Justia Business Law Opinion Summaries

In a series of decisions arising from personal injuries sustained by business invitees on the premises of businesses whose operations involve customer self-service, the New Jersey Supreme Court has recognized a principle known as “mode of operation.” This appeal arose from a slip-and-fall accident that occurred at a Kentucky Fried Chicken restaurant in Cherry Hill. On the evening of her accident, plaintiff Janice Prioleau and her adult son and daughter, Richard Prioleau and Adriana Prioleau, were on a trip from their home in Delaware to New Jersey. Plaintiff and her children recalled that the weather that evening was rainy; plaintiff stated that there was a torrential storm. Plaintiff and her children decided to stop at the Kentucky Fried Chicken restaurant to have dinner. Plaintiff testified that, because of the heavy rain outside, she and her children tracked water into the restaurant. As she approached the restroom, plaintiff slipped and fell, landing on her buttocks and hands. According to plaintiff, the floor near the restroom felt greasy and wet. She stated that there were no mats or warning signs in the area where she fell. Plaintiff s children agreed with her that the floor near the restroom at the restaurant was slippery and greasy. Plaintiff’s testimony established that she had not yet ordered or purchased her dinner when her accident occurred. Instead, by her own account, plaintiff fell immediately after entering the restaurant. She asserted a negligence claim and specifically alleged that defendants failed to exercise reasonable care by failing to provide plaintiff, an invitee, with a safe place to traverse the premises. The jury found defendants negligent, without identifying the theory of negligence on which its verdict was based, and concluded that defendants’ negligence was a proximate cause of plaintiff’s accident. Defendants appealed the trial court’s judgment. A divided Appellate Division panel affirmed the trial court’s denial of defendant’s motion for a directed verdict. The majority reasoned that the unifying factor in case law recognizing the “mode-of-operation” doctrine was the negligence [that] resulted from the business’s method of operation, which was designed to allow patrons to directly handle merchandise or products without intervention from business employees, and entailed an expectation of customer carelessness. Finding no reversible error in the Appellate Division’s judgment, the Supreme Court affirmed. View "Prioleau v. Kentucky Fried Chicken, Inc." on Justia Law

Plaintiff Bruce Kaye, the controlling principal of three entities that sold and managed timeshare interests in resort properties in Atlantic County, hired defendant Alan Rosefielde, an attorney admitted to practice law in New York but not in New Jersey, initially as outside counsel, and then as an employee. After defendant had worked closely with plaintiff for approximately four months, the parties entered an agreement providing that, as compensation for his services, defendant would earn an annual salary of $500,000. For approximately two years, defendant served as Chief Operating Officer for several of the timeshare entities, and effectively functioned as their general counsel. In that capacity, defendant committed serious misconduct by acting on his own behalf instead of for his employers benefit, and exposing his employers to potential liability. Based on this misconduct, and dissatisfaction with defendant’s performance, plaintiff terminated defendant’s employment. Kaye, in his individual capacity and as trustee of two trusts, Kaye’s son Jason Kaye, and the business entities that Kaye owned, sued Rosefielde and several other entities. Plaintiffs asserted claims based on Rosefielde’s breach of fiduciary duty, fraud, legal malpractice, unlicensed practice of law, and breach of the duty of loyalty. Following a lengthy bench trial, the trial court found that Rosefielde engaged in egregious conduct constituting a breach of his duty of loyalty, breach of his fiduciary duty, legal malpractice, and civil fraud. The trial court rescinded Rosefielde’s interest in several entities, awarded compensatory damages, punitive damages, and legal fees, and dismissed Rosefielde’s counterclaims. It declined, however, to order the equitable disgorgement of Rosefielde’s salary as a remedy for his breach of the duty of loyalty, on the ground that his breach did not result in damage or loss to the entities that employed him. The Appellate Division affirmed that determination, and the New Jersey Supreme Court granted certification on the issue of equitable disgorgement. “In imposing the remedy of disgorgement, depending on the circumstances, a trial court should apportion the employee’s compensation, rather than ordering a wholesale disgorgement that may be disproportionate to the misconduct at issue. . . . If an agent is paid a salary apportioned to periods of time, or compensation apportioned to the completion of specified items of work, he is entitled to receive the stipulated compensation for periods or items properly completed before his renunciation or discharge. This is true even if, because of unfaithfulness or insubordination, the agent forfeits his compensation for subsequent periods or items.” The judgment of the Appellate Division was reversed with respect to the remedy of equitable disgorgement, and the matter was remanded to the trial court to decide whether plaintiffs were entitled to disgorgement. If so, the trial court should apportion Rosefielde’s compensation, ordering disgorgement only for monthly pay periods in which he committed acts of disloyalty. View "Kaye v. Rosefielde" on Justia Law