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May 2003, No.2

May 2003, Vol. I, No. 2

Does the Consumer Fraud Act Apply to Doctors? Yes. Recently, the Appellate Division held that the Consumer Fraud Act provides a viable cause of action against doctors. See Macedo v. Russo, 359 N.J. Super. 78 (App. Div. 2003). The Appellate Division reasoned that anyone who engages in common commercial activities is subject to the CFA. The Appellate Division is absolutely correct, but how does this decision square with the Supreme Court’s decision in Howard v. University of Medicine and Dentistry, 172 N.J. 537 (2002), which held that common law fraud does not apply to a doctor who misrepresents his credentials prior to surgery? Why not? Both fraud and consumer fraud should apply to doctors, and the Appellate Division quietly and correctly sidestepped Howard in rendering its decision. Now that is some fancy footwork!

Can an Insurer Refuse to Extend Uninsured Motorist (UM) Coverage Because of an Intentional Act? No. In reversing the trial court and Appellate Division, the Supreme Court held that extending UM coverage to intentional acts fulfills the two purposes of the UM statute – (1) “to provide maximum remedial protection to the innocent victims of financially irresponsible motorists” and (2) to reduce the burden on the Unsatisfied Claim and Judgment Fund. See Shaw v. City of Jersey City, 174 N.J. 567 (2002). In Shaw, the Court held that an injured police officer is entitled to UM coverage when a purported criminal hits the officer with a stolen car because the intentional act constitutes an accident.

Is a Per Quod Claim Available In §1983 Case? According to the Appellate Division, no. See Maudsley v. State, 357 N.J. Super. 560 (App. Div. 2003). Although the panel recognized that a per quod claim is derivative of the spouse’s primary claim as opposed to a separate and independent claim, the panel relied on federal cases for the proposition that §1983 provides a cause of action only for the individual whose constitutional rights were violated. Thus, the panel concluded that a spouse has no standing to seek loss of consortium. But, doesn’t the basic concept of a per quod claim create the requisite standing that the Appellate Division said does not exist? In other words, the standing arises because of the derivative nature of the cause of action. The fact that a spouse’s injuries arise out of a constitutional violation should not create a class of spouses who cannot recover for the loss of consortium. More importantly, under Maudsley, if the constitutional violation leads to significant personal or psychological injuries and the only cause of action is under §1983, a spouse would be left with no recourse.

How Do We Apply a Child Judgment Lien To a Settlement? If a plaintiff recovers an award or settlement for personal injuries, but also has a docketed child support judgment in excess of the award or settlement, how much of the award or settlement is subject to the lien? If you said everything, you are wrong. In Simpkins v. Saiani, 356 N.J. Super. 26 (App. Div. 2002), the Appellate Division stated that pursuant to N.J.S.A. 2A:17-56.23(b), the lien exists against only the plaintiff’s “net funds,” i.e., after fees and costs, in excess of $2,000. Thus, if a client’s net funds are less than $2,000, there is no lien. In the event that you recover an award for personal injuries that yields more than $2,000 in net funds for a client who has a child support judgment against him, you must file a motion for distribution on notice to the Probation Services Division of the AOC.

Practice Tip: Serving Corporate Entities. A client wants to sue an LLC for consumer fraud, but you learn that the LLC has closed its doors and moved without leaving a trace. If you can determine that the LLC had insurance during the relevant time periods, it is worth pursuing the matter, but how do you serve the LLC? Well, R. 4:4-4 provides that proper service on a corporate entity includes, among others, personal service on a person at the registered office or on any person authorized to receive service, e.g., the registered agent. To ascertain the registered agent for an LLC or corporate entity, send a letter and a check for $5.00 to the Department of Treasury, Division of Revenue and Business Services. FYI: attorneys and accountants are often listed as the registered agent, which provides for easy service.

Ethics Tip: Legal Chat Rooms Can Lead To Attorney-Client Relationship. The District of Columbia Ethics Committee ruled that attorneys who communicate with anonymous people via online legal chat rooms create an attorney-client relationship if the communication becomes legal advice. See D.C. Bar Legal Ethics Comm. Op. No. 316. The Committee explained that legal advice arises when an attorney “offer[s] recommendations tailored to the unique facts of a particular person’s circumstances.” To avoid problems, lawyers should provide only legal information, i.e., general principles or theories that are not tailored to specific facts. Attorneys should also provide disclaimers that a communication is for informative purposes and does not create an attorney-client relationship. The moral of this opinion is be careful where and what you type when you enter online chat rooms.

Contributions. If anyone has an interesting case, rule interpretation, ethical opinion, or civil-related story, please contact me at 201-918-3560, (f) (201) 845-5973, or e-mail [email protected] so that we can continue to provide the Bar with this monthly update.