Opinion
DOCKET NO. A-5747-14T3
11-03-2016
HARTFORD INSURANCE COMPANY OF THE MIDWEST, Plaintiff-Appellant, v. LIMMIE CAVER, JR., Defendant-Respondent.
Michael A. Puppelo argued the cause for appellant (Law Offices of Jan Meyer and Associates, attorneys; Solomon Rubin on the brief). Limmie Caver, Jr., respondent, argued the cause pro se.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R.1:36-3. Before Judges Koblitz and Rothstadt. On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-7902-13. Michael A. Puppelo argued the cause for appellant (Law Offices of Jan Meyer and Associates, attorneys; Solomon Rubin on the brief). Limmie Caver, Jr., respondent, argued the cause pro se. PER CURIAM
Hartford Insurance Company of the Midwest (Hartford) appeals from the August 7, 2015 order dismissing with prejudice its complaint against defendant Limmie Caver, Jr. seeking approximately $31,000 in damages to a wall owned by Hartford's subrogor, Electrical Motor Repair Company (EMR) on May 29, 2012, caused by Caver driving into both the wall and a fence on EMR's property. Because EMR had previously sued and collected $6000 from defendant for damage to the fence, Judge Brian R. Martinotti dismissed the complaint, after a careful analysis of the particular factors in this case, on the basis of the entire controversy doctrine and res judicata. Finding no abuse of discretion, we affirm.
Hartford, which provided casualty insurance to EMR, paid EMR $30,965.47 for property damage to EMR's wall. Beginning in September 2012, EMR sought payment from defendant for the damaged fence, which was not covered under its insurance policy with Hartford. EMR's counsel also warned defendant that after he paid for the fence, Hartford would seek reimbursement for the money paid to EMR for damage to the wall. And, indeed, in September 2012, plaintiff sent at least two letters to defendant requesting payment of $30,965.47 for property damage it paid to its insured, EMR. On October 8, 2012, defendant wrote to a Harford employee, requesting a "copy of the investigation that determined these damages were caused by negligence on my part to your insured['s] property on May 29, 2012." On November 28, 2012, EMR filed a complaint against defendant in Mercer County, Special Civil Part, (Mercer Action) seeking $6095 in damages.
On December 17, 2012, defendant wrote a letter to Hartford about the three different "claimants" representing EMR and his concern about "with whom I will be dealing." On April 9, 2013, after a trial, a judgement for $6095 was entered against defendant. Six months later, Harford, as subrogee for EMR, filed its complaint in the Superior Court.
At oral argument, defendant informed us a trial was held in Mercer County. The exhibit evidencing the result is captioned "settlement form." Hand-written on the form, however, is the word "trial" followed by an arrow pointing to the words "Judgement for the Plaintiff in amount of $6095.00 plus costs." This was the entire amount sought by EMR, and the form was not signed by the parties as a settlement would be. --------
Generally, the entire controversy doctrine, codified in Rule 4:30A,
embodies the principle that the adjudication of a legal controversy should occur in one litigation in only one court; accordingly, all parties involved in a litigation should at the very least present in that proceeding all of their claims and defenses that are related to the underlying controversy.
[Wadeer v. N.J. Mfrs. Ins. Co., 220 N.J. 591, 605 (2015) (quoting Highland Lakes Country Club & Cmty. Ass'n v. Nicastro, 201 N.J. 123, 125 (2009)).]
Our Supreme Court's decision in Wadeer is instructive in determining whether a subsequent subrogation claim should be barred under the entire controversy doctrine:
The "polestar of the application of the rule is judicial 'fairness.'" In considering whether application of the doctrine is fair, courts should consider fairness to the court system as a whole, as well as to all parties. Because plaintiff should have "a fair and reasonable opportunity to have fully litigated that claim in the original action," the doctrine "does not apply to unknown or unaccrued claims." Put simply, "[f]airness in the application of the entire controversy doctrine focuses on the litigation posture of the respective parties and whether all of their claims and defenses could be most soundly and appropriately litigated and disposed of in a single comprehensive adjudication."
[Wadeer, supra, 220 N.J. at 605-06 (citation omitted).]
Hartford contends that the motion judge incorrectly distinguished Ohio Casualty v. Meadowlands Toyota, 295 N.J. Super. 271, 274 (App. Div. 1996). Hartford argues that its claim should not be barred because it is analogous to Meadowlands Toyota. It asserts that applying the entire controversy doctrine to situations such as these would cause negative policy consequences for future subrogation actions because "it would require insurance companies to continuously monitor court records to ascertain whether their insured filed a lawsuit."
In Meadowlands Toyota, we held that the plaintiff insurance company's claims were not defeated by the entire controversy doctrine because there was "no suggestion in the record that [the plaintiff] either knew about the first action or in any way participated in it." Meadowlands, supra, 295 N.J. Super. at 274. Here, Hartford was at least generally aware of another action. Defendant wrote letters to Hartford before the April 9, 2013 Mercer Action. On October 8, 2012, defendant wrote to plaintiff's employee requesting an investigation report. Then on December 17, 2012, defendant wrote to plaintiff expressing concern about who he should deal with concerning the accident, given that he was being contacted by more than one entity.
The application of the entire controversy doctrine is fact sensitive and not a rigid doctrine. Oliver v. Ambrose, 152 N.J. 383, 395-96 (1998) ("[Application of the entire controversy doctrine] remains an equitable doctrine whose application is left to judicial discretion based on factual circumstances of individual cases." (quoting Brennan v. Orban, 145 N.J. 282, 291 (1996))).
Plaintiff contends that the motion judge also incorrectly found that its claim was barred by res judicata because of the lack of privity of the parties. It further argues that the motion judge incorrectly applied American Reliance Ins. Co. v. K. Hovnanian at Mahwah IV, Inc., 337 N.J. Super. 67 (App. Div. 2001), because defendant was aware of Hartford's insurance claim payment to EMR before the Mercer trial between EMR and defendant.
However, Judge Martinotti rejected plaintiff's contention that there was no privity of parties because Hartford, as a subrogee for EMR, stands in the shoes of EMR. Since EMR is a party and Hartford's insured in the Mercer Action, Judge Martinotti found that there was privity of parties barring re-litigation following the trial between defendant and EMR. In making this determination, the judge relied upon American Reliance, which held that a release between an insured victim and a tortfeasor served as a bar to a subsequent subrogation action against the tortfeasor. Am. Reliance, supra, 337 N.J. Super. at 75. Furthermore, EMR's attorney, when filing the Mercer complaint, certified that there were no other parties or actions contemplated. See R. 4:5-1(b)(2) ("Each party shall include with the first pleading a certification as to whether the matter in controversy is the subject of any other action pending in any court or of a pending arbitration proceeding, or whether any other action or arbitration proceeding is contemplated; and, if so, the certification shall identify such actions and all parties thereto."); R. 6:3-1 (applying Rule 4:5-1 to Special Civil Part).
Generally, res judicata "serves the purpose of providing 'finality and repose; prevention of needless litigation; avoidance of duplication; reduction of unnecessary burdens of time and expenses; elimination of conflicts, confusion and uncertainty; and basic fairness.'" Wadeer, supra, 220 N.J. at 606 (quoting First Union Nat. Bank v. Penn Salem Marina, Inc., 190 N.J. 342, 352 (2007)). "Application of res judicata 'requires substantially similar or identical causes of action and issues, parties, and relief sought,' as well as a final judgment." Ibid. (quoting Culver v. Ins. Co. of N. Am., 115 N.J. 451, 460 (1989)). In deciding its applicability, the court must determine:
(1) whether the acts complained of and the demand for relief are the same (that is, whether the wrong for which redress is sought is the same in both actions); (2) whether the theory of recovery is the same; (3) whether the witnesses and documents necessary at trial are the same (that is, whether the same evidence necessary to maintain the second action would have been sufficient to support the first); and (4) whether the material facts alleged are the same.
[Id. at 606-07 (citing Culver, supra, 115 N.J. at 461-62).]
Here, the record supports the motion judge's order barring plaintiff's subrogation action under the doctrine of res judicata. See Culver, supra, 115 N.J. at 463 ("The principle of res judicata applies not only to 'all matters litigated and determined by such judgment but also as to all relevant issues which could have been presented, but were not.'" (quoting Anselmo v. Hardin, 253 F.2d 165, 168 (3d Cir. 1958))).
American Reliance held that "the burden [is] on a subrogee to assert its right of subrogation against a tortfeasor rather than placing the burden on the tortfeasor to inquire as to whether a subrogation right exists." Am. Reliance, supra, 337 N.J. Super. at 74. Defendant's letters to Hartford evidence a good-faith attempt to clear up all actions relating to the May 29 accident at one time. Judge Martinotti considered the fairness to all parties as well as the court system when exercising his discretion to dismiss this complaint with prejudice.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION