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Willner v. Vertical Reality, Inc.

Supreme Court of New Jersey

August 15, 2018

JOSH WILLNER, An Infant by his Guardian ad Litem, LESTER WILLNER, LESTER WILLNER, Individually, and AMY WILLNER, Individually, Plaintiff-Respondents,
v.
VERTICAL REALITY, INC., An Entity Doing Business in the State of New Jersey, and VERTICAL REALITY MANUFACTURING, INC., An Entity Doing Business in the State of New Jersey, Defendant-Respondents. And IVY LEAGUE CAMP, An Entity Doing Business in the State of New Jersey, Defendant, and ASCO NUMATICS, improperly pled as NUMATICS, INC., Defendant-Appellant.

          Argued April 24, 2018

          On certification to the Superior Court, Appellate Division.

          Joseph DiRienzo argued the cause for appellants (DiRienzo, DiRienzo & Dulinski, attorneys; Joseph DiRienzo, on the briefs).

          Cynthia A. Walters argued the cause for respondents (Budd Larner, attorneys; Cynthia A. Walters and Terrence John Hull, on the brief).

          Michael Ferrara argued the cause for amicus curiae New Jersey Association for Justice (The Ferrara Law Firm and Lomurro, Munson, Comer, Brown & Schottland, attorneys; Michael Ferrara, of counsel, and Christina Vassiliou Harvey, of counsel and on the brief).

         FERNANDEZ-VINA, J., writing for the Court.

         In this products liability case, the Court reviews both a trial judge's jury instruction related to evidence of a defendant manufacturer's conduct and the New Jersey rule governing offers of judgment in cases in which a single plaintiff pursues joint and several liability against multiple defendants.

         Plaintiff Josh Willner was injured while climbing a rock wall owned by his employer, Ivy League Day Camp. Willner sued the camp and the manufacturers of the wall and parts contained in the wall, Vertical Reality, Inc. (Vertical Reality), and ASCO Numatics (Numatics), respectively, alleging strict products liability claims and negligence. Before trial, Willner made a single offer of judgment to the defendants in accordance with Rule 4:58 in the amount of $125, 000. No defendant accepted the offer or counteroffered.

         The claims against Vertical Reality and Numatics proceeded to a jury trial. Willner's strict liability claims against defendants were based on theories of design defect, manufacturing defect, and failure to warn. Throughout trial, evidence was submitted regarding Numatics' conduct both before and after the incident. Prior to summation, the court dismissed the design defect and failure to warn claims, allowing Willner to proceed only on his strict liability claim of manufacturing defect against Numatics.

         Although any need for evidence of Numatics' conduct was thereby obviated, during summation, Vertical Reality's counsel again underscored Numatics' alleged malfeasance. Numatics objected and moved for a mistrial. The trial court denied the mistrial motion, but instructed the jury to disregard counsel's comments concerning Numatics' conduct, explaining that evidence of Numatics' actions was not relevant to the remaining issues in the case. Following summations, Numatics requested an instruction to the jury regarding the applicability of Numatics' conduct in the context of Willner's manufacturing defect claim. The judge denied that proposal and instead provided an instruction that substantially mirrored Model Jury Charges (Civil), 5.4OB, "Manufacturing Defect" (2009). Numatics' attorney requested a meeting with the judge at sidebar during the judge's reading of that charge, which the judge granted. Counsel asked, "I assume, Judge, that if you made the request in writing and you did not instruct it, there's no way to reiterate it? . . . There's no need to address it any further at this point? You've ruled?" The Court replied, "I think I. . .ruled on everything this morning?" No formal objections were made to the instruction.

          The jury found that: Vertical Reality's rock wall was designed defectively and was a proximate cause of Willner's fall; Vertical Reality provided inadequate warnings, which were a proximate cause of Willner's fall; and Numatics' product was manufactured defectively and was a proximate cause of Willner's fall. The jury awarded Willner a total of $358, 000, allocating seventy and thirty percent liability to Vertical Reality and Numatics, respectively. Following a hearing, the trial court awarded attorney fees of $62, 963.00, costs of $12, 160.83, and prejudgment interest of $115, 727.70 as requested pursuant to Rule 4:58.

         Numatics appealed to the Appellate Division, contesting the failure to instruct the jury regarding the trial evidence related to its conduct and the award of attorney fees and costs. With respect to the latter issue, Numatics argued that the trial court erred in granting Willner's motion for sanctions because its molded share of the total verdict ($107, 400) did not exceed 120% of Willner's $125, 000 offer of judgment. The appellate panel affirmed, concluding that the trial judge's "pre- and post-deliberation instructions were proper and appropriate and did not constitute error, let alone plain error." The panel found that case law "does not compel the use of molded judgments in determining" whether sanctions should be awarded under Rule 4:58. Rather, the panel found that the appropriate figure to compare with the amount of the offer is "the amount of the jury's verdict." Accordingly, the panel found that because the jury verdict of $358, 000 was greater than 120% of the $125, 000 offer of judgment, the trial court's award of fees and costs was appropriate.

         Numatics filed a petition for certification with this Court, challenging: (1) the standard that the Appellate Division employed in its review of the trial judge's jury instructions; (2) the trial court's instructions; and (3) the award of sanctions under Rule 4:58. The Court granted certification. 231 N.J. 197 (2017).

         HELD: The Court affirms the panel's approval of the judge's jury instruction, albeit under a different standard of review, finding that the judge's actions were harmless error. The Court reverses the imposition of sanctions. It would be unfair to impose sanctions in a case where the only means for a party to avoid sanctions would be to pay an amount greater than the jury's verdict against that party, without advance notice of that consequence.

         1. Strict products liability claims are governed by N.J.S.A. 2A.58C-2, which provides that claims can be brought under three theories of liability: manufacturing defect, failure to warn, or design defect. A successful showing of the latter two theories necessarily implicates the manufacturer's conduct. Conduct evidence, however, is never relevant to a claim of manufacturing defect. A factfinder's sole responsibility in those cases is to evaluate (1) the manufacturer's design specifications and (2) the actual condition of the product that allegedly caused the claimant harm, and compare the two. (pp. 15-16)

         2. Pursuant to Rule 1:7-2, in order to preserve an issue for appeal, "a party . . . shall make known to the court specifically the action which the party desires the court to take." Such an objection may be offered "in open court, in the absence of the jury." R 1:7-2. Without an objection at the time a jury instruction is given, there is a presumption that the charge was not error and was unlikely to prejudice the defendant's case. Therefore, the failure to object to a jury instruction requires review under the plain error standard. When a party has brought an alleged error to the attention of the trial court, though, the error will not be grounds for reversal on appeal if it was harmless. An error cannot be harmless if there is some degree of possibility that the error led to an unjust result. (pp. 16-18)

         3. Although offering a jury instruction alone is not adequate to preserve an issue for appeal under Rule 1:7-2, Numatics' counsel did more than suggest a charge. Counsel also requested a sidebar with the judge to confirm the judge's decision not to adopt counsel's preferred charge and to confirm that no further objection was necessary. Such a colloquy is sufficient to preserve Numatics' right to contest the charge on appeal pursuant to our rules. The standard of review for Numatics' challenge is thus harmless error. (pp. 18-20)

         4. Here, the judge's actions, if error, were harmless. The Court agrees with the Appellate Division that a limiting instruction would have been appropriate. However, in the absence of such an instruction, the judge acted appropriately to direct the jury's attention away from any newly irrelevant evidence of Numatics' negligence, and the judge's adoption of the model charge for Willner's remaining manufacturing defect claim effectively informed the jury of the only evidence necessary for its decision. Consequently, there was no genuine possibility that the judge's actions led the jury to reach a verdict it otherwise would not have reached. The Court accordingly affirms the Appellate Division's ruling on the trial judge's instruction. (pp. 20-21)

         5. The offer of judgment rule, R. 4:58, was designed as a mechanism to encourage, promote, and stimulate early out-of-court settlement of claims. The rule imposes financial consequences on a party who rejects a settlement offer that turns out to be more favorable than the ultimate judgment by a certain amount, but leaves unclear the circumstances triggering the imposition of sanctions on an individual defendant when a single plaintiff makes a global offer to multiple defendants. Comparing the jury's full award of damages to a plaintiff to a single plaintiff's offer of judgment is uncomplicated. Doing the same in the joint and several liability setting is not. Forcing plaintiffs to negotiate individually with defendants in settlement negotiations would create an unfair risk of settling with defendants that are ultimately found by juries to be significantly liable, for a smaller amount than the percentage of fault allocated to those defendants. By the same token, mandating that individual defendants contemplate global offers from a single plaintiff would force defendants who are likely less liable than their co-defendants to consider settling for an amount greater than their individual liabilities, simply to avoid significant sanctions. This case illustrates the problem. The offer of judgment rule must balance the competing interests of plaintiffs and defendants. If the sanction of fee shifting is to be awarded, there must be advance notice of that consequence. Here, that did not happen. Consequently, it would be improper to shift fees and costs in this circumstance. (pp. 21-26)

         AFFIRMED in part, REVERSED in part.

          CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON, SOLOMON, and TIMPONE join in JUSTICE FERNANDEZ-VINA's opinion.

          FERNANDEZ-VINA JUSTICE

         In this products liability case, we review both a trial judge's jury instruction related to evidence of a defendant manufacturer's conduct and our rule governing offers of judgment in cases in which a single plaintiff pursues joint and several liability against multiple defendants.

         Plaintiff Josh Willner was injured while climbing a rock wall owned by his employer, Ivy League Day Camp (Ivy League). Willner sued the camp and the manufacturers of the wall and parts contained in the wall, Vertical Reality, Inc. (Vertical Reality), and ASCO Numatics (Numatics), respectively, alleging strict products liability claims and negligence. Before trial, Willner made a single offer of judgment to the defendants in accordance with Rule 4:58 in the amount of $125, 000. No defendant accepted the offer or counteroffered.

         By the end of the ensuing trial, the only count remaining against Numatics alleged a manufacturing defect. Because a defendant's conduct is not relevant to adjudicating such a claim, at the conclusion of the parties' cases, Numatics requested a jury instruction that advised the jurors not to consider evidence of its conduct or negligence. The judge denied the request and instead provided an instruction tracking the model jury charge for manufacturing defect claims.

         The jury returned a verdict in favor of Willner, awarding him $358, 000 and apportioning Numatics thirty percent of the liability and Vertical Reality seventy percent. The judge then granted Willner's motion for attorney fees and costs pursuant to the offer of judgement rule, Rule 4:58.

         Numatics appealed, and the Appellate Division affirmed. The panel found that the trial judge's jury instruction did not constitute plain error because he correctly advised the jury on the only evidence relevant to the manufacturing defect claim. The panel further held the judge's award of attorney fees and costs was proper because the jury's verdict was sufficiently greater than Willner's offer to trigger sanctions pursuant to Rule 4:58.

         We affirm the panel's approval of the judge's jury instruction, albeit under a different standard of review, finding that the judge's actions were harmless error. We disagree with the panel, and reverse the imposition of sanctions on Numatics under the offer of judgment rule. It would be unfair to impose sanctions in a case where the only means for a party to avoid sanctions would be to pay an amount greater than the jury's verdict against that party, without advance notice of that consequence.

         I.

         A.

         In the summer of 2006, Willner was employed as a junior counselor at Ivy League in Manalapan. The camp offered a rock climbing wall for its campers to use. The wall was manufactured by Vertical Reality and contained parts produced by Numatics. Willner's only responsibility in his role as junior counselor with regard to the rock wall was to assist campers as they put on harnesses and helmets; the camp employed specialists to assist with climbing.

         On July 19, 2006, Willner was supervising a group of campers at the rock wall. After his group finished, he was invited by a specialist to climb as well. He strapped on a harness and helmet. His harness was inspected by the specialist, and attached by a rope to an auto-belay system that was assembled by Vertical Reality and contained parts manufactured by Numatics.

          Willner ascended approximately fifteen feet up the wall before deciding to come down. When he pushed off the wall to descend, the rope initially supported his weight, but suddenly and rapidly lost all of its tension after he ...


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