Defense Digest 3/09: Marshall Dennehey Is Happy To Celebrate Our Recent Appellate Victories

Walter Kawalec and Philip Anderson (Cherry Hill, NJ) were successful in the Appellate Division. The plaintiffs were children of a woman who was allegedly sexually assaulted by the employee of our client, a nursing care facility. The plaintiffs did not find out about the assault until many months later, when the county prosecutor contacted them to determine if they wanted to make a statement at sentencing. The plaintiffs brought suit alleging the negligent infliction of emotional distress. They premised their claim on both the "bystander liability" and "direct duty" theories. The Appellate Division found that the plaintiffs lacked any contemporaneous observation of the alleged assault to qualify under the bystander liability theory. Further, the Appellate Division held that there was no statutory duty to the children of the patient that was breached and that the children did not assert sufficient injury if the court were to recognize a common-law duty.

Walter Kawalec and William Waldron (Cherry Hill, NJ) were successful in the Appellate Division, which affirmed the denial of the plaintiff's motion to consolidate two arbitration proceedings. In this case our client was an engineering subconsultant who was sued by the architect, who had hired our client and was seeking to release construction liens we had in place in a number of projects. The architect alleged that the engineering was deficient. Our client agreed to release the liens as part of a settlement whereby the claims would be sent to arbitration before one arbitrator. The architect was also being sued by his client, a property developer, stemming from one of the projects on which our client had a lien in place. That claim went before a three-arbitrator panel, pursuant to the contract between the developer and architect, which had an arbitration clause. No such clause existed in the contract with our client. After a period of time had passed and the separate arbitrations had proceeded, the architect sought to join the two arbitrations together. The trial court denied the motion, and the Appellate Division affirmed based on the fact that the prejudice to our client if the joinder were ordered -- by being forced to arbitrate along with the developer, by being forced into a three-arbitrator arbitration, and by virtue of the fact that undue delay existed -- outweighed any prejudice to the architect in proceeding with two separate arbitrations.

James Gicking and Andrew Schwartz (Philadelphia, PA) obtained a reversal before the Third Circuit in a precedential opinion. In Campuzano-Burgos, et al v. Midland, et al, Case No. 07-3770 (2008 U.S. App. LEXIS 26021), the plaintiffs were a class of debtors that received form collection letters with facsimile signatures of officers of the collection agency. The plaintiffs attempted to apply an attorney-based standard requiring meaningful involvement as to the issuance of such letters to senior officers of the collection agency. Interestingly, on the same day that the Honorable Stewart Dalzell granted the plaintiffs' motion for summary judgment, the Honorable Michael Baylson granted our motion to dismiss as to another collection agency on the same issue. (Womack v. National Action Financial Services, Civil Action No. 06-4935 (2007 U.S. Dist. LEXIS 54206). Both Womack and Campuzano-Burgos were cases of first-impression on this issue. As a result, Judge Dalzell certified this matter for appeal, and Jim Gicking drafted a Petition for Appeal pursuant to 28 U.S.C. § 1292(b), which the Third Circuit granted and agreed to hear the appeal. We prevailed at oral argument, and the Third Circuit issued a precedential opinion and remanded the matter to the District Court with instructions to enter summary judgment in favor of our client.

James Gicking (Philadelphia, PA), Walter Kawalec (Cherry Hill, NJ), and Andrew Schwartz (Philadelphia, PA) obtained affirmation of an order granting a motion to dismiss a class action in the New Jersey Superior Court - Appellate Division in the matter Hoffman, et al., v. Encore, et al., Appellate Docket No. A-3008-07T1. In the complaint, the plaintiffs alleged fraud and fraud on the court (count one); violations of the New Jersey Consumer Fraud Act, N.J.S.A. 56:3-1 to -20 (CFA) (count two); and violations of the New Jersey Racketeer Influenced and Corrupt Organizations Act, N.J.S.A. 2C:41-1 to -6.2, (RICO). On behalf of the defendants, Andrew Schwartz drafted and argued a motion to dismiss before the Honorable Ross Anzaldi in the New Jersey Superior Court - Law Division in Union County. Judge Anzaldi granted the motion to dismiss on all counts. Plaintiffs' counsel filed an appeal. Jim Gicking and Walt Kawalec drafted a compelling appellee brief, and Walt Kawalec appeared for oral argument on the appeal. The Appellate Court, per curiam, agreed with the trial court, finding that the plaintiffs wholly failed to assert a viable common law fraud claim or fraud on the court and rejected the RICO claim. Most significantly, the Appellate Court affirmed that the CFA does not apply to debt collectors as debt collectors do not sell or market merchandise or extend loans to consumers.