What Every Supermarket, Department Store, Mall and Retail Store Must Know Regarding Recent Developments in New Jersey’s Mode of Operation Doctrine

At Marshall Dennehey, attorneys are regularly defending cases involving slip and fall incidents. In these cases, in addition to establishing the defendant’s duty of care, the plaintiff is required to establish that the defendant had actual or constructive notice of the dangerous condition that allegedly caused the accident. Indeed, it is the plaintiff’s burden to prove negligence against the defendant.

However, in certain circumstances, the plaintiff does not need to prove notice. This exception, known as the “Mode of Operation Doctrine,” applies 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., 818 A.2d 314 (N.J. 2003). In fact, in Mode of Operation cases, the plaintiff is entitled to an inference of negligence. The inference shifts the burden to the defendant, who may avoid liability by showing that it did all that a reasonably prudent person would do in light of the risk of injury.

The inquiry into whether or not the Mode of Operation Doctrine applies is undertaken by examining the facts of each individual case. However, following the first Mode of Operation case, Bozza v. Vornado, Inc., 200 A.2d 777 (N.J. 1964), the doctrine has been inconsistently applied by New Jersey courts. As revealed in this article, over the past year, the unfortunate trend has been to expand the applicability of the doctrine.

New Jersey’s Appellate Division initially limited the scope of the doctrine in Prioleau v. Kentucky Fried Chicken, Inc., 85 A.3d 1015 (App. Div. 2014). In Prioleau, the plaintiff slipped and fell on water that was tracked into the defendant’s establishment from a rainstorm. The plaintiff argued that Mode of Operation should apply as the floor was also slippery due to employees tracking around grease as they traversed to and from the restroom (evidence revealed that employees and customers shared the same restroom). The Appellate Division emphasized that the Mode of Operation Doctrine should not be broadly applied and held that a plaintiff must identify facts showing a nexus between the method or manner in which the business is operated in extending products or services to the public and the harm alleged to have caused the plaintiff’s injury. According to the court, the negligence must result from the defendant’s method of operation, which is designed to allow patrons to directly handle merchandise or products without intervention from the defendant’s employees, and entails an expectation of customer carelessness. Accordingly, the court found that the hazardous condition—a wet floor—did not arise from KFC’s business practice of serving customers. A dissenting opinion in Prioleau, however, argued that the hazardous condition, a mix of water and grease, was related to the daily operations of KFC. The dissent suggested that a customer can actually bring a hazardous condition into a store (e.g., rainwater), either knowingly or not, and be entitled to the Mode of Operation charge. Due to the dissenting opinion, there was an appeal of right to the New Jersey Supreme Court, and oral argument was recently heard on March 17, 2015. A discussion of what occurred before the Supreme Court is provided at the conclusion of this article.

New Jersey’s courts have also recently examined the Mode of Operation Doctrine in cases involving supermarkets. In Novick v. Glass Gardens, Inc., 2014 N.J. Super. Unpub. LEXIS 2873 (App. Div. Dec. 12, 2014), the plaintiff slipped and fell on a wet substance at or near the checkout aisle of a supermarket. Another customer in a checkout aisle had a gallon of milk that was leaking from his cart onto the floor. The Appellate Division ruled that the Mode of Operation Doctrine was not applicable because milk is neither a loose item nor one likely to fall to the ground during handling so to cause a hazardous condition. Compare the facts of Novick to the facts of Nisivoccia, supra, in which the New Jersey Supreme Court ruled that the plaintiff was entitled to the Mode of Operation charge as a result of slipping and falling on a grape near the check out area of the defendant’s store. The Supreme Court in Nisivoccia looked at the way the grapes were packaged and found that it was foreseeable that loose grapes would fall to the ground during customer handling at the checkout area. However, the Appellate Division in Novick was not of the opinion that milk was likely to fall or spill during handling and, thus, did not find the Mode of Operation Doctrine to be applicable.

Another recent case involving a supermarket, Berry v. Shoprite, 2014 N.J. Super. Unpub. LEXIS 1549 (Law. Div. June 20, 2014), involved a plaintiff who was pushing her cart through the dairy aisle when she slipped and fell when passing an open-top refrigerated unit. The plaintiff alleged she slipped on a cleaning fluid that had leaked from a broken bottle of cleaner that was hidden from sight. The court found that the Mode of Operation Doctrine did not apply because the injury did not result from items sold in open bags, bins, or containers and because the defendant had not implemented a Mode of Operation that created a reasonable probability that customers would be injured as a result of the nature of the business, the property’s condition, or a demonstrable pattern of conduct or incidents. The court hypothetically suggested that if the Mode of Operation Doctrine were applied in the case, supermarkets would have to inspect each and every customer’s shopping cart to guard against items leaking, and the entire supermarket would be open to potential Mode of Operation liability. The court implied that, because customers walk around the supermarket filling their carts as they see fit, there is a risk that customers will drop items in the aisle. However, such a risk was not enough to relieve the plaintiff of his or her burden of proving negligence.

Consider, however, Mattia v. Shoprite of Brookdale, 2015 N.J. Super. Unpub. LEXIS 224 (App. Div. Feb. 6, 2015), in which the plaintiff slipped and fell on water in an area about seven feet from a flower/potted plant stand where customers were permitted to select flowers, and also within feet of a self-service salad bar wherein various items rested on ice. The Appellate Division reversed a “no cause” verdict in favor of the defendant after finding that the failure to instruct the jury with the Mode of Operation charge constituted reversible error. According to the Appellate Division, the plaintiff was entitled to the charge, even if unable to specifically identify the source of the tripping hazard. Moreover, the Appellate Division noted that it was enough to produce sufficient proof showing that the slipping hazard more likely than not arose out of the merchant’s mode of operation. By relying on Prioleau, the Mattia court found a nexus between the defendant’s mode of operation and the slipping hazard at issue. In Mattia, however, the court seemingly rules that a jury can find that the slipping hazard, by a “more likely than not” standard, arose out of the supermarket’s mode of operation. This is counter to the decision reached in Prioleau. Recall that in Prioleau, the plaintiff was required to identify facts showing a nexus between the business’s operation and the harm alleged to have caused the injury.

New Jersey’s courts have also recently examined the Mode of Operation Doctrine as it relates to slip and falls occurring in malls. For example, in Cline v. Westfield Garden State Plaza, 2014 N.J. Super. Unpub. LEXIS 2632 (App. Div. Nov. 5, 2014), the plaintiff slipped on a clear liquid within the mall. The fall occurred on an entirely different floor from the mall’s food court. The Appellate Division affirmed the trial judge’s decision that the Mode of Operation Doctrine was not applicable as there was no evidence that the hazardous condition—possible spillage of drinks—was connected to the mall’s method of doing business.

The Cline decision, however, is completely at odds with the prior decision in Ryder v. Ocean County Mall, 774 A.2d 700 (App. Div. 2001). In Ryder, the plaintiff slipped and fell in a common area of the mall, but outside of the mall’s food court area. The Ryder court affirmed the judgment in favor of the plaintiff and found that, “[g]iven that mode of operation [allowing customers to eat/drink in common areas], the Mall becomes the functional equivalent of a cafeteria. […] and can reasonably be charged with notice that food and drink spills are likely to occur and do occur anywhere and at any time in the common areas.” Ryder, supra, at 703 (emphasis added)).

The recent decision of Lebrio v. The Pier Shops at Caesar’s, 2014 N.J. Super. Unpub. LEXIS 2319 (App. Div. Sept. 25, 2014), is consistent with the decision reached in Ryder. In Lebrio, the plaintiff slipped and fell on a clear liquid in the common area of the defendant’s mall. The plaintiff did not know how the liquid spilled or how long the condition was present prior to the fall. The Appellate Division relied upon Ryder to conclude that the jury was rightfully instructed on the Mode of Operation Doctrine. The court found that the nexus between the business, a shopping mall with a food court and the policy of permitting patrons to walk around common areas with drinks, triggered the application of Mode of Operation.

Most recently, in Katsaros v. Target Corp., Civ. No. 12-7708, 2015 WL 456950 (D.N.J. Feb. 3, 2015), New Jersey’s Federal District Court denied the defendant’s motion for summary judgment after the plaintiff allegedly slipped and fell on water in between the men’s department and the shoe department of the defendant’s store. The defendant argued, in part, that the Mode of Operation Doctrine should not apply because the fall did not occur in a “self-service” area of the store and no drinks were available for purchase near the fall location. The court disagreed, finding that the nature of the defendant’s business—a self-service retail store that sells food and drink in a concession area and allows customers to carry same in the store—permitted an inference of negligence. Relying on the Ryder and Lebrio decisions, the Katsaros court reasoned that, since Target did not restrict the carrying or consumption of food and drink, the entire Target store could be subject to Mode of Operation liability.

As evidenced by the recent decisions above, it is clear that application of the Mode of Operation Doctrine is dangerously expanding. Although the Appellate Division in Prioleau emphasized that the Doctrine should not be broadly applied, subsequent decisions have seemingly ignored such precedent. The decisions reached in Ryder, Lebrio and Katsaros are quite unfortunate and have widespread ramifications. Based on those decisions, every single store that permits the purchase and carrying of food and/or beverages will potentially be subject to Mode of Operation liability, regardless of where a fall occurs within the store, and regardless of the source of the alleged dangerous condition.

As stated, oral argument was recently held before the Supreme Court in Prioleau. The Justices questioned plaintiff’s counsel as to why the facts of Prioleau constituted anything other than a standard premises liability case. Plaintiff’s counsel conceded that the Mode of Operation charge, under the facts of the case, may not have been needed because liability against KFC was clear. The issue for the court then became whether the Mode of Operation charge influenced the jury and was consequential in the case’s outcome. The Justices, however, did not “show their cards” on that issue.

It was not surprising that the New Jersey Association for Justice (the plaintiff’s bar) participated in oral argument as amicus. The argument presented by amicus was that Mode of Operation should be standard in every premises liability case so long as there is a nexus to the injury. Amicus argued that the grease being tracked by KFC employees was the mode of operation of the business. The Justices seemingly disagreed and warned that, if that were the standard, Mode of Operation would be used in every case involving a business open to the public. Amicus also presented an argument that the Appellate Division’s decision set too narrow of a standard for Mode of Operation applicability due to the insinuation that the Doctrine is only appropriate in a fast-food type of restaurant. If Amicus had their way, Mode of Operation would apply to every business.

The Supreme Court’s decision in Prioleau will likely not be issued for a number of months. The court needs to establish a much brighter line as to when Mode of Operation should (or should not) apply. Furthermore, the court must address the decisions reached in Ryder, Lebrio and Katsaros. These cases expand the Mode of Operation doctrine and put nearly every business that allows invitees on its premises at risk of limitless liability. The Mode of Operation Doctrine must remain an exception.

Attorneys in New Jersey eagerly await the publication of the New Jersey Supreme Court’s opinion in Prioleau. Regardless of the outcome, the attorneys at Marshall Dennehey are, and will continue to be, prepared to defend your business in premises liability actions.

*Greg is an associate in our Roseland, New Jersey office who can be reached at 973.618.4179 or GDSpeier@mdwcg.com.

_{Defense Digest, Vol. 21, No. 2, June 2015}

_{Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2015 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.}