December 2, 2008
RUTH PARKER, PLAINTIFF-APPELLANT,
RCG INFORMATION TECHNOLOGY, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Bergen County, L-1390-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 28, 2008
Before Judges Winkelstein and Chambers.
Plaintiff Ruth Parker appeals pro se from the trial court's denial of her application to vacate the order of September 20, 2004, appointing a guardian ad litem for her, and to vacate the consent order of December 29, 2004, setting forth the terms of the settlement of the case. We reverse and remand, finding that the failure to provide plaintiff with notice of the guardian ad litem application was a fatal defect in the procedure below. Further, the record does not contain a sufficient factual basis to warrant approval of the settlement without plaintiff's consent.
Plaintiff, represented by Saltz Polisher, P.C. (formerly Saltz Hollaender, P.C.), commenced this employment discrimination case against defendant RCG Information Technology on February 27, 2003. In April 2004, plaintiff authorized her attorneys to demand $65,000 in settlement of the case which they did. The defense offered to settle the case for the sum of $35,000. Plaintiff failed to advise her attorneys whether or not this offer was acceptable. Plaintiff's counsel wrote and called plaintiff numerous times and counsel even visited her home, but she did not respond to their inquiries. On June 15, 2004, her attorneys sent plaintiff a letter, advising her of the offer and their numerous attempts to contact her, stating that the offer would likely be withdrawn if she did not respond by June 18, 2004, and warning that "[i]f you do not respond to our efforts to communicate, this firm will have no other alternative but to file a motion with the court to withdraw as counsel and terminate our representation of your interests." Counsel continued their efforts to contact plaintiff, including three more visits to her home, but she did not respond to the settlement offer. According to plaintiff's counsel, on the last visit, in mid July 2004, plaintiff told her attorney in a flat voice that "I am very ill. I am not able to process this information. I am not able to make a decision. Please leave."
Based on representations by defense counsel that the case was settled in principle subject to finalization of the settlement papers, the court entered an order dismissing the case on July 16, 2004. However, plaintiff had not agreed to the settlement.
In August 2004, plaintiff's counsel applied to the court for appointment of a guardian ad litem for plaintiff on the basis that plaintiff was unable to make decisions in her case. Inadvertently, plaintiff's counsel failed to send notice of the application to plaintiff. No medical certifications regarding her competency were submitted to the court. In support of the application, plaintiff's counsel submitted a certification recounting the numerous efforts to find out if plaintiff would accept or reject the order and stating in part that:
21. The local authorities and medical professionals with whom I have consulted confirmed, without opportunity of examination, that Ms. Parker is unable to comprehend the information provided to her.*fn1
22. In my professional judgment, Ms. Parker is incapable of making any decisions relating to this litigation and her self interests.
The court entered the order of September 20, 2004, appointing Russell A. Pepe, Esq. as guardian ad litem for plaintiff.
After a telephone conference with counsel for both parties and the guardian ad litem, the trial court entered a consent order dated December 29, 2004, settling the case for $35,000, and authorizing plaintiff's counsel to execute a settlement agreement and general release on behalf of plaintiff. The order also provided that the guardian ad litem was to receive $1,512.50 in fees from the settlement sum. The balance of $33,487.50 was to be deposited with the court, subject to plaintiff's counsel's application for counsel fees. Plaintiff received notice of the consent order on January 5, 2005, and at that time discovered that a guardian ad litem had been appointed for her and that the case had been settled. An order was entered dated February 18, 2005, awarding plaintiff's counsel $12,449.11 in attorneys' fees from the settlement proceeds.
On August 18, 2005, plaintiff moved pro se to vacate the order of September 20, 2004, appointing the guardian ad litem, and the order of December 29, 2004, approving the settlement. In support of her motion, she argued that her attorney's professional opinion "does not constitute a lawful determination of my mental capacity, capability or competence." She maintained that she had refused the settlement offer and that she told the attorneys that she no longer wanted them to represent her. She contended that her attorneys had attempted to harass her into accepting the settlement and that her disagreement with them did not render her incompetent. She accused her attorneys of fraud and maintained that they had made material misrepresentations to the court. She also noted that she had never received notice of the application for the appointment of a guardian ad litem, and that at the time of the application, the case had already been dismissed. The trial court denied plaintiff's application, and she took her first appeal. Due to the factual issues presented by the application, the Appellate Division remanded for an evidentiary hearing. Parker v. RCG Info. Tech., No. A-0775-05 (App. Div. Dec. 21, 2006).
The evidentiary hearing was held on July 10, 2007, before the same trial judge who had entered the previous order.*fn2
Plaintiff testified that she told her attorneys she did not want to settle the case but wanted to go to trial. She also understood that if she did not communicate with her attorneys, they would withdraw, and she testified that their withdrawal was all right with her. She acknowledged that she did not respond to her attorneys' written communications regarding the settlement. She explained that in accordance with their correspondence to her, she understood that if she did not act, they would withdraw. She also testified that she received no notice of the guardian ad litem proceeding. Plaintiff's former attorney, Veronica Saltz, Esq., made a statement to the court at the hearing; she was not placed under oath.
At the conclusion of the hearing, the trial judge found that plaintiff had failed to either reject or accept the settlement proposal. Rather, she did nothing. He then held that "[h]er silence makes this settlement final." The trial judge made no finding of incompetency. He stated, "plaintiff certainly seems competent and there is no testimony to the contrary, but she simply did not act in a way that would direct her attorneys in whether to accept or reject [the settlement] and left them in a situation where it was up to the Court who they then came to rely on to make a determination in the best interest of Ms. Parker."*fn3 The order of July 10, 2007, denied plaintiff's motion to dismiss and vacate the orders of September 20, 2004, and December 29, 2004.
In this appeal, plaintiff raises the following issues:
I. Case Dismissed in Underlying Employment Action on July 14, 2004.
II. Lack of Jurisdiction in Appointing Guardian Ad Litem for Non-resident.
III. Deficiencies in Action for Guardianship of a Mentally Incapacitated Person Voids the Appointment of a Guardian Ad Litem.
Defendant RCG Information Technology opposes these arguments and also contends that plaintiff's appeal should be dismissed because she failed to serve her notice of appeal, brief, and appendix upon the defense as required by the court rules. The notice of appeal, however, states that such service was made. The only evidence in the record that service was not made is defense counsel's letter to the court stating that she had not received the appeal papers. In any event, defendant did eventually receive these documents, and was able to present its opposing papers to the court. In light of plaintiff's substantial compliance with the rules and the lack of prejudice to defendant, we will address the appeal on its merits. See Alberti v. Civil Serv. Comm'n, 41 N.J. 147, 156-57 (1963) (allowing appeal to proceed against a defendant despite appellant's failure to send a timely notice of appeal to defendant where defendant had actual, although untimely, notice of the appeal and was not prejudiced by the delay).*fn4
In our review, we accord deference to the trial judge's findings of fact at the hearing below, since he had the opportunity to see the witnesses and weigh their credibility. Cesare v. Cesare, 154 N.J. 394, 411-12 (1998). As a result, we accept as true the trial judge's findings that plaintiff failed to respond to the settlement offer. However, when applying the law to those established facts set forth in the record, we accord the trial judge's decision no deference, and our review of the legal issues is de novo. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
Plaintiff's application to vacate the orders is governed by Rule 4:50-1(f) which allows a judgment or order to be set aside for "reason[s] justifying relief from the operation of the judgment or order." This portion of the Rule is invoked "sparingly, in exceptional situations," to prevent grave injustice. Cmty. Realty Mgmt., Inc. v. Harris, 155 N.J. 212, 237 (1998) (quoting Hous. Auth. of Morristown v. Little, 135 N.J. 274, 289 (1994)). We conclude that the circumstances of this case present the kind of exceptional situation where the orders must be reversed so that a grave injustice is prevented.
At the outset, we note that the failure to notify plaintiff of the application for appointment of a guardian ad litem was a fatal defect in the procedure resulting in the appointment of a guardian ad litem. New Jersey law has long recognized that notice is necessary before a guardian ad litem may be appointed for a person. Borough of E. Paterson v. Karkus, 136 N.J. Eq. 286, 289-90 (Ch. 1945) (stating that "due and reasonable notice of the application [for appointment of a guardian ad litem] must be given to the party whose mental competency is to be ascertained" and "[s]uch notice is ordinarily indispensable"). Here the record is undisputed that plaintiff did not receive notice of the application for appointment of a guardian ad litem, and without such notice, the appointment should not have been made.*fn5
Rule 4:26-2(b)(2) allows the court to appoint a guardian ad litem for an "alleged mentally incapacitated person." This Rule is in accordance with the inherent power of a court in equity to appoint a guardian ad litem in order "to protect a party against the consequences of his mental incompetency [where] . . . the proof makes it evident that the party from any cause, whether by age, disease, affliction, or extreme intemperance, has become incapable and unfit for the governance of himself and his property." Borough of E. Paterson v. Karkus, supra, 136 N.J. Eq. at 288-89. Indeed, where the court has "received facts or observed actions which indicate that a litigant may be incompetent," in order to avoid possible injustice, it may not proceed with the litigation until it receives "assurance that such a litigant is able to manage his or her affairs." In re D.K., 204 N.J. Super. 205, 225 (Ch. Div. 1985). Here, the trial court stated at the July 10, 2007 hearing that appointment of the guardian ad litem was warranted because plaintiff failed to either reject or accept the settlement. However, that circumstance alone did not warrant appointment of a guardian ad litem, since it is not necessarily evidence of alleged incompetency.
While a person need not be an adjudicated mentally incapacitated person before the guardian ad litem is appointed, nevertheless, the lynchpin of the appointment is that the person is alleged to be mentally incapacitated. Ibid.; Pressler, Current N.J. Court Rules, comment 3 on R. 4:26-2 (2009). A mentally incapacitated person is one who is "unfit and unable to govern himself or herself and to manage his or her affairs." R. 4:86-2(b). An application for an adjudication of incompetency must be supported by affidavits from either two physicians or one physician and one licensed practicing psychologist finding incapacity. Ibid. Here neither the proofs presented to the court in the initial motion nor those presented at the hearing on remand would sustain a finding that plaintiff was mentally incapacitated, and indeed no one argues that she was.
Although plaintiff's conduct, based on the representations of her attorney, may have warranted appointment of a guardian ad litem to investigate whether competency proceedings were warranted, that is not what occurred here. See Pressler, Current N.J. Court Rules, comment 3 on R. 4:26-2 (2009) (stating that the role of the guardian ad litem "is to advise the court as to whether a formal competency hearing may be necessary and if so, to represent the alleged mentally incapacitated person at that hearing").*fn6 We find no legal or factual basis for the court to appoint a guardian ad litem to evaluate the settlement offer and for the court to approve that settlement in the circumstances of this case.
We reverse the trial court's order of July 10, 2007, and vacate the order of September 20, 2004, appointing a guardian ad litem for plaintiff, and the consent order of December 29, 2004, setting forth the terms of the settlement of the case. We remand for any necessary further proceedings in accordance with this opinion.