Viviano v. CBS, Inc.

• Decision Date: 01 October 1991
• Citation: 597 A.2d 543,251 N.J.Super. 113
• Parties: Lucrezia Minnitti VIVIANO, Plaintiff-Respondent, v. CBS, INC., Joseph Kroll, Nelson E. Horner and John L. Noonan, Defendants-Appellants.
• Court: New Jersey Superior Court — Appellate Division

Page 113

251 N.J.Super. 113

597 A.2d 543

Lucrezia Minnitti VIVIANO, Plaintiff-Respondent, v. CBS, INC., Joseph Kroll, Nelson E. Horner and John L Noonan, Defendants-Appellants.

Superior Court of New Jersey,

Appellate Division.

Argued May 28, 1991.

Decided Oct. 1, 1991.

Thomas B. Kenworthy, of the Pennsylvania Bar, Philadelphia, Pa., admitted pro hace vice, for defendants-appellants (Brandt, Haughey, Penberthy, Lewis & Hyland, attorneys; Sandford F. Schmidt, Moorestown and Thomas B. Kenworthy, Philadelphia, Pa., on the brief).

Angelo J. Falciani, for plaintiff-respondent (Falciani & Fletcher, attorneys; James D. Donnelly, Woodbury, on the brief).

Before Judges PETRELLA, MUIR, and BROCHIN.

The opinion of this court was delivered by

BROCHIN, J.A.D.

In this case, we hold that a corporate employer and its supervisory employees who fraudulently concealed information relevant to another employee's suit against third parties for work-related injuries are answerable in damages to the injured employee.

Plaintiff Lucrezia Viviano was an employee of defendant CBS, Inc. She operated a machine that worked like a giant waffle iron, pressing out plastic phonograph records. On December 1, 1978, the machine malfunctioned, catching her left hand between its upper and lower plates. Before her hand was released, the heat and pressure had destroyed three and a half of her fingers.

On July 2, 1979, plaintiff filed suit to recover for her injuries, initially naming only fictional parties as defendants. See R. 4:26-4. On September 2, 1980, she filed an amended complaint which deleted all of the fictional defendants and substituted a real party whom she alleged had manufactured the press. On September 10, 1981, after having filed three additional amended complaints, each one adding one or more other companies whom she alleged had sold or manufactured other components responsible for the malfunctioning of the press, plaintiff again amended her complaint to add CBS as a defendant. This fourth amended complaint asserted various personal injury claims against CBS and, in addition, included a count in the nature of a bill of discovery. In that count, plaintiff alleged that CBS had unreasonably impeded her discovery and had failed to furnish her with relevant information despite her proper demand.

On December 21, 1981, the trial court dismissed the counts of plaintiff's amended complaint which charged CBS with liability for her personal injuries. The court held that those counts were barred by the Workers' Compensation Act. See N.J.S.A. 34:15-1; Wilson v. Faull, 27 N.J. 105, 116, 141 A.2d 768 (1958). The count in the nature of a bill of discovery remained pending.

In the meanwhile, CBS had re-hired plaintiff as a night security guard at the plant where she had been injured. During the latter part of May 1982, she entered defendant Nelson E. Horner's office. Horner was director of employee relations at the plant. Her personnel file was lying on his desk. In the file, she discovered a previously undisclosed memorandum which Mr. Ronald Brandt, the general foreman responsible for all shifts in the press room, had written three days after her injury. She removed the memorandum from the file and delivered it to her attorneys. The memorandum described the results of Mr. Brandt's investigation and contained the following paragraph:

We found a problem on the old Taylor Timers, we are in the process of changing. If the microswitch sticks, the press will reset itself and go back in and through a cycle. I questioned the electricians on a safety device. We are in the process of replacing the Taylor timers with our electronic timers that have an additional safety built in.

A few days later, an attorney for CBS handed a copy of the Brandt memorandum to plaintiff's attorney. CBS did not indicate it knew that plaintiff had already discovered the memorandum.

On the basis of the Brandt memorandum, plaintiff prepared a sixth amended complaint. In it, she named Sybron, a corporation, as a defendant. Sybron was the successor by merger to the company that had manufactured the Taylor Timers. On July 16, 1982, the court permitted plaintiff to file this amended complaint and to serve it on Sybron. ¹ By an order also dated July 16, 1982, the court dismissed with prejudice the count of plaintiff's fourth amended complaint that asserted a claim against CBS in the nature of a bill of discovery. That dismissal order became effective September 17, 1982. With the dismissal of the discovery count, no further claim for relief remained pending against CBS.

Thereafter, Sybron moved for summary judgment dismissing the sixth amended complaint because it had not been filed within the two-year period of limitations. See N.J.S.A. 2A:14-2. The trial court denied the motion by an order entered November 9, 1983. Sybron took an interlocutory appeal to this court. In an unpublished opinion filed April 12, 1984, we reversed, with one judge dissenting. We held that the discovery rule did not apply and that the fictitious party practice, R. 4:26-4, did not toll the statute of limitations because plaintiff had not retained any fictitious defendants after she had amended her complaint for the first time in July 1980. Plaintiff appealed our decision to the Supreme Court.

On June 4, 1984, shortly after we issued our opinion dismissing plaintiff's amended complaint against Sybron, she commenced the present suit. In this suit she charges that CBS and certain of its supervisory employees delayed, hampered, and interfered with her personal injury action by fraudulently concealing and misrepresenting relevant facts which CBS was obligated to divulge in compliance with plaintiff's discovery demands. Defendants moved to dismiss on grounds which included the entire controversy doctrine. Before that motion was heard, plaintiff, without opposition, obtained an order transferring the case to the inactive list until the Supreme Court decided her appeal.

On January 28, 1986, the Supreme Court reversed this court's decision in plaintiff's personal injury suit against Sybron. See Viviano v. CBS, Inc., 101 N.J. 538, 503 A.2d 296 (1986). The Court agreed that the discovery rule was inapplicable and that R. 4:26-4 had not been utilized correctly. But it relaxed the latter rule and remanded the case for trial because plaintiff's misapplication of the fictitious party practice was attributable primarily "to the frustration of discovery by CBS." Id. at 556, 503 A.2d 296.

In February 1987, after remand and on the eve of trial, plaintiff settled with Sybron for $292,500, and the personal injury suit was dismissed with prejudice.

After the action against Sybron had been settled, in July 1988, the present suit seeking damages from CBS because of its concealment of evidence in the personal injury action was restored to the active list. The action against CBS was tried to a jury. The jury found that CBS and all of the individual defendants had fraudulently concealed material discovery information and had tortiously interfered with the "prospective economic advantages" which plaintiff had sought to gain from her personal injury suit. The jury also found that CBS and defendant Kroll had fraudulently misrepresented material information to plaintiff. They awarded plaintiff $65,600 compensation for the loss of interest on her personal injury settlement; $7,351.71 for expenses; and, against CBS alone, $215,000 in punitive damages.

On appeal, the defendants argue that plaintiff's case is predicated solely on their allegedly false testimony and their asserted failure to provide discovery during the course of a law suit. They contend that the evidence presented at trial was insufficient to support those claims; that, even if proved, the conduct attributed to them does not state a claim for which relief may be granted under New Jersey law; and that any such claims should have been litigated in the personal injury action and are now barred by the entire controversy doctrine. They also assert that there was no legal basis for the jury's awarding punitive damages, that the compensatory damages were unduly speculative, and that they were prejudiced by the court's permitting plaintiff to recover damages for losses which she did not specify during pretrial discovery and by a series of other trial errors. We disagree with defendants' contentions and therefore affirm.

The gravamen of plaintiff's case is defendants' fraudulent concealment of the Brandt memorandum. The accident happened on a Friday. The memorandum was prepared the following Monday. It contained the key information plaintiff needed to recover for her injuries. It told her, "[O]n the old Taylor Timers.... [i]f the micro-switch sticks, the press will reset itself and go back in and through a cycle." In those few words, it explained what had probably caused the accident, it identified the timer as the defective component responsible for the malfunction, and it named the company that had manufactured the timer. Immediately after the accident, CBS removed the timer and discarded it so that it was not available to plaintiff's expert when he was permitted to view the machine. The memorandum was the only evidence plaintiff was able to find that suggested Sybron's culpability. Once the Supreme Court had ruled that the expiration of the period of limitations would not defeat plaintiff's action, her personal injury damage claim against Sybron was promptly settled.

The Brandt memorandum was addressed to defendant John L. Noonan, manager of manufacturing. It listed defendant Joseph Kroll, the plant manager, and defendant Nelson E. Horner, the plant director of employee relations, as carbon copy addressees. Mr. Kroll was served with a subpoena returnable at his deposition. As he interpreted the subpoena, it required him to produce the Brandt memorandum. He claimed that he had not recalled the existence of the memorandum when he received the subpoena, but...