RSB Laboratory Services, Inc. v. BSI, Corp.

RSB Laboratory Services, Inc. v. BSI, Corp.

Opinion

 [*543]  [**601]   The opinion of the court was delivered by

FUENTES, J.A.D.

This is a breach of contract action instituted by plaintiff RSB Laboratory Services, Inc., against defendant BSI, Corporation (d/b/a Block Scientific, Inc., or Block Scientific Equipment Exchange, Inc.). A jury awarded plaintiff $ 254,763.55 in damages, including lost profits, attorneys' fees, costs and prejudgment interest.

Defendant appeals arguing that the Law Division erred when it denied its motion to: (1) dismiss plaintiff's claims for lost profits as barred under the new business rule; (2) dismiss plaintiff's consumer [***2]  fraud claim and breach of warranty claims; and (3) exclude plaintiff's expert's testimony as a net opinion. Plaintiff cross-appeals arguing that the court erred when it denied its consumer fraud claim for treble damages.

Addressing the issues raised by the parties requires us to reexamine the continued legal viability of the so-called new business rule. Before doing so, we will lay out the facts of the case as revealed by the evidence presented at trial.

Ruth B. Yao graduated from college with a degree in medical technology. Beginning in 1972, Yao worked as a medical technician and later as a supervisor in the department of hematology at Bayonne Hospital. In 1995, she left Bayonne Hospital to work for Brookdale Clinical Laboratory ("Brookdale"), a small medical lab in Hackensack, as a general supervisor of medical technicians and  [*544]  support staff. According to Yao, the owner of Brookdale encouraged her to open a "bleeding station," that is an office to which doctors refer patients to have blood or other bodily fluids drawn for analysis at a laboratory.

In 1996, Yao and Susan Reyes, Yao's sister and a registered nurse, formed plaintiff, a New Jersey corporation, with an office [***3]  in Bayonne, which initially operated under the name RSB Services, Inc., as a bleeding station. Yao worked part-time at Brookdale and part-time at plaintiff, while Reyes, who was an equal partner in the business, contributed only financial resources. Brookdale referred its Bayonne patients to plaintiff for blood and fluid draws. Plaintiff would then send the specimens to Brookdale for analysis.  [**602]  Plaintiff received a commission from Brookdale for all laboratory work referred.

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