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Semexant v. Mil Limited12/6/1991
This appeal arises from a personal injury sustained by plaintiff during the course of his employment with Silvatrim Corp. of America (hereinafter "Silvatrim"). Alleging that at the time of the accident he was working on an industrial machine negligently designed, manufactured and distributed by defendants MIL Limited -- Boston Machinery Division (hereinafter "MIL"), and Teledyne Farris Engineering (hereinafter "Teledyne"), he brought this product liability action against MIL and Teledyne. Teledyne then filed its answer and also filed its third-party complaint against Silvatrim, plaintiff's employer, for indemnification and contribution. Thereupon, counsel for Silvatrim explained by letter to counsel for Teledyne that the third-party action was completely without merit, citing applicable New Jersey precedents. The letter added that if the third-party complaint was not withdrawn, Silvatrim would move for summary judgment and seek attorneys fees, costs and other remedies
pursuant to N.J.S.A. 2A:15-59.1 on the ground that Teledyne's action was "obviously frivolous."
The letter on behalf of Silvatrim went unanswered and Silvatrim successfully moved for summary judgment. It appeals, however, from so much of the order below as denied its application for attorney fees under the so-called "frivolous suit" statute, N.J.S.A. 2A:15-59.1. The relevant portion of that statute provides:
a. A party who prevails in a civil action, either as plaintiff or defendant, against any other party may be awarded all reasonable litigation costs and reasonable attorney fees, if the judge finds at any time during the proceedings or upon judgment that a complaint, counterclaim, cross-claim or defense of the nonprevailing person was frivolous.
b. In order to find that a complaint, counterclaim, cross-claim or defense of the nonprevailing party was frivolous, the judge shall find on the basis of the pleadings, discovery, or the evidence presented that either:
(1) The complaint, counterclaim, cross-claim or defense was commenced, used or continued in bad faith, solely for the purpose of harassment, delay or malicious injury; or
(2) The nonprevailing party knew, or should have known, that the complaint, counterclaim, cross-claim or defense was without any reasonable basis in law or equity and could not be supported by a good faith argument for an extension, modification or reversal of existing law.
Silvatrim correctly cites Ramos v. Browning Ferris Industries, 103 N.J. 177, 510 A.2d 1152 (1986), to demonstrate that Teledyne's third-party complaint could not prevail. In Ramos, the Supreme Court decided that a third-party tortfeasor could not obtain contribution from the employer of an injured worker . The same result was reached in a companion case, Stephenson v. R.A. Jones & Co., Inc., 103 N.J. 194, 510 A.2d 1161 (1986). However, in the Stephenson case, Justice Stein wrote a dissent in which he argued that a manufacturer should be entitled to seek indemnification from an employer who persistently frustrates a manufacturer's efforts to correct a dangerous condition in a machine. It was this dissent that the Law Division relied upon in concluding that because Teledyne had based its third-party complaint on a "theory that is developing," its action could not be deemed frivolous within the meaning
of the statute. We substantially agree with that assessment.
From the fact that existing New Jersey jurisprudence disfavors Teledyne's claim for relief it does
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