Opinion
DOCKET NO. A-3843-12T4
09-16-2014
P.B. and W.B., her husband, Plaintiffs, v. BYRON S. HAPNER, D.O., BYRON S. HAPNER, T/A PENNCARE-ELMWOOD OB/GYN ASSOCIATES, and CLINICAL HEALTHCARE ASSOCIATES OF NEW JERSEY, P.C., Defendants/Third-Party Plaintiffs-Respondents, v. UTAH MEDICAL PRODUCTS, INC., Third-Party Defendant/Appellant.
Noel C. Crowley argued the cause for appellant (Crowley & Crowley, attorneys; Mr. Crowley and Michael C. Crowley, on the briefs). Peter J. Lynch argued the cause for respondents (Christie Pabarue and Young, attorneys; Mr. Lynch and Christina G. Tershakovec, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Lihotz, Maven and Hoffman. On appeal from Superior Court of New Jersey, Law Division, Salem County, Docket No. L-0205-10. Noel C. Crowley argued the cause for appellant (Crowley & Crowley, attorneys; Mr. Crowley and Michael C. Crowley, on the briefs). Peter J. Lynch argued the cause for respondents (Christie Pabarue and Young, attorneys; Mr. Lynch and Christina G. Tershakovec, on the brief). The opinion of the court was delivered by HOFFMAN, J.A.D.
Third-party defendant Utah Medical Products, Inc. (Utah Medical) appeals from Law Division orders denying its motion for sanctions, pursuant to Rule 1:4-8, and denying its motion to reinstate its counter-claim against defendant/third-party plaintiff Dr. Byron S. Hapner and his former medical practice Elmwood OB/GYN (collectively respondents). As to each order, Utah Medical argues the court abused its discretion. For the reasons that follow, we affirm.
I.
This appeal stems from a medical negligence action filed by plaintiffs P.B. and W.B., alleging Dr. Hapner negligently performed gynecological surgery, causing serious injuries. Specifically, plaintiff alleged she sustained an electrical shock and resulting injury during a LEEP procedure on December 2, 2008. In a LEEP procedure, the doctor inserts a surgical instrument into the patient's body, and applies electrical energy originating in an electrosurgical unit (ESU) through the instrument to remove tissue.
We refer to P.B. and her husband, W.B., collectively as "plaintiffs," and P.B., individually, as "plaintiff."
"Loop electrosurgical excision procedure (LEEP) uses a wire loop heated by electric current to remove cells and tissue as part of the diagnosis and treatment for abnormal or cancerous conditions in a woman's lower genital tract." Johns Hopkins Med. Health Libr., http://www.hopkinsmedicine.org/healthlibrary/test_procedures/gynecology/loop_electrosurgical_excision_procedu re_leep_92,P07780/ (last visited Sept. 8, 2014).
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The object of plaintiff's procedure was to excise tissue from her cervix for histological examination. The record indicates the ESU used during plaintiff's procedure was likely designed, manufactured and sold by Utah Medical.
ESUs manufactured by some other companies include a safety feature not found on Utah Medical's ESU, as noted in a 1994 article published in The Journal of Family Practice, "Gynecologic and Dermatologic Electrosurgical Units: A Comparative Review," which provided the following description of the safety feature:
A partially adherent [dispersive electrode] pad could concentrate the returning energy and inflict a burn to the patient. Therefore, many electrosurgical units have an electrode continuity monitor that prevents activation of the ESU if the return electrode pathway to the unit is interrupted (unplugged or broken). Safer units feature separate redundant systems or contact quality monitors (return electrode monitoring) that check, by an impedance signal, the effectiveness or quantity of the
return electrode surface area contacting the patient. Hence, unit activation is prevented if incomplete dispersive pad contact occurs, thus avoiding potential patient burns.
[Daron G. Ferris, M.D. et al., Gynecologic and Dermatologic Electrosurgical Units: A Comparative Review, 39 J. Fam. Prac. 160, 161 (1994) (footnote omitted).]
The specific ESU used during plaintiff's procedure could not be located and was discarded in the ordinary course of business, after the medical practice disbanded. However, respondents were able to identify the specific unit involved by referring to a product inventory for devices at the former practice.
On December 30, 2010, respondents filed a third-party complaint against Utah Medical alleging the ESU used during plaintiff's LEEP procedure was defective. Utah Medical filed an answer and then a counter-claim against respondents for "fraudulent concealment or destruction for evidence," alleging the subject ESU "was intentionally concealed, withheld or destroyed by defendants . . . to impede [Utah Medical's] defense of the third-party claim."
In December 2011, Utah Medical filed a motion for sanctions, claiming respondents filed their third-party complaint in bad faith and without a factual basis. The motion judge denied the motion for sanctions, finding a reasonable basis to join the manufacturer of the machine that allegedly caused plaintiff's injury.
Several months later, plaintiffs settled their case against respondents, without any contribution from Utah Medical. Upon learning of the settlement, the court entered an order dismissing all claims, including Utah Medical's counter-claims. Utah Medical learned of the dismissal of the entire case about six weeks later. Approximately three months after learning of the dismissal, Utah Medical filed a motion to reinstate its counter-claim for spoliation. Another motion judge heard and denied the motion, finding there was no longer a cause of action because the underlying action settled. This appeal followed.
II.
Rule 1:4-8 requires an attorney to "certif[y] to the best of his or her knowledge" that "the claims, defenses, and other legal contentions [in any paper filed with the court] are warranted by existing law or by a non-frivolous argument for the extension, modification, or reversal of existing law or the establishment of new law[.]" R. 1:4-8(a)(2); see also Alpert, Goldberg, Butler, Norton & Weiss, P.C. v. Quinn, 410 N.J. Super. 510, 543 (App. Div. 2009) (stating that frivolous conduct "includes pursuing litigation that has no legal basis, [and] filing papers to harass or cause unnecessary delay"), certif. denied, 203 N.J. 93 (2010). "An assertion is deemed frivolous when 'no rational argument can be advanced in its support, or it is not supported by any credible evidence, or it is completely untenable.'" First Atl. Fed. Credit Union v. Perez, 391 N.J. Super. 419, 432 (App. Div. 2007) (quoting Fagas v. Scott, 251 N.J. Super. 169, 190 (Law Div. 1991)).
Moreover, "[t]he nature of conduct warranting sanction under [Rule] 1:4-8 has been rather strictly construed," Wyche v. Unsatisfied Claim & Judgment Fund of N.J., 383 N.J. Super. 554, 560 (App. Div. 2006), and "the term 'frivolous' should be given a restrictive interpretation" to avoid limiting access to the court system. McKeown-Brand v. Trump Castle Hotel & Casino, 132 N.J. 546, 561-62 (1993). Thus, sanctions are not warranted where the party or the party's attorney had a reasonable, good faith belief in the merits of the action or defense. Wyche, supra, 383 N.J. Super. at 561. Moreover, "'honest and creative advocacy should not be discouraged.'" Ibid. (quoting Iannone v. McHale, 245 N.J. Super. 17, 29 (App. Div. 1990)).
An honest attempt to pursue a perceived, though ill-founded, claim is not considered to be frivolous. McKeown-Brand, supra, 132 N.J. at 563. The burden of proving bad faith is on the party who seeks the fees and costs. Id. at 559.
We review a trial judge's decisions on frivolous-litigation motions under an abuse of discretion standard. Masone v. Levine, 382 N.J. Super. 181, 193 (App. Div. 2005). An abuse of discretion arises
when a decision is made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis. In other words, a functional approach to abuse of discretion examines whether there are good reasons for an appellate court to defer to the particular decision at issue. It may be an arbitrary, capricious, whimsical, or manifestly unreasonable judgment.Thus, an "abuse of discretion is demonstrated if the discretionary act was not premised upon consideration of all relevant factors, was based upon consideration of irrelevant or inappropriate factors, or amounts to a clear error in judgment." Masone, supra, 382 N.J. Super. at 193 (citing Flagg, supra, 171 N.J. at 571).
[Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002) (citations and internal quotation marks omitted).]
Here, Utah Medical based its Rule 1:4-8 motion on the assertion respondents knew or should have known their third-party complaint was not viable and lacked a reasonable basis, for numerous reasons, including the fact they failed to preserve the subject ESU. Respondents argue they had a reasonable, good faith basis for filing their third-party complaint based upon evidence that Utah Medical manufactured the ESU that caused plaintiff's injuries.
In denying Utah Medical's application, the motion judge considered that Utah Medical's ESU lacked a safety feature which other ESU manufacturers had incorporated. He further noted the evidence suggested the safety feature would have prevented the machine from engaging if it was not properly connected. The judge further stated,
[respondent] has literature that indicates that this particular machine [does not] have that feature and it's their assertion that had it had that feature, that this mistake that the defendant may have made in failing to detach the cellophane would have been checked by the fact of the machine itself not being able to work because the cellophane was still attached.
The judge concluded there was a rational basis for respondent's claim against Utah Medical because if plaintiffs prove the injuries sustained were related to the machine, "then it's the machine that may well be the culprit in this particular case in addition to the fact that it [was not] being used properly by Dr. Hapner." The judge further explained, "[t]here was no other device on her except for this one device and as a result it's reasonable to look to it as the device that caused the problem." Therefore, the judge found respondents' joinder of Utah Medical as a third-party defendant had a rational basis, and thus was not frivolous, and denied the motion for sanctions.
In this case, the judge made detailed findings that are fully supported by the record. Accordingly, we find no abuse of discretion or reversible error. See Rendine v. Pantzer, 141 N.J. 292, 317 (1995) ("[F]ee determinations by trial courts will be disturbed only on the rarest occasions, and then only because of a clear abuse of discretion.").
III.
New Jersey does not recognize a separate tort for spoliation. Tartaglia v. UBS PaineWebber Inc., 197 N.J. 81, 122 n.6 (2008). Courts find "spoliation claims, as between parties to a particular litigation, are technically claims for fraudulent concealment." Ibid. (citing Rosenblit v. Zimmerman, 166 N.J. 391, 406 (2001)). Spoliation claims are "a type of fraud claim, [courts] have not in the past recognized . . . [as a] separate tort for negligent spoliation." Ibid. Spoliation of evidence "'occurs when evidence pertinent to the action is destroyed, thereby interfering with the action's proper administration and disposition.'" Manorcare Health Servs., Inc. v. Osmose Wood Preserving, Inc., 336 N.J. Super. 218, 226 (App. Div. 2001) (quoting Aetna Life and Cas. Co. v. Imet Mason Contractors, 309 N.J. Super. 358, 364 (App. Div. 1998)); see also Tartaglia, supra, 197 N.J. at 118 (holding that to prevail on a spoliation claim, a plaintiff must prove the five elements of fraudulent concealment as articulated in Rosenblit, supra, 166 N.J. at 406-07, which includes that a "defendant intentionally withheld, altered or destroyed the evidence with purpose to disrupt the litigation").
Utah Medical's January 23, 2013 motion to reinstate its counterclaim for spoliation was filed almost three months after it became aware the entire case had been dismissed. While the motion judge indicated the motion was "technically untimely," he stated his preference "to address the motion on the merits . . . ." We review an order denying reinstatement of a complaint under an abuse of discretion standard. Baskett v. Kwokleung Cheung, 422 N.J. Super. 377, 382 (App. Div. 2011) (quoting Weber v. Mayan Palace Hotel & Resorts, 397 N.J. Super. 257, 262 (App. Div. 2007)).
The judge denied Utah Medical's motion to restore its counterclaim, concluding it would serve no purpose because the counterclaim was wholly dependent on the now-settled claims of plaintiffs. The judge noted those claims were resolved without a trial and without any contribution from Utah Medical, and with the resolution of plaintiffs' claims, Utah Medical had suffered no compensable damages.
Utah Medical's own brief effectively concedes the complete absence of evidence that respondents intentionally destroyed the subject ESU with the purpose to disrupt the litigation, noting that Dr. Hapner's deposition testimony shows he had not "considered even the theoretical possibility of a problem with the electrosurgical equipment" until one month before his October 15, 2010 deposition. Since the ESU had been discarded long before Dr. Hapner's deposition, Utah Medical lacks any basis to argue that respondents "intentionally . . . destroyed the evidence with purpose to disrupt the litigation[.]" Rosenblit, supra, 166 N.J. at 407.
We discern no indication the judge mistakenly exercised his discretion in denying Utah Medical's motion to reinstate its counterclaim. To the extent we have not specifically addressed any of defendant's arguments, we find them to be without sufficient merit to warrant additional discussion. R. 2:11-3(e)(1)(E).
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION