February 2006, No. 1

February 2006, Vol. IV, No. 1

Greetings: A belated happy new year, and a happy valentines day to all of you. Enough of the mushy stuff, let's see what is new in the CIVIL LAW!

If a student's peers repeatedly harass him based on his perceived sexual orientation, does he have a valid LAD claim against the school district? Yes. In L.W. v. Toms River Regional School Board, 381 N.J. Super. 465 (App. Div. 2005), Bergen County's Judge Yannotti authored the opinion recognizing the cause of action. The Appellate Division held that a school is a "public accommodation," and that the LAD permits a student to sue a school district if the harassment denies a student the privileges of a public accommodation because of his sexual orientation. See N.J.S.A. 10:5-4, 5(l), 5(hh), 12(f). The Appellate Division then ruled that the elements of this claim mirror those in the employment context, i.e., conduct "sufficiently severe or pervasive to alter the conditions of employment and create an intimidating, hostile, or offensive working environment." In L.W., a young boy's peers subjected him to years of extensive, repeated, and continuous harassment because of his sexual orientation. The Appellate Division concluded that the school district did not adequately protect the student. Judge Alley dissented finding that the incidents were occasional rather than pervasive. With the dissent, this case is going up to the Supremes, and you can expect an affirmance because Judge Yannotti's opinion is logical and well-founded. Judge Yannotti should be applauded for this opinion because it protects an often disenfranchised group and because the school board did not do nearly enough to protect this child.

When can a judge question an attorney about bias in his selection of jurors? If and only if the trial court has identified a prima facie case of discrimination. See Hitchman v. Nagy, 2006 N.J. Super. LEXIS 9 (App Div. 2006). In Hitchman, the Appellate Division explained that requiring the prima facie case of discrimination will prevent trial courts from creating a chilling effect on counsel's exercise of peremptory challenges. The facts in Hitchman are straightforward: plaintiff was African-American, and defendant's attorney exercised his first peremptory to excuse a white man and the second one to excuse an African-American woman. After defense counsel exercised the second peremptory, the trial court held a sidebar and inquired as to the reason for the exercise of the second peremptory. The Appellate Division found the trial court's injection of race improper, but did not reverse because the panel concluded it was harmless error as the trial court did not reverse the peremptory challenge. Not much to say about this decision – good reasoning, good law.

Can a plaintiff pursue UIM benefits if he settles with the underlying defendant for 60% of the defendant's policy limits? For those of you who said no, you would be wrong. In Winner v. Revill, 382 N.J. Super. 399 (App. Div. 2006), the defendant had policy limits of $50,000, and the plaintiffs accepted $30,000 to settle because of the costs of litigating (expert fees were estimated to be at least $6,000-$10,000) and because they did not want the stress of litigation. The Appellate Division ruled that the stated reasons were sufficient to support the settlement and to satisfy the exhaustion requirement in the UIM policy. This case is important because it reaffirms that the exhaustion requirement in UIM policies does not mean settling for the entire or "most of the" underlying policy as many people think. To the contrary, all that is required is a reasonable settlement under the circumstances, which include the cost of litigating. The Appellate Division hit a home run here.

If an insured's company becomes insolvent, is the insured liable for a verdict in excess of the $300,000 cap from PLIGA? If you said no, you would be wrong. In Johnson v. Braddy, 2006 N.J. LEXIS 21 (2006), the Supremes affirmed the Appellate Division's ruling that the insured was personally liable for any excess verdict. This decision puts this issue to rest, and should help foster settlements when insurers become insolvent. The Supremes also asked the Legislature to consider this issue because the ruling exposes insureds who attempted to protect themselves and because the outcome could have a serious financial impact on such insureds. Let's see what, if anything, the Legislature can do to assist these people without affecting the rights of those who sustained injuries and losses.

Contributions. If you have an interesting case, rule interpretation, ethics issue, or civil-related story, please contact me at 201-918-3560, (f) (201) 845-5973, or e-mail mjepstein@epsteinbeirne.com.

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