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New Jersey Superior Court, Appellate Division Holding Limits the Application of the Mode-of-Operation Doctrine

March 25, 2014

In an opinion approved for publication earlier this month, the Superior Court of New Jersey, Appellate Division modified the application of the mode-of-operation doctrine, holding that in order to trigger mode-of-operation liability, a plaintiff must identify facts showing a nexus between the method or manner in which the business is operated and the harm alleged to have caused the plaintiff's injury.  Prioleau v. Kentucky Fried Chicken, Inc., __ A3d __, 2014 N.J. Super. Lexis 29, 2014 WL 813692 (App. Div. March 3, 2014).  (A case not handled by Zarwin Baum attorneys.)

In certain distinctive instances, New Jersey courts have eliminated a plaintiff's requirement of proof of actual or constructive notice where, as a matter of probability, a dangerous condition is likely to occur “as the result of the nature of the business, the property’s condition, or a demonstrable pattern of conduct or incidents.”  Nisivoccia v. Glass Gardens, Inc., 175 N.J. 559, 563, 818 A.2d 314 (2003).  The New Jersey Supreme Court’s prior reported cases that have allowed mode-of-operation liability have typically involved hazards located inside of a defendant's retail building, such as grocery stores, cafeterias, shopping malls and self-service furniture stores.  In Craggan, the Appellate Division suggested the unifying factor in cases applying the mode-of-operation was that the businesses were designed to allow patrons to directly handle merchandise without intervention from business employees and this entails an expectation of customer carelessness, thus putting the business on notice of inherent risks in its business practice. See Craggan v. IKEA USA, 332 N.J.Super. 53, 59, 61–63, 752 A.2d 819 (App.Div.2000).  In such mode-of-operation cases, the courts “have accorded the plaintiff an inference of negligence, imposing on the defendant the obligation to come forward with rebutting proof that it had taken prudent and reasonable steps to avoid the potential hazard.” Nisivoccia v. Glass Gardens, Inc., 175 N.J. 559, 563, 818 A.2d 314 (2003); See also Model Jury Charge (Civil) 5.20F(11), “Notice Not Required When Mode of Operation Creates Danger” (1970).

In Prioleau, the plaintiff slipped on the floor of a “fast food self-service restaurant,” in an area which was dripping with water from an ongoing heavy rain storm. Plaintiff alleged KFC’s method of operating its business should have put KFC on notice of the potential hazard and warranted the application of the mode-of-operation doctrine.  The Essex County trial court agreed with plaintiff and charged the jury with a mode-of-operation jury instruction.

However, while acknowledging that self-service can cause a dangerous condition resulting in an the owner’s liability, the Appellate Division held the doctrine should only be applied in limited circumstances and that not all dangerous conditions arising in the operation of a food self-service business justify the application of the mode-of-operation theory of liability. Contrary to the trial judge’s conclusions, Defendant, KFC’s business as a “fast-food operation” had no relationship to Plaintiff’s fall.  The Appellate division held there was “no link between the manner in which the business was conducted and the alleged hazard Plaintiff slipped on or its source. No testimony showed the alleged wet/greasy floor was the result of patron’s spilled drink or dropped food.”  Finding there was no evidence establishing a KFC business practice that created an implicit or inherent danger likely to cause the alleged hazardous condition at issue, the Appellate Division concluded the mode-of-operation doctrine should not be invoked merely because the defendant operated a fast-food restaurant.  Prioleau v. Kentucky Fried Chicken, Inc., __ A3d __, 2014 N.J. Super. Lexis 29, 2014 WL 813692 (App. Div. March 3, 2014). Therefore, in determining whether the mode-of-operation doctrine applies, a court must apply a fact based  analysis in which it is not only crucial to identify the nature of the business as a “self-service business,” but also evaluate the connection between the specific method or manner in which the business is conducted and the specific harm alleged by the plaintiff. 

There was, however, a dissenting opinion in Prioleau and, as a result of the split verdict, the plaintiff is provided a right of appeal to the New Jersey Supreme Court.

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