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Lopez v. Patel

May 7, 2009


On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-223-05.

The opinion of the court was delivered by: Ashrafi, J.S.C. (temporarily assigned).



Argued March 25, 2009

Before Judges Payne, Waugh and Ashrafi.

Plaintiffs appeal from an order dismissing their automobile negligence complaint in accordance with Habick v. Liberty Mutual Fire Insurance Co., 320 N.J. Super. 244 (App. Div.), certif. denied, 161 N.J. 149 (1999). In Habick, we held that a plaintiff is collaterally estopped from relitigating in a negligence action an adverse finding on proximate cause previously reached in PIP arbitration. Here, because defendants delayed without excuse raising collateral estoppel as a defense until the day of trial, we hold that defendants themselves are equitably estopped from invoking collateral estoppel against plaintiffs. We reverse the order of dismissal and remand for trial.


Plaintiff, Tito Lopez, was a passenger in a car that was struck in the rear on May 29, 2004, by a car driven by defendant Tushar Patel. Lopez alleges that he suffered serious injury to his back that required surgery in August 2004 and has left him bound to a wheelchair. In January 2005, Lopez and his wife, Daphne Lopez, filed a negligence complaint in Superior Court against defendant Patel, and also against defendants William Brown and Janie B. Nail, who were respectively the driver and owner of the car in which Lopez was riding.

Lopez did not own a car and did not have his own automobile policy with personal injury protection (PIP) coverage. In October 2004, Lopez submitted an insurance claim for PIP benefits to Clarendon National Insurance Company, which was the automobile insurer for defendant Janie B. Nail. Clarendon denied the claim, taking the position that the August 2004 surgery and other treatment for Lopez's back were not caused by the May 2004 accident. Before the accident, Lopez had a history of back problems, and after the accident, in July 2004, he had fallen from a chair, requiring hospitalization for further injury to his back.

In March 2005, two months after filing plaintiffs' negligence complaint, Lopez's attorney filed a demand for arbitration of his PIP claim against Clarendon, pursuant to N.J.S.A. 39:6A-5, -5.1 and N.J.A.C. 11:3-5.1 et seq. The arbitration hearing was held on September 12, 2006, while the negligence action was still pending. Following the advice of his attorney, Lopez did not attend the arbitration hearing, and no testimony was taken. Instead, both Lopez and Clarendon relied on written reports of doctors. Lopez's doctors reported that the accident of May 2004 aggravated his pre-existing condition necessitating the spinal surgery performed in August 2004. Clarendon's doctor reported that plaintiff's surgery was not causally related to the accident of May 2004 but to his pre-existing condition and the fall from the chair.

Clarendon also availed itself of the PIP statutory provision that allows any party to request an evaluation regarding causation by an independent medical review organization (MRO). N.J.S.A. 39:6A-5.1d. The MRO doctor reviewed Lopez's medical records and concluded that the motor vehicle accident was at most a very minor, "no greater than 2 percent," contributing factor to plaintiff's injuries. The MRO doctor's report was provided to the arbitrator and counsel.

The arbitrator rendered her written decision on November 13, 2006, which coincidentally was the initial trial date set for Lopez's negligence action in Superior Court. Finding that Lopez had not proven by a preponderance of the evidence that his surgery and other medical treatment were proximately caused by the accident of May 2004, the arbitrator decided the PIP claim against Lopez and in favor of Clarendon.

After the arbitration, present counsel for plaintiffs was substituted into their negligence action. At the request of defendant Patel, the November 13, 2006, trial date was adjourned for reasons unrelated to the PIP arbitration. Following a case management conference held on January 4, 2007, discovery was reopened until January 31, 2007, to permit plaintiffs' new attorney to depose defendant Patel's medical expert. Thereafter, trial dates were repeatedly set and adjourned nine more times until the case finally came on for trial on the tenth new trial date, January 7, 2008. At oral argument for this appeal, counsel for plaintiffs stated that four of the ten trial dates were "real," meaning that he expected the trial to proceed on those four dates, and he prepared for trial. For the January 2008 trial date, plaintiffs traveled to New Jersey from their residence in Georgia. Plaintiffs' attorney represents that he paid thousands of dollars to an expert witness and for other trial services.

A few days before the January 2008 trial date, the trial judge solicited pretrial submissions from the attorneys to help identify trial issues. For the first time, defendant Patel's attorney mentioned the PIP arbitration and collateral estoppel, and he provided a copy of Habick v. Liberty Mutual Fire Insurance Co., supra, 320 N.J. Super. 244, to the judge. On the morning of trial, he moved to dismiss plaintiffs' complaint.

Defendant Brown joined in the motion.*fn1 The trial judge expressed great surprise and dismay at the timing of the motion. He admonished counsel for failing to raise the motion months earlier. Counsel for Patel responded that he had no obligation to raise the motion earlier and that plaintiffs ...

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