(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
Joseph Prevratil, et al. v. George Mohr, et al. (A-52-95)
Argued November 28, 1995 -- Decided July 10, 1996
POLLOCK, J., writing for a majority of the Court.
The primary issue on appeal is whether the Court should create an exception from the entire
controversy doctrine for automobile-negligence cases.
On March 2, 1989, Prevratil was operating a vehicle owned by his employer, Benjo Trucking
Company (Benjo), and insured by Royal Insurance. George Mohr was operating a vehicle owned by his
employer, Rich Hill Transportation (Rich Hill). Janet Olsen was operating her own vehicle. The three
vehicles were involved in an accident. Mohr drove his vehicle into the rear of Prevratil's truck which then
struck Olsen's vehicle.
Olsen filed a personal injury action on May 2, 1989, naming Prevratil, Mohr, Benjo and Rich Hill.
Olsen's counsel served a summons and complaint on Prevratil at his home in Long Island City, New York, by
both regular mail and certified mail. Although Prevratil claimed that he never received any notice of the
suit, someone signed his name on the certified-mail return-receipt card.
Benjo's insurer retained the law firm of Crowley & Cross to represent both Prevratil and Benjo. On
June 23, 1989, the firm filed an answer and cross-claim for contribution on Prevratil's behalf. The answer
did not assert any cross-claims or counterclaims for personal injuries to Prevratil.
In a release and stipulation of dismissal with prejudice executed on December 4, 1989, Olsen settled
her claims against Mohr and Rich Hill for $15,000. She dismissed her claims against Prevratil and Benjo.
On November 26, 1990, Prevratil filed suit against Mohr and Rich Hill. Mohr and Hill moved for
summary judgment on the grounds that Prevratil should have asserted his personal injury claims in the Olsen
action. Prevratil contended that he was unaware of the pendency of the Olsen action or Crowley & Cross's
appearance in that action on his behalf.
The trial court conducted a plenary hearing to determine whether Prevratil actually knew about the
Olsen action prior to its resolution. Thereafter, the court found that Prevratil had timely knowledge of the
Olsen litigation because the proofs revealed that: shortly after the accident Prevratil knew of his alleged
injuries; three months after the accident, Prevratil consulted an attorney about filing an action for personal
injuries arising out of the accident; and while the Olsen action was pending, Prevratil consulted an attorney
about filing a workers' compensation claim for the same injuries. Finding no special equities justifying the
exception to the entire controversy doctrine, the trial court granted Mohr's and Hill's motion for summary
judgment.
Prevratil appealed to the Appellate Division. While that matter was pending, another Appellate
Division panel hearing the case of Stebbins v. Robbins permitted a plaintiff in a multi-vehicle accident case
to pursue a personal injury claim despite plaintiff's failure to assert an affirmative claim in a prior related
litigation. The Appellate Division panel hearing the Prevratil matter affirmed the summary judgment
dismissing Prevratil's complaint. The court ruled that absent equitable considerations, automobile-negligence
cases should remain subject to the joinder-of-claims requirement of the entire controversy doctrine as
contained in Rule 4:30A.
The Supreme Court granted Prevratil's petition for certification to resolve the conflict in the
Appellate Division decisions.
HELD: The entire controversy doctrine applies to actions arising out of automobile-accident cases. Litigants
currently involved in negligence litigation shall have time to make a timely application to assert
affirmative claims. In all other cases, litigants in automobile-accident cases must assert any
affirmative claims in the course of a single litigation.
1. The entire controversy doctrine requires, whenever possible, all phases of a legal dispute to be
adjudicated in one action. At a minimum, all parties to a suit should assert all affirmative claims and
defenses arising out of the underlying controversy. The doctrine promotes the goals of efficient judicial
administration and fairness by encouraging the comprehensive and conclusive determination of a legal
controversy. Of course, equitable considerations can relax mandatory-joinder requirements when joinder
would be unfair. This case involves the mandatory joinder of claims. Since 1979, the rules of practice
required defendants in personal-injury actions to assert their claims for personal injuries in the original
action. (pp. 6-15)
2. The Court rejects Prevratil's request that it make an exception for litigants represented by insurance
counsel in the initial litigation. For decades, courts have held that the fact that an insurance carrier's counsel
defended in no way demonstrates the inability of the plaintiff to comply with the Rules of Court. In any
litigation, counsel for an insurer must put the insured's interest ahead of the insurer's. Automobile
negligence cases will not be excepted from the entire controversy doctrine. Since 1979, such cases, like other
litigation, have been subject to the mandatory joinder of all claims arising from a controversy. (pp. 15-19)
3. Rule 4:30A provides a sensible solution to addressing an ever-increasing docket. Although justice will
never be sacrificed for economic considerations, the cost to the public of multiple litigation cannot be
ignored. To prevent any problems arising from the failure of insureds to assert affirmative claims, insurance
companies and their counsel should notify insureds of the requirement of mandatory joinder, explain that
insureds must join all related claims in a pending suit, and advise insureds of the need to seek the advice of
personal counsel regarding affirmative claims. Since insurance companies have been following that practice
for years, problems following that procedure are not anticipated. The Court recognizes the special
considerations arising from the application of the entire-controversy doctrine to automobile-insurance
litigation, particularly when the initial action involves a claim for property damage in the Special Civil Part.
Problems that may arise in that context are manageable. (pp. 19-21)
4. While the Olsen action was pending, Prevratil retained counsel to prosecute both a workers'
compensation claim and a personal-injury action arising from the accident. Thus, ample evidence supports
the judgment of the trial court dismissing Prevratil's complaint. Nonetheless, out of an abundance of
caution, the matter is remanded to the Law Division for further consideration in light of this opinion. The
purpose of the remand is to permit the Law Division to consider the fairness of the dismissal. (pp. 21-22)
5. The dissent fails to recognize that for seventeen years the Rules of Court have required mandatory
joinder of claims in all civil actions, including those arising out of automobile accidents. Moreover, the
dissent's concerns about the effect of the verbal threshold are misplaced. (p. 22)
Judgment of the Appellate Division is REVERSED and the matter is REMANDED to the Law
Division.
JUSTICE STEIN, dissenting, is of the view that the Court's application of the entire controversy
doctrine to litigants represented by assigned insurance counsel is unprecedented, unfair and unjustified.
More importantly, the Court's insistence that all persons injured in a motor vehicle accident file their claims
in the same action, or lose the right to sue, utterly ignores the built-in delay and other practical realities that
influence the management of automobile-negligence cases. The Court's disposition will cause grave harm to
innocent litigants and do virtually no good for the cause of case management. Moreover, the decision
ignores the practical effect of the verbal threshold.
JUSTICES HANDLER, O'HERN, GARIBALDI and COLEMAN join in JUSTICE POLLOCK's
opinion. JUSTICE STEIN filed a separate dissenting opinion. CHIEF JUSTICE WILENTZ did not
participate.
SUPREME COURT OF NEW JERSEY
A-
52 September Term 1995
JOSEPH PREVRATIL and LISA
PREVRATIL, his wife,
Plaintiffs-Appellants,
v.
GEORGE MOHR and RICH HILL,
TRANSPORTATION,
Defendants-Respondents.
Argued November 28, 1995 -- Decided July 10, 1996
On certification to Superior Court,
Appellate Division, whose opinion is reported
at
279 N.J. Super. 652 (1995).
Kenneth S. Javerbaum argued the cause for
appellants (Javerbaum Wurgaft & Hicks,
attorneys; Mr. Javerbaum and Eric G. Kahn, on
the brief).
Modestino Carbone argued the cause for
respondents (McDonald, Nathan & Carbone,
attorneys).
The opinion of the Court was delivered by
POLLOCK, J.
The primary issue is whether we should create an exception from the entire controversy doctrine for automobile-negligence cases. Specifically, the question is whether the entire controversy doctrine bars the personal injury action of plaintiffs, Joseph Prevratil, and his wife, Lisa, when counsel for his employer's insurer defended Prevratil and the employer in
a prior action arising out of the same automobile accident as
gives rise to Prevratil's present action.
The Law Division granted the motion for summary judgment by
defendants George Mohr and Rich Hill, holding that the doctrine
barred plaintiffs' claims. The Appellate Division affirmed,
279 N.J. Super. 652 (1995). We granted Prevratil's petition for
certification,
141 N.J. 97 (1995), and now reverse and remand the
matter to the Law Division.
We hold that the entire controversy doctrine applies to
actions arising out of automobile-accident cases. Likewise,
litigants currently involved in negligence litigation shall have
time to make a timely application to assert affirmative claims.
In all other cases, litigants in an automobile-accident case must
assert any affirmative claims in the course of a single
litigation.
This action arises from a three-vehicle accident on March 2, 1989. Prevratil was operating a vehicle owned by his employer, Benjo Trucking Company (Benjo), and insured by Royal Insurance. Defendant, George Mohr, was operating a vehicle owned by his employer, Rich Hill Transportation (Rich Hill), and Janet Olsen was operating her own vehicle. The vehicles were proceeding on
State Highway 440 in Woodbridge: Mohr, Prevratil, and Olsen.
Mohr drove his vehicle into the rear of Prevratil's truck, which
then struck Olsen's vehicle.
Olsen filed a personal injury action on May 2, 1989, naming
as defendants Prevratil, Mohr, Benjo, and Rich Hill. Olsen's
counsel served a summons and complaint on Prevratil at his
residence, 51-24 35th Street, Long Island City, New York, by both
regular and certified mail. Although Prevratil claimed that he
never had received any notice of the suit, someone signed his
name on the certified-mail return-receipt card.
Benjo's insurer retained the law firm of Crowley & Cross to
represent Prevratil and Benjo. On June 23, 1989, the firm filed
an answer and cross-claim for contribution on Prevratil's behalf.
The answer did not assert any cross-claims or counterclaims for
personal injuries to Prevratil.
Olsen settled her suit within seven months of filing. In a
release and stipulation of dismissal with prejudice executed on
December 4, 1989, Olsen settled her claims against Mohr and Rich
Hill for $15,000. She dismissed her claims against Prevratil and
Benjo.
On November 26, 1990, Prevratil filed the present action
against Mohr and Rich Hill (subsequently described as
defendants). Defendants moved for summary judgment on the ground
that Prevratil should have asserted his personal injury claims in
the Olsen action. Prevratil countered that he was unaware of the
pendency of the Olsen action or Crowley & Cross's appearance in
that action on his behalf.
The trial court reasoned that the application of the entire
controversy doctrine turned on whether Prevratil actually knew
about the Olsen action before its resolution. Consequently, the
court conducted a plenary hearing on July 12, 1993, on that
issue. See Cafferata v. Peyser,
251 N.J. Super. 256, 260 (App.
Div. 1991) (requiring evidential hearing when plaintiff's
knowledge of initial suit is disputed); Madison Indus. v. Eastman
Kodak,
243 N.J. Super. 578, 585 (App. Div. 1990) (affirming fact-finding hearing to resolve summary judgment on intent of
parties). The purpose of the hearing was to conduct limited
fact-finding before ruling on the motion for summary judgment.
The procedure is eminently sensible. If a court can determine a
matter on summary judgment by recourse to limited fact-finding, a
plenary trial on all issues is inefficient and unnecessary.
At the hearing, defendants contended that Prevratil's answer to Olsen's complaint, filed on Prevratil's behalf by Crowley &
Cross, showed that Prevratil had been properly served.
Defendants submitted correspondence from Patrick W. Foley,
Olsen's attorney, to Crowley & Cross after it filed Prevratil's
answer. The letter stated that Foley had been unable to serve
Benjo. Defendants reasoned that Prevratil must have received the
complaint and forwarded it to Benjo, who then forwarded it to
Royal Insurance, which finally forwarded it to Crowley & Cross.
Otherwise, Crowley & Cross would not have filed Prevratil's
answer to the complaint. Prevratil countered that the omission
of an answer on behalf of Benjo was a mere oversight.
To substantiate that Prevratil had been served with the
Olsen complaint, defendants introduced the certified-mail return-receipt card bearing Prevratil's signature. The complaint had
been sent by regular and certified mail to Prevratil's residence
in Long Island City. Neither the complaint nor any other
correspondence regarding the Olsen action sent by Foley or by
Crowley & Cross to Prevratil had been returned as undelivered.
Prevratil conceded that he had received other official documents,
such as tax returns and worker's compensation checks, at his Long
Island City residence. He denied, however, that the signature on
the receipt card was his and explained that a neighbor might have
signed his name.
The trial court concluded that Prevratil had timely
knowledge of the Olsen litigation. The proofs also revealed that
shortly after the accident Prevratil knew of his alleged
injuries. Three months after the accident, Prevratil consulted
his personal attorney about filing an action for personal
injuries arising out of the accident. While the Olsen action was
pending, moreover, Prevratil consulted an attorney about filing a
worker's compensation claim for the same injuries. Finding no
special equities justifying an exception to the entire
controversy doctrine, the trial court granted defendants' motion
for summary judgment.
Prevratil appealed to the Appellate Division. While the
appeal was pending, another part of the Appellate Division
permitted a plaintiff in a multi-vehicle accident case to pursue
a personal injury claim despite plaintiff's failure to assert an
affirmative claim in prior related litigation. Stebbins v.
Robbins,
278 N.J. Super. 439 (1995). In the present case,
however, the Appellate Division affirmed the summary judgment
dismissing Prevratil's complaint. It ruled that absent equitable
considerations, automobile-negligence cases should remain subject
to the joinder-of-claims requirements of the entire controversy
doctrine as contained in Rule 4:30A. 279 N.J. Super. at 657.
We granted Prevratil's petition for certification to resolve
the conflict in the Appellate Division decisions. We agree that
automobile-accident cases should be subject to the rules
pertaining to the mandatory joinder of claims, R. 4:27, and to
the entire controversy doctrine, R. 4:30A. To assure the
fairness of the dismissal of Prevratil's action, however, we
reverse the judgment of the Appellate Division and remand the
matter to the Law Division.
Rule 4:30A states:
Non-joinder of claims or parties required to
be joined by the entire controversy doctrine
shall result in the preclusion of the omitted
claims to the extent required by the entire
controversy doctrine, except as otherwise
provided by R. 4:64-5 (foreclosure actions)
and R. 4:67-4(a) (leave required for
counterclaims or cross-claims in summary
actions).
See also R. 4:7 (making mandatory counterclaims not asserted
subject to preclusion under R. 4:30A); R. 4:5-1 (requiring
identification of any other pending or contemplated action in any
other court or arbitration proceeding involving same
controversy).
During the pendency of Olsen's action, Rule 4:27-1(b), the predecessor of Rule 4:30A, provided: "Each party to an action
shall assert therein all claims which he may have against any
other party thereto insofar as may be required by application of
the entire controversy doctrine." Rule 4:30A replaced and
modified Rule 4:27-1(b) by extending mandatory joinder beyond
claims to parties. In this case, however, we are concerned only
with the mandatory joinder of claims. Since September 10, 1979,
when subparagraph (b) was added to Rule 4:27-1, the Rules
Governing the Courts of the State of New Jersey have required the
mandatory joinder of all claims as required by the entire
controversy doctrine. Thus, for ten years preceding the date of
accident that gives rise to Prevratil's claim, the rules of
practice required defendants in personal-injury actions to assert
their claims for personal injuries in the original action.
Generally speaking, the entire controversy doctrine requires whenever possible all phases of a legal dispute to be adjudicated in one action. At a minimum, all parties to a suit should assert all affirmative claims and defenses arising out of the underlying controversy. Cogdell v. Hospital Ctr., 116 N.J. 7, 15 (1989). The doctrine, which promotes the twin goals of efficient judicial administration and fairness, encourages the comprehensive and conclusive determination of a legal controversy. Mystic Isle Development Corp. v. Perskie & Nehmad, 142 N.J. 310, 322 (1995); Crispin v. Volkswagenwerk, A.G., 96 N.J. 336, 349 (1984). It
stems directly from the principles underlying the doctrine of res
judicata or claim preclusion.
So deeply rooted in the administration of the judicial
system is the doctrine that it attained constitutional status in
the 1947 Constitution:
Subject to the rules of the Supreme Court,
the Law Division and the Chancery Division
shall each exercise the powers and functions
of the other division when the ends of
justice so require, and legal and equitable
relief should be granted in any cause so that
all matters in controversy between the
parties may be completely determined.
[N.J. Const. art. VI, § 2, ¶ 4].
Even before the 1947 Constitution, courts recognized the
doctrine as an efficient means of administering justice. See,
e.g., Smith v. Red Top Taxicab Corp.,
111 N.J.L. 439, 440-41 (E.
& A. 1933) (stating that "[n]o principle of law is more firmly
established than that a single or entire cause of action cannot
be subdivided into several claims, and separate actions
maintained thereon"); Mantell v. International Plastic Harmonica
Corp.,
141 N.J. Eq. 379, 393 (E. & A. 1947) (declaring equity
court may render "final determination of the entire controversy"
to further "the policy of avoiding `a multiplicity of suits'").
Early interpretations of the entire controversy doctrine led
to rulings that the Chancery Division should adjudicate the legal
issues of a case, even when the equitable issues had been
determined previously. Steiner v. Stein,
2 N.J. 367, 378 (1949);
see also Tumarkin v. Friedman,
17 N.J. Super. 20, 24 (App. Div.
1951) (ruling that county court was authorized to resolve both
legal and equitable issues of suit properly filed in its
jurisdiction) certif. denied,
9 N.J. 287 (1952). In Massari v.
Einsiedler,
6 N.J. 303, 313 (1951), the Court broadened the reach
of the doctrine by requiring joinder of defenses. See also
Applestein v. United Bd. & Carton Corp.,
35 N.J. 343, 356 (1961)
(stating that a defendant "must assert all matters which will
defeat a claim against him and a plaintiff must seek complete
relief for vindication of the wrong he charges"). The Court
precluded a claimant who had been a defendant in an earlier
action from asserting a claim in a later action that could have
been asserted as a defense in the earlier one. 6 N.J. at 311-12.
The Court in Ajamian v. Schlanger,
14 N.J. 483, cert.
denied,
348 U.S. 835,
75 S. Ct. 58,
99 L. Ed. 659 (1954),
extended the doctrine by precluding such proceedings by the
plaintiff. The Court held that a plaintiff's failure to raise a
claim for damages in a proceeding in which he had sought
rescission of an allegedly fraudulent contract barred a later
action for money damages. Id. at 488-89.
Justice Brennan, writing for the Court, explained that the
procedural reform was
designed and purposed for the just and
expeditious determination in a single action
of the ultimate merits of an entire
controversy between litigants. It is a
fundamental objective of this procedural
reform to avoid the delays and wasteful
expense of the multiplicity of litigation
which results from splitting of a
controversy.
Moreover, "to sanction [one party's] holding in reserve his one available remedy for the purpose of attack in another suit, would be utterly destructive of the policy . . . . 'To hold otherwise would be to revive one of the worst defects of the old order and to do violence to both the letter and the spirit of the new Constitution.'" Id. at 489 (quoting State ex rel. Wm. Eckelmann, Inc. v. Jones, 4 N.J. 374, 383 (1950)); see also Falcone v. Middlesex County Medical Soc'y, 47 N.J. 92 (1966) (stating that elemental considerations of fairness to other party and judicial economy dictate all of plaintiff's claims arising from same occurrence be joined in a single proceeding). In Vacca v. Stika, 21 N.J. 471 (1956), we further broadened the doctrine by requiring representative parties to assert counterclaims in one suit. Id. at 476; see Korff v. G & G Corp., 21 N.J. 558, 571-72 (1956) (broadening doctrine to include defendant's counterclaim
against nonresident plaintiff who voluntarily instituted a
lawsuit in New Jersey).
The Appellate Division in Wm. Blanchard Co. v. Beach
Concrete Co.,
150 N.J. Super. 277, certif. denied,
75 N.J. 528
(1977), identified the underlying transaction, not the nature of
the plaintiff's cause of action, as defining the limit of the
action. In a factually complex dispute, the Appellate Division
barred a series of cross-claims and counterclaims that co-parties
in an earlier action had failed to assert. Id. at 287. The
court ruled that the entire controversy doctrine required that
defendants assert not only claims deriving from plaintiff's cause
of action, but also any and all cross-claims and counterclaims
arising out of the underlying transaction. Id. at 294.
In the following year, the Appellate Division barred a shareholder's suit for alleged breach of an oral agreement to make a loan to the corporation, when the suit was brought two years after the corporation had lost a suit brought by the bank. Malaker Corp. Stockholders Protective Comm. v. First Jersey Nat'l Bank, 163 N.J. Super. 463, 468 (1978), certif. denied, 79 N.J. 488 (1979). Although the shareholders were not parties to the earlier action, the court dismissed the second suit on the basis of the entire controversy doctrine and Rule 4:7-1, which requires
mandatory joinder of counterclaims seeking liquidated damages.
Id. at 496-500.
Thus the entire controversy doctrine encompasses "virtually
all causes, claims, and defenses relating to a controversy."
Cogdell, supra, 116 N.J. at 16. In essence, "it is the factual
circumstances giving rise to the controversy itself, rather than
a commonality of claims, issues or parties, that triggers the
requirement of joinder to create a cohesive and complete
litigation." Mystic Isle, supra, 142 N.J. at 323 (citing
DiTrolio v. Antiles,
142 N.J. 253, 267-68 (1995)).
In 1979, we incorporated into our court rules the policy of mandatory joinder of claims and defenses. Ultimately, the application of the doctrine depends on the exercise of judicial discretion in the facts of each case. Mystic Isle, supra, 142 N.J. at 323. Thus, equitable considerations can relax mandatory-joinder requirements when joinder would be unfair. See ibid. (noting that doctrine does not apply to bar component claims that are "unknown, unarisen, or unaccrued at the time of the original action"); Cafferata, supra, 251 N.J. Super. at 260 (stating that doctrine does not bar transactionally-related claims of which party was unaware during pendency of prior litigation). In sum, the entire controversy doctrine compels
litigants at the risk of preclusion to assert all claims in a
single controversy.
The mandatory joinder of parties has evolved more
tentatively than the mandatory joinder of claims. Before our
decision in Crispin, supra, we had declined to extend the entire
controversy doctrine to the mandatory joinder of parties. See,
e.g., Thornton v. Potamkin Chevrolet,
94 N.J. 1, 5 (1983)
(stating that "[t]he essence of that policy is the joinder of
claims and not parties"); Aetna Ins. Co. v. Gilchrist Bros.,
Inc.,
85 N.J. 550, 556-60 (1981); McFadden v. Turner,
159 N.J.
Super. 360, 369 (App. Div. 1978) (holding that "entire
controversy doctrine "[i]s a rule of mandatory joinder of claims,
not of parties," so plaintiff's suit against nurses for injuries
sustained during stay at hospital may proceed even though verdict
already won against hospital for same injuries). In Crispin,
however, we recognized that joinder of known parties in a single
pending action, especially in complex negligence cases, should be
the norm. 96 N.J. at 343. Consistent with the equitable
principles of the entire controversy doctrine, we decided to
proceed on a case-by-case basis, "recognizing that the doctrine
is one of judicial fairness and will be invoked in that spirit."
Ibid.
Beginning with Cogdell, we extended the entire controversy
doctrine to the joinder of parties. 116 N.J. at 26. Shortly
after rendering the decision in Cogdell, we adopted Rule 4:30A,
thereby codifying the mandatory joinder of both claims and
parties. Last year we applied the doctrine to four cases
involving party joinder. See Mortgagelinq Corp. v. Commonwealth
Land Title Ins. Co.,
142 N.J. 336 (1995) (barring claims against
parties omitted from earlier action in another jurisdiction if
jurisdiction was available in the first forum); Mystic Isle,
supra, 142 N.J. at 325, 334 (barring legal-malpractice claims
arising from real estate development suit because developer
failed to join attorneys as defendants in first litigation);
Circle Chevrolet v. Giordano, Halleran & Ciesla,
142 N.J. 280
(1995) (barring attorney-malpractice claims for failure to join
attorneys and assert claims in underlying action against landlord
for reformation of commercial lease agreement); DiTrolio, supra,
142 N.J. at 279 (barring physician's suit against members of
hospital staff because of failure to join them as defendants in
prior suit against hospital).
Those decisions have attracted some criticism from academicians and the bar. See Geoffrey C. Hazard, Jr., An Examination Before and Behind the Entire Controversy Doctrine, New Jersey Institute for Continuing Legal Education, Entire Controversy Doctrine, Seminar Material (1996) (criticizing the
party-joinder requirements of the entire controversy doctrine as
introducing unnecessary uncertainty into complex civil
litigation, but noting that claims-joinder decisions prior to
Cogdell are consistent with the principles of res judicata);
Albert L. Cohn & Terri A. Smith, Practice and Malpractice after
Circle Chevrolet, New Jersey Institute for Continuing Legal
Education, Entire Controversy Doctrine, Seminar Material (1996)
(articulating the pitfalls created by requirement in Circle
Chevrolet of mandatory joinder of attorneys for malpractice
claims in underlying suit); see also Russ Bleemer, First Thing
You Do, Sue All the Lawyers,
141 N.J.L.J. 1 (Aug. 7, 1995)
(interpreting the court's opinions as stating "[s]ue early and
sue everyone, including your own lawyer"). The criticism,
however, is limited to the application of the entire controversy
doctrine to the joinder of parties, particularly to the joinder
of attorneys for the purpose of asserting potential malpractice
claims. Whatever problems may inhere in party joinder do not
apply to the issue in the present case, which concerns only the
joinder of claims.
In 1989, when Olsen filed her action, neither the court rules nor the case law made any exception from the entire controversy doctrine for automobile cases. During the pendency
of this appeal, the Appellate Division rendered conflicting
decisions on the issue.
Burrell v. Quaranta,
259 N.J. Super. 243, (App. Div. 1992),
involved facts almost identical to those in this case. Burrell
was injured in a three-car accident. One driver initially filed
an action against the other drivers, including Burrell. The
insurance carrier's counsel represented Burrell in that action.
Subsequently, Burrell filed a separate personal injury action
against the same parties. The trial court barred Burrell's
action on the basis of the entire controversy doctrine, and the
Appellate Division affirmed.
In Stebbins v. Robbins, 278 N.J. Super. 439 (App. Div. 1995), however, another part of the Appellate Division reached a contrary result. Stebbins was operating a jitney bus when a jeep collided with the bus. In three separate actions, the jeep passengers sued the operators of both vehicles. Stebbins had retained personal counsel shortly after the accident, but had not asserted an affirmative claim in the original suit. After two of the cases settled, Stebbins filed a personal injury action against the owner and operator of the jeep. The court permitted Stebbins to maintain his personal injury action. It reasoned that a contrary result would deprive the plaintiffs of personal injury claims while relegating them to malpractice actions
against their attorneys. Id. at 448. The Appellate Division
declined to follow Burrell, stating that automobile-accident
cases constituted an exception to the requirements of the
mandatory joinder of claims. It reasoned further that the filing
of a separate action during the pendency of another personal
injury action would satisfy the entire controversy doctrine,
because it would alert the court and other parties to all claims.
Id. at 445.
In addition, the Stebbins court relied on an exception
recognized in Humble Oil & Ref. Co. v. Church,
100 N.J. Super. 495 (App. Div. 1968), which involved a collision of a tractor
trailer, owned by Humble Oil, with two automobiles. In the first
suit for wrongful death, an insurance company attorney
represented Humble Oil, which subsequently filed an action for
property damage. The Appellate Division allowed the property
damage action to proceed primarily because the insurer, not the
insured, had controlled the wrongful-death action. Id. at 498-99. The court also reasoned: "A property damage claim, a
personal injury claim and a claim for contribution under the
Joint Tortfeasors Contribution Law constitute separate claims for
relief even though they all arise by reason of one tortious
incident. Joinder of such claims is permissive, not mandatory."
Id. at 500.
Humble Oil no longer supports the proposition that property
damage and personal injury actions are necessarily distinct
actions. First, at the time of the decision in Humble Oil, the
joinder of claims was permissive, not mandatory. See R. 4:7-1;
see also Schweizer v. MacPhee,
130 N.J. Super. 123 (App. Div.
1974) (distinguishing Humble Oil because claims there were
permissive, not mandatory, counterclaims). Second, Humble Oil
apparently had brought its property damage claim before its
carrier settled the wrongful-death suit. Humble Oil, supra, 100
N.J. Super. at 497. But see Stebbins, supra, 278 N.J. Super. at
446 n.1 (explaining that discrepancies in timing of Humble Oil
litigations suggest wrongful-death action may have been resolved
prior to filing of Humble Oil's property damage suit). Because
all parties knew of the property damage claim during the first
action, the holding comported with the entire controversy
doctrine as it had evolved at that time. Even when Humble Oil
was decided, however, the entire controversy doctrine would have
barred a subsequent personal injury action instituted after the
conclusion of a related action arising from the same accident.
We reject plaintiff's request to make an exception under Humble Oil for litigants represented by insurance counsel in the initial litigation. For decades, courts have discounted a plaintiff's representation in an earlier action by counsel provided by an insurer. See Schweizer, supra, 130 N.J. Super. at
127 (stating that "[t]he mere fact that an insurance carrier['s]
. . . counsel defended, in no way demonstrates the inability of
plaintiff to comply with the rules of the court"); Burrell,
supra, 259 N.J. Super. at 258. Although an insurer may select
the attorney to represent an insured, that "attorney owes his
first allegiance to his client in the action, the insured, and
bears the responsibility to represent him properly in all
respects." Molnar v. Hedden,
260 N.J. Super. 133, 147 (App. Div.
1992), rev'd on other grounds,
138 N.J. 96 (1994); see also
Lieberman v. Employers Ins.,
84 N.J. 325, 336 (1980) (stating
that insurance carrier has fiduciary duty to represent insured);
Rova Farms Resort, Inc. v. Investors Ins. Co.,
65 N.J. 474, 492
(1974). Plainly stated, in any litigation, counsel for an
insurer must put the insured's interests ahead of the insurer's.
Lieberman, supra, 84 N.J. at 336.
results. We stress however, that except as provided in Rule
4:64-5 (foreclosure actions) and Rule 4:67-4(a) (leave required
for counterclaims or cross-claims in summary actions), all
disputes, including automobile-negligence cases, initially are
subject to the doctrine. Equitably enforced, as it has been in
cases like Caffereta and Burrell, Rule 4:30A provides a sensible
solution to addressing an ever-increasing docket.
The court system cannot afford the luxury of needless
multiple actions. From November 1994 to October 1995, 128,274
civil actions were filed in New Jersey. Of those, 50,048 or
thirty-nine percent, were automobile-negligence cases. We will
never sacrifice justice for economic considerations, but we
cannot ignore the cost to the public of such extensive
litigation. All branches of government, including the judiciary,
must strive to function efficiently, as well as fairly. The
question is not whether the judiciary should provide a forum for
the pursuit of claims for personal injuries in automobile-accident cases, but whether in providing such a forum, the
judiciary should consider not only the rights of the injured
party, but also the rights of the other parties and the public.
To prevent any problems arising from the failure of insureds to assert affirmative claims, insurance companies and their counsel should notify insureds of the requirement of mandatory
joinder, explain that the insureds must join all related claims
in a pending suit, and advise insureds of the need to seek the
advice of personal counsel regarding affirmative claims. It is
our understanding, confirmed at oral argument, that insurance
companies and their attorneys have been following that practice
for years. Hence, we do not anticipate any practical problems
with that procedure.
We also recognize the special considerations arising from
the application of the entire controversy doctrine to automobile
insurance litigation, particularly when the initial action
involves a claim for property damage in the Special Civil Part.
Statistics provided by the Administrative Office of the Courts
demonstrate that insurers increasingly resort to inter-company
arbitration to resolve subrogation claims. Over a four-year
period, automobile property damage claims declined from 10,414 in
1991 to 5,626 in 1995, a forty-six percent decrease. When an
insured asserts a personal injury claim, the court may remand the
entire action to the Law Division or sever the property damage
action from the personal injury action. We are aware, moreover,
that for decades insurance company counsel appearing for insureds
have successfully resolved questions of representation when the
insureds have retained their own counsel on personal injury
claims. In sum, the problems are manageable.
In the present case, the trial court found that Prevratil
knew of the pendency of the Olsen action. While that action was
pending, moreover, he retained counsel to prosecute both a
workers compensation claim and a civil action for the injuries he
allegedly sustained in the accident. Thus, ample evidence
supports the judgment of the lower courts dismissing Prevratil's
complaint. Out of an abundance of caution, however, we are
remanding the matter to the Law Division for further
consideration in light of this opinion. The purpose of the
remand is to permit the Law Division to consider the fairness of
dismissal. The Law Division has already conducted a plenary
hearing on certain issues, including Prevratil's knowledge of the
pendency of the Olsen action. Hence, the court need not revisit
that issue. Prevratil's counsel, however, may wish to bring
other issues to the attention of the court. We do not suggest
that the Law Division should reach a different result. We leave
to the sound discretion of the Law Division, moreover, the
determination whether to permit the parties to supplement the
record.
The basic flaw in the dissent is its failure to recognize that for seventeen years, the Rules of Court have required the mandatory joinder of claims in all civil actions, including those arising out of automobile accidents. Misplaced also are the dissent's concerns about the effect of the verbal threshold. One
of the twin pillars of the entire controversy doctrine is
fairness. In deciding whether to apply the doctrine, a trial
court may consider whether an injured party lacks sufficient
information to assert a claim because of the uncertainty about
(a) the permanency of the loss of use of a body organ or member,
N.J.S.A. 39:6A-8a (Type 7); (b) the significance of limitation of
use of a bodily function or system, id. (Type 8); or (c) the
extent of impairment of a non-permanent injury, id. (Type 9).
Concerns about such matters need not deprive the courts, the
parties, and the public of the benefits of a court system that is
efficient, as well as fair. In the present case, moreover, such
concerns are misplaced. Nothing indicates that they played any
part in Prevratil's decision or that of his attorney not to file
a claim in the Olsen action.
The judgment of the Appellate Division is reversed, and the
matter is remanded to the Law Division.
JUSTICES HANDLER, O'HERN, GARIBALDI and COLEMAN join in
JUSTICE POLLOCK's opinion. JUSTICE STEIN filed a separate
dissenting opinion. CHIEF JUSTICE WILENTZ did not participate.
SUPREME COURT OF NEW JERSEY
A-
52 September Term 1995
JOSEPH PREVRATIL and LISA
PREVRATIL, his wife,
Plaintiffs-Appellants,
v.
GEORGE MOHR and RICH HILL,
TRANSPORTATION,
Defendants-Respondents.
STEIN, J., dissenting.
The Court is mesmerized by the entire controversy doctrine- so much so that its opinion, holding that the doctrine makes mandatory all counterclaims and cross-claims in automobile negligence cases, scarcely acknowledges that the prospective effect of non-compliance is to bar the later filing of meritorious claims, and never attempts to address whether that severe and extraordinary consequence is justified by specific benefits to the administration of justice. Not only is the Court's application of the doctrine to litigants represented by assigned insurance counsel unprecedented, unfair, and unjustified. More importantly, its insistence that all persons injured in a motor vehicle accident file their claims in the same action, or lose the right to sue, utterly ignores the built-in delay and other practical realities that influence the management of automobile-negligence litigation. The Court's disposition
will cause grave harm to innocent litigants and do virtually no
good for the cause of case management.
The facts are garden-variety, typical of thousands of motor vehicle accident cases. Prevratil was driving a truck owned by his employer, Benjo Trucking Company (Benjo), and insured by Royal Insurance. He was rear-ended by a truck driven by George Mohr, owned by his employer Rich Hill Transportation (Rich Hill). Prevratil's truck was pushed into the rear of Janet Olsen's automobile. Olsen sued Prevratil, Benjo, Mohr, and Rich Hill in May, 1989. Benjo's carrier, Royal Insurance, assigned a law firm to represent Prevratil and Benjo. The law firm filed an answer and cross-claim for contribution on behalf of Prevratil, but asserted no claim for personal injuries. The record is silent on whether the law firm informed Prevratil that the entire controversy doctrine compelled him to join in that suit any claim for personal injuries or be barred from subsequently filing such a claim. In December 1989, Olsen settled her claim against Mohr and Rich Hill for $15,000 and dismissed her claims against Prevratil and Benjo.
About one year later, Prevratil sued Mohr and Rich Hill to recover damages for personal injuries he sustained in the
accident. Relying on the entire controversy doctrine, defendants
moved for summary judgment, contending that Prevratil should have
filed his claim in the first action. Prevratil asserted that he
was unaware of the first action, but the trial court conducted an
evidentiary hearing and concluded that Prevratil knew of the
Olsen litigation. No one contended that the insurer's lawyers
had informed Prevratil that he was obligated to file his claim in
the original action. The trial court concluded, however, that
irrespective of Prevratil's lack of knowledge that he was
required to file his claim in the first action, the entire
controversy doctrine barred his present claim. The Appellate
Division affirmed, as does this Court, except to remand the
matter to the Law Division to permit that court "to consider the
fairness of dismissal." Ante at ___ (slip op. at 21).
The Court approaches the case doctrinally rather than pragmatically and arrives at the wrong answer because it poses the wrong question: "The primary issue is whether we should create an exception from the entire controversy doctrine for automobile negligence cases." Ante at ___ (slip op. at 1). That question compels a negative answer, but the critical issue could have been more precisely framed this way: Are the policies underlying the entire controversy doctrine important enough to bar an innocent litigant from pursuing a meritorious personal
injury claim because an insurer's lawyer, assigned to represent
that litigant as a defendant, failed to make clear that the
personal injury claim must be asserted in the action pending
against him or her? That issue is virtually unaddressed by the
Court.
The folly of the Court's holding can be illustrated by two
hypotheticals. First, assume that Prevratil filed his cross-claim in the first action and that Olsen's claim did not settle.
In accordance with current practice, the case undoubtedly would
have been bifurcated and the liability issues tried first.
Current statistics maintained by the Administrative Office of the
Courts inform us that in Middlesex County, where this suit was
filed, the median time from filing an automobile negligence
action complaint for personal injuries to termination of a civil
jury trial is 38.8 months. (The statewide figure is 33.5
months.) After the liability trial, both Olsen's and Prevratil's
damage claims, had they not settled, probably would have been
separately tried.
For comparison purposes, assume the same facts except that
Prevratil filed his complaint in a separate action within the
period allowed by the statute of limitations, but after the
liability trial on Olsen's claim. (That chronology is unlikely
because Prevratil's claim had to be filed within twenty-four
months of the accident and, based on current statistics, the
liability trial probably would have commenced some months after
Prevratil's complaint was filed and the limitations period had
expired). In that event, Prevratil would be collaterally
estopped from challenging in his own case the result of the
liability trial in Olsen's case, see, e.g., Colucci ex rel.
Collucci v. Thomas Nichol Asphalt Co.,
194 N.J. Super. 510, 517-18 (App. Div. 1984), so that a second liability trial would be
unnecessary. Assuming that Prevratil was not able to settle his
claim, it undoubtedly would be resolved by a separate trial on
damages only, as would Olsen's claim.
Thus, from a case management standpoint, whether Prevratil
or a similarly situated defendant files an affirmative claim in
the first action or in a subsequent action has little impact.
Principles of collateral estoppel suggest that only one liability
trial will be necessary and the damage claims will either be
settled or separately tried in either event. The most likely
result of permitting the claim to be filed in a second suit is
that that action would be consolidated with the first suit, well
in advance of the liability trial. Nor is the delay in filing
the affirmative claim likely to cause prejudice. Sophisticated
automobile liability carriers investigate automobile personal
injury claims in sufficient detail to be informed of the identity
of all persons injured in an accident and of the nature and
extent of their injuries. Although we are uninformed by this
record, a reasonable assumption is that the carrier for Mohr and
Rich Hill knew that Prevratil sustained personal injuries in the
accident long before Prevratil filed his claim, and in all
probability had established a claim file in anticipation of
Prevratil's filing suit.
Thus, the Court's holding is unlikely to have any useful
effect on civil case management. The flurry of recently reported
Appellate Division decisions on the issue, see infra at ___ (slip
op. at 18-20), suggests that attempts to apply the entire
controversy doctrine in this context are a recent phenomenon,
undoubtedly attributable to this Court's increased reliance on
the doctrine. Prior practice would have allowed a claimant such
as Prevratil to file his claim in a separate suit. Because that
claim invariably would have been filed long before a liability
trial in the first suit commenced, consolidation of the two
actions would have been feasible and would have achieved the same
effect as the Court's holding, without the unnecessary side
effect of barring numerous meritorious claims.
The Court's opinion also ignores the practical effect of the
verbal threshold, N.J.S.A. 39:6A-8a, set forth in New Jersey's
no-fault, automobile-insurance statute, N.J.S.A. 39:6A-1 to -35.
The verbal threshold provision, if elected by persons purchasing
automobile insurance, allows recovery for non-economic losses
resulting only from those personal injuries that fit into one of
nine specified categories. Those categories are set forth in
N.J.S.A. 39:6A-8a:
TYPE 1: death;
TYPE 2: dismemberment;
TYPE 3: significant disfigurement;
TYPE 4: a fracture;
TYPE 5: loss of a fetus;
TYPE 6: permanent loss of use of a body
organ, member, function or system;
TYPE 7: permanent consequential limitation
of use of a body organ or member;
TYPE 8: significant limitation of use of a
body function or system;
TYPE 9: a medically determined injury or
impairment of a non-permanent nature which
prevents the injured person from performing
substantially all of the material acts which
constitute that person's usual and customary
daily activities for not less than 90 days
during the 180 days immediately following
the occurrence of the injury or
impairment . . . .
[Oswin v. Shaw,
129 N.J. 290, 315 (1992).]
As this Court noted in Oswin, supra, several of those categories are "elusive of clear interpretation." Ibid. More to the point, the time period necessary for a plaintiff injured in an automobile accident to ascertain whether he or she has a sustainable cause of action for non-economic injuries may vary substantially. Those plaintiffs who select the traditional tort option, which allows unrestricted recovery of non-economic damages, see N.J.S.A. 39:6A-8b, as well as "verbal threshold" plaintiffs who sustain fractures or significant disfigurement, for example, need not await the result of prolonged medical treatment before filing suit. But those verbal threshold plaintiffs relying on category 7, 8, or 9 as the basis for claiming entitlement to non-economic damages may not, for many months following the accident, possess sufficient information to enable a lawyer to determine whether their injuries satisfy the
verbal threshold. To require such claimants to file their suit
as a counterclaim or cross-claim in the first action arising out
of an accident may unfairly and unnecessarily deprive them of the
full benefit of the statute of limitations.
Regrettably, the majority has made no attempt to analyze the
practical implications of its holding or to offer any pragmatic
justification for a decision that inevitably will deprive
innocent litigants of the right to file meritorious claims,
implying that the entire controversy doctrine justifies itself.
The Court pays lip service to the preclusive effect of its
decision, without any attempt to explain what administrative
goals it advances: "We will never sacrifice justice for economic
considerations, but we cannot ignore the cost to the public of
such extensive litigation." Ante at ___ (slip op. at 19). Those
words ring hollow in the face of statistical and pragmatic
evidence that the Court's ruling will have little or no impact on
the management of litigation, other than to encourage the filing
of motions to dismiss based on the entire controversy doctrine.
A decision that deprives New Jersey citizens of access to our
courts should stand on firmer ground.
The Court's decision not only fails the test of pragmatism.
It also fails the test of fairness. In applying the entire
controversy doctrine, this Court, until recently, has
"proceed[ed] on a step-by-step basis recognizing that the
doctrine is one of judicial fairness and will be invoked in that
spirit." Crispin v. Volkswagenwerk, A.G.,
96 N.J. 336, 343
(1984). Never before today has this Court held applicable the
preclusive effects of the doctrine to a party whose failure to
assert a claim was attributable not to the omission of retained
counsel, but to the omission of counsel assigned by an insurance
company to represent its own interests as well as the interests
of the affected party. Moreover, the leading cases establishing
and applying the entire controversy doctrine as a bar to the
subsequent assertion of omitted claims appear to have involved
deliberate and calculated claim-splitting strategies designed to
frustrate the orderly administration of justice, as opposed to an
innocent omission by an uninformed litigant.
Thus, in Massari v. Einsiedler,
6 N.J. 303 (1951), the
plaintiff sued to recover the unpaid balance of the purchase
price on the sale of a business, and the defendant asserted in
its answer that subsequent loan and security trust agreements not
signed by the plaintiff altered the payment terms of the original
contract. Massari was awarded summary judgment. Einsiedler then
instituted a new action to reform the original contract in
accordance with the terms of the subsequent agreements. Holding
that the second action was barred by res judicata, this Court
observed that an objective "of the Judicial Article of the 1947
Constitution was to facilitate . . . the hearing of causes by
disposing of all matters . . . arising in a controversy in one
trial." Id. at 307. The Court held that Einsiedler was
obligated to assert the alleged grounds for reformation in the
first action, and having failed to do so was deemed to have
waived the defense. Id. at 312-13.
Similarly, in Ajamian v. Schlanger,
14 N.J. 483, cert.
denied,
384 U.S. 835,
75 S. Ct. 58,
99 L. Ed. 659 (1954), the
purchaser of a business sued for rescission based on the seller's
fraudulent representations, the defendant asserting in response
that the purchaser had nevertheless ratified the contract. After
a judgment for defendant, the purchaser assigned the claim to his
brother, a New York attorney, who filed suit in the Law Division
seeking damages for the alleged deceit. Reversing the lower
courts, this Court held that the damages action was barred. In
one of the earliest formulations of the entire controversy
doctrine, Justice Brennan observed:
To tolerate his pressing of the pursuit for
rescission, even though futile from the
outset, to the limits to which it was carried
here after the clear warning of its
infirmities when the opportunity to shift his
ground was still open to him, and to sanction
his holding in reserve his one available
remedy for the purpose of attack in another
suit, would be utterly destructive of the
policy to avoid multiplicity of litigation.
Although the Court relied principally on the merger of equitable
and legal powers in the Superior Court under the 1947
Constitution as the basis for its decision, standard principles
of res judicata would have led to the same result. See
Restatement (Second) of Judgments § 24(1) (1982); Geofrey C.
Hazard, Jr., An Examination Before and Behind the Entire
Controversy Doctrine, at 9, New Jersey Institute for Continuing
Legal Education, Entire Controversy Doctrine, Seminar Material
(1996). As in Massari, supra, there was compelling justification
for barring the assertion in a second suit of a claim that could
have been advanced in the first suit, and no hint that the
Court's disposition was unfair to the unsuccessful litigant.
Falcone v. Middlesex County Medical Society,
47 N.J. 92
(1966), applied the entire controversy doctrine in a context
analogous to Ajamian, supra, holding that a physician who had
obtained a Law Division judgment compelling his admission to the
Middlesex County Medical Society could not thereafter maintain a
new action against the Society to recover damages. Id. at 94-95.
As in Ajamian, that result also was consistent with res judicata
principles.
In William Blanchard Co. v. Beach Concrete Co., Inc.,
150 N.J. Super. 277, certif. denied,
75 N.J. 528 (1977), the
Appellate Division issued a ringing endorsement of the mandatory
claim joinder aspect of the entire controversy doctrine, not in
the context of barring omitted claims in a subsequent action but
rather in affirming a trial court's ruling barring an amended
complaint seeking to assert claims that deliberately had been
withheld from a pending action. The case involved multiple
parties engaged in the construction of an office building that
had been delayed over difficulties in installing concrete facade
panels. Although the owner and general contractor had agreed to
arbitrate their disputes, other parties instituted litigation in
Essex County in 1970 and in Union County in 1972. Progress in
those suits was impeded by the existence of various arbitration
agreements among the parties and by the owner's and general
contractor's desire to present a united front and withhold from
the litigation claims against each other. In 1973, all parties
agreed to waive arbitration, but efforts at settlement in the
spring of 1975 were frustrated by the refusal of the owner and
general contractor to assert delay claims against each other that
would affect the other parties. The trial court ordered the
claims to be filed and subsequently ruled that the principles
underlying the entire controversy doctrine required dismissal of
the amended pleadings with prejudice, because they would delay
unreasonably the ultimate resolution of the case. Affirming the
dismissal of the amended pleadings, the Appellate Division
explained the necessity for case-by-case analysis in applying the
entire controversy doctrine:
[I]t is also apparent that the task of
definitionally circumscribing the outer
limits of a given controversy for purposes of
application of the [entire controversy]
doctrine is inordinately difficult. As a
practical matter, the doctrine cannot be
dealt with on an a priori basis. It must be
applied empirically. That is to say, an
evaluation must be made of each potential
component of a particular controversy to
determine the likely consequences of the
omission of that component from the action
and its reservation for litigation another
day. If those consequences are likely to
mean that the litigants in the action as
framed will, after final judgment therein is
entered, be likely to have to engage in
additional litigation in order to
conclusively dispose of their respective
bundles of rights and liabilities which
derive from a single transaction or related
series of transactions, then the omitted
component must be regarded as constituting
an element of the minimum mandatory unit of
litigation. . . .
The point, of course, is that a
component of the controversy may not be
unfairly withheld, and a withholding is by
definition unfair if its effect is to render
the pending litigation merely one inning of
the whole ball game.
[150 N.J. Super. at 293-94
(citations omitted).]
Other cases have applied the entire controversy doctrine to bar claims asserted in a second action that appeared to have been strategically withheld from an earlier action. See, e.g., Tall Timbers Property Owners Ass'n v. Tall Timbers, Inc., 217 N.J. Super. 119, 12