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Scott Simon, An Incompetent, By His Guardian Ad Litem, Daniel P. Mecca, and Arnold Simon, Individually v. Harding Pharmacy

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


October 17, 2012

SCOTT SIMON, AN INCOMPETENT, BY HIS GUARDIAN AD LITEM, DANIEL P. MECCA, AND ARNOLD SIMON, INDIVIDUALLY, PLAINTIFFS-APPELLANTS,
v.
HARDING PHARMACY, INC., T/A M&C DRUG, INC., MYRON LESH, JAMES CORDIROLI, MARC MALAJIAN, RICHARD G. MALAJIAN, BONNIE E. MALAJIAN, DONNIE NUCKEL, ALAN ROTHBERG, VINCE MANELLA, ERNIE DEFIORE, ANDREA KASS-DEFIORE, MISHA KANG, TED KRAUS, TERRY SANDERS, MICHAEL TRISCHETTA, ERICA PISCITELLI, JASON ELIYA, AND KALEIGH SOSEBEE, DEFENDANTS, AND KINRAY INCORPORATED, DEFENDANT-RESPONDENT, AND M&C DRUG, INC. T/A HARDING PHARMACY; MYRON LESH AND JAMES CORDIROLI, THIRD-PARTY PLAINTIFFS,
v.
ARNOLD SIMON, DONALD NUCKEL; LINDA NUCKEL; DONNIE NUCKEL; SARA ENTWISTLE; KALEIGH SOSEBEE; ERICA PISCITELLI; MIA MARTINEZ; MICHAEL TRISCHETTA; JASON ELIYA; KINRAY INCORPORATED; PKT FASHIONS, LLC; RAMIRO VENCES; QUINCY MUTUAL AND FIRE INS. CO., THIRD-PARTY DEFENDANTS.

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-5205-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 11, 2012

Before Judges Reisner, Yannotti and Hoffman.

Plaintiffs Scott Simon and Arnold Simon appeal from an August 12, 2011 order granting summary judgment in favor of defendant Kinray, Inc. (Kinray).*fn1 We affirm.

I

We begin by summarizing the most pertinent undisputed facts. Since 1996, Harding Pharmacy (Harding) purchased prescription drugs, including controlled dangerous substances (CDS) such as Xanax, from Kinray, a large-scale drug wholesaler and distributor. One of Harding's owners, Myron Lesh, hired Marc Malajian as a clerk in the pharmacy despite knowing that Malajian had prior drug addiction issues. Harding, while required by state and federal statutes and regulations to secure CDS from diversion, was lax in implementing those requirements.

For example, the pharmacy's secure cabinet, intended for storage of Schedule II CDS, was not kept locked, and customers often walked behind the pharmacy counter where CDS were also stored. A later audit of Harding by the Federal Drug Enforcement Agency (DEA) noted at least ninety-two regulatory violations. However, none of those violations involved any alleged wrongdoing by Kinray.

Sometime in early 2007, the DEA advised Lesh that Malajian was suspected of stealing CDS from the pharmacy. However, even after receiving this information, Lesh did not change Malajian's duties or limit his access to CDS within the pharmacy. Lesh testified at his deposition that the DEA asked him not to reassign Malajian, in order to allow the agency to continue its investigation and possibly catch him in the act of theft. Harding failed to notify Kinray about the DEA's investigation.

On September 22, 2007, Malajian stole a partially-full, open bottle of Xanax from a shelf in the pharmacy department. Later that evening, Malajian went to a party at his friend Scott Simon's house. There, Malajian gave seventeen-year-old Scott*fn2 the stolen Xanax, even though he observed that Scott seemed "messed up" and despite knowing Scott's reputation for getting "a little crazy [with drugs] at times." The party, which was attended by dozens of teenagers, was loud, and an adult on the premises told Scott to shut the party down.*fn3 Instead of complying, Scott arranged to move the party to another teenager's house; that teen's parents were not at home, and the unsupervised revelry continued into the early hours of September 23, 2007.

The next morning, Malajian found Scott lying unresponsive, with shallow breathing and blue-tinged skin. Instead of calling an ambulance, Malajian called a friend, who, unable to resuscitate Scott, drove him to the hospital. Scott was eventually revived, but suffered catastrophic injuries that left him in a coma.

Plaintiffs filed suit against Kinray, Harding, Harding's owners, Malajian, and numerous other parties. Plaintiffs settled or otherwise resolved their claims against all of the defendants except Kinray.

Kinray filed a summary judgment motion, which Judge Rachelle L. Harz granted, stating her reasons in a written opinion filed on August 16, 2011. Citing Piscitelli v. Classic Residence by Hyatt, 408 N.J. Super. 83 (App. Div. 2009), Judge Harz concluded that Kinray owed no common law duty to Scott, a third party with whom it had no special relationship. She also reasoned that state and federal statutes did not impose upon Kinray a legal duty that plaintiffs could enforce in a tort action. And she found that, even if a duty existed, Kinray's allegedly negligent actions did not proximately cause Scott's injury.

Notably, in addressing the proximate cause issue, Judge Harz set forth the following analysis:

Assuming arguendo that this court did find that Kinray owed a duty of care to Simon in the distribution of Xanax to prevent Scott's overdose and that Kinray breached that duty of care, this court concludes that plaintiffs have failed to establish that Kinray's breach proximately caused Scott to overdose on Xanax. The requisite casual connection between Kinray's alleged breaches of its duty of care and Scott's injury do not exist. To be considered a proximate cause, the courts must find that "the negligent conduct was a substantial factor in causing the alleged harm." Endre v. Arnold, 300 N.J. Super. 136, 147 (App. Div.), certif. denied, 150 N.J. 27 (1997).

Plaintiffs argue to this court that Kinray is liable to Scott due to its allegedly negligent implementation of a suspicious order monitoring system. While this court is not convinced that this is true, regardless of the effectiveness of Kinray's system, there can be no causal connection between Harding's purchases of controlled substances and the diversion at issue. First, based upon the toxicology results, an overdose of Xanax caused Simon's injuries. There had been no suspect purchases of Xanax. Second, the thefts at issue involved a 1/4 to 1/2 open bottle of Xanax and eight Oxycontin pills. Plaintiffs have failed to present to this court a known suspicious order monitoring system that could have detected the internal thefts at Harding in these small numbers that would have triggered knowledge of a suspicious order. Accordingly, any deficiency in Kinray's suspicious order monitoring system could not be found as a matter of law to be a proximate cause of Scott's injuries.

Plaintiffs present multiple arguments to this court regarding the fact that Harding allowed non-pharmacists to accept deliveries of pharmaceuticals. Plaintiffs claim that for this reason, Kinray is liable to Scott for failing to properly supervise delivery personnel. Kinray denies that industry standards require pharmaceutical deliveries be made only to licensed pharmacists. This issue is irrelevant to this court in this decision because Malajian admits that he stole the Xanax not upon delivery from Kinray, but rather directly off Harding's shelves when the on-duty pharmacist was not present. Accordingly, Kinray's delivery practices had no bearing on Malajian's theft of Xanax from Harding, and therefore as a matter of law, cannot be a proximate cause of Scott's injuries.

Plaintiff also argues to this court that Kinray is liable to Scott for not conducting background checks of Harding's entire staff, including part-time clerks, like Malajian. There presently is no duty, by statute or otherwise, for a wholesale pharmaceutical distributor like Kinray to perform such a background check of its customer's clerks and this court will not create such a duty. Moreover, Lesh knew of Malajian's drug history and the fact Malajian was suspected of stealing drugs from Harding and[,] inconceivably[,] did nothing with this information thereby negligently disregarding the internal safety and integrity of his own pharmacy. To suggest that Lesh would somehow willingly care to share this information with Kinray, when he himself did not act upon the information, is less than believable. The fact remains that Lesh did not share any Malajian-drug related information with Kinray.

Kinray distributes to two thousand pharmacies. It would be an insurmountable task, both procedurally and financially, to require pharmaceutical wholesalers like Kinray to conduct the types of investigations of all employees of all of their customers that plaintiffs seek to have this court create as the new standard in the industry. This court will not do so.

II

We review the trial court's grant of summary judgment de novo, employing the same standard used by the trial court. Davis v. Devereaux Foundation, 209 N.J. 269, 286 (2012); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). If there are no material facts in dispute, we consider whether, viewing the undisputed facts in the light most favorable to the non-moving party, the moving party is nonetheless entitled to judgment as a matter of law. Agurto v. Guhr, 381 N.J. Super. 519, 525 (App. Div. 2005). We conclude that this case was ripe for summary judgment, and it was properly granted.

In their appellate brief, plaintiffs present the following points for our consideration:

I. WHETHER THE LOWER COURT ERRED IN RULING THAT KINRAY OWED NO LEGAL DUTY TO PLAINTIFF WHEN THE RISK OF HARM TO PLAINTIFF WAS FORESEEABLE.

A. The risk of harm to plaintiff was foreseeable.

B. Kinray had the ability to exercise minimal care to prevent the harm sustained by Scott.

C. The relationship of the parties mandates the imposition of a duty upon Kinray in this case.

D. The imposition of a duty is necessary as public interest dictates such a duty be imposed on Kinray.

II. WHETHER THE LOWER COURT ERRED IN GRANTING SUMMARY JUDGMENT WHEN KINRAY'S CONDUCT WAS A PROXIMATE CAUSE OF SCOTT'S INJURIES AND A QUESTION OF FACT FOR THE JURY.

III. WHETHER THE LOWER COURT ERRED IN GRANTING SUMMARY JUDGMENT WHEN INDUSTRY STANDARDS CAN BE CONSIDERED BY THE TRIER OF FACT AS EVIDENCE OF NEGLIGENCE.

IV. WHETHER THE LOWER COURT ERRED IN GRANTING SUMMARY JUDGMENT WHEN THERE EXISTED GENUINE ISSUES OF MATERIAL FACT.

Having reviewed the record de novo, we conclude that plaintiffs' appellate arguments are completely without merit. Judge Harz addressed the issues in her comprehensive written opinion, and they require little further discussion here.

R. 2:11-3(e)(1)(E). However, we add the following comments. As Judge Harz concluded, even viewing the evidence in the light most favorable to plaintiffs, no jury could reasonably conclude that Kinray's acts or omissions were a proximate cause of Scott's injury. In her decision, the judge found that "[p]laintiffs have failed to establish any connection between the delivery of Kinray drugs to Harding and the theft of the Xanax which is the known cause of Scott's drug overdose." We agree.

Plaintiffs contend that Kinray was negligent in permitting its delivery drivers to hand over packages of CDS to store employees other than pharmacists, and in failing to ensure that its customers had policies permitting only pharmacists to sign for CDS deliveries. However, in this case, there is no connection between those omissions and the harm that befell Scott.

There is no evidence that Malajian signed for or accepted delivery of the Xanax involved in Scott's overdose, or that he stole the Xanax contemporaneously with its delivery. Rather, he stole an opened, partially-full bottle of Xanax from its place on a pharmacy shelf. As a clerk in the pharmacy department, he was permitted to enter the area where the pharmacists worked and the shelves were located, in order to hand prescription slips to the pharmacists. While he was in that area, he stole the bottle of Xanax from a shelf when the pharmacist on duty was not watching him.

Moreover, even tracing further the disposition of the delivered Xanax, there is no evidence that Harding acted improperly in storing the Xanax bottle on the pharmacy shelf.

In his deposition testimony, plaintiffs' pharmacy expert admitted that pharmacies are legally permitted to disperse CDS on shelves among other non-CDS medications, rather than storing the CDS in a locked cabinet. See 21 C.F.R. § 1301.75(b); N.J.A.C. 13:45H-2.5(b). Scattering the bottles of CDS among containers of other drugs makes it more difficult for a thief to locate the CDS and steal it. He also admitted that in New Jersey, dispersement was the standard industry practice for schedule III, IV and V drugs. Therefore, Harding's 2007 practice of keeping schedule III drugs, such as Xanax, on its pharmacy shelves was consistent with State and federal law and with the prevailing standard in the industry.*fn4

Plaintiffs' remaining arguments amount to an assertion that Kinray had a duty to exercise extensive oversight and regulation of its wholesale pharmacy customers, including periodically inspecting their premises and demanding criminal background checks of all their employees. We reject that argument for the same reasons as Judge Harz. It would be burdensome and impractical for Kinray to exercise that level of detailed oversight of the thousands of pharmacies to which it sold its products. See Piscitelli, supra, 408 N.J. Super. at 114-16. Moreover, those pharmacies, including Harding, were already subject to comprehensive state and federal regulations governing their operations, including the handling and storage of CDS. See, e.g., 21 C.F.R. § 1301.75(b); N.J.A.C. 13:39-4.15. Absent some reason to suspect a problem at a particular pharmacy, once Kinray delivered the CDS, it could reasonably rely on the pharmacy to properly handle the drugs. In this case, prior to the tragic events of September 23, 2007, Kinray had an uneventful, eleven-year business relationship with Harding, and the record reflects no incidents that would have alerted Kinray to any problems in Lesh's operation of the business.

Plaintiffs do not cite to any federal or state regulations that specifically required Kinray to exercise the omnibus oversight of its pharmacy customers that plaintiffs claim Kinray should have implemented. Instead, plaintiffs rely on generalities, unsupported by the statutes and regulations they do cite. There is no dispute that Kinray complied with its federally-mandated duty to create a tracking system designed to detect suspicious orders of CDS. See 21 C.F.R. § 1301.74(b). There is no evidence that Harding placed any unusual orders for Xanax.

Given this record, it is unnecessary for us to decide whether, under some very different set of facts from those presented here, a pharmaceutical wholesaler such as Kinray could be liable to a third-party consumer of prescription drugs. In this case, plaintiffs' complaint against Kinray was far-fetched and unsupported by evidence, and summary judgment was properly granted.

Affirmed.


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