September 2, 2008
MOHAMED ELMOGHAZI, PLAINTIFF-APPELLANT,
MARCUS AVILES AND MILAGROS B. COLLAZO, DEFENDANTS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Law Division, Civil Part, Hudson County, Docket No. L-3313-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: April 21, 2008
Before Judges Collester and C.L. Miniman.
Plaintiff Mohamed Elmoghazi appeals from an order for summary judgment entered on April 13, 2007, dismissing his complaint with prejudice under New Jersey's two-year statute of limitations, N.J.S.A. 2A:14-2, rather than New York's three-year limitations period under N.Y. C.P.L.R. § 214 (LEXIS through Apr. 23, 2008). We reverse.
On March 29, 2004, plaintiff was involved in a motor vehicle accident at the intersection of West Fourth Street and Seventh Avenue in New York City. The other motor vehicle was owned by defendant Milagros B. Collazo and driven by defendant Marcus Aviles. At the time of the accident plaintiff resided at 474 Avenue C in Bayonne and was operating a vehicle owned by Sincere Cab Corp. of Glen Ridge. Both defendants then resided at 481 Lake Street, Newark.
Plaintiff filed this personal-injury action in Hudson County on July 10, 2006--more than two years after the accident. Defendants served and filed a notice of motion for summary judgment returnable on March 30, 2007, asserting that the action was time barred under N.J.S.A. 2A:14-2, which establishes a two-year statute of limitations for personal injury actions. They also asserted that New York, with a three-year limitations period, had no interest in the action and that New Jersey law should govern. Plaintiff argued that New Jersey should apply New York law to the limitations issue.
The judge in an oral opinion delivered from the bench held that New Jersey law governed the conflict issue. She found that all of the parties had significant New Jersey contacts and that New York was merely the locus of the accident. She concluded that there was no equitable basis for relief from the New Jersey statute of limitations and granted defendant's motion for summary judgment with prejudice despite the fact that plaintiff had filed a protective action in New York on March 28, 2007, one day before the expiration of New York's limitations period.*fn1
On appeal plaintiff urges that the judge erred in applying New Jersey's statute of limitations to this action rather than applying New York's three-year limitations period. This appeal involves only the application of law to undisputed facts and our review is de novo. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.").
Under New Jersey law plaintiff was required to file his complaint on or before March 29, 2006, N.J.S.A. 2A:14-2, and he failed to do so. Under New York law plaintiff could file his complaint in New York on or before March 29, 2007, N.Y. C.P.L.R. § 214, and, as stated, he did so on March 28, 2007.*fn2 This is a frank conflict of law.
Defendant has suggested that there is no conflict because New York would have applied New Jersey's shorter limitations period by virtue of its borrowing statute, N.Y. C.P.L.R. § 202, which provides:
An action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued, except that where the cause of action accrued in favor of a resident of the state the time limited by the laws of the state shall apply. [Id. (emphasis added).]
Here, because the cause of action accrued in New York, not New Jersey, this statutory provision has no application to these facts and we must evaluate the choice-of-law issue presented by this New York cause of action involving solely New Jersey residents. Because New Jersey is the forum state, we evaluate the conflict-of-laws issue under New Jersey's choice-of-law principles. Gantes v. Kason Corp., 145 N.J. 478, 484 (1996).
At one time statutes of limitations were considered procedural, not substantive, and as a consequence the law of the forum governed actions pending in New Jersey. See, e.g., Marshall v. Geo. M. Brewster & Son, Inc., 37 N.J. 176, 188 (1962). In Heavner v. Uniroyal, Inc., 63 N.J. 130, 135-36 (1973), the Supreme Court reexamined "the common law conflicts rule that the statute of limitations is ordinarily a matter of procedure" and concluded:
We are convinced the time has come . . . to discard the mechanical rule that the limitations law of this state must be employed in every suit on a foreign cause of action. We need go no further now than to say that when the cause of action arises in another state, the parties are all present in and amenable to the jurisdiction of that state, New Jersey has no substantial interest in the matter, the substantive law of the foreign state is to be applied, and its limitation period has expired at the time suit is commenced here, New Jersey will hold the suit barred. In essence, we will "borrow" the limitations law of the foreign state. We presently restrict our conclusion to the factual pattern identical with or akin to that in the case before us, for there may well be situations involving significant interests of this state where it would be inequitable or unjust to apply the concept we here espouse. [Id. at 140-41 (footnote omitted).]
The Court also clearly stated that it was not addressing the issue of whether a longer foreign statute of limitations should be applied to an action barred by New Jersey's shorter limitations period. Id. at 138. We confront that issue now.
Heavner is generally recognized as standing for the proposition that "[t]he governmental interest test applies to choice of limitations law."*fn3 Pressler, Current N.J. Court Rules, comment 6.2 on R. 4:5-4 (2008); see also Pine v. Eli Lilly & Co., 201 N.J. Super. 186, 191 (App. Div. 1985) ("We glean from Heavner that the underlying analysis of whether New Jersey should apply its limitations statute or that of the foreign state is essentially akin to the 'governmental interest' test in resolving choice of substantive law issues.").
The governmental-interest test was formulated in Veazey v. Doremus, 103 N.J. 244 (1986). There, the Supreme Court had before it a case in which two Florida domiciliaries were involved in an accident in New Jersey, which, unlike Florida, had abolished inter-spousal immunity. Id. at 245. To resolve the conflict of law, the court adopted a two-step analysis.
Under that analysis, the determinative law is that of the state with the greatest interest in governing the particular issue.
The first step in the analysis is to determine whether a conflict exists between the law of the interested states. Any such conflict is to be determined on an issue-by-issue basis. If an actual conflict exists, the next step is to identify the governmental policies underlying the law of each state and how those policies are affected by each state's contacts to the litigation and to the parties. If a state's contacts are not related to the policies underlying its law, then that state does not possess an interest in having its law apply. Consequently, the qualitative, not the quantitative, nature of a state's contacts ultimately determines whether its law should apply. [Id. at 248 (citations omitted).]
The Court then determined that New Jersey's interest in an accident involving an out-of-state couple was "in maintaining highway safety and deterring negligent driving." Id. at 249. It concluded that "judicial recognition of inter-spousal immunity as declared by another state will not endanger highway safety in New Jersey." Id. at 250. The Court also determined that "[t]his state's interest in the capacity of spouses domiciled elsewhere to sue each other pales by comparison to the interest of their state of domicile." Id. at 251. Accordingly, it applied Florida law to the issue of inter-spousal immunity. Ibid.
Subsequently, in Fu v. Fu, 160 N.J. 108 (1999), where a choice of law question concerned the states' policies governing vicarious liability, the Court addressed the issue of whether each state's policies would be furthered by application of its laws. Id. at 122. After considering Restatement (Second) of Conflict of Laws, § 6 (1971), the Court identified five factors bearing on "an issue arising out of tort law." Ibid. Those were "(1) the interests of interstate comity; (2) the interests of the parties;*fn4 (3) the interests underlying the field of tort law; (4) the interests of judicial administration;*fn5 and (5) the competing interests of the states," "the most significant factor in the tort field." Id. at 122, 125. The last factor requires courts to consider whether application of the particular law will advance the policies the law was intended to promote. Id. at 125. "'[I]f a state's contacts [with the transaction] are not related to the policies underlying its law, then that state does not possess an interest in having its law apply.'" Ibid. (quoting Pfizer, Inc. v. Employers Ins. of Wausau, 154 N.J. 187, 198 (1998)).
As here, the sole contact of New York was that it was the locus of the accident. Ibid.
In personal injury cases, "the place where the injury occurred is a contact that, as to most issues, plays an important role in the selection of the state of the applicable law." Restatement, supra, § 145 comment e. When both conduct and injury occur in a single jurisdiction, with only "rare exceptions, the local law of the state where conduct and injury occurred will be applied" to determine an actor's liability.
Id. § 145 comment d. That is so because "a state has an obvious interest in regulating the conduct of persons within its territory and in providing redress for injuries that occurred there." Ibid. The place of injury becomes less important where it is simply fortuitous. Ibid. [Id. at 125-26.]
Balancing the states' interests, the Court concluded that New York law should apply: "[A]lthough New Jersey's common law plainly shields automobile owners from liability for permissive use of their vehicles in this State, New Jersey does not have a governmental interest in affording that same protection to its residents for tortious conduct out of state." Id. at 138. Further, "the application of New York law would certainly not frustrate, and may even be partially congruent with, this State's policy regarding a vehicle owner's responsibility for injuries caused by the negligence of a permissive user of the vehicle." Ibid.
In Erny v. Merola the choice-of-law issue respecting joint and several liability arose in the context of a New Jersey automobile accident involving a New Jersey passenger in a New Jersey vehicle driven by her New Jersey husband whose vehicle was struck by a New York driver after she was cut off by another New York driver and lost control of her vehicle. 171 N.J. 86, 91 (2002). Both drivers' vehicles were owned by New York residents, who had registered and insured them in New York. Id. at 92. The policy limits of the vehicle determined to be sixty percent at fault were insufficient and the injured plaintiff sought application of New York joint-and-several-liability law, N.Y. C.P.L.R. § 1411, so that she could recover the full amount of her damages from the less negligent defendant whose liability policy exceeded the total amount of plaintiff's damages. Id. at 93-94. The trial court applied New Jersey law and we affirmed. Id. at 94 (citing Erny v. Russo, 333 N.J. Super. 88, 99, 104 (2000)). The Supreme Court reversed. Id. at 91.
The Court reasoned that "application of New Jersey law on joint and several liability does not follow automatically from the determination that our comparative negligence law applies." Id. at 99. Rather, they may operate independently. Ibid.
Although Restatement (Second) of Conflict of Laws, § 172, "regards the law of the site of the conduct and injury as the presumptively applicable law, the governmental-interest analysis requires that the sister state's policies be reviewed before determining which state has the dominant interest in having its . . . law apply. The inquiry also must determine whether any policy of the situs state would be frustrated by application of another state's law." Ibid.
Concluding that the first prong of the governmental-interest test was satisfied because there was unquestionably an actual conflict, the Court then considered the second prong, which requires a court to examine the interest of each state in the application of its law. Id. at 100-101.
In personal injury cases, the place of the injury is important, and when both the conduct and the injury occur in the same place, that jurisdiction's law generally will apply except in those rare instances where another jurisdiction has a demonstrable dominant interest and no policy of the situs state is frustrated by application of the sister state's policy. [Id. at 103 (citing Restatement, supra, §§ 145 cmt. e, 146 cmt. c, d).]
After considering the various competing interests, the Court concluded that New York law should govern the issue of joint and several liability. Id. at 104-108. In closing, the Court highlighted the concept that "[e]ach choice-of-law case presents its own unique combination of facts--the parties' residences, the place and type of occurrence and the specific set of governmental interests--that influence the resolution of the choice-of-law issue presented." Id. at 108. As a consequence, the Court warned, comparison with rulings in other cases may be unavailing. Ibid.
Last year the Supreme Court addressed a conflict-of-law issue in a product liability, failure-to-warn action by a Michigan resident against two New Jersey pharmaceutical manufacturers. Rowe v. Hoffman-La Roche, Inc., 189 N.J. 615 (2007). The drug, Accutane, was manufactured in New Jersey but prescribed and consumed in Michigan. Id. at 618. Under Michigan law the action was barred because Michigan had enacted a statute establishing that FDA approval created "a conclusive determination that the health risk warnings issued by defendants regarding the drug were adequate." Ibid. (citing Mich. Comp. Laws § 600.2946(5) (2006)). Under New Jersey law FDA approval only created a rebuttable presumption of adequacy. Ibid. (citing N.J.S.A. 2A:58C-4).
Finding that there was an actual conflict between the laws of Michigan and New Jersey, the Court considered the states' respective interests and concluded that they were not antithetical but, rather, "substantially congruent" because each sought to limit the liability of drug manufacturers in product liability actions. Id. at 626. After weighing the interests of each state, the Court concluded that "New Jersey's interest is limited and outweighed by Michigan's interest in making more prescription drugs available to its citizens." Id. at 629.
The first prong of the governmental-interest test is clearly satisfied by the conflict in the term of the limitations periods. Veasey, supra, 103 N.J. at 248. We must therefore identify the governmental policies underlying each state's law and determine how those policies are affected by each state's contacts to the litigation and the parties. Ibid. In doing so, we consider the five factors identified in Fu, supra, 160 N.J. at 122-25.
In Galligan v. Westfield Centre Service, Inc., 82 N.J. 188 (1980), our Supreme Court discussed in depth the public purposes underlying New Jersey's statutes of limitations.
The most important of these purposes recognizes that eventual repose creates desirable security and stability in human affairs. Thus statutes of limitations compel the exercise of a right of action within a specific, reasonable period of time. See Tevis v. Tevis, 79 N.J. 422, 430 (1979); Farrell [v. Votator Div. of Chemetron Corp.], 62 N.J. [111,] 115 [(1973)]; State v. United States Steel Corp., 22 N.J. 341, 358 (1956); see also Wood v. Carpenter, 101 U.S. 135, 139, 25 L.Ed. 807, 808 (1979); Holmes, "The Path of the Law," 10 Harv. L. Rev. 457, 477 (1897).
Separate from the opposing parties' interest in repose is their ability to answer the allegations against them. Statutes of limitations reflect the importance of both. By penalizing unreasonable delay, such statutes induce litigants to pursue their claims diligently so that answering parties will have a fair opportunity to defend. See Kaczmarek [v. N.J. Turnpike Auth.], 77 N.J. [329,] 337 [(1978)]; Union City Housing Auth. v. Commonwealth Trust Co., 25 N.J. 330, 335 (1957). Another purpose of limitation periods is "to spare the courts from litigation of stale claims." State v. Standard Oil Co., 5 N.J. 281, 295 (1950), aff'd sub nom. Standard Oil Co. v. New Jersey, 341 U.S. 428, 71 S.Ct. 239, 95 L.Ed. 1078 (1951) (quoting Chase Securities Corp. v. Donaldson, 325 U.S. 304, 314, 65 S.Ct. 1137, 1142, 89 L.Ed. 1628, 1635 (1945)); see Kaczmarek, [supra,] 77 N.J. at 337; Farrell, [supra,] 62 N.J. at 115. Once memories fade, witnesses become unavailable, and evidence is lost, courts no longer possess the capacity to distinguish valid claims from those which are frivolous or vexatious. See Kczmarek, [supra,] 77 N.J. at 338; Lopez [v. Sawyer], 62 N.J. [267,] 274; Union City Housing Auth., [supra,] 25 N.J. at 335. Scarce judicial resources are therefore best conserved for litigation timely commenced. [Id. at 191-192.]
New York has articulated the legislative purposes of its statute of limitations in a similar manner. Statutes of limitations, at times referred to as "statutes of repose," "represent a legislative judgment that . . . occasional hardship is outweighed by the advantage of barring stale claims." 1
Weinstein-Korn-Miller, N.Y. Civ. Prac., par. 201.01; see Schmidt v. Merchants Desp. Transp. Co., 270 N.Y. 287, 302 (1936); Jordan v. State, 56 Misc. 2d 1032, 1035 (N.Y. Ct. Cl. 1968). They are intended "to spare the courts from litigation of stale claims, and the citizen from being put to his defense after memories have faded, witnesses have died or disappeared, and the evidence has been lost." Ratka v. St. Francis Hosp., 44 N.Y.2d 604, 612 (N.Y. 1978).
Statutes of limitation represent a legislative judgment that the occasional hardship that occurs when a just claim is barred because it was not timely sued upon is outweighed by competing interests. These include the desirability of repose, i.e., allowing people to plan lives and business secure in the belief that "ancient" misdeeds will not be the source of judicial action against them. There is also an often unstated feeling that a long dormant claim is unlikely to be meritorious. The policy consideration most frequently articulated by courts, and the one that has had the greatest effect in shaping the case law of limitations, however, is the effect the passage of time is likely to have on the availability and reliability of evidence, and the consequent prejudice to an accurate determination of factual disputes. [1-2 Weinstein, Korn & Miller CPLR Manual § 2.01.]
The only real difference between the legislative purposes of the New York and New Jersey statutes of limitation is that New York is somewhat more favorable to persons injured within its borders, giving them three years in which to bring their causes of action, and less favorable to tortfeasors, leaving them exposed to claims for three years. We could hardly consider a three-year limitations period to be unreasonable per se as our law provides for periods of limitations longer than three years. See, e.g., N.J.S.A. 12A:2-725 (four years on sale of goods); N.J.S.A. 2A:14-1 (six years on property damage); N.J.S.A. 2A:14-4 (six years on instrument under seal).
With respect to the interests of interstate comity, New York's interest in compensating injured victims of automobile accidents will be fostered by application of its statute of limitations. New Jersey's interest in barring stale claims will not be fostered by the application of its limitations period because the action could be and was brought in New York.
With respect to the interests underlying the field of tort law, Fu, supra, 160 N.J. at 123, New York law clearly governs this action and its policies of deterrence and compensation will be impaired by application of New Jersey's statute of limitations. New Jersey's interests underlying the field of tort law are not implicated by the dispute between the parties.
The interests of the parties "plays little or no part in a choice-of-law question in the field of torts." Ibid. (citation omitted). We need not consider this factor.
"The interests of judicial administration require the courts to consider the relative ease in determination and application of the choice of law regarding a specific issue, a factor that in turn furthers the values of uniformity and predictability of result." Id. at 124. Because New York's three-year limitations period is easy to determine in a action where the substantive rights of the parties are governed by New York substantive law, this factor does not weigh in favor of applying New Jersey's two-year limitations period.
Finally, the competing interests of the states, id. at 125, also supports application of New York's limitations period. New Jersey's contact with the litigation and the parties is limited to the pendency of the action here and the residence of both parties. New York, on the other hand, is a forum where the parties are amenable to process and is the locus of the accident. New York's tort law governs the rights of the parties and establishes the cause of action:
In personal injury cases, "the place where the injury occurred is a contact that, as to most issues, plays an important role in the selection of the state of the applicable law." Restatement, supra, § 145 comment e. When both conduct and injury occur in a single jurisdiction, with only "rare exceptions, the local law of the state where conduct and injury occurred will be applied" to determine an actor's liability. Id. § 145 comment d. That is so because "a state has an obvious interest in regulating the conduct of persons within its territory and in providing redress for injuries that occurred there." Ibid. [Id. at 125-26.]
New Jersey has no significant interest in this action and we conclude that it was error to dismiss this action under New Jersey's limitation period, especially where another action was filed in New York within its limitations period. We find under our choice-of-law principles that N.Y. C.P.L.R. § 214 governs the time within which the action could be brought and reverse for further proceedings consistent with this opinion.
Reversed and remanded. We do not retain jurisdiction.