April 30, 2008
L.W. GUARDIAN AD LITEM FOR R.W. AND D.W., GUARDIAN AD LITEM FOR B.W., COMPLAINANTS,
SUBWAY RESTAURANT, RUPESH TRIVEDI, OWNER, RESPONDENT, AND DIPEN PATEL*FN1 , MANAGER AND INDIVIDUALLY, RESPONDENT-APPELLANT.
On appeal from the Division on Civil Rights, Docket Nos. EL07RB-51653-E and EL07RB-51654E OAL No. CRT 6505-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted April 14, 2008
Before Judges S.L. Reisner and Gilroy.
Dipen Patel appeals from a final determination and order issued by the Director of the State Division on Civil Rights (Division or agency) on February 23, 2007. We affirm.
Before addressing the factual background and the merits of this appeal, we consider the scope of the appeal. The Director issued a final determination on February 23, 2007, finding that Patel had committed employment discrimination in violation of the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49, and ordering a variety of monetary remedies. Patel filed a notice of appeal from the Director's final order on April 5, 2007. On April 9, 2007, he filed a motion before the Director for reconsideration.
Pursuant to Rule 2:9-1(a), the agency did not have jurisdiction to entertain the motion, because the underlying order was on appeal to this court. Mistakenly reasoning that "it seems expedient for the Director to rule on the motion rather than petitioning the Appellate Division to formally remand to the Division," the agency adjudicated the motion despite its lack of jurisdiction to do so. While we understand the agency's desire to act expeditiously, it was not the agency's burden to extricate appellant from his self-created procedural dilemma; rather, appellant should have filed a motion with this court for a temporary remand to permit the agency to decide his reconsideration motion.
Moreover, once the agency denied his reconsideration motion on May 18, 2007, appellant should have filed an amended notice of appeal if he sought to challenge that determination as well. Consequently, the only order properly on appeal before us is the agency's February 27, 2007 final order. However, in the interests of justice as well as completeness of the record, we have also considered the May 18 decision.
We next address the procedural history and the factual record. In that connection, we cannot consider the procedural history and fact sections of appellant's brief, because they do not contain citations to the record, in violation of Rule 2:6-2(a)(3) and (4). Moreover, our review of the record itself reveals that some of appellant's factual contentions have no support in the record. We rely on the evidence in the record, and not on unsupported assertions.
On July 26, 2005, L.W., as Guardian ad litem for R.W., and D.W., as Guardian ad litem for B.W. (complainants)*fn2 , filed verified complaints with the New Jersey Division on Civil Rights. The complaints against respondents Rupesh Trivedi, the owner of a Subway Restaurant in Lawrenceville, New Jersey (Subway), and defendant Dipen Patel, the Subway's manager, alleged unlawful employment discrimination because of race in violation of the LAD. B.W. and R.W., who were minors at the time, were employed at Subway between April, 9, 2005, and July 15, 2005, and June 5, 2005, and July 15, 2005, respectively. Complainants, who are African-American, alleged that Patel had frequently referred to them as "nigger[s]" and had made other egregiously racist comments to them in the workplace, thus creating a hostile work environment and leading to their constructive discharge.
On August 29, 2005, the Division mailed copies of the complaints, and document and information requests, to respondent Patel. The letters transmitting the complaints explained that the Division required that "each of the respondents serve upon the Division on Civil Rights a written answer to the complaint within twenty (20) days after receipt of the Verified Complaint."
By October 20, 2005, Patel had not responded to the Division, prompting the Division to send Patel a second letter, which requested a response to both the complaint and the document and information request within ten days. The one page letter stated that "should [Patel] fail to submit the required information within ten days of [his] receipt of this letter, the Division on Civil Rights will take any necessary action, including issuing a subpoena, to ensure compliance."
On that same day, the Division's Trenton Regional Co-Manager Juanita Jenkins spoke to Patel, and learned that Arthur E. Swidler, Esq., was representing him. Thereafter, Jenkins left a message at Swidler's office, to which Swidler did not respond.
By November 14, 2005, the Division had not received any response from Patel or Swidler. On the same day, the Division issued a subpoena to Patel seeking the information requested by the Division's document and information request. The Division hand delivered the subpoena, serving an individual claiming to be Patel's niece, at Patel's place of business, Subway. Subsequently, on January 27, 2006, the Division mailed the subpoena by overnight mail to Patel, at Subway.
On January 31, 2006, the Division's counsel had a telephone conversation with Swidler. After Swidler stated that he represented Patel, the agency's counsel advised him that the Division required him to file an answer to the complaint and a response to the agency's document and information request. Swidler was further advised that a response to the Document and Information Request would satisfy the January 27th subpoena.
The Division's counsel confirmed this conversation in a February 3, 2006, letter, advising Swidler that the subpoena was returnable February 8, 2006, and that he should provide a response by that date. In pertinent part, the letter provided that if Swidler was unable to respond by February 8th, he should: contact Juanita Jenkins, Regional Co-Manager of the Division's Trenton office and advise as to when a response will be forthcoming.
If the Division does not hear from you by that time, the Division will take whatever action is necessary to compel compliance, which may include the filing of an action to enforce the subpoena or initiating default proceeding.
As of February 22, 2006, Swidler had not responded. On that day, the Division's counsel left a message on Swidler's voicemail advising that if the Division did not hear from him by March 1, 2006, the Division would file an action to enforce the subpoena. Counsel confirmed this message in a letter.
Having received no response from Patel or Swidler, the Division filed an order to show cause in the Superior Court to enforce the subpoena on March 9, 2006. A copy of the order to show cause was delivered to Patel at his home on March 16, 2006. The order required Patel to file an answer, brief and affidavits/certifications on or before April 3, 2006.
Patel failed to respond to the order, and on April 4, 2006, the Division requested that the court enter judgment by default against defendants. Patel and Swidler were copied on this request. On April 12, 2006, the court issued an order requiring compliance with the Division's subpoena within twenty days, specifically noting that Patel filed no opposition to the Division's order to show cause. On April 18, 2006, a copy of the court's order was personally delivered to Patel.
By May 16, 2007, Patel had not provided any documents to the Division, prompting the Division to send Patel a second letter regarding the court's April 12, 2006 order. In that letter, the Division advised Patel that he was in contempt of a Superior Court order, and could face up to six months in jail and/or a fine of up to $1,000. The Division further advised Patel that because he had failed to provide an answer to the Division's complaint, the Division intended to initiate default proceedings pursuant to N.J.A.C. 13:4-5.2. With regard to the default, the Division placed Patel on notice that:
A default will result in all allegations against you contained in the Verified Complaint to be deemed as admitted. The Division will thereafter be permitted to make findings of liability, damages and penalties based solely upon the State's evidence supporting the allegations in the Verified Complaint. . . . The Division may also assess an administrative penalty of up to $10,000 and issue an order for you to pay the Division's costs in prosecuting this matter. You should be further advised that once a default is entered, you can be required to pay all costs associated with obtaining the default judgment if you wish to vacate it prior to a hearing.
By June 23, 2006, Patel had not filed an answer to the complaints or otherwise contacted the Division. As a result, the Division issued a notice and order, notifying Patel that should he fail to file answers to the complaints and fully answer requests for information and documents within ten days, a default would be entered in this case. Patel was advised that a default shall constitute:
(a) An admission that the interrogatories, if answered, would have established facts in accordance with the claim of the complaint;
(b) A waiver of your right to have this Division conduct further investigation, find whether there is probable cause, make conciliation efforts or hold a public hearing (N.J.S.A. 10:5-14, 10:5-15; N.J.A.C. 13:4-2.1, 13:4-6.1, 13:4-11.1, 13:4-12.1).
(c) A waiver of your right to present any and all defenses.
The Division mailed a copy of the notice and order to Patel at his home. By July 19, 2006, Patel had not responded to the notice and order, and as a result, on July 19, 2006, the Division finally issued an order of default, which was delivered to Patel at his home.
On September 9, 2006, following the transmittal of the verified complaints to the Office of Administrative Law (OAL), the OAL issued a notice of filing, which was served on attorney Swidler. The OAL also issued a notice of a pre-hearing conference, with a copy to Swidler. Because Swidler had not responded to the Division, the Division requested that Administrative Law Judge, Douglas H. Hurd (ALJ), serve all notices directly on Patel. The Division sent a copy of this letter to Patel at his home.
The ALJ also sent a letter to Patel at his home advising him of the September 27, 2006 pre-hearing conference. This letter indicated that it was unclear whether Patel was represented by Swidler and advised him that if you have retained counsel, please have them immediately file a letter of appearance with the undersigned, so that the service list may be amended. You are also required to appear at the September 27, 2006[,] prehearing conference. If you have any questions regarding the above, please contact my chambers. [(emphasis added)]
Swidler, though not Patel, did appear at the September 27th prehearing conference. On September 28, 2006, Swidler entered an appearance on behalf of Patel and Rupesh Trivedi. On October 6, 2006, Swidler filed a motion to vacate the default on behalf of the two respondents on the grounds that their failure to respond was due to miscommunication between them and counsel. Swidler also asserted that Patel's age, seventeen at the time of the incident, should be considered.
In support of the motion, counsel filed a certification from Janak Patel, Dipen Patel's father. The certification admitted that the Patel's family was aware of the complaints in this matter prior to the Division's entry of default, and that Dipen Patel was eighteen years old. Janak Patel contended that he, and not his son, was the manager of the Subway store and that he fired the complainants because they were not doing a good job. While the certification contended that Dipen Patel was not an employee or manager of the Subway store, the certification did admit that Dipen Patel worked on the store's computer system. Notably, the motion was not supported by a certification from Dipen Patel denying the racist workplace conduct of which he was accused.
The ALJ denied the motion on October 26, 2006, finding that Patel failed to present good cause to vacate the default. The ALJ also found that Patel had failed to file answers to the complaints and the document and information requests, which was a prerequisite to a motion to vacate a default under N.J.A.C. 13:4.5.3(a). There was no appeal of the ALJ's order.
The ALJ conducted a default hearing on December 11, 2006. At the hearing, the ALJ heard testimony from the teenage complainants and their mothers, all of whom he found to be credible witnesses. On January 16, 2007, the ALJ issued his initial decision finding respondents in violation of the LAD and recommended an award of back pay of $2,420.68; pain and suffering damages of $60,000 to each of the complainants; a $10,000 penalty for each violation of the LAD; plus counsel fees and costs of $27,142.25.
On February 23, 2007, the Director issued a final order adopting the ALJ's decision. The Director found the entry of default to be appropriate, and concluded that respondents had not presented good cause to vacate the default. Moreover, the Director adopted the ALJ's monetary awards of back pay, pain and suffering, penalties and attorneys' fees, finding respondents jointly liable for those sums; however, each respondent was held individually liable for a $10,000 penalty.
On March 12, 2007, Patel retained George Psak to represent him, and on April 4, 2007, Psak filed a motion for reconsideration with the Director, seeking to vacate the default. Patel's motion was based on his assertion that he relied on his prior counsel to handle this matter, and that Patel should not be responsible for the default, as it was Swidler's, not Patel's actions that caused the Division to enter default. Again, the motion was not supported by any legally competent evidence from Dipen Patel denying the discriminatory conduct of which he was accused.
In an order issued on May 18, 2007, the Division noted the significant number of prior communications between the agency and Patel directly, and found that Patel was not blameless in permitting the default to be entered against him. After reviewing the entire record, the Division denied Patel's motion to vacate the final order.
On this appeal, Patel raises the following contentions:
POINT I: THE NJDCR COMMITTED REVERSIBLE ERROR IN CONCLUDING THAT THE DELAY IN FILING A MOTION FOR RECONSIDERATION WAS ATTRIBUTABLE TO ANYTHING OTHER THAN MR. SWIDLER'S MALFEASANCE AS DIPEN PATEL'S ATTORNEY.
POINT II: WHERE AN UNSOPHISTICATED 18-YEAR[-]OLD BOY RELIES ON THE EXPERTISE OF RETAINED COUNSEL, AND COUNSEL CONTINUALLY MISREPRESENTS THE STATUS OF A CASE, THE YOUNGSTER IS BLAMELESS FOR DELAYS -PARTICULARLY WHERE IT IS UNCLEAR WHAT NOTICES, IF ANY, WERE ACTUALLY SERVED UPON HIM.
POINT III: WHERE AN ATTORNEY ACCEPTS RETAINER PAYMENTS, AND THE ATTORNEY ANNOUNCES HIS REPRESENTATION, IT IS A REASONABLE CONCLUSION FOR A YOUTHFUL LITIGANT TO BELIEVE THAT HE HAS EFFECTIVELY RETAINED COUNSEL.
POINT IV: THE NJDCR IGNORED THE PRACTICAL ASPECTS OF THE AGGREIVED PARTIES COLLECTING ON THE DEFAULT JUDGMENT IN CONCLUDING THAT THE PLAINTIFF-RESPONDENTS WOULD BE UNDULY PREJUDICED BY VACATING THE DEFAULT JUDGMENT.
Having reviewed the record, we conclude that the agency's determinations are supported by substantial credible evidence, Rule 2:11-3(e)(1)(D), and that Patel's appellate contentions are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We add the following comments.
Our review of an administrative agency's final determination is limited. We will not overturn the agency's decision unless it is not supported by substantial credible evidence or unless it is inconsistent with applicable law. See Goodman v. London Metals, Exchange, Inc., 86 N.J. 19, 28-29 (1981); Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980). Viewed in that light, we find no basis to disturb the Director's decisions.
In this case, there is no dispute that Patel did not respond to the agency's discovery requests and its subpoena, despite repeated notices, demands, and the filing of an enforcement action in Superior Court. Patel does not dispute that the agency properly declared him in default and transmitted the matter to the Office of Administrative Law. See N.J.A.C. 13:4-5.1 to 5.4. Under the agency's regulations, once the matter was transmitted, it was up to the administrative law judge (ALJ) to adjudicate a motion for relief from the default:
(a) At any time after entry of default and before transmittal of the case to OAL, the respondent may petition the Director who may vacate the entry of default and reopen the case for good cause shown. The respondent's assertion of good cause shall be in affidavit form and shall include the full and complete answers to the verified complaint and all requests for information or documents.
(b) As a condition of vacating the default, the Director may order the respondent to pay costs or reasonable expenses, including attorney's fees, to the State of New Jersey or an aggrieved representative or party.
(c) If the Director vacates the entry of default at any time prior to the date of transmittal of the case to the OAL, the verified complaint shall instead proceed to an investigation finding as to probable cause, and where appropriate, conciliation or public hearing as provided by these rules.
(d) After transmittal of the case to OAL, a motion to vacate a default shall be directed to the Administrative Law Judge pursuant to N.J.A.C. 1:1. [N.J.A.C. 13:4-5.3(a) to (d).]
The ALJ denied Patel's motion to vacate the default, and Patel did not appeal that decision to the Director. See N.J.A.C. 1:1-14.10 (interlocutory appeals).
Once the agency has rendered a final decision, the losing party may file a motion for reconsideration.
(a) Any party may, within 30 days after the service of a finding of probable cause or no probable cause or other final order of the Director, file a motion for reconsideration seeking review of the agency's decision and/or the reopening of the record for further investigation. The motion shall be in writing and state the grounds upon which relief is sought. The motion shall be served upon all opposing parties in accordance with N.J.A.C. 13:4-7.5, following which each opposing party may, within 10 days following service of the motion, file a response to the motion. The Director may grant such motion and vacate or modify the order, and/or reopen the record upon showing of the following:
1. Mistake, inadvertence, surprise, or excusable neglect;
2. Fraud, misrepresentation or other misconduct of an adverse party;
3. Newly discovered evidence, which the moving party can demonstrate is reasonably likely to change the final decision of the Director and which by due diligence could not have been discovered in time to be presented at the hearing or during the investigation of the matter; or
4. Any other reason consistent with the public policy of the Law Against Discrimination or Family Leave Act and in the interest of justice. [N.J.A.C. 13:4-7.4(a).]
This rule is analogous to Rule 4:43-3, concerning vacation of default judgments, and Rule 4:50-1, concerning the re-opening of judgments. We review a decision on such a motion for abuse of discretion. See Marder v. Realty Constr. Co., 84 N.J. Super. 313, 318 (App. Div.), aff'd, 43 N.J. 508 (1964)("It is well established that the decision granting or denying an application to open a judgment rests within the sound discretion of the trial court, exercised with equitable principles in mind, and will not be overturned in the absence of an abuse of that discretion.").
It is also fundamental that, under either Rule, a defendant moving to set aside a default judgment for reasons other than lack of service must show excusable neglect and a meritorious defense. Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283-84 (1994); Marder, supra, 84 N.J. Super. at 318-19. In this case, while Patel produced some evidence of an alleged miscommunication with his prior attorney and even possible malpractice on the attorney's part (an issue as to which we express no view), he did not produce evidence of a meritorious defense in his reconsideration motion before the agency. In particular, Patel did not deny that he made the racist remarks that the employees claimed he directed at them in the workplace. Further, the record fairly supports the conclusion that Patel, who was not a minor when the case was adjudicated, was well aware of the proceedings before the agency and chose to ignore them. We find no abuse of discretion in the Director's determination to enter judgment by default or in his decision to deny the reconsideration motion.
Court Investment Co. v. Perillo, 48 N.J. 334 (1966), which Patel cited in his reconsideration motion, does not support his claim that his former attorney's alleged inattention to the matter justified re-opening the case. In Court Investment Co., defendants demonstrated that they had an "absolute defense to the suit." Id. at 347.