Rodriguez v. Shelbourne Spring, LLC, ___ N.J. ___ (2024). The first signed opinion of the current Term was by Justice Fasciale. The Court addressed issues relating to whether Hartford Underwriters Insurance Company, a third-party defendant, was obligated to defend third-party plaintiff SIR Electric in a workplace personal injury action brought by plaintiff, an employee of SIR. The case was before the Court on leave to appeal. Both courts below, acting on Hartford’s motion to dismiss for failure to state a claim, held that Hartford had no duty to defend.
By a 6-0 vote (Justice Hoffman did not participate), the Court held that “Hartford has no duty to defend the employer. The employee’s allegations of simple negligence, gross negligence, and recklessness (the negligence-based claims), which are subject to the workers’ compensation exclusivity bar, are not covered under Part One of the insurance policy and are excluded from coverage under Part Two of the policy.” Plaintiff also asserted intentional tort claims, invoking an exception to the exclusivity of Workers’ Compensation Act remedies that the Court recognized in Laidlow v. Hariton Mach. Co., Inc., 170 N.J. 602 (2002). But the Court found that the policy excludes coverage for intentional wrongdoing, so that SIR could not invoke insurance coverage for an intentional tort claim.
Applying de novo review, Justice Fasciale provided a lengthy and highly useful review of the duty to defend, the workers’ compensation scheme, and the Laidlow exception to that scheme. He then carefully examined the insurance policy at issue and reached the conclusions stated above. Finally, the Court upheld rulings below that had denied SIR leave to amend as futile, finding that “SIR’s belated contention that intentional wrong exclusions are generally inconsistent with public policy” was without basis. Accordingly, SIR’s third-party complaint against Hartford was dismissed.
Thurman v. Volkswagen Group of America, Inc., ___ N.J. Super. ___ (App. Div. 2024). Judge Sabatino wrote the panel’s opinion in this case under the Lemon Law, N.J.S.A. 56:12-29 et seq, The basis for plaintiff’s claim was a crack in he windshield of his vehicle that, as Judge Sabatino described it, “emerged two days after plaintiff had acquired the car. The crack increased in size as time passed, purportedly hindering the driver’s view and creating an alleged safety hazard. Plaintiff promptly reported the crack, a condition covered by the vehicle manufacturer’s warranty, to the manufacturer and the dealership that had sold him the vehicle. Despite plaintiff’s repeated requests to have the windshield repaired or replaced, ten months passed before the defendant manufacturer did so, after plaintiff filed suit. In the meantime, plaintiff contends he restricted his use of the SUV, avoiding highways and driving it with trepidation at lower speeds as the crack worsened. The manufacturer refused to provide him with a loaner vehicle.”
The Law Division granted summary judgment dismissing the Lemon Law claim, on the grounds that defendants eventually repaired the windshield. The Appellate Division reversed. Under the statute, plaintiff was obligated to show that “the subject vehicle manifested a nonconformity defined as a ‘defect or condition that substantially impairs the vehicle’s use, value or safety’; and the manufacturer was unable to remedy the condition in a reasonable amount of time.” A third element– that the problem appeared “during the first 24 months or 24,000 miles of operation”– was indisputably satisfied.
The “substantial impairment” inquiry involved “a mixed objective and subjective approach,” Judge Sabatino said. “The objective component focuses on what a reasonable person in the buyer’s position would have believed about the nonconformity. The subjective component is personalized in the sense that the facts must be examined from the viewpoint of the buyer and his circumstances.”
The Law Division, the panel said, did not adequately apply those factors. “First, the growing length and width of the windshield crack, which Hogan attested had distorted light and impeded his vision, could reasonably have been deemed by a jury to be a substantial impairment of the vehicle’s safety.” A statute that prohibits driving with an “unduly fractured” windshield that causes “undue or unsafe distortion of visibility,” along with cases from other jurisdictions that recognized the dangers of cracked windshields supported that conclusion.
Second, as quoted above, plaintiff had restricted his driving due to the condition of the windshield. Though he had driven 13, 000 miles in the ten months that elapsed until defendants repaired the windshield, “that mileage figure does not necessarily signify that [he] reasonably received the usage of the new vehicle he had anticipated.” Finally, plaintiff’s expert documented reduced market value due to the cracked windshield.
The Law Division “misstated the law in declaring that no Lemon Law claim could be tenable so long as the defect was eventually repaired, overlooking the statute’s ‘reasonable time’ requirement. [Citation]. A jury could rationally conclude from the totality of circumstances that the ten-month repair delay was unreasonably long.” The panel reversed the summary judgment and remanded for further proceedings. Judge Sabatino noted that “Volkswagen’s contention that a replacement windshield was on backorder due to supply chains that were out of its control can be duly considered by a jury as it assesses the reasonableness issue.”