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Special Law Alert - NJ Supreme Court Reaffirms Limitations of "Mode of Operation" Doctrine

October 1, 2015

In a significant ruling that will impact how premises liability cases are litigated throughout the state, the New Jersey Supreme Court, on September 28, 2015, unanimously reaffirmed the limitations of ‘Mode of Operation’ applicability.

In the typical slip and fall case, the plaintiff is required to prove that the defendant business had actual or constructive notice of the condition which allegedly caused the accident. In other words, a plaintiff must prove that the business knew, or should have known, of the condition(s) which caused the plaintiff’s fall. However, in Mode of Operation cases, the plaintiff is relieved of the burden of proving notice and is entitled to an inference of negligence against the business in situations where it is established that the manner in which a business operates creates the hazard.

The burden then shifts to the defendant, who may avoid liability only by showing that it acted reasonably and prudently in light of the risk of injury the operation entailed. Clearly, in Mode of Operation cases, the plaintiff has the upper hand.

In Prioleau v. Kentucky Fried Chicken, the New Jersey Supreme Court answered the question of when Mode of Operation should, or should not, apply to a particular case. In Prioleau, the plaintiff slipped and fell on a wet floor on her way to the bathroom within KFC and alleged that the dangerous condition was caused by employees tracking grease onto the floor from the kitchen, which mixed with rain water which was tracked into the restaurant from outside. The plaintiff argued that the jury should be instructed on Mode of Operation due to the fact that the “operation” of KFC permitted employees to track grease on the floor. The trial judge agreed; instructed the jury on Mode of Operation; and the jury came back with a verdict in favor of the plaintiff. On appeal, KFC argued that Mode of Operation did not apply and that giving the charge to the jury constituted reversible error. The Appellate Division agreed with KFC, but due to a dissenting opinion, the matter was appealed to the New Jersey Supreme Court.

In its decision, the New Jersey Supreme Court ordered a new trial on the issue of liability and ruled that Mode of Operation application: (1) is limited to businesses engaged in a “customer self-service” business model; (2) only applies to areas affected by a business’s self-service operations, which may extend beyond the areas traditionally associated with self-service activities (the court gave the examples of applying Mode of Operation beyond the produce aisle of supermarkets and beyond the area of a mall’s food court); and (3) does not require only customer mishandling, as the condition may be created by employee mishandling or the inherent qualities of the merchandise itself (think loose grapes in a vented bag).

Applying these principles to the Prioleau case, the court held that the location where the plaintiff’s slip and fall occurred, near the bathroom within KFC, had no relationship to any self-service component of KFC’s business. In that regard, the court held that the jury instruction on Mode of Operation was given in error, thus requiring a new trial on the issue of liability.

For a copy of the Prioleau decision, please contact Gregory D. Speier in our Roseland office.

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