Prevratil v. Mohr

• Decision Date: 10 July 1996
• Parties: Joseph PREVRATIL and Lisa Prevratil, his wife, Plaintiffs-Appellants, v. George MOHR and Rich Hill, Transportation, Defendants-Respondents.
• Court: New Jersey Supreme Court

Page 180

145 N.J. 180

678 A.2d 243

Joseph PREVRATIL and Lisa Prevratil, his wife, Plaintiffs-Appellants, v. George MOHR and Rich Hill, Transportation, Defendants-Respondents.

Supreme Court of New Jersey.

Argued Nov. 28, 1995.

Decided July 10, 1996.

Kenneth S. Javerbaum, Springfield, for appellants (Javerbaum Wurgaft & Hicks, attorneys; Mr. Javerbaum and Eric G. Kahn, on the brief).

Modestino Carbone, Mt. Laurel, for respondents (McDonald, Nathan & Carbone, attorneys).

The opinion of the Court was delivered by

POLLOCK, J.

The primary issue is whether we should create an exception from the entire controversy doctrine for automobile-negligence cases. Specifically, the question is whether the entire controversy doctrine bars the personal injury action of plaintiffs, Joseph Prevratil, and his wife, Lisa, when counsel for his employer's insurer defended Prevratil and the employer in a prior action arising out of the same automobile accident as gives rise to Prevratil's present action.

The Law Division granted the motion for summary judgment by defendants George Mohr and Rich Hill, holding that the doctrine barred plaintiffs' claims. The Appellate Division affirmed, 279 N.J.Super. 652, 653 A.2d 1190 (1995). We granted Prevratil's petition for certification, 141 N.J. 97, 660 A.2d 1196 (1995), and now reverse and remand the matter to the Law Division.

We hold that the entire controversy doctrine applies to actions arising out of automobile-accident cases. Likewise, litigants currently involved in negligence litigation shall have time to make a timely application to assert affirmative claims. In all other cases, litigants in an automobile-accident case must assert any affirmative claims in the course of a single litigation.

-I-

This action arises from a three-vehicle accident on March 2, 1989. Prevratil was operating a vehicle owned by his employer, Benjo Trucking Company (Benjo), and insured by Royal Insurance. Defendant, George Mohr, was operating a vehicle owned by his employer, Rich Hill Transportation (Rich Hill), and Janet Olsen was operating her own vehicle. The vehicles were proceeding on State Highway 440 in Woodbridge: Mohr, Prevratil, and Olsen. Mohr drove his vehicle into the rear of Prevratil's truck, which then struck Olsen's vehicle.

Olsen filed a personal injury action on May 2, 1989, naming as defendants Prevratil, Mohr, Benjo, and Rich Hill. Olsen's counsel served a summons and complaint on Prevratil at his residence, 51-24 35th Street, Long Island City, New York, by both regular and certified mail. Although Prevratil claimed that he never had received any notice of the suit, someone signed his name on the certified-mail return-receipt card.

Benjo's insurer retained the law firm of Crowley & Cross to represent Prevratil and Benjo. On June 23, 1989, the firm filed an answer and cross-claim for contribution on Prevratil's behalf. The answer did not assert any cross-claims or counterclaims for personal injuries to Prevratil.

Olsen settled her suit within seven months of filing. In a release and stipulation of dismissal with prejudice executed on December 4, 1989, Olsen settled her claims against Mohr and Rich Hill for $15,000. She dismissed her claims against Prevratil and Benjo.

On November 26, 1990, Prevratil filed the present action against Mohr and Rich Hill (subsequently described as defendants). Defendants moved for summary judgment on the ground that Prevratil should have asserted his personal injury claims in the Olsen action. Prevratil countered that he was unaware of the pendency of the Olsen action or Crowley & Cross's appearance in that action on his behalf.

The trial court reasoned that the application of the entire controversy doctrine turned on whether Prevratil actually knew about the Olsen action before its resolution. Consequently, the court conducted a plenary hearing on July 12, 1993, on that issue. See Cafferata v. Peyser, 251 N.J.Super. 256, 260, 597 A.2d 1101 (App.Div.1991) (requiring evidential hearing when plaintiff's knowledge of initial suit is disputed); Madison Indus. v. Eastman Kodak, 243 N.J.Super. 578, 585, 581 A.2d 85 (App.Div.1990) (affirming fact-finding hearing to resolve summary judgment on intent of parties). The purpose of the hearing was to conduct limited fact-finding before ruling on the motion for summary judgment. The procedure is eminently sensible. If a court can determine a matter on summary judgment by recourse to limited fact-finding, a plenary trial on all issues is inefficient and unnecessary.

At the hearing, defendants contended that Prevratil's answer to Olsen's complaint, filed on Prevratil's behalf by Crowley & Cross, showed that Prevratil had been properly served. Defendants submitted correspondence from Patrick W. Foley, Olsen's attorney, to Crowley & Cross after it filed Prevratil's answer. The letter stated that Foley had been unable to serve Benjo. Defendants reasoned that Prevratil must have received the complaint and forwarded it to Benjo, who then forwarded it to Royal Insurance, which finally forwarded it to Crowley & Cross. Otherwise, Crowley & Cross would not have filed Prevratil's answer to the complaint. Prevratil countered that the omission of an answer on behalf of Benjo was a mere oversight.

To substantiate that Prevratil had been served with the Olsen complaint, defendants introduced the certified-mail return-receipt card bearing Prevratil's signature. The complaint had been sent by regular and certified mail to Prevratil's residence in Long Island City. Neither the complaint nor any other correspondence regarding the Olsen action sent by Foley or by Crowley & Cross to Prevratil had been returned as undelivered. Prevratil conceded that he had received other official documents, such as tax returns and workers' compensation checks, at his Long Island City residence. He denied, however, that the signature on the receipt card was his and explained that a neighbor might have signed his name.

The trial court concluded that Prevratil had timely knowledge of the Olsen litigation. The proofs also revealed that shortly after the accident Prevratil knew of his alleged injuries. Three months after the accident, Prevratil consulted his personal attorney about filing an action for personal injuries arising out of the accident. While the Olsen action was pending, moreover, Prevratil consulted an attorney about filing a workers' compensation claim for the same injuries. Finding no special equities justifying an exception to the entire controversy doctrine, the trial court granted defendants' motion for summary judgment.

Prevratil appealed to the Appellate Division. While the appeal was pending, another part of the Appellate Division permitted a plaintiff in a multi-vehicle accident case to pursue a personal injury claim despite plaintiff's failure to assert an affirmative claim in prior related litigation. Stebbins v. Robbins, 278 N.J.Super 439, 651 A.2d 486 (1995). In the present case, however, the Appellate Division affirmed the summary judgment dismissing Prevratil's complaint. It ruled that absent equitable considerations, automobile-negligence cases should remain subject to the joinder-of-claims requirements of the entire controversy doctrine as contained in Rule 4:30A. 279 N.J.Super. at 657, 653 A.2d 1190.

We granted Prevratil's petition for certification to resolve the conflict in the Appellate Division decisions. We agree that automobile-accident cases should be subject to the rules pertaining to the mandatory joinder of claims, Rule 4:27, and to the entire controversy doctrine, Rule 4:30A. To assure the fairness of the dismissal of Prevratil's action, however, we reverse the judgment of the Appellate Division and remand the matter to the Law Division.

-II-

Rule 4:30A states:

Non-joinder of claims or parties required to be joined by the entire controversy doctrine shall result in the preclusion of the omitted claims to the extent required by the entire controversy doctrine, except as otherwise provided by R. 4:64-5 (foreclosure actions) and R. 4:67-4(a) (leave required for counterclaims or cross-claims in summary actions).

See also R. 4:7 (making mandatory counterclaims not asserted subject to preclusion under R. 4:30A); R. 4:5-1 (requiring identification of any other pending or contemplated action in any other court or arbitration proceeding involving same controversy).

During the pendency of Olsen's action, Rule 4:27-1(b), the predecessor of Rule 4:30A, provided: "Each party to an action shall assert therein all claims which he may have against any other party thereto insofar as may be required by application of the entire controversy doctrine." Rule 4:30A replaced and modified Rule 4:27-1(b) by extending mandatory joinder beyond claims to parties. In this case, however, we are concerned only with the mandatory joinder of claims. Since September 10, 1979, when subparagraph (b) was added to Rule 4:27-1, the Rules Governing the Courts of the State of New Jersey have required the mandatory joinder of all claims as required by the entire controversy doctrine. Thus, for ten years preceding the date of the accident that gives rise to Prevratil's claim, the rules of practice required defendants in personal-injury actions to assert their claims for personal injuries in the original action.

Generally speaking, the entire controversy doctrine requires whenever possible all phases of a legal dispute to be adjudicated in one action. At a minimum, all parties to a suit should assert all affirmative claims and defenses arising out of the underlying controversy. Cogdell v. Hospital Ctr., 116 N.J. 7, 15, 560 A.2d 1169 (1989). The doctrine, which promotes the twin goals of efficient judicial administration and fairness, encourages the comprehensive and conclusive determination of a legal controversy. Mystic Isle Development Corp. v. Perskie & Nehmad, 142 N.J. 310, 322, 662 A.2d 523 (1995); Crispin v. Volkswagenwerk, A.G....