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McColley v. Edison Corporation Center

303 N.J. Super. 420, 697 A.2d 149 (App. Div. 1997)

NEGLIGENCE—This is a personal injury case where the Court has again clouded the historical distinctions between the duty to trespassers and the invitees. It also reminds us that in appropriate cases, a parent company may be liable for the tortious acts of its subsidiary.

A 14-year old, was riding a motorized bike on private property when he was injured by a wire cable strung 2 ½ feet above the ground across the end of a paved roadway. Less than 7 weeks before the accident, ownership of the property had been transferred to a bank by deed in lieu of foreclosure and then immediately transferred to a wholly owned subsidiary of the bank, which held title on the day of the accident. The plaintiff and others had been riding motorbikes on the property for two years prior to the accident, and none of them had ever encountered the wire across the path nor been warned off the property. There was evidence that everyone in the chain of title was aware that youngsters rode motorbikes on the property. Furthermore, there was no posted warning to keep off the property or the road, and no warning of the wire. After the plaintiff brought suit against the group of present and former landowners, the motion judge concluded that the plaintiff was a trespasser to whom defendants owed no duty and granted summary judgment in favor of the landowners. The Appellate Division reversed, citing material questions of fact requiring a jury determination.

The Appellate Division followed both general principles of tort law and traditional common law classifications and held that under either analysis, one or more of the present or former landowners owed the plaintiff a duty. Under traditional common law analysis, the duty owed is based on whether the injured party is classified as an invitee, licensee or trespasser. The Court stated that even an adult trespasser is entitled to warning of serious artificial danger, and concluded that the wire was an artificial condition that posed a risk of serious bodily harm. In applying traditional trespasser liability rules, the Court followed the infant-trespasser exception of the Restatement (Second) of Torts, Section 339, which states that a landowner is liable to children for physical harm caused by an artificial condition on the land if: (a) the place where the condition exists is one which the owner knows or has reason to know that children trespass on, (b) the condition is one which the owner has reason to know and which he should realize involves an unreasonable risk of death or serious bodily harm to the children, (c) the children do not discover the condition or realize the risk involved, (d) the benefit to the owner of maintaining the condition and the burden of eliminating it are slight compared with the risk involved, and (e) the owner fails to exercise reasonable care to eliminate the danger or otherwise protect the children. Since the nature and obviousness of the risk and the likelihood that the risk would be discovered and appreciated by a 14-year old are all factors, the Court concluded that summary judgment was inappropriate.

The Appellate Court went on to decide the case again, citing general tort principles stated in a 1993 New Jersey Supreme Court decision (Hopkins v. Fox & Lazo Realtors, 132 N.J. 426 (1993)) that found it “increasingly difficult in the modern world to classify the parties within the rigid construction of traditional common law,” and found further that common law “holds no great comfort that such analysis will center on factors that will lead to a sound principle of tort liability.”

Even though the Appellate Court had no problem deciding this case under common law, it did a “Hopkins analysis” anyway and reached the same verdict. It followed the Hopkins rationale that whether a person owes a duty of care towards another turns on, “whether the imposition of such a duty satisfies an abiding sense of basic fairness under all the circumstances in light of considerations of public policy.” Such an analysis is both “fact specific and principled” and must lead to solutions that properly and fairly resolve the specific case and generate sensible rules to govern future conduct. In this case, the analysis involved looking at all past and present owners, to determine (a) whether any of them knew or should have known that people had been motorbiking on the property and if so, for how long, (b) what steps any of them took to prevent such use, (c) who placed the wire across the road, (d) why it was put there and (e) how visible it was. Furthermore, there were material questions of fact regarding each defendant’s relationship to the property, to the wire and to each other. As to the bank, the Court held that while a parent corporation is not normally liable for torts of the subsidiary, where the parent corporation exercises control over the subsidiary or over the property, it may be liable. In short, under either analysis, one or more of the defendants owed the plaintiff a duty, and therefore he was entitled to a jury trial. Finally, the Court held that if after a trial, the judge concludes that the relationship between the plaintiff and the defendants does not fit into one of the traditional classifications, the judge should define defendants’ duty in general negligence terms, specifically, “a general duty to exercise reasonable care in preventing foreseeable harm under the existing circumstances.”


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