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Insurance Restoration Specialists, Inc., Alan Goeltz and New Jersey v. Toll Brothers

June 29, 2012

INSURANCE RESTORATION SPECIALISTS, INC., ALAN GOELTZ AND NEW JERSEY MANUFACTURERS INSURANCE COMPANY AS SUBROGEE OF INSURANCE RESTORATION SPECIALISTS, INC. AND ALAN GOELTZ, PLAINTIFF-RESPONDENT,
v.
TOLL BROTHERS, INC., DEFENDANT/THIRD PARTY PLAINTIFF-APPELLANT,
v.
J. LAZEWSKI EXCAVATING COMPANY, INC., THIRD PARTY DEFENDANT.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-5451-09.

The opinion of the court was delivered by: Per Curaim

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted June 20, 2012

Before Judges A. A. Rodriguez and Reisner.

In this automobile insurance litigation, defendant Toll Brothers, Inc. appeals from the following trial court orders: March 19, 2010 (reinstating plaintiff's complaint); July 9, 2010 (denying defendant's motion to dismiss the complaint); and May 26, 2011 (denying defendant's in limine motion concerning spoliation of evidence). We affirm.

I

The litigation concerns an automobile owned by Insurance Restoration Specialists, Inc. (Insurance Restoration), driven by its president Alan Goeltz, and insured by New Jersey Manufacturers Insurance Company (NJM). In the first lawsuit, filed on July 16, 2008, Goeltz, through his personal attorney, filed a Special Civil Part complaint in Middlesex County against Toll Brothers, seeking to recover about $3500 for his deductible and incidental expenses. That lawsuit alleged that on October 19, 2007, the car was damaged when he drove over a raised manhole cover on "an undedicated street, which was under repair." He alleged that Toll Brothers, the developer of the property, failed to warn drivers about "the hazardous condition of the raised manhole cover." Toll Brothers filed a third-party complaint against J. Lazewski Excavating Company (Lazewski), alleging that Lazewski was responsible for the defective manhole cover. Goeltz and Toll Brothers settled the litigation on March 25, 2009, for an undisclosed amount.

Paragraph 1 of the Settlement Agreement and Mutual General Release recited that it "fully, finally and forever settled" all claims relating to, or arising from, damages allegedly sustained as the result" of the October 19, 2007 incident. However, paragraph 6, the "Release" section of the document, specifically carved out an exception for NJM's subrogation lawsuit then pending in Monmouth County. In that suit, NJM was seeking to recover about $19,000 that it paid for the damage to the car:

This Release shall have no effect on claims currently pending in a matter known as Insurance Restoration Specialists, Inc./NJM v. J. Lazewski Excavating Company, Inc., Docket No. MON-L-3920-08, which involves a subrogation claim by the insurance carrier for Goeltz's employer against J. Lazewski Excavating Company.

As the March 2009 Release acknowledged, the Monmouth lawsuit was filed on or about August 6, 2008, by NJM against Lazewski and several fictitious defendants. That lawsuit alleged that Goeltz was driving a vehicle owned by Insurance Restoration and insured by NJM, when he drove over a raised manhole cover "which had been negligently repaired" by Lazewski.

NJM, "as subrogee of Alan Goeltz and Insurance Restoration," sought to recover from Lazewski the money it paid Insurance Restoration "for property damage, storage, and towing" and sought to recover Insurance Restoration's deductible under the NJM policy. The record reflects that NJM initially sued Lazewski rather than Toll Brothers because, when NJM put Toll Brothers on notice of its subrogation claim shortly after the 2007 accident, Toll Brothers asserted that Lazewski was responsible for the manhole cover and referred NJM's adjuster to Lazewski's insurer. After the Monmouth suit was filed, Lazewski's attorney provided NJM's counsel with exculpatory evidence and threatened to counterclaim for a frivolous pleading if the complaint was not withdrawn. NJM withdrew the lawsuit.

On July 26, 2009, the same attorney who had filed the Monmouth lawsuit on NJM's behalf filed essentially the same suit in Middlesex County, asserting the same subrogation claims. The only difference was that instead of naming Lazewski as a defendant, the Middlesex complaint named Toll Brothers. Toll Brothers filed a motion to dismiss that complaint, and on November 20, 2009, a Middlesex Law Division judge entered an order dismissing the complaint without prejudice, "for reasons set forth on the record on November 20, 2009." However, Toll Brothers has not provided us with a copy of its motion papers or with a transcript of that judge's statement of reasons. NJM's counsel filed a motion for reconsideration seeking to vacate the November 20 order, but on January 22, 2010, a second Middlesex judge denied that motion. We also have not been provided with any record concerning that motion, beyond a copy of the order.

NJM filed yet another motion seeking to reinstate the complaint, this time under the aegis of Rule 4:50, essentially contending that its attorney was lulled by his adversary into failing to file opposition to the original motion to dismiss. Toll Brothers' counsel filed a certification contradicting those assertions. By order dated March 19, 2010, a third judge, Judge Nicholas J. Stroumtsos, Jr., reinstated the NJM complaint, citing Rule 4:50-1 (a), (f).

Toll Brothers filed a motion to dismiss the now-reinstated complaint. In opposition, NJM filed certifications establishing that as early as November 2007, NJM had put Toll Brothers on notice of its subrogation claim, and that prior to the settlement with Goeltz, both Goeltz's counsel and Toll Brothers were aware of Lazewski's claim that it "had not yet entered the job site prior to the accident." ...


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