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Mercer Mutual Insurance Co. v. Proudman

October 22, 2007

MERCER MUTUAL INSURANCE COMPANY, PLAINTIFF,
v.
JOSEPH N. PROUDMAN, SR., THE ESTATE OF MARIE E. PROUDMAN, KORMAN RESIDENTIAL PROPERTIES, INC. T/A KORMAN SUITES, HARTFORD INSURANCE COMPANY AS SUBROGEE OF KORMAN SUITES, SERGEANT DAVID HARKINS, DETECTIVE JOHN STOLLSTEIMER, PATROLMAN JOHN ANDRISCOLA, PATROLMAN TROY KENUK, PETER LAMARRA, ALLSTATE INSURANCE COMPANY AS SUBROGEE OF PETER LAMARRA, LAURA TRESCA, JAN OLEN, DEFENDANTS, AND DOLORES GRAZIANO AND ALBERT GRAZIANO, HER HUSBAND, DEFENDANTS/THIRD-PARTY PLAINTIFFS-APPELLANTS,
v.
R.J. REYNOLDS TOBACCO COMPANY, THIRD-PARTY DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Camden County, L-467-05.

The opinion of the court was delivered by: Lintner, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued October 1, 2007

Before Judges Lintner, Sabatino and Alvarez.

This appeal involves the application of the absolute defense under N.J.S.A. 2A:58C-3a(2) of the New Jersey Products Liability Act (Products Liability Act), N.J.S.A. 2A:58C-1 to -11, precluding suits for defective design where the harm is "caused by an unsafe aspect of the product that is an inherent characteristic of the product and . . . would be recognized by the ordinary person who uses or consumes the product."

On March 19, 2004, seventy-nine-year-old Marie Proudman left a Viceroy cigarette burning on a chair in her apartment in Gloucester Township, causing a fire that destroyed the residence. Dolores Graziano, Proudman's daughter, was in the apartment at the time of the fire. Proudman's liability carrier, Mercer Mutual Insurance Company (Mercer Mutual), filed an interpleader action naming various potential claimants, including Dolores and her husband, Albert, seeking to pay the full limits of its policy ($100,000) into court.

In February 2006, Dolores and Albert filed, with leave of court, a third-party complaint against R.J. Reynolds Tobacco Company, seeking damages for personal injuries allegedly sustained by Dolores as a result of the fire. In October 2006, Mercer Mutual settled its interpleader action, leaving only the Grazianos' (plaintiffs) third-party complaint against R.J. Reynolds Tobacco Company (defendant).*fn1

On May 12, 2006, defendant moved to dismiss the third-party complaint for failure to state a claim upon which relief can be granted. R. 4:6-2(e). Following oral argument on the motion, the judge dismissed plaintiffs' third-party complaint. Plaintiffs appeal and we now affirm substantially for the reasons set forth by the motion judge.

In their complaint, plaintiffs alleged that the Viceroy cigarette, manufactured by defendant, was defective and a cause of the fire because it "was not a self-extinguishing cigarette known as a 'Fire Safe' cigarette . . . currently sold and distributed in New York and California." Their complaint asserted that defendant was liable under the Products Liability Act. Dismissing the suit, the motion judge found that plaintiffs failed to assert a cause of action because the inherent danger of the product, i.e., "the capacity . . . to ignite a fire [and] . . . burn . . . cannot be completely eliminated."

To understand plaintiffs' assertion, we first address, conceptually, self-extinguishing cigarettes and recent applicable legislation. On May 4, 2007, recognizing, in part, that "[c]igarettes are the leading cause of fire deaths" and injuries and "[c]igarette-caused fires result in billions of dollars of property losses" and "unnecessarily jeopardize firefighters," N.J.S.A. 54:40A-55, our Legislature passed The Reduced Cigarette Ignition Propensity and Firefighter Protection Act (Reduced Cigarette Ignition Act), N.J.S.A. 54:40A-54 to -66, effective June 1, 2008. N.J.S.A. 54:40A-55j declares that "[i]t is . . . fitting and proper for this State to adopt the cigarette fire safety standard that is in effect in New York State to reduce the likelihood that cigarettes will cause fires and result in deaths, injuries and property damage."

Subject to certain enumerated fines and penalties, all cigarettes sold in this State are to be certified as meeting certain test criteria as set forth in the "Standard Test Method for Measuring the Ignition Strength of Cigarettes" in accordance with the American Society of Testing and Materials. N.J.S.A. 54:40A-57a(1). That standard requires in part that "[n]o more than 25 percent of the cigarettes tested in a test trial . . . shall exhibit full length burns." N.J.S.A. 54:40A-57a(3).

The Products Liability Act (PLA) codified the case law, leaving "intact" the three theories, specifically defective manufacture, defective design, and defective warnings, by which a manufacturer or seller may be held strictly liable for harm caused by a product. Roberts v. Rich Foods, Inc., 139 N.J. 365, 375 (1995). However, in so doing, the PLA provided, under Section 3a(2), an affirmative defense not previously recognized in the common law. William A. Dreier et al., New Jersey Products Liability & Toxic Tort Law, §14:3-1b (2007). N.J.S.A. 2A:58C-3 provides:

a. In any product liability action against a manufacturer or seller for harm allegedly caused by a product that was designed in a defective manner, the ...


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