February 2004, No. 2

February 2004, Vol. II, No. 2

Does the Consumer Fraud Act Apply To Doctors Who Falsely Advertise? It should, but the Supreme Court ruled that it does not. In Macedo v. Dello Russo, 2004 N.J. LEXIS 12 (2004), the plaintiff alleged that Dr. Dello Russo falsely advertised that one of his associates was licensed to practice medicine when, in fact, he was not. In finding that the plaintiff did not have a cause of action under the Consumer Fraud Act (CFA), the Supreme Court explained that "advertisements by learned professionals in respect of the rendering of professional services are insulated from the CFA but subject to comprehensive regulation by the relevant regulatory bodies and to any common-law remedies that otherwise may apply." However, in Howard v. University of Dentistry and Medicine, 172 N.J. 537 (2002), the Supreme Court ruled that the plaintiff did not have a common law fraud claim against a doctor who allegedly misrepresented his credentials. These two rulings leave patients without a proper remedy against doctors who commit fraud or consumer fraud against them. Essentially, the Supreme Court is providing doctors and other licensed professionals with preferential treatment from other business people despite the fact that like other business people, they render services to the public. This treatment is unfair to the public, and if a doctor or licensed professionally falsely advertised, they should be subject to the CFA. The Supreme Court judicially legislated in rendering this opinion, and its statement that the legislature could pass a new law if it disagreed with the opinion missed the mark. To the contrary, the Supreme Court should have interpreted the broad language of the CFA to include licensed professionals, and if the legislature disagreed, it could have insulated licensed professionals.

Supreme Court Weighs in on Split Limit Policies? Last month, we reported that the decisions in Galante v. May, 364 N.J. Super. 284, 286 (App. Div. 2003), and Vassiliu v. Daimler Chrysler Corp., 356 N.J. Super. 447 (App. Div. 2002), inconsistently applied a split limit policy to wrongful death and survival claims. Well, the Supreme Court has determined that the "per person" phrase in an insurance policy (both UIM and liability) means the injured individual, not the estate or heirs. Vassiliu v. Daimler Chrysler Corp., 2004 N.J. LEXIS 9 (2004). The Supreme acknowledged that survival and wrongful death claims are distinct causes of action, but determined that the survival and wrongful death claims were derivative of "one" injury. Thus, the plaintiffs' claims were subject to the single per person limit. Like the Appellate Division in Galante, the Supreme Court relied on the language of the insurance policy in rendering its opinion. That reliance is somewhat misplaced as insureds do not have the option of paying a higher premium if they want their estate and family to have the ability to pursue two claims under the UIM policy. Without that option, the Supreme Court has left two distinct parties without any recourse for pursuing their independent claims. This issue may be one for the legislature to consider.

Can a Law Firm Require a Departing Partner to Pay 50% of His Contingency Fees to Firm? Yes. In Groen, Laveson, Goldberg & Rubenstone v. Kancher, 362 N.J. Super. 350 (App. Div. 2003), the law firm's partnership agreement provided that any contingent fees for cases taken by a departing partner would be divided equally between the partner and the firm. The Appellate Division ruled that such an agreement does not violate RPC 5.6, which prohibits lawyers from entering into agreements that restrict an attorney's right to practice after termination of the relationship, including situations where there is a financial disincentive to leave. The Appellate Division reasoned that the agreement was not restrictive because it merely required the departing partner to pay the firm a portion of the fee garnered from contingency cases on which he worked before he departed. This ruling is sound because to rule otherwise would fail to recognize the work performed and risks taken by the law firm.

Does the Tort Claims Act Apply to §1983 Claims? Yes. In Leopardi v. Township of Maple Shade, 363 N.J. Super. 313 (App. Div. 2003), the Appellate Division stated that a plaintiff who files a §1983 claim must meet the threshold requirements of the Tort Claims Act, i.e., (1) an objective permanent injury and (2) a permanent loss of a bodily function that is substantial. The Appellate Division stated that the plaintiff met the threshold because his two surgical interventions altered his vertebral structure.

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 [email protected].