I. GENERAL LITIGATION

Court Holds a Ratio of 1:1 in Punitive Damages Applies When Plaintiff is Awarded Substantial Compensatory Damages and Damages were Purely Economic

In Jurinko v. Medical Protective Co., 2008 WL 5378011 (3d Cir. Pa. January 17, 2008), an unpublished opinion, Plaintiffs Stephen and Cynthia Jurinko brought a diversity action in federal court alleging bad faith on the part of The Medical Protective Company in a medical malpractice suit Mr. Jurinko brought in state court against Medical Protective's insured, Dr. Paul Marcincin. In the underlying action, a state jury found Dr. Marcincin liable for medical malpractice and awarded Mr. Jurinko $2.5 million in damages, $1.3 million more than Dr. Marcincin's coverage. In lieu of paying the excess verdict, Dr. Marcincin assigned to the Jurinkos his bad faith claim against Medical Protective for its conduct in the malpractice action.

In the bad faith action, plaintiffs alleged Medical Protective acted in bad faith by appointing the same counsel to represent both of its insured physicians and by failing to settle the case within policy limits.

A federal jury found Medical Protective acted in bad faith and awarded the Jurinkos compensatory and punitive damages, in the amounts of $1,658,345 and $6,250,000 respectively. The District Court denied Medical Protective's post-trial motions seeking reversal of the jury verdict and a new trial, and then granted in part and denied in part the Jurinkos' motion to mold the verdict, awarding attorneys' fees, costs, and interest. Both parties appealed.

On appeal, Medical Protective argued there was insufficient evidence for the jury to award punitive damages. The court disagreed. Medical Protective’s claims adjuster testified that Medical Protective tried to play a negotiating tactic against the CAT Fund in order to save itself money, which exposed Dr. Marcincin to the risk of an excess judgment. The court found testimony provided sufficient evidence to find Medical Protective’s conduct outrageous for the purpose of punitive damages.

Medical Protective also argued that the punitive damages award was unconstitutionally excessive. The court cited the factors to look at to determine whether an award is grossly excessive: “(1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the [factfinder] and the civil penalties authorized or imposed in comparable cases.”

The court measured reprehensibility by considering whether “the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident.”

The court found there was only evidence of two of the factors of reprehensibility: the target of the conduct (Marcincin) had financial vulnerability and the conduct of Medical Protective in refusing to tender the policy in order to force the CAT Fund to pay more of Medical Protective’s other insured physician’s policy was intentional.

Therefore, the court held that Medical Protective's conduct did not justify so high an award (3.13:1 ratio) in light of the moderate degree of reprehensibility, the substantial compensatory award, and the large disparity between the award and civil penalties. Following the reasoning of the Supreme Court in Exxon Shipping Co. v. Baker, 128 S.Ct. 2605, 2633 (2008), which held that punitive damages may not exceed a 1:1 ratio in the context of maritime law, the court reduced the award to reflect a 1:1 ratio.

II. DENTAL MALPRACTICE

The Mere Fact of an Infection Following a Dental Surgical Procedure, Without More, is Not Indicative of Negligence

In an unpublished opinion, Lipira v. Maron, 2009 WL 62926 (N.J. Super. January 12, 1009), Plaintiff filed an appeal of denial of a motion of reconsideration of an order granting summary judgment to defendant Andrew Maron, dismissing plaintiff’s dental malpractice claim. The claim was dismissed on summary judgment for plaintiff’s failure to produce an expert report opining that defendant deviated from any applicable standard of care.

In the malpractice action, plaintiff alleged that she developed a bone infection in her jaw after dental implant procedures performed by defendant. As a result of the infection, plaintiff underwent additional surgeries to remove two teeth and a portion of her infected jaw that required a reconstructive plate. Although plaintiff produced an affidavit of merit, she did not serve an expert report opining on the issue of deviation prior to the grant of summary judgment or prior to the denial of her motion for reconsideration.

At the motion for reconsideration, plaintiff argued that defendant failed to secure an informed written consent to the implant procedures and, in any event, the doctrine of res ipsa loquitur precluded summary judgment, especially where the defendant impliedly admitted negligence by offering to pay for plaintiff's subsequent treatment. The judge determined that, unlike a hospital procedure, no writing is required to secure an informed consent to a dental procedure. He also held that the doctrine of res ipsa loquitur did not apply to the facts because infection can result from a dental procedure in the absence of negligence. The judge reaffirmed the earlier ruling that an expert report was required to proceed with the claim and denied plaintiff's motion for reconsideration.

On appeal, plaintiff argued that the judge should have reconsidered the summary judgment “because plaintiff's ‘extreme injuries ... were presumptive evidence of negligence,’ which defendant tacitly acknowledged by offering to pay for plaintiff's subsequent treatment.”

The court acknowledged the two exceptions to the requirement of an expert report in a malpractice action: the doctrines of res ipsa loquitur and common knowledge. The court held that plaintiff could not rely on the doctrine of res ipsa loquitur in lieu of an expert opinion to establish a deviation from the accepted standard of care because the mere fact of an infection following a dental surgical procedure, without more, is not indicative of negligence. A surgical procedure generally presents a risk of infection, even in the absence of negligence. As a result, plaintiff could only rely on res ipsa loquitur to prove a deviation if she produced an expert report opining that an infection such as occurred here would not have occurred in the absence of negligence.

The court also held that plaintiff could not rely on the doctrine of common knowledge which is applied in a medical malpractice case after the plaintiff proves his injury and a causally related act or omission by the defendant. Application of this doctrine turns the case into an ordinary negligence case, which would obviate the expert testimony requirement. The court found that the facts of this case did not fall within this doctrine because the severity of plaintiff's jaw infection following her dental implants is simply a surgical complication that can occur in the absence of negligence. Plaintiff did not identify some act or omission of defendant that caused the infection. In the absence of such evidence, a jury may not rely on its common knowledge to supply the standard of care.

The court affirmed the denial of plaintiff’s motion for reconsideration.

III. EMPLOYMENT LAW

The Existence of One Theory of Recovery Does Not Necessarily Bar Pursuit of the Same Remedy Under Some Other Legal Theory

In Vitale v. Atlantic County Special Services Board of Education , 2009 WL 62881 (N.J. Super. Jan. 12, 2009), an unpublished opinion, plaintiff filed a complaint asserting he was terminated by defendant Atlantic County Special Services School District (the district) in violation of the Law Against Discrimination (LAD) and the Veterans' Tenure Act (VTA). Plaintiff, a fifty-five year old military veteran, was employed by the district as a teacher for handicapped students from January 2001 until June 2003. At the end of the 2003 school year, plaintiff was advised he would not be retained because a shortfall in tuition and a downturn in student enrollment necessitated a reduction in force of four teachers. Following notice of his termination, plaintiff informally appeared before the school board, asserting his status as a veteran and his right to a hearing pursuant to the VTA.

All defendants moved for summary judgment. The motion was granted in favor of the individual defendants on the LAD claims and in favor of all defendants on the VTA claim, leaving for trial only plaintiff's LAD claim against the district. Regarding summary judgment on the VTA claim, the motion judge held that VTA “is not an act which gives any protection other than that already afforded by the [LAD].” Plaintiff’s LAD claim went to trial and the jury returned a verdict in favor of the district. Plaintiff appealed only the order that granted summary judgment in favor of the district on his VTA claim.

On appeal, the court held that the motion judge’s basis for granting summary judgment on the VTA claim was not valid stating: “A litigant is entitled to pursue alternative theories in seeking relief. The existence of one theory of recovery does not necessarily bar pursuit of the same remedy under some other legal theory.” Therefore the court rejected the motion judge's rationale for dismissing the VTA claim.

The court held that summary judgment on the claim should have been denied, agreeing with plaintiff that the facts asserted in opposition to summary judgment raised a question as to whether the reduction in force was legitimate and therefore, there was an issue for the jury to resolve. The court also noted there was a genuine factual dispute about whether the informal discussion between plaintiff and the school board referred to by the parties was the equivalent of the impartial hearing required by the VTA.

The court disagreed with the district’s argument that even if summary judgment on the VTA claim should not have been granted, the jury's finding on the LAD claim was fatal to plaintiff's VTA claim. The district argued that the demise of the LAD claim rendered irrelevant any error committed when the VTA claim was dismissed. However, the elements necessary to sustain the LAD and VTA claims are not the same. To sustain a cause of action under the VTA, plaintiff was required to show that he was either deprived of a fair and impartial hearing, or that the district lacked “good cause” for his termination. To sustain his LAD claim, plaintiff was required to prove more.

The district argued that a finding that the reduction in force was legitimate or not pretextual - as to which both parties presented evidence at the LAD trial - would be fatal to both the LAD and VTA claims. But the LAD claim also turned on the substantiation of a discriminatory intent, which was not an element of plaintiff's VTA claim. For that reason, absent a specific finding by the jury on the third stage of the burden-shifting process (where the employee must prove by a preponderance of the evidence that the reason articulated by the employer was merely a pretext for discrimination and not the true reason for the employment decision), the jury could very well have determined that plaintiff's LAD claim failed at the first stage and, thus, never reached plaintiff's contention that the reduction in force was pretextual. Because the court was not certain whether the jury found legitimate the reduction in force, it rejected the districts argument that the jury verdict on the LAD claims precludes further litigation on the VTA claim.

The court concluded that the summary judgment procedure does not authorize dismissal of claims merely because they are similar or cumulative to other claims. And the precipitous grant of summary judgment on the VTA claim disserved the summary judgment procedure, which was designed to promote efficient resolution of some or all of the issues in a given case.