On February 18, the New Jersey Supreme Court issued its decisions in two cases that had the potential to dramatically re-shape the state’s insurance law. The court’s opinion in the Wadeer case has gotten the attention of the legal community, but not for the reasons one might expect. The court declined to answer several questions related to the case, and instead directed the Civil Practice Committee to look into the issues and make recommendations.

 

The court’s decision has left some court-watchers scratching their heads. Doesn’t the court have the highest judicial authority in the state? Why is it handing off its work to others? While the court’s decision is unusual, it is not unprecedented. Nor is it a dereliction of duty – quite the opposite in fact.

 

The court’s number one job is to uphold the rule of law by saying what the law is, not what the law should be. The court resolved the underlying case by invoking the doctrine of res judicata (it held Wadeer’s claims were barred since the suit at hand raised the same alleged wrongs, theories of recovery, evidence, and material facts as a previous suit Wadeer had filed against the defendant). Had the court answered the questions it is now asking the Civil Practice Committee to address, it would have been making new law in its decision despite having already resolved the issue in the underlying case.

 

Since the underlying case had already been dealt with any further rulings would only be dicta – which is authoritative but not binding. People would probably follow what the court had to say since dictum from the high court is pretty darn persuasive, but they would not be obligated to. In order to firmly settle the issue, the court passed the decision-making on to the body with the power to provide a binding answer without needing a case on point to do so – the court’s own Civil Practice Committee.

 

The court directed the Civil Practice Committee to take up these three issues it would like to see clarified:

 

• The court determined that the nature of first-party bad faith claims – they can arise while the case is ongoing – makes them difficult to reconcile with the entire controversy doctrine, which requires the parties in a case to bring all the claims that they may have against one another that are at all related to the central claim at the same time. The court asked that the Civil Practice Committee determine whether the court’s rules should be changed to allow a policyholder to bring a first-party bad faith claim against an insurer after the resolution of an underlying uninsured motorist action.
• The court also directed the Civil Practice Committee to develop an amendment to the Offer of Judgment Rule. The Rule allows an offering party to recover litigation expenses and attorneys’ fees when a pre-trial offer is rejected and the subsequent monetary award exceeds 120 percent of the offer. The court would like the Committee to clarify if the Rule is triggered by the amount the jury awards or the amount a court reduces the jury award to in order to conform to the applicable insurance policy.
• Finally, the court asked that the Civil Practice Committee to determine whether attorney’s fees should be available to plaintiffs like Wadeer who bring a lawsuit against their insurer if they prevail.

 

As Chief Justice Rabner reminded the attendees of our 2014 Spring Luncheon, administering the state’s justice system is a big, though less visible, part the court’s role. The court has a slew of committees that it tasks with developing the rules and policies that regulate the state’s justice system.

 

The Civil Practice Committee is responsible for reviewing and suggesting changes to the Rules of Court. It also crafts policy statements related to the Rules, and evaluates legislation impacting civil practice.

 

The committee agenda is typically set via a directive from the court. For example, after receiving a rule change request from NJCJI, the court asked its Committee on the Rules of Evidence to consider “whether (1) ‘N.J.R.E. 702 and related case law are so unclear that New Jersey’s trial courts are applying inconsistent standards in admitting expert testimony’ and, (2) ‘whether current law is creating other problems, such as attracting a disproportionate number of negligence cases to the State, especially mass tort cases, that might otherwise be filed in other jurisdictions.’” (The Evidence Committee’s report on this is currently available for public comment.)

 

The Civil Practice Committee reports to the court in even years. Once the committee issues a report, the court accepts public comments and holds a public hearing on the report’s recommendations. The court then decides whether to act on the recommendations.

 

The current members of the Civil Practice Committee are:

 

Judge Jack M. Sabatino, Chair

Peter G. Verniero, Vice-Chair

Meredith A. Accoo, Esq.

Judge Allison E. Accurso

John S. Beckerman, Esq.

Judge Karen M. Cassidy

Judge Heidi W. Currier

Philip J. Espinosa, Esq.

John M. Falzone, III, Esq.

Judge Clarkson S. Fisher, Jr.

Amos Gern, Esq.

Judge Jamie D. Happas

Robert B. Hille, Esq.

Craig S. Hilliard, Esq.

Judge Paul Innes

Judge Deborah Silverman Katz

Herbert Kruttschnitt, Esq.

Mary McManus-Smith, Esq.

Judge Anne McDonnell

Judge Margaret M. McVeigh

John R. Parker, Esq.

Elizabeth A. Pascal, Esq.

Judge Robert L. Polifroni

Judge Joseph P. Quinn

Arthur J. Raimon, Esq.

Andrew J. Rothman, Esq.

Hector D. Ruiz, Esq.

Judge Laura Sanders

Judge Barry P. Sarkisian

Neal L. Schonhaut, Esq.

Thomas Shebell, III, Esq.

Willard C. Shih, Esq.

Ahmed M. Soliman, Esq.

Judge Edwin H. Stern (Ret.)

Nina Thomas

Kevin D. Walsh, Esq.

Jonathan D. Weiner, Esq.

 

If the committee takes up the court’s Wadeer directives immediately, the committee’s recommendations could be included in its 2016 report, and considered by the court later that year.

 

NJCJI will keep you updated on the Wadeer directives as new information becomes available.