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Reilly v. Rutgers Casualty and Surety Co.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 17, 2007

JOHN P. REILLY, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
v.
RUTGERS CASUALTY AND SURETY COMPANY, DEFENDANT-APPELLANT/ CROSS-RESPONDENT.

On appeal from Superior Court of New Jersey, Law Division, Essex County, No. ESX-L-1628-03.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 31, 2007

Before Judges Wefing, C.S. Fisher and Messano.

The parties appeal and cross-appeal from a judgment entered by the trial court following a proof hearing.*fn1 After reviewing the record in light of the contentions advanced on appeal, we reverse and remand for further proceedings.

Unfortunately, although the incident which gave rise to this appeal was relatively straightforward, the subsequent legal proceedings became complex and, unfortunately, acrimonious. In May 1998, plaintiff John P. Reilly*fn2 was struck by an automobile while he was either in the process of, or after, alighting from the driver's side of his vehicle. Mr. Reilly, who was eighty-three years old at the time of the accident, suffered significant injuries in this accident, and he filed suit in October 1998. The vehicle that struck Mr. Reilly was insured with Allstate Insurance Co. with a policy limit of $25,000. In February 2001, Allstate offered its policy limits to settle Reilly's claim. Reilly was insured by Rutgers Casualty & Surety Co. and had underinsured motorist (UIM) coverage of $100,000. Upon receipt of this offer from Allstate, Reilly's attorney notified Rutgers in accordance with Longworth v. Van Houten, 223 N.J. Super. 174 (App. Div. 1988).

After an extended exchange of correspondence, Rutgers offered to settle Reilly's UIM claim for $50,000. It recognized the severity of his injuries but asserted that he was comparatively negligent in trying to get out of his car into moving traffic. Plaintiff rejected this offer (and a subsequent increase to $60,000), and the parties proceeded to arbitration. Prior to that arbitration, plaintiff's attorney put defendant on notice that it considered the failure of Rutgers to offer the policy limits to be bad faith on its part. The arbitration resulted in a gross award of $250,000, but found plaintiff to be 10% at fault, resulting in a net award of $225,000.

In response, the attorney representing Rutgers told plaintiff's counsel that it would offer $70,000 to settle plaintiff's UIM claim. Plaintiff would not accept that offer. Instead, he commenced suit to establish his damages and also sought damages from Rutgers, contending it had acted in bad faith throughout.

Plaintiff's counsel knew which firm was representing Rutgers in connection with this UIM claim. He did not, however, inquire whether counsel would accept service of process and did not provide counsel with a courtesy copy of the summons and complaint. Instead, he served Rutgers at its place of business on March 26, 2003. When an answer was not filed by April 30, 2003, plaintiff's counsel on May 2, 2003, requested that default be entered against Rutgers. Default was entered on May 5, 2003.

Two weeks later, plaintiff notified the attorney with whom he had been dealing that default had been entered against Rutgers. Shortly after that, Rutgers offered plaintiff the full $75,000 to settle the UIM claim but plaintiff would not accept it. Nor would plaintiff consent to setting aside that default and permit Rutgers to file an answer. Although plaintiff opposed Rutgers' motion to set aside the default, the motion was granted by an order entered July 25, 2003.

Plaintiff then filed two motions in September. The first sought to set an expedited trial date within sixty days and the second, to dismiss Rutgers just-filed answer for failure to respond to the interrogatories, demands for admission, and request for production of documents that had been served upon Rutgers in early April 2003. Rutgers responded that there was no need for an expedited trial date in light of the fact that the discovery end-date was only two months hence. It also asserted that the bulk of the discovery to which it had not responded related to plaintiff's bad faith claim but that it was its position that plaintiff did not have a claim for bad faith until he received a damage award at least in excess of $100,000 ($25,000 recovered from the tortfeasor plus $75,000 offered by Rutgers for the UIM claim). Rutgers asserted it would provide the remaining discovery within five days. Plaintiff's motion was argued on December 5, 2003. We are informed that the trial judge executed an order granting plaintiff's motion but agreed not to file the order for ten days to provide Rutgers an opportunity to provide the outstanding discovery.

Plaintiff contended that Rutgers did not supply the outstanding discovery and on February 18, 2004, moved to strike Rutgers answer nunc pro tunc as of December 5, 2003. The trial court granted this motion and entered an order on March 11, 2004, striking Rutgers answer without prejudice nunc pro tunc to December 5, 2003. Rutgers moved immediately to vacate that order, and plaintiff opposed that relief. The trial court denied the motion, noting on the order that discovery remained outstanding. On May 28, 2004, plaintiff moved to strike Rutgers answer with prejudice. Following oral argument, the trial court granted that motion by order entered June 25, 2004. Rutgers moved for reconsideration, but its motion was denied. At no point in any of these discovery-related matters had the trial court delineated the manner in which defendant's discovery responses had been deficient.

For a variety of factors that do not bear upon our decision, the proof hearing did not take place until October 26, 2005. The trial court did not enter judgment until June 2, 2006.*fn3 This appeal by Rutgers from the order of June 25, 2004, striking its answer with prejudice, the order of August 6, 2004, denying its motion for reconsideration and the judgment of June 2, 2006, awarding damages for bad faith, followed. Plaintiff has cross-appealed from the denial of his request for punitive damages.

We are satisfied that, for several reasons, the trial court erred in striking Rutgers' answer with prejudice. When plaintiff propounded discovery in connection with his bad faith claim, Rutgers responded, "Objection, these Interrogatories concern a claim of bad faith, which claim is not ripe at this time. Without waiving this objection, please accept the following Answers." It supplied answers to the balance of the questions.

This was thus not a case in which Rutgers did not answer interrogatories at all. Rather, the question was the adequacy of its answers. If there is "a bona fide dispute as to the adequacy of the answers," then "a dismissal is inappropriate." Pressler, Current N.J. Court Rules, comment 1.5 on R. 4:23-5 (2007). "Rather, the court must adjudicate the dispute and, if appropriate, enter an order compelling more specific answers." Ibid. (citing Zimmerman v. United Services Auto., 260 N.J. Super. 368 (App. Div. 1992))). The court in Zimmerman noted that "if the real contour of the dispute is [propounder's] request for more specific answers, then the judicial obligation is to adjudicate that dispute, not to dismiss the action with prejudice." Id. at 377.

The propounder may move for an order requiring more specific answers. R. 4:23-1. In this regard we point out that in explaining R. 4:23-5(a)(1), the Civil Practice Committee noted that ordinarily an order compelling answers would be an inappropriate and unintended judicial response to the motion for dismissal. But an order compelling answers is a very different matter from an order for more specific answers, and we are persuaded that when the real discovery dispute is not a failure to answer but rather an alleged failure to answer in a "fully responsive" manner, it is the dismissal with prejudice which is inappropriate unless the answering party has been ordered to answer more fully and fails to do so. Beyond that, it is clear that if the answering party has provided sufficient information at least to withstand summary judgment, he may be bound in his trial presentation by his inadequate answers. Thus his inadequate answers constitute his risk, not his opponent's, since the trial proofs may be limited by the content of the interrogatory answers. [Id. at 377-78.]

Here, the trial court never specified the deficiencies in defendant's discovery responses and never entered an order directing that those deficiencies be cured within a specified time frame.

Further, by the time plaintiff moved to suppress Rutgers' pleadings with prejudice, ninety days had not elapsed from the entry of the earlier order dismissing those pleadings without prejudice. We are unaware of any authority which would warrant an order entered in March to be deemed effective the prior December for purposes of satisfying the time frames of R. 4:23-5(a)(2). In our judgment, appending the phrase "nunc pro tunc" to the March 2004 order cannot serve to deprive Rutgers of the ninety-day window to which it was entitled under R. 4:23-5(a)(2). In State v. Molina, 187 N.J. 531 (2006), Justice Rivera-Soto explained that the term "nunc pro tunc" indicated that a particular action had been taken "as within time." Id. at 535 n.1. No deadline called for entry by a specified date of an order dismissing Rutgers' answer. It was incorrect to describe the March 11, 2004, order as suppressing Rutgers' answer "nunc pro tunc."

Because we are satisfied that Rutgers' pleadings were improperly suppressed, the default judgment entered against it must be set aside. We, therefore, do not address the merits of plaintiff's claim of bad faith. However, having reviewed the police report prepared subsequent to this accident, it is apparent that a question existed whether plaintiff was struck by the passing vehicle or whether that vehicle struck the open door of plaintiff's car, thrusting him forward. Further, our disposition makes moot the cross-appeal; it is, therefore, dismissed without prejudice.

Reversed and remanded for further proceedings; we do not retain jurisdiction. The cross-appeal is dismissed without prejudice.


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