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Prevratil v. Mohr

July 10, 1996

JOSEPH PREVRATIL AND LISA PREVRATIL, HIS WIFE, PLAINTIFFS-APPELLANTS,
v.
GEORGE MOHR AND RICH HILL, TRANSPORTATION, DEFENDANTS-RESPONDENTS.



On certification to Superior Court, Appellate Division, whose opinion is reported at 279 N.J. Super. 652 (1995).

The opinion of the Court was delivered by Pollock, J. Justices Handler, O'hern, Garibaldi and Coleman join in Justice POLLOCK's opinion. Justice Stein filed a separate Dissenting opinion. Chief Justice Wilentz did not participate.

The opinion of the court was delivered by: Pollock.

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

Joseph Prevratil, et al. v. George Mohr, et al. (A-52-95)

Argued November 28, 1995 -- Decided July 10, 1996

POLLOCK, J., writing for a majority of the Court.

The primary issue on appeal is whether the Court should create an exception from the entire controversy doctrine for automobile-negligence cases.

On March 2, 1989, Prevratil was operating a vehicle owned by his employer, Benjo Trucking Company (Benjo), and insured by Royal Insurance. George Mohr was operating a vehicle owned by his employer, Rich Hill Transportation (Rich Hill). Janet Olsen was operating her own vehicle. The three vehicles were involved in an accident. Mohr drove his vehicle into the rear of Prevratil's truck which then struck Olsen's vehicle.

Olsen filed a personal injury action on May 2, 1989, naming Prevratil, Mohr, Benjo and Rich Hill. Olsen's counsel served a summons and complaint on Prevratil at his home in Long Island City, New York, by both regular mail and certified mail. Although Prevratil claimed that he never received any notice of the suit, someone signed his name on the certified-mail return-receipt card.

Benjo's insurer retained the law firm of Crowley & Cross to represent both Prevratil and Benjo. On June 23, 1989, the firm filed an answer and cross-claim for contribution on Prevratil's behalf. The answer did not assert any cross-claims or counterclaims for personal injuries to Prevratil.

In a release and stipulation of dismissal with prejudice executed on December 4, 1989, Olsen settled her claims against Mohr and Rich Hill for $15,000. She dismissed her claims against Prevratil and Benjo.

On November 26, 1990, Prevratil filed suit against Mohr and Rich Hill. Mohr and Hill moved for summary judgment on the grounds that Prevratil should have asserted his personal injury claims in the Olsen action. Prevratil contended that he was unaware of the pendency of the Olsen action or Crowley & Cross's appearance in that action on his behalf.

The trial court conducted a plenary hearing to determine whether Prevratil actually knew about the Olsen action prior to its resolution. Thereafter, the court found that Prevratil had timely knowledge of the Olsen litigation because the proofs revealed that: shortly after the accident Prevratil knew of his alleged injuries; three months after the accident, Prevratil consulted an attorney about filing an action for personal injuries arising out of the accident; and while the Olsen action was pending, Prevratil consulted an attorney about filing a workers' compensation claim for the same injuries. Finding no special equities justifying the exception to the entire controversy doctrine, the trial court granted Mohr's and Hill's motion for summary judgment.

Prevratil appealed to the Appellate Division. While that matter was pending, another Appellate Division panel hearing the case of Stebbins v. Robbins permitted a plaintiff in a multi-vehicle accident case to pursue a personal injury claim despite plaintiff's failure to assert an affirmative claim in a prior related litigation. The Appellate Division panel hearing the Prevratil matter affirmed the summary judgment dismissing Prevratil's complaint. The court ruled that absent equitable considerations, automobile-negligence cases should remain subject to the joinder-of-claims requirement of the entire controversy doctrine as contained in Rule 4:30A.

The Supreme Court granted Prevratil's petition for certification to resolve the conflict in the Appellate Division decisions.

HELD:

The entire controversy doctrine applies to actions arising out of automobile-accident cases. Litigants currently involved in negligence litigation shall have time to make a timely application to assert affirmative claims. In all other cases, litigants in automobile-accident cases must assert any affirmative claims in the course of a single litigation.

1. The entire controversy doctrine requires, whenever possible, all phases of a legal dispute to be adjudicated in one action. At a minimum, all parties to a suit should assert all affirmative claims and defenses arising out of the underlying controversy. The doctrine promotes the goals of efficient judicial administration and fairness by encouraging the comprehensive and conclusive determination of a legal controversy. Of course, equitable considerations can relax mandatory-joinder requirements when joinder would be unfair. This case involves the mandatory joinder of claims. Since 1979, the rules of practice required defendants in personal-injury actions to assert their claims for personal injuries in the original action. (pp. 6-15)

2. The Court rejects Prevratil's request that it make an exception for litigants represented by insurance counsel in the initial litigation. For decades, courts have held that the fact that an insurance carrier's counsel defended in no way demonstrates the inability of the plaintiff to comply with the Rules of Court. In any litigation, counsel for an insurer must put the insured's interest ahead of the insurer's. Automobile negligence cases will not be excepted from the entire controversy doctrine. Since 1979, such cases, like other litigation, have been subject to the mandatory joinder of all claims arising from a controversy. (pp. 15-19)

3. Rule 4:30A provides a sensible solution to addressing an ever-increasing docket. Although Justice will never be sacrificed for economic considerations, the cost to the public of multiple litigation cannot be ignored. To prevent any problems arising from the failure of insureds to assert affirmative claims, insurance companies and their counsel should notify insureds of the requirement of mandatory joinder, explain that insureds must join all related claims in a pending suit, and advise insureds of the need to seek the advice of personal counsel regarding affirmative claims. Since insurance companies have been following that practice for years, problems following that procedure are not anticipated. The Court recognizes the special considerations arising from the application of the entire-controversy doctrine to automobile-insurance litigation, particularly when the initial action involves a claim for property damage in the Special Civil Part. Problems that may arise in that context are manageable. (pp. 19-21)

4. While the Olsen action was pending, Prevratil retained counsel to prosecute both a workers' compensation claim and a personal-injury action arising from the accident. Thus, ample evidence supports the judgment of the trial court dismissing Prevratil's complaint. Nonetheless, out of an abundance of caution, the matter is remanded to the Law Division for further consideration in light of this opinion. The purpose of the remand is to permit the Law Division to consider the fairness of the dismissal. (pp. 21-22)

5. The Dissent fails to recognize that for seventeen years the Rules of Court have required mandatory joinder of claims in all civil actions, including those arising out of automobile accidents. Moreover, the Dissent's concerns about the effect of the verbal threshold are misplaced. (p. 22)

Judgment of the Appellate Division is REVERSED and the matter is REMANDED to the Law Division.

JUSTICE STEIN, Dissenting, is of the view that the Court's application of the entire controversy doctrine to litigants represented by assigned insurance counsel is unprecedented, unfair and unjustified. More importantly, the Court's insistence that all persons injured in a motor vehicle accident file their claims in the same action, or lose the right to sue, utterly ignores the built-in delay and other practical realities that influence the management of automobile-negligence cases. The Court's Disposition will cause grave harm to innocent litigants and do virtually no good for the cause of case management. Moreover, the decision ignores the practical effect of the verbal threshold.

JUSTICES HANDLER, O'HERN, GARIBALDI and COLEMAN join in JUSTICE POLLOCK's opinion. JUSTICE STEIN filed a separate Dissenting opinion. CHIEF JUSTICE WILENTZ did not participate.

The opinion of the Court was delivered by

POLLOCK, J.

The primary issue is whether we should create an exception from the entire controversy doctrine for automobile-negligence cases. Specifically, the question is whether the entire controversy doctrine bars the personal injury action of plaintiffs, Joseph Prevratil, and his wife, Lisa, when counsel for his employer's insurer defended Prevratil and the employer in a prior action arising out of the same automobile accident as gives rise to Prevratil's present action.

The Law Division granted the motion for summary judgment by defendants George Mohr and Rich Hill, holding that the doctrine barred plaintiffs' claims. The Appellate Division affirmed, 279 N.J. Super. 652 (1995). We granted Prevratil's petition for certification, 141 N.J. 97 (1995), and now reverse and remand the matter to the Law Division.

We hold that the entire controversy doctrine applies to actions arising out of automobile-accident cases. Likewise, litigants currently involved in negligence litigation shall have time to make a timely application to assert affirmative claims. In all other cases, litigants in an automobile-accident case must assert any affirmative claims in the course of a single litigation.

-I-

This action arises from a three-vehicle accident on March 2, 1989. Prevratil was operating a vehicle owned by his employer, Benjo Trucking Company (Benjo), and insured by Royal Insurance. Defendant, George Mohr, was operating a vehicle owned by his employer, Rich Hill Transportation (Rich Hill), and Janet Olsen was operating her own vehicle. The vehicles were proceeding on State Highway 440 in Woodbridge: Mohr, Prevratil, and Olsen. Mohr drove his vehicle into the rear of Prevratil's truck, which then struck Olsen's vehicle.

Olsen filed a personal injury action on May 2, 1989, naming as defendants Prevratil, Mohr, Benjo, and Rich Hill. Olsen's counsel served a summons and complaint on Prevratil at his residence, 51-24 35th Street, Long Island City, New York, by both regular and certified mail. Although Prevratil claimed that he never had received any notice of the suit, someone signed his name on the certified-mail return-receipt card.

Benjo's insurer retained the law firm of Crowley & Cross to represent Prevratil and Benjo. On June 23, 1989, the firm filed an answer and cross-claim for contribution on Prevratil's behalf. The answer did not assert any cross-claims or counterclaims for personal injuries to Prevratil.

Olsen settled her suit within seven months of filing. In a release and stipulation of dismissal with prejudice executed on December 4, 1989, Olsen settled her claims against Mohr and Rich Hill for $15,000. She dismissed her claims against Prevratil and Benjo.

On November 26, 1990, Prevratil filed the present action against Mohr and Rich Hill (subsequently described as defendants). Defendants moved for summary judgment on the ground that Prevratil should have asserted his personal injury claims in the Olsen action. Prevratil countered that he was unaware of the pendency of the Olsen action or Crowley & Cross's appearance in that action on his behalf.

The trial court reasoned that the application of the entire controversy doctrine turned on whether Prevratil actually knew about the Olsen action before its resolution. Consequently, the court conducted a plenary hearing on July 12, 1993, on that issue. See Cafferata v. Peyser, 251 N.J. Super. 256, 260, 597 A.2d 1101 (App. Div. 1991) (requiring evidential hearing when plaintiff's knowledge of initial suit is disputed); Madison Indus. v. Eastman Kodak, 243 N.J. Super. 578, 585, 581 A.2d 85 (App. Div. 1990) (affirming fact-finding hearing to resolve summary judgment on intent of parties). The purpose of the hearing was to conduct limited fact-finding before ruling on the motion for summary judgment. The procedure is eminently sensible. If a court can determine a matter on summary judgment by recourse to limited fact-finding, a plenary trial on all issues is inefficient and unnecessary.

At the hearing, defendants contended that Prevratil's answer to Olsen's complaint, filed on Prevratil's behalf by Crowley & Cross, showed that Prevratil had been properly served. Defendants submitted correspondence from Patrick W. Foley, Olsen's attorney, to Crowley & Cross after it filed Prevratil's answer. The letter stated that Foley had been unable to serve Benjo. Defendants reasoned that Prevratil must have received the complaint and forwarded it to Benjo, who then forwarded it to Royal Insurance, which finally forwarded it to Crowley & Cross. Otherwise, Crowley & Cross would not have filed Prevratil's answer to the complaint. Prevratil countered that the omission of an answer on behalf of Benjo was a mere oversight.

To substantiate that Prevratil had been served with the Olsen complaint, defendants introduced the certified-mail return-receipt card bearing Prevratil's signature. The complaint had been sent by regular and certified mail to Prevratil's residence in Long Island City. Neither the complaint nor any other correspondence regarding the Olsen action sent by Foley or by Crowley & Cross to Prevratil had been returned as undelivered. Prevratil conceded that he had received other official documents, such as tax returns and worker's compensation checks, at his Long Island City residence. He denied, however, that the signature on the receipt card was his and explained that a neighbor might have signed his name.

The trial court concluded that Prevratil had timely knowledge of the Olsen litigation. The proofs also revealed that shortly after the accident Prevratil knew of his alleged injuries. Three months after the accident, Prevratil consulted his personal attorney about filing an action for personal injuries arising out of the accident. While the Olsen action was pending, moreover, Prevratil consulted an attorney about filing a worker's compensation claim for the same injuries. Finding no special equities justifying an exception to the entire controversy doctrine, the trial court granted defendants' motion for summary judgment.

Prevratil appealed to the Appellate Division. While the appeal was pending, another part of the Appellate Division permitted a plaintiff in a multi-vehicle accident case to pursue a personal injury claim despite plaintiff's failure to assert an affirmative claim in prior related litigation. Stebbins v. Robbins, 278 N.J. Super. 439, 651 A.2d 486 (1995). In the present case, however, the Appellate Division affirmed the summary judgment dismissing Prevratil's complaint. It ruled that absent equitable considerations, automobile-negligence cases should remain subject to the joinder-of-claims requirements of the entire controversy doctrine as contained in Rule 4:30 A. 279 N.J. Super. at 657.

We granted Prevratil's petition for certification to resolve the conflict in the Appellate Division decisions. We agree that automobile-accident cases should be subject to the rules pertaining to the mandatory joinder of claims, R. 4:27, and to the entire controversy doctrine, R. 4:30A. To assure the fairness of the dismissal of Prevratil's action, however, we reverse the judgment of the Appellate Division and remand the matter to the Law Division.

-II-

Rule 4:30A states:

Non-joinder of claims or parties required to be joined by the entire controversy doctrine shall result in the preclusion of the omitted claims to the extent required by the entire controversy doctrine, except as otherwise provided by R. 4:64-5 (foreclosure actions) and R. ...


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