Opinion
DOCKET NO. A-5506-13T4
03-07-2016
RONALD ZECK and WML LLC, Plaintiffs-Respondents, v. ATLANTIC CITY ELECTRIC, Defendant-Appellant.
Georgette Castner argued the cause for appellant (Montgomery McCracken Walker & Rhoads, LLP, attorneys; Gerald J. Corcoran and Ms. Castner, of counsel and on the brief; Cora Dayon, on the brief). Gary D. Thompson argued the cause for respondents (Ware, Streitz & Thompson, attorneys; Mr. Thompson, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Ostrer and Haas. On appeal from Superior Court of New Jersey, Law Division, Gloucester County, Docket No. L-31-12. Georgette Castner argued the cause for appellant (Montgomery McCracken Walker & Rhoads, LLP, attorneys; Gerald J. Corcoran and Ms. Castner, of counsel and on the brief; Cora Dayon, on the brief). Gary D. Thompson argued the cause for respondents (Ware, Streitz & Thompson, attorneys; Mr. Thompson, on the brief). PER CURIAM
Defendant Atlantic City Electric (ACE) appeals from the June 26, 2014 order for judgment entered in favor of plaintiffs Ronald Zeck and WML LLC following a jury trial in the Law Division. ACE argues that the trial court erred in denying its motion for an involuntary dismissal at the end of plaintiffs' case pursuant to Rule 4:37-2(b). Although ACE did not file a motion for a new trial or remittitur following the jury's verdict as required by Rule 2:10-1, it also argues for the first time on appeal that the quantum of damages awarded by the jury was against the weight of the evidence. We affirm.
On July 14, 2014, the trial court issued an amended order of judgment, which specified the amount of pre-judgment interest awarded to plaintiffs.
I.
We derive the following facts from the record on appeal. Zeck owns property in Gloucester County. He and his wife formed WML LLC (WML), a limited liability company that owns a preschool and daycare center that they operate from the only building located on the property. The school building is approximately eighty to one-hundred yards from an electrical substation owned and operated by ACE. Plaintiffs' facility is ACE's first customer in line for electrical service emanating from ACE's substation.
The building has a security system that is connected to the phone lines and computers, a fire system, an electronic key-entry system that is constantly monitored, a video monitoring system that is always recording, a primary and back-up computer system, and an HVAC system. The HVAC system is composed of ten individual units. The electricity provided by ACE powers all of this equipment. The local township inspected and approved the building's electrical system and issued a certificate of occupancy before the facility opened in June 2005.
Almost immediately after the school opened, Zeck experienced electrical service problems in the building. The first issues involved the security and fire systems registering false alarms. To address the problem, Zeck called ACE, and one of its representatives recommended that Zeck install a surge protector for the entire facility. Zeck followed ACE's recommendation and installed a surge protector. However, problems continued. Computers began to "burn[] out[,]" and there were more false alarms involving the security and fire systems.
In March 2009, Zeck sent an email to ACE to complain about the electrical service and the damage to his equipment. ACE sent Zeck an email on March 11, 2009, advising him that "'[a] claim has been filed on your behalf, for damages to your equipment.'" Zeck sent two additional emails to ACE, but received no response.
In July 2009, an ACE employee, Russ Erlick, notified Zeck that ACE had installed a monitor for the electricity entering the facility from ACE's substation. Zeck's problems continued. In August 2009, Zeck experienced "some really severe damage with the actual DVR player that burned out, as a result of these electrical issues."
Over the next few months, Zeck continued to experience problems and continued to send complaints by email to ACE. Finally, on April 21, 2010, Erlick sent Zeck an email, which in pertinent part stated:
"Personally, I have continued to check the substation for breaker operations in the surrounding areas, using our outage maintenance system for events that impact the facility. To date, I've seen mostly normal system operations that correlate to either a [momentary] loss of power and/or voltage sags.According to Zeck, the air conditioning system was not in use during this period.
. . . .
I'm still having trouble correlating these events with the damage of . . . equipment at your facility. The monitoring at the facility has identified events that I believe are correlated to either motor or lighting contractor's closing. This is typical of HVAC equipment, cycling, or outside lighting coming on; but, should not cause equipment damage.
. . . .
[T]he study stated voltage levels monitored to date have been within acceptable levels. If it's okay with you, I'll try to stop at the site next week to get some additional data for review."
In May 2010, ACE installed an "I-Sense power quality monitor" on the property, which monitored the electricity entering plaintiffs' facility for the period between May 28, 2010 and August 3, 2012. According to the "I-Sense Monitoring Report" for this period, "[a] total of 143 significant power quality [PQ] and power reliability events . . . (plus 74 insignificant transient PQ events)" were detected. Forty-one of these events were classified as "voltage sags," which occurred when insufficient voltage was provided to plaintiffs' facility. The report concluded that these sags "would be expected to cause problems with sensitive equipment." Zeck claimed that WML spent $19,183.26 to repair or replace damaged equipment at the facility.
In the beginning of 2011, Zeck decided he needed to install a solar panel energy system to provide his own source of electrical service to the facility and stop the ongoing damage to his equipment. He completed the installation in November 2011 at a cost of $242,256.00. Zeck financed the project with a $242,000 loan, with a 6.5% interest rate. Zeck also testified that he received solar energy system credits (SRECs) from the State of New Jersey for generating clean energy. These credits could be sold on the open market and, at the time of trial, the solar energy system had generated 143 credits. According to Zeck, the market value of the SRECs was falling. At the time of trial, Zeck stated that each credit was worth $100, a figure which would continue to decrease over time as the solar energy system became less efficient. Zeck testified that his first-year energy savings were $10,242.67, but that the savings would likewise continue to fall over the fifteen-year lifespan of the system. Zeck also stated that he received a tax credit of $72,676.80 for installing the solar energy system.
On March 14, 2014, plaintiffs filed an amended complaint against ACE. Plaintiffs alleged that they experienced electrical service problems consisting of power interruptions and voltage sags which had worsened in severity and frequency since 2007. Plaintiffs asserted that these electrical service problems damaged their equipment. Plaintiffs also alleged that they needed to install a solar energy system on the property due to the constant damage to their equipment caused by the electrical service ACE provided to the facility. ACE filed an answer to the amended complaint on June 19, 2014, and the matter was tried before a jury on June 23, 24, 25, and 26, 2014.
Plaintiffs filed their original complaint on January 5, 2012.
After Zeck testified at trial, plaintiffs presented the expert testimony of Ronald Heigler, Jr., an electrical engineer. Heigler testified that the electrical system at plaintiffs' facility "was installed in a good workmanship manner, and it was well within the code, [the] National Electric Standard Code." Additionally, he opined that the grounding system "exceeded . . . grounding requirements that the code recommends" and that the surge protection system was "in perfect working condition[.]"
Heigler reviewed the information from the I-Sense monitor, which would notify Zeck by email each time there was a voltage disturbance. Heigler cross-referenced the voltage disturbances with the incidents of damage to equipment that Zeck reported to ACE. Heigler found that the reported problems corresponded with voltage sags. According to Heigler:
[I]n these circumstances where the voltage goes down, and you have an increased amount of current, then you're going to have an increased amount of heat. . . . And, in sensitive electronic equipment, if you have an excessive amount of heat, then you're going to have damage to internal components of the equipment.
Heigler also discussed the National Electric Code Standards (NECS), which only allow for a maximum voltage sag between 3 and 2.5 percent. Based on Heigler's review of the I-Sense data, there were ninety-four voltage sags that exceeded this standard during the monitoring period.
Heigler concluded that "the damage to [Zeck's] equipment [was] due to voltage sags . . . ." Heigler based his conclusion on the data he reviewed, the timing of the damage, and his determination "that there were no other problems in [Zeck's] existing system." Heigler further concluded that the voltage sags had to "come from [ACE because it was the] utility source[,]" and because there was only one utility supplying power to the facility, that was the source of the problem.
When asked about other possible causes of the electrical problems and equipment damage at the center, Heigler confirmed that "there were no problems with the facility"; "no problems with the surge protection system"; and "no problems with the grounding system." With respect to the air conditioning system, Heigler admitted that, if all ten units were to start up at the same exact time, then "there could be a problem." According to Heigler, however, "there's a better chance of me being struck by lightning right now than for all ten of those units to come on at exactly the same time." When asked about the role that severe weather could have played, Heigler opined that a lightning strike would likely cause a voltage surge, not a sag, and that if such a surge occurred the surge suppression system would protect the facility.
Heigler opined that Zeck's installation of a solar panel energy system would solve the facility's problems because the utility power provided by ACE and the power provided by a solar panel system would work "side-by-side" "[s]o, if you're going to have any fluctuations in your utility power, you're going to have the solar power to back it up." According to Heigler, this would eliminate the voltage sags that were damaging plaintiffs' equipment.
At the end of plaintiffs' case, ACE made a motion for an involuntary dismissal of the action pursuant to Rule 4:37-2(b). In addressing ACE's motion, the trial judge acknowledged that plaintiffs did not originally frame their complaint as a product liability claim, even though that is the claim that they pursued at trial. Relying on Teilhaber v. Greene, 320 N.J. Super. 453 (App. Div. 1999), the judge explained "that pleadings are primarily fact[-]based. The [c]ourt may instruct the jury as to legal theories not expressly alleged, and . . . all underlying facts [that] have been pled."
With the parties' consent, the trial judge postponed consideration of ACE's motion until after ACE presented its case so as not to inconvenience the jury. In conformance with Rule 4:37-2(b), however, the judge advised the parties that he would not consider any of ACE's proofs in deciding the motion. Thus, although ACE presented the testimony of an expert at trial, that testimony is not relevant to the issues on appeal because ACE's arguments are limited to the denial of its motion to dismiss under Rule 4:37-2(b), and its belated claim that the damages the jury awarded were against the weight of the evidence.
The parties discussed whether this was a manufacturing defect or a design defect case, with the judge ultimately concluding it was a manufacturing defect case and that the jury should be instructed accordingly. Based upon the proofs plaintiffs submitted concerning a manufacturing defect in the electricity ACE provided to their facility, the judge denied ACE's motion for an involuntary dismissal.
ACE did not object to the jury charge, setting forth the standards the jury must consider in a manufacturing defect case. ACE also did not object to Zeck seeking damages for the cost of installing the solar energy system.
At the conclusion of the trial, the jury found in favor of plaintiffs and awarded $9,000.67 to WML for the damages to its equipment, and $245,000 to Zeck for having to install the solar energy system. This appeal followed.
II.
On appeal, ACE argues that the trial judge erred by denying its motion to dismiss plaintiffs' claims at the conclusion of their case. ACE also contends that Zeck's damage award was against the weight of the evidence. We address these arguments in turn.
A.
Under Rule 4:37-2(b), a defendant may move for involuntary dismissal of a plaintiff's claims "on the ground that upon the facts and upon the law the plaintiff has shown no right to relief." The test for involuntary dismissal under the rule is "whether 'the evidence, together with the legitimate inferences therefrom, could sustain a judgment in . . . favor of the party opposing the motion[.]'" Dolson v. Anastasia, 55 N.J. 2, 5 (1969) (alteration in original) (quoting Bozza v. Vornado, Inc., 42 N.J. 355 (1964)).
In its appellate brief, ACE mistakenly asserted that it filed a motion to dismiss plaintiffs' complaint for failure to state a claim under Rule 2:6-2(e). However, the trial transcript states that ACE's motion at the end of plaintiff's case was based on Rule 4:37-2(b), a fact which ACE's counsel confirmed at oral argument.
The court's function on a motion for involuntary dismissal is "quite a mechanical one" as the "court is not concerned with the worth, nature or extent (beyond a scintilla) of the evidence, but only with its existence, viewed most favorably to the party opposing the motion." Id. at 5-6. "[I]f, accepting as true all the evidence which supports the position of the party defending against the motion and according [that party] the benefit of all inferences which can reasonably and legitimately be deduced therefrom reasonable minds could differ, the motion must be denied." Potente v. Cty. of Hudson, 187 N.J. 103, 111 (2006) (first alteration in original) (quoting Monaco v. Hartz Mt. Corp., 178 N.J. 401, 413 (2004)).
On appeal, "we apply the same standard as the trial court[.]" Bennett v. Lugo, 368 N.J. Super. 466, 479 (App. Div.), certif. denied, 180 N.J. 457 (2004). We do not give any special deference to the legal conclusions of the trial court. Manalapan Realty, L.P. v. Twp. Comm., 140 N.J. 366, 378 (1995).
Applying these principles, we discern no basis for disturbing the trial judge's decision denying ACE's motion for an involuntary dismissal at the end of plaintiffs' case. Although plaintiffs did not specifically state in their complaint that they were asserting a manufacturing defect claim under the Product Liability Act (PLA), N.J.S.A. 2A:58C-1 to -11, the judge properly concluded that such a claim was supported by the evidence presented in plaintiffs' case.
It is well established that "a complaint need not spell out the legal theory upon which it is based[,]" Teilhaber, supra, 320 N.J. Super. at 464 (quoting Farese v. McGarry, 237 N.J. Super. 385, 390 (App. Div. 1989)), so long as "all of the underlying facts have been pleaded and proved." Id.; see also Farese, supra, 237 N.J. Super. at 390 (stating that a trial judge may submit a "case to the jury on a legal theory which was not asserted in the pleadings, provided, of course that the legal theory was correct."). New Jersey is a fact-based pleading state. Farese, supra, 237 N.J. Super. at 390. Thus, as long as the complaint asserts the facts supporting a cause of action, and the evidence presented at trial supports those facts, the claim can survive a motion to dismiss and go to the jury. Ibid.
This test was clearly met in this case. The PLA provides claimants with a cause of action for "harm caused by a product, irrespective of the theory underlying the claim, except actions for harm caused by breach of an express warranty." N.J.S.A. 2A:58C-1(b)(3). To substantiate a product liability claim, the plaintiff must show that
the product causing the harm was not reasonably fit, suitable or safe for its intended purpose because it: a. deviated from the design specifications, formulae, or performance standards of the manufacturer or from otherwise identical units manufactured to the same manufacturing specifications or formulae, or b. failed to contain adequate warnings or instructions, or c. was designed in a defective manner.Accordingly, a plaintiff can pursue a design defect, manufacturing defect, and/or a defective warning claim under the PLA. See Dewey v. R.J. Reynolds Tobacco Co., 121 N.J. 69, 94, 95 (1990).
[N.J.S.A. 2A:58C-2.]
In order to establish a prima facie case of a manufacturing defect, a plaintiff must show that "the product was defective, that the defect existed when the product left the manufacturer's control, and that the defect proximately caused injuries to the plaintiff[.]" Myrlak v. Port Auth. of N.Y. & N.J., 157 N.J. 84, 97 (1999). "A product is deemed to be defective if it is not reasonably fit, suitable, or safe for the ordinary or foreseeable purpose for which it is sold." Ibid.
Defects can be shown through direct evidence, such as an expert, or by circumstantial proof. Id. at 98; Lauder v. Teaneck Volunteer Ambulance Corps, 368 N.J. Super. 320, 331 (App. Div. 2004). "[P]roof of proper use, handling or operation of the product and the nature of the malfunction, . . . may be enough to satisfy the requirement that something is wrong with [the product]." Lauder, supra, 368 N.J. Super. at 331 (quoting Scanlon v. Gen. Motors Corp., 65 N.J. 582, 591 (1974)). Additionally, "[p]roof that a product is not fit for its intended purposes 'requires only proof . . . that something was wrong' with the product." Myrlak, supra, 157 N.J. at 98 (alteration in original) (quoting Scanlon, supra, 65 N.J. at 591). A prima facie case does not require the plaintiff to show what caused the defect, just that the defect in the product was present while the defendant had control of it. Scanlon, supra, 65 N.J. at 591.
If a plaintiff cannot show a defect through direct or circumstantial proof, there is a "third option," where a plaintiff can prove a defect by "negat[ing] other causes of the failure of the product for which the defendant would not be responsible[.]" Myrlak, supra, 157 N.J. at 99 (first alteration in original). A plaintiff need not "negate all possible causes of failure, only those likely causes of failure." Ibid.
Giving plaintiffs the benefit of all legitimate inferences from the evidence they submitted during their case in chief, it is clear that they presented sufficient proofs to withstand ACE's motion to dismiss. Heigler, plaintiffs' expert, reviewed the I-Sense monitoring report and identified a specific defect in ACE's electrical service, namely, it exceeded the voltage sag standards of the NECS on numerous occasions. He also correlated a number of the voltage sags to the specific incidents when Zeck's equipment was damaged. Because plaintiffs' facility was the first customer in line to receive service from ACE's electrical substation, an inference can certainly be drawn that the defect in the service existed while the electricity was within ACE's control. This inference is further corroborated by the fact that the monitor recorded the sags as they entered plaintiffs' facility and interior electrical system. Thus, plaintiffs presented compelling direct proof and a strong circumstantial case that ACE's electrical service was defective and caused the damages they sustained.
Heigler also negated other causes for plaintiffs' equipment problems. Heigler testified that there was nothing wrong with plaintiffs' facility, the grounding system, the surge protection, or the air conditioning system. He also explained why the damage could not have been caused by lightning or bad weather. The expert further opined that Zeck's installation of a solar energy system would ameliorate the equipment problems at the facility. Thus, plaintiffs' proofs reasonably supported their claim that the defect existed while the electricity was in ACE's control and that this defect caused damage to the facility's electrical system and warranted the installation of the solar energy system. Therefore, the judge properly denied ACE's motion for an involuntary dismissal at the end of plaintiffs' case.
Contrary to ACE's contention, this case is readily distinguishable from Consalo v. General Motors Corporation, 258 N.J. Super. 60, 61 (App. Div. 1992), and Scanlon, supra, 65 N.J. at 586. In Consalo, a woman was injured after her car experienced "unintended, sudden and uncontrollable acceleration." Consalo, supra, 258 N.J. Super. at 62. The plaintiff's expert identified a problem — the car accelerated unexpectedly - but was unable to identify what defect created the problem. Id. at 64. Because the expert was "unable to express any plausible reason for the unintended acceleration[,]" we held that the plaintiff did not establish a prima facie case. Id. at 67. In this matter, however, Heigler was able to identify the problem (equipment malfunctioning) and the defect (voltage sags) causing the problem. Thus, plaintiffs established a prima facie case of a manufacturing defect.
In Scanlon, the plaintiff tried to lightly press the accelerator of his car, and the car "'took off like a jet'" and would not stop even after the brakes were applied. Scanlon, supra, 65 N.J. at 587-88. The plaintiff's expert never examined the vehicle, yet opined that "the plastic fast idle cam in the carburetor 'broke,'" causing a jam that led to uncontrolled acceleration. Id. at 589. However, the automobile manufacturer demonstrated that the fast idle cam was "'intact, undamaged, and in one piece[.]'" Ibid.
According to the Court, "support for the conclusion of a broken cam was found in the evidence that the accelerator was depressed and the car went out of control. But that conclusion was rendered entirely untenable by" the fact that the fast idle cam was intact. Id. at 596. Additionally, the plaintiff failed to negate other causes for the accident, such as improper maintenance. Id. at 600. As a result, the Court held that the plaintiff had not established a prima facie case of a manufacturing defect. Ibid.
Unlike the expert in Scanlon, Heigler sufficiently ruled out other possible causes for the voltage sags, such as a problem with the facility itself, the grounding system, the surge protection, the weather, and the air conditioning system. He testified that the facility, grounding system, and surge protection system were all in proper working order. Additionally, Heigler explained that the air conditioning system could cause problems if all of the units came on at the same time, but it was extremely unlikely that would ever happen. With respect to the weather, Heigler opined that lightning strikes would be more likely to cause surges than sags and that the facility would be protected by the surge protection system. By ruling out other causes for the problems, plaintiffs' expert created a reasonable inference that the defect existed while the electricity was in ACE's control. Cf. Scanlon, supra, 65 N.J. at 600. Thus, the judge properly denied ACE's motion for an involuntary dismissal.
ACE asserts that the trial judge did not fully explain his reasons for denying its motion to dismiss. However, even if this were the case, it would be of no moment because our standard of review in this matter is de novo. Manalapan, supra, 140 N.J. at 378. --------
B.
ACE next argues that the jury's award of $245,000 in damages to Zeck was against the weight of the evidence. This argument lacks merit.
Rule 2:10-1 plainly states:
In both civil and criminal actions, the issue of whether a jury verdict was against the weight of the evidence shall not be cognizable on appeal unless a motion for a new trial on that ground was made in the trial court. The trial court's ruling on such a motion shall not be reversed unless it clearly appears that there was a miscarriage of justice under the law.In this case, ACE did not move for a new trial based on the weight of the evidence or seek remittitur pursuant to Rule 4:49-1. "Absent a new trial motion on that ground, the claim that the damages verdict was against the weight of the evidence is not cognizable on appeal." Ogborne v. Mercer Cemetery Corp., 197 N.J. 448, 462 (2009) (citing R. 2:10-1); see also Garnes v. Passaic Cty., 437 N.J. Super, 520, 526 n.1 (App Div. 2014) (noting that "a claim that the verdict was against the weight of the evidence cannot be raised on appeal if it was not raised by way of motion for a new trial in the trial court"). Therefore, we reject ACE's contention on this point.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION