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Eagle Insurance Co. v. Fathollahi


July 23, 2009


On appeal from Superior Court of New Jersey, Law Division, Passaic County, L-2621-04.

Per curiam.


Submitted March 11, 2009

Before Judges A. A. Rodríguez and Payne.

In this subrogation action, plaintiff, Eagle Insurance Company, sued defendant, Minoosh Fathollahi, for recovery of uninsured motorist, personal injury protection, and property damage benefits paid by Eagle after Fathollahi rear-ended a car owned by Eagle insured, Miquel Soraino, and driven by Yecenia Vasquez-Cortez. At the time of the accident, Fathollahi's car was unregistered and uninsured. The accident occurred in Little Ferry, New Jersey, apparently on October 16, 2001. The police report erroneously listed the accident as occurring on October 16, 2002, as did Eagle's complaint. However, the summons bore the 2001 date, and evidence demonstrated that applicable fines were paid by Fathollahi prior to October 16, 2002. Additionally, in a certification dated March 29, 2007 in support of an order to show cause, Fathollahi stated:

Plaintiff's Complaint was filed on June 14, 2004 which is 2 years and 8 months after the motor vehicle accident which occurred on October 16, 2001. I understand that this is beyond the statute of limitations for personal injury actions.

The evidence thus supports the conclusion that the police report and complaint were in error and that the accident occurred in 2001. On that date, Fathollahi was a New Jersey resident. She moved to Florida in December 2001. Nonetheless, Fathollahi has taken the position throughout this litigation that the accident took place in 2002 while she resided in Florida, and that she was not present in New Jersey on October 16, 2002.


This case has a tortured procedural history. As stated, Eagle filed its complaint on June 14, 2004 seeking recovery for moneys expended as the result of an October 2002 accident. Fathollahi answered the complaint and moved for dismissal on the ground of lack of personal jurisdiction, basing her right to relief on the erroneous 2002 accident date. Nonetheless, for reasons that are not clear from the record, a final judgment by default was entered against her, and her jurisdictional motion was not adjudicated. On appeal, we reversed and remanded for consideration of the jurisdictional motion, stating in our opinion that, on remand, Fathollahi could move in the trial court to vacate the default judgment against her pursuant to Rule 4:50-1. See Eagle Ins. Co. v. Fathollahi, No. A-3145-04T5 (App. Div. January 20, 2006).

Following additional procedural steps, in an order dated April 25, 2007, the motion judge entered an order vacating the default judgment, restoring the case to the trial list, directing the Motor Vehicle Commission to reinstate Fathollahi's previously-suspended driving privileges, and permitting Fathollahi to file an answer or otherwise plead by May 15, 2007.

On May 14, 2007, Fathollahi again filed a motion to dismiss the complaint for lack of personal jurisdiction, again relying on a 2002 accident date and her absence from New Jersey at that time. Eagle's counsel neglected to file opposition, and an order was entered dismissing its complaint with prejudice for lack of personal jurisdiction on June 25, 2007. However, the motion judge was apparently skeptical of Fathollahi's position, since he wrote on the order, "although the facts do appear to be confusing the Plaintiff has not provided any opposition."

On July 6, 2007, Eagle moved to vacate the order of dismissal and to reinstate the complaint. In a certification in support of the motion, counsel stated that the file in the matter had been mistakenly closed following a substantial period of inactivity, and as a result, Fathollahi's motion had not been brought to his attention. Eagle's motion was served upon Fathollahi on July 19, 2007, and on July 23, 2007, Fathollahi filed opposition to it. By order dated August 3, 2007, the trial court granted the motion, vacating the dismissal and restoring the complaint to the active trial calendar with a trial date of October 22, 2007. On the order, the motion judge wrote: "This application is granted. It is evident this accident occurred in Oct. of 2001. Defendant, while not technically lying to this court, has played fast and loose."

On August 18, 2007, Fathollahi served interrogatories and a document demand upon Eagle, to which Eagle declined to respond, noting that the discovery requests had been served after the period for discovery had ended. Additionally, Eagle was successful in obtaining an order quashing a subpoena served by Fathollahi on a non-party New York deputy rehabilitator of the American Insurance Management Group, Inc.*fn1

On August 27, 2007, Fathollahi moved for reconsideration of the court's August 3, 2007 order vacating the dismissal entered against Eagle and finding personal jurisdiction to exist. On September 2, 2007, the motion was denied, with the following comment:

There is clearly a fact issue of when this accident occurred. If it occurred in 2001 it appears clearly this court has jurisdiction over defendant. Trial date remains 10/22/07. No further adjournments granted.

Fathollahi's subsequent motion before us for leave to appeal was denied on October 25, 2007.

Additionally, two requests by Fathollahi in the trial court for adjournment of trial were denied. In an order dated October 12, 2007, the trial court noted:

Defendant has not cited any viable reasons warranting an adjournment. This defendant continues to play fast and loose with this court and has misrepresented the facts on at least 2 prior occasions to the court.

Fathollahi's further motion before us for emergent relief and an adjournment of trial was denied.

Additional subsequent attempts by Fathollahi to obtain assignment of the case to discovery Track II, pursuant to Rule 4:5A, to adjourn the trial date, and to stay proceedings pending appeal were likewise rejected.

On October 22, a default was entered against Fathollahi when she failed to appear for trial. A default judgment was entered against her in the amount of $21,049.51 on January 4, 2008.


On appeal, Fathollahi again challenges the court's jurisdiction over her. We reject her position, determining that Eagle made a prima facie case that the accident occurred in New Jersey in October 2001, while Fathollahi was resident here, and that by defaulting at trial, Fathollahi failed to present competent evidence that would have defeated jurisdiction.*fn2 It is unquestionable that New Jersey courts have jurisdiction over an accident occurring in New Jersey between New Jersey residents, regardless of whether the residents later move to another state. Cooke v. Yarrington, 62 N.J. 123, 129 (1973) (recognizing New Jersey's jurisdiction in an auto accident case on the basis of defendant's residence in the state and his car registration and licensure here, despite the fact that the accident occurred in Pennsylvania and defendant later moved to New York); Guas v. Guas, 146 N.J. Super. 541, 544-46 (Law Div. 1977) (basing jurisdiction over New Jersey resident who subsequently moved out-of-state upon New Jersey license and car registration); see also Avdel Corp. v. Mecure, 58 N.J. 264, 268 (1971) (adopting minimum contacts principles). Defendant's acknowledgement of service of the complaint at the April 25, 2007 motion hearing, at which time the default judgment against her was vacated, effectively waived any possible objections related to the manner of service of process. Trocki Plastic Surgery Ctr. v. Bartowski, 344 N.J. Super. 399, 404 (App. Div. 2001), certif. denied, 171 N.J. 338 (2002).

That Eagle's complaint contained a misstatement of fact does not constitute a due process violation. That complaint set forth sufficient details to put Fathollahi on notice that a claim was being prosecuted against her as the result of her involvement in a rear-end collision occurring in Little Ferry, New Jersey on October 16 - particularly because evidence indicated that she was a participant in that collision and thus was aware of its timing. Rule 4:5-7 requires that "[a]ll pleadings be liberally construed in the interest of justice." As Judge Pressler has commented in connection with this rule,

[I]t is fundamental that the pleading must fairly apprise the adverse party of the claims and issues raised and that on a challenge to adequacy, all facts, reasonable inferences and implications are to be considered most strongly in favor of the pleader. [Pressler, Current N.J. Court Rules, cmt. 1 on R. 4:5-2 (2009).]

That standard has been met here.


Fathollahi claims additionally that the court abused its discretion in vacating the order of June 25, 2007 dismissing Eagle's complaint with prejudice as the result of its failure to oppose Fathollahi's motion to dismiss that complaint on jurisdictional grounds. As we have stated, Eagle's attorney has certified that the file in this matter was mistakenly closed after a substantial period in which Fathollahi failed to take action in accordance with our directive following the first appeal, and that he was unaware of Fathollahi's jurisdictional motion. Realizing his mistake, on July 6, 2007, very shortly after the June 25 order was entered, counsel moved to vacate the dismissal and to reinstate Eagle's complaint.

We find no abuse of discretion on the part of the motion judge in vacating the dismissal pursuant to R. 4:50-1(a). The mistake was quickly realized, a remedy was timely sought, and the merits of Eagle's position were strong. Moreover, none of the fault can be attributed to Eagle, and Fathollahi has demonstrated no prejudice as the result of the restoration, other than the need to continue to defend the action. R. 4:50-1(a); Febus v. Barot, 260 N.J. Super. 322, 325 (App. Div. 1992) (determining that error in diarying a summary judgment motion, resulting in the absence of any opposition, should not deprive plaintiffs of their right to proceed). Because of the shortness of the delay, the single instance of negligence in a lengthy litigation, the lack of blame attributable to Eagle, the lack of prejudice to Fathollahi, and the merits of Eagle's position, the result is likewise sustainable under Rule 4:50-1(f). See Jansson v. Fairleigh Dickinson Univ., 198 N.J. Super. 190, 195 (App. Div. 1985).


In her reply brief, Fathollahi raises a statute of limitations defense for the first time. We decline to consider this argument, determining that it has been improperly raised. In re Hosps.' Petitions for Adjustment of Rates for Reimbursement of Inpatient Servs. to Medicaid Beneficiaries, 383 N.J. Super. 219, 242 (App. Div.), certif. denied, 187 N.J. 81, 82 (2006); Turner v. Wong, 363 N.J. Super. 186, 219 (App. Div. 2003); Di Nizio v. Burzynski, 81 N.J. Super. 267, 277 (App. Div. 1963).

We note, as well, that the six-year statute of limitations had not run on the property damage claims at the time that the complaint was filed on June 17, 2004. N.J.S.A. 2A:14-1. We find Fathollahi to have waived her right to assert a statute of limitations bar in connection with Eagle's personal injury claims. Fathollahi never asserted the statute as a bar in defense of Eagle's action as she was required to do. Zaccardi v. Becker, 88 N.J. 245, 256 (1982) ("[S]tatutes of limitations are not self-executing. . . . They must be raised as affirmative defenses."). "[O]rdinarily an affirmative defense that is not pleaded or otherwise timely raised is deemed to have been waived." Pressler, Current N.J. Court Rules, cmt. 1.2 on R. 4:5-4 (2009). Moreover, although Fathollahi recognized that the statute of limitations might have run, she never moved formally for dismissal on that ground, deferring the issue until the default judgment against her had been entered and the matter was on appeal. As such, the claim was presented too late. Fees v. Trow, 105 N.J. 330, 335 (1987) (a statute of limitations defense not pled prior to summary judgment is deemed waived); Meglino v. Tp. Committee of Eagleswood Tp., 197 N.J. Super. 296, 302 (App. Div. 1984) (a challenge to the untimeliness of an action cannot first be asserted post-judgment), rev'd on other grounds, 103 N.J. 144 (1986).

We do not find any of Fathollahi's remaining arguments to have sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).


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