assumed, the results obtained, the amount of time spent by the attorney, any particular novelty or difficulty, the time spent and services rendered by secretaries and staff, other factors pertinent in the evaluation of the services rendered, the amount of the allowance applied for, an itemization of the disbursements for which reimbursement is sought, and any other factors relevant in evaluating fees and costs; and
(2) How much has been paid to the attorney and what provision, if any, has been made for the payment of these fees in the future.
The Court Rule:
Rule 1:4-8, “Frivolous Litigation,” states in pertinent part as follows:
(a) Effect of Signing, Filing or Advocating a Paper. The signature of an attorney or pro se party constitutes a certificate that the signatory has read the pleading, writtenmotion or other paper. By signing, filing or advocating a pleading, written motion, or other paper, an attorney or pro se party certifies that to the best of his or her knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:
(1) the paper is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;
(2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a non-frivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;
(3) the factual allegations have evidentiary support or, as to specifically identified allegations, they are either likely to have evidentiary support or they will be withdrawn or corrected if reasonable opportunity for further investigation or discovery indicates insufficient evidentiary support; and
(4) the denials of factual allegations are warranted on the evidence or, as to specifically identified denials, they are reasonably based on a lack of information or belief or they will be withdrawn or corrected if a reasonable opportunity for further investigation or discovery indicates insufficient evidentiary support.
(b) Motions for Sanctions.
(1) Contents of Motion, Certification. An application for sanctions under this rule shall be by motion made separately from other applications and shall describe the specific conduct alleged to have violated this rule. No such motion shall be filed unless it includes a certification that the applicant served written notice and demand pursuant to R. 1:5-2 to the attorney or pro se party who signed or filed the paper objected to. The certification shall have annexed a copy of that notice and demand, which shall (i) state that the paper is believed to violate the provisions of this rule, (ii) set forth the basis for that belief with specificity, (iii) include a demand that the paper be withdrawn, and (iv) give notice, except as otherwise provided herein, that an application for sanctions will be made within a reasonable time thereafter if the offending paper is not withdrawn within 28 days of service of the written demand. If, however, the subject of the application for sanctions is a motion whose return date precedes the expiration of the 28-day period, the demand shall give the movant the option of either consenting to an adjournment of the return date or waiving the balance of the 28-day period then remaining. A movant who does not request an adjournment of the return date as provided herein shall be deemed to have elected the waiver. The certification shall also certify that the paper objected to has not been withdrawn or corrected within the appropriate time period provided herein following service of the written notice and demand.
No motion shall be filed if the paper objected to has been withdrawn or corrected within 28 days of service of the notice and demand or within such other time period as provided herein.
(2) Time for Filing; Attorney’s Fees. A motion for sanctions shall be filed with the court no later than 20 days following the entry of final judgment.
(3) Scope of Responsibility. Except in extraordinary circumstances, a law firm shall be jointly responsible for violations committed by its partners, shareholders, associates and employees.
(d) Order for Sanctions. A sanction imposed for violation of paragraph (a) of this rule shall be limited to a sum sufficient to deter repetition of such conduct. The sanction may consist of (1) an order to pay a penalty into court, or (2) an order directing payment to the movant of some or all of the reasonable attorneys’ fees and other expenses incurred as a direct result of the violation, or both.
Among the factors to be considered by the court in imposing a sanction under (2) is the timeliness of the movant’s filing of the motion therefor. In the order imposing sanctions, the court shall describe the conduct determined to be a violation of this rule and explain the basis for the sanction imposed.
(f) Applicability to Parties. To the extent practicable, the procedures prescribed by this rule shall apply to the assertion of costs and fees against a party other than a pro se party pursuant to N.J.S.A. 2A:15-59.1 (emphasis added).
Legal Analysis:
With regard to the award of sanction against the plaintiff’s attorney in this case, the court ruled that the attorney has an affirmative (actual) duty to make a reasonable investigation of the claim to insure that there is a ‘reasonable basis in fact and law…. or a good faith argument for an extension of existing case law”. The court specifically stated: “We accept for purposes of our discussion that plaintiff and her counsel did not act in bad faith in continuing with the lawsuit after receiving the timely “safe harbor” letters from defense counsel. However, even if a claim is not frivolous under N.J.S.A. 2A:15-59.1(b)(1) because it has not been pursued “in bad faith, solely for the purpose of harassment, delay or malicious injury,” the claim alternatively may be deemed frivolous under subsection (b)(2) of the statute if “[t]he nonprevailing party knew, or should have known, that the [claim] was without any reasonable basis in law or equity and could not be supported by a good faith argument for an extension, modification, or reversal of existing law.” N.J.S.A. 2A:15-59.1(b)(2). See also Wyche v. Unsatisfied Claim Fund, 383 N.J. Super. 554, 560-61 (App. Div. 2006) (applying analogous concepts expressed in Rule 1:4-8). The trial court appropriately relied on this portion of the statute in its analysis.
The letter plaintiff’s counsel sent to defense counsel in response to the safe harbor correspondence maintained that the casino was liable under an asserted duty to “keep the evidence in tact [sic].” However, that letter cited to no supporting legal authority. On appeal, plaintiff’s brief likewise cites to no case or specific authority from which a duty could be extended. During oral argument on the sanctions motion, the trial court asked plaintiff’s counsel if he could cite to any case from “any jurisdiction” recognizing a legal duty of a property owner to detain a third party customer after an injury, and counsel provided in response no citation but only alluded generally to a premises owner’s duty to keep its property “reasonably safe.” Our statutes and court rules do not wish to discourage inventive or creative lawyering. Even so, the circumstances of this particular case, in absence of at least colorable or analogous support for plaintiff’s claims cited in case law or statute, reflect the trial court did not abuse its discretion in awarding sanctions.
There has been a significant amount of case law interpreting N.J.S.A. 2A:15-59.1 and Rule 1:4-8. The Courts of New Jersey have been cautioned to interpret the statute and rule restrictively “to ensure that our citizens are not dissuaded from accessing the courts.” McKeown-Brand v. Trump Castle Hotel & Casino, 132 N.J. 546, 561-562 (1993). Conversely, however, Courts must also deter baseless litigation, without discouraging honest, creative advocacy. Ellison v. Evergreen Cemetery, 266 N.J. Super. 74, 85 (App. Div. 1993). Very significantly, in doing so, the case record is to be reviewed to determine whether a party’s actions were objectively reasonable under the circumstances.
In Toll Brothers, Inc. v. Township of Windsor et al., 190 N.J. 61, 67 (2007), our New Jersey Supreme Court recognized that the statute “serves a dual purpose. On the one hand, the statute serves a punitive purpose, seeking to deter frivolous litigation. On the other hand, the statute serves a compensatory purpose, seeking to reimburse the party that has been victimized by the party bringing the frivolous litigation.” “While it is clear that Rule 1:4-8 has a punitive purpose in seeking to deter frivolous litigation, it also seeks to compensate a party that has been victimized by another party bringing frivolous litigation.” Alpert, Goldberg, Butler, Norton & Weiss, P.C. v. Quinn, 410 N.J. Super. 510 (App. Div. 2009).
Rule 1:4-8 was “designed to ensure that attorneys do not initiate or pursue litigation that is frivolous.” LoBiondo v. Schwartz, 199 N.J. 62, 98 (2009). The explicit language of the rule specifically obliges an attorney to certify that their client’s position has merit, or will be withdrawn based upon investigation and discovery. There is a time limitation to the recovery of sanctions, which is the point in the litigation at which it becomes clear that the action is frivolous.
“A claim will be deemed frivolous or groundless when no rational argument can be advanced in its support, when it is not supported by any credible evidence, when a reasonable person could not have expected its success, or when it is completely untenable.” Belfer v. Merling, 322 N.J. Super. 124, 144 (App. Div. 1999), citing Fagas v. Scott, 251 N.J. Super. 169, 189 (Law Div. 1991). “The sanction consists of reasonable counsel fees and litigation costs.” Ferolito v. Park Hill Assoc., Inc., 408 N.J. Super. 401, 407 (App. Div. 2009).
Accordingly, before a claim is brought against a prospective defendant, taketh necessary steps to investigate your claim, the law, and the defendant to insure that there is an appropriate legal and factual basis for your claim.
