Gibbons Law Alert

Gibbons Law Alert

Tagged: New Jersey Law

Third Circuit Concludes that Tying Arrangement Does Not Violate New Jersey’s Truth-in Consumer Contract, Warranty, and Notice Act

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Posted in General Litigation

On July 12, 2012

The New Jersey Truth-in-Consumer Contract, Warranty, and Notice Act (the “NJ Warranty Act”) prohibits a seller from offering to consumers any warranty containing a provision that violates a “clearly established legal right” under state or federal law. The Third Circuit analyzed the scope of this “clearly established legal right” in its July 2, 2012 opinion in McGarvey v. Penske Auto Group and suggested that a warranty will be upheld absent a blatant violation of law.

New Jersey State Courts Enter the E-Discovery Arena in Earnest; Award Sanctions for Email Spoliation

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Posted in E-Discovery: Legal Decisions and Court Rules

On June 29, 2012

On June 18, 2012, an Appellate Court in New Jersey issued Goldmark v. Mellina, which held that asserting the attorney-client privilege does not excuse counsel and parties from their obligation to preserve relevant e-mails or other documents. There, the Court upheld the trial judge’s award of $5,502.50 in sanctions against a prominent New Jersey law firm because it had failed to timely produce electronic documents, which had temporarily disappeared, even though the lapse was not knowing. Because there were virtually no prior opinions (published or unpublished) addressing e-discovery in this jurisdiction, Goldmark is an important first-step towards providing e-discovery guidance to New Jersey practitioners.

Third Circuit Rules that Car Manufacturers’ Wholesale Price Increases Designed to Recover Warranty Costs to Dealers is Consistent with New Jersey Franchise Protection Act

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Posted in General Litigation

On May 4, 2012

The Third Circuit’s to-be-published opinion in Liberty Lincoln-Mercury, Inc. v. Ford Motor Company, confirms that the New Jersey Franchise Protection Act, N.J.S.A. § 56:10-1 to § 56:10-31, permits motor vehicle franchisors to use permissible cost-recovery systems to recoup the increased cost of reimbursing New Jersey motor vehicle dealers under the Act, but also clarifies that such a cost-recovery system must allow individual dealers to retain the ability to mitigate the increased costs imposed.

Failure to Strictly Comply With the Express Terms of the Notice Provisions in a Claims-Made Insurance Policy Will Forfeit Available Coverage

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Posted in Insurance

On April 26, 2012

The Third Circuit’s recent decision in Atlantic Health System Inc. v. National Union Fire Insurance Company of Pittsburgh confirms the importance of strictly following the notice requirements of a claims-made policy and the relevance of the parties’ course of prior and subsequent performance on the ultimate interpretation of allegedly ambiguous policy terms and conditions. In this case, the failure to strictly comply with the notice requirements resulted in AHS retaining liability for more than $2 million of defense costs and settlement payments.

New Jersey Appellate Division Limits Application of Parol Evidence Rule in Fraudulent Inducement Cases and Finds that Unsophisticated Fraud Claimant Can Only Be Charged With His Actual Knowledge

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Posted in General Litigation

On April 17, 2012

In a to-be-published opinion in Walid v. Yolanda for Irene Couture, Inc., the New Jersey Appellate Division reaffirmed and clarified the scope of the fraudulent inducement exception to the parol evidence rule. The court also clarified the level of knowledge to be imputed to a contracting party when assessing the reasonableness of that party’s reliance on the alleged misrepresentations.

Victory for Accountants: Accountant Third-Party Liability Based on Third-Party’s Access to Accountants’ Work Product Arises Only When Accountant is Explicitly Informed at Outset of Engagement that Third Party Will Rely on Accountant’s Work

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Posted in General Litigation

On March 12, 2012

The New Jersey Supreme Court recently held in Cast Art Industries, LLC v. KPMG LLP that the scope of accountant liability contained in the Accountant Liability Act, N.J.S.A. 2A:53A-25(b)(2)(a), is restricted to clients and third parties who the accountant knew at the start of engagement would have access to the accountant’s work product. N.J.S.A. 2A:53A-25(b)(2) identifies three circumstances when an accountant may be liable to a third party, including when the accountant “knew at the time of the engagement by the client, or agreed with the client after the time of the engagement” that the accountant’s work product would be made available to the third party. The Appellate Division held that an accountant retained to conduct an audit could be liable to a third party who received and relied on the audit so long as the accountant knew at some point during the engagement that the third party would rely on the audit.

New Jersey Chancery Division Determines Insurance Agents are Not Franchises for Purposes of the New Jersey Franchise Practices Act

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Posted in General Litigation

On February 10, 2012

New Jersey insurers and insurance agents must be aware that agents are not entitled to the broad protections of the New Jersey Franchise Practices Act (“NJFPA”) pursuant to a recent Chancery Division decision in DeLuca v. Allstate Insurance Co., in which the Court held that insurance agents do not meet the definition of a “franchise.” The Court thus concluded that Allstate Insurance Company was free to terminate its agents pursuant to the terms of their respective agency agreements, which permitted termination with or without cause.

New Jersey Framework for Analyzing Attorneys’ Fee Awards, Including Contingency Fee Enhancements, Unchanged

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Posted in General Litigation

On February 2, 2012

Last week, the New Jersey Supreme Court reiterated that lawyers who represent clients on a contingency basis in disputes brought under New Jersey laws that permit the recovery of attorneys’ fees can recover an additional fee “enhancement” pursuant to the framework the Court set forth nearly 20 years ago in Rendine v. Pantzer, 141 N.J. 292 (1995) . The decision, Walker v. Guiffre, Case Nos. 72-10, 100-10 (N.J. Jan. 25, 2012), is noteworthy for businesses that all too frequently must weigh the risk of paying their opponents’ attorneys’ fees when deciding whether to settle disputes – particularly those companies that wishfully thought the reins on contingency fee enhancers might be tightened in light of two recent decisions by New Jersey appellate courts.

Lack of Standing and Choice-of-Law Rules Doom Nationwide Consumer Fraud Class Action Against BMW

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Posted in General Litigation

On November 23, 2011

On October 31, 2011, in Nirmul v. BMW, the District Court for the District of New Jersey dismissed a nationwide class action against BMW asserting claims under the New Jersey Consumer Fraud Act (“NJ CFA”), concluding, essentially, that none of the three plaintiffs had a standing to sue. The complaint alleged that the high pressure fuel pump in BMW’s N54 turbo engines had a known defect and that BMW failed to disclose this fact to purchasers throughout the country.

Negotiated Sale of Customized Computer to Sophisticated Business Is Not a Sale of “Merchandise” Within the Meaning of the New Jersey Consumer Fraud Act

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Posted in General Litigation

On November 15, 2011

New Jersey courts have long held that businesses may assert claims under New Jersey’s Consumer Fraud Act (“CFA”) in appropriate circumstances. See Hundred E. Credit Corp. v. Schuster. Whether a business is entitled to assert a CFA claim typically turns on the specific facts of the case and whether the transaction at issue constitutes a “sale of merchandise” within the meaning of the CFA. See N.J.S.A. § 56:8-2. In Princeton Healthcare System v. Netsmart New York, Inc., the Appellate Division confronted this precise issue in holding that Princeton Healthcare, a sophisticated business entity, was not entitled to assert a CFA claim against Netsmart arising out of the sale and implementation of a customized computer system.

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