On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Hunterdon County, Docket Nos. DC-342-00 and HUNT-L-168-01.
Before Judges Conley, Carchman and Parrillo.
The opinion of the court was delivered by: Carchman, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
In this appeal, we address the issue of whether a counterclaimant in an action in the Special Civil Part, whose counterclaim exceeds the jurisdictional monetary limits of the Special Civil Part, must move to transfer the Special Civil Part action to the Law Division under R. 6:4-1(c) at the time of filing a counterclaim. We disagree with the motion judge's determination that the failure to pursue the transfer at the time of filing of the counterclaim bars the transfer and conclude that subject to the discretion of the Law Division judge, a motion for transfer must be made by a counterclaimant prior to trial and within a reasonable time after the issue is joined. We further conclude that the motion should generally be granted when warranted and where the timing of such motion does not unduly prejudice the rights of the other parties.
The judge here erred in denying the motion. We, therefore, reverse the order of February 16, 2001, denying the transfer; vacate the judgment in favor of defendant as well as the orders awarding costs; affirm dismissal of defendant's Law Division action as well as dismissal of defendant's consumer fraud claim; and remand the matter to the Law Division for a new trial on plaintiff's complaint and defendant's counterclaim for breach of contract.
Although the merits of the underlying action were contested, the procedural facts that generated this issue are not in significant dispute. Defendant Steven J. Moss, *fn1 acting as the general contractor in the construction of his new home, contracted with plaintiff Splash of Tile, Inc. (Splash) to, among other things, install a new ceramic tile floor in his kitchen. Moss was dissatisfied with the work and refused to pay the full balance owed Splash. Splash brought an action in April 2000, in the Special Civil Part for $3,538, representing the balance due on its bill. On May 4, 2000, Moss filed an answer and a single-count counterclaim in the Special Civil Part alleging a violation of the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -19, and seeking $10,000 in damages.
The matter was scheduled for an arbitration hearing on September 7, 2000; however, Moss did not appear claiming that he received no notice of that proceeding. A default was entered, but then vacated in October 2000. Attached to Moss' motion to vacate the default was a certification from Moss' attorney, setting forth that Moss had two expert reports to confirm the deficiencies in Splash's work as well as the extent of damages -$22,563. The matter was rescheduled for arbitration in the Special Civil Part on March 1, 2001.
On December 27, 2000, Moss moved to transfer the claim from the Special Civil Part to the Law Division. Moss' counsel represents that he agreed to adjourn argument of this motion while Splash substituted new counsel; however, that assertion is not supported by the record. According to the record, Moss agreed to delay the motion to vacate the default rather than the motion to transfer. The motion to transfer was denied. The motion judge, citing R. 6:4-1(c), set forth in his statement of reasons:
Upon review of the evidence, the record shows that the defendant filed its answer and counterclaim on May 4, 2000. However, defendant did not file an affidavit together with the answer and counterclaim stating that the amount of such claim is believed to exceed the Special Civil Part monetary limit.
Therefore, because defendant has failed to satisfy the requirements of R. 6:4-1(c), defendant's motion to transfer is DENIED. [Emphasis added.]
At the ensuing arbitration, Moss produced two expert reports. The first report, dated July 2000, and authored by Vijay Komar Chopra of Acxet Corporation, stated that "the [kitchen] floor has not been prepared as per the recommendations of the Tile Institute of America or any other industry specification standards, i.e., AIA etc. . . . The tile installation in general, is not satisfactory and is a major visual defect in the flooring at the captioned structure." The second report from Timothy Jones of TJC Homes, L.L.C., dated September 5, 2000, estimated the cost of repairing the floor to be $22,563. Following the arbitration, Splash filed for a trial de novo. On March 15, 2001, the court fixed the trial date as April 25, 2001, and the notice stated that "NO ADJOURNMENTS WILL BE ENTERTAINED."
Moss then filed an action on March 22, 2001, in the Law Division naming Splash as well as Meyer Beyder, President of Splash, and "alleging essentially the same allegations set forth in [Moss'] Special Civil Part Counterclaim" according to Moss. That representation was also inaccurate as unlike the counterclaim, the complaint contained two counts, the first sounding in breach of contract and the second claiming a violation of the CFA. After being denied an opportunity to file a motion on short notice, Moss filed an untimely motion to consolidate the Special Civil Part and Law Division claims returnable two days after the scheduled Special Civil Part trial. The trial proceeded as scheduled.
At trial, the issue of liability was contested, with both parties producing experts. Following conclusion of the proofs, the judge dismissed Moss' CFA claim, but, relying on R. 4:9-2, he then amended the counterclaim to conform to the evidence, concluding that "there was a defect which needs repair and/or remediation. That's the thrust of the counterclaim. And therefore, I will not dismiss the counterclaim." He entered a judgment finding that Splash was "entitled to no award on its claim" and that Moss was "entitled to the full amount of $22,563 on its counterclaim." Because of the jurisdictional limit of the Special Civil Division, however, Moss was awarded $10,000 plus costs, but was denied interest. On April 27, 2001, Moss' consolidation motion was ...