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Mogull v. Pototschnig

February 22, 2010


On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-9155-07.

Per curiam.


Argued January 26, 2010

Before Judges Wefing, Grall and LeWinn.

Defendants Hubert W. Pototschnig and Care Products, Inc. (collectively the Pototschnig defendants) appeal from an order confirming arbitration awards and entering judgment in favor of plaintiff Martha Mogull and defendants Thomas Lawrence and Thomas Lawrence & Co. The Pototschnig defendants sought trial de novo by way of cross-motion filed in opposition to motions to confirm the arbitration award filed by Mogull and Lawrence. The cross-motion was filed eleven days after the expiration of the thirty-day period permitted. R. 4:21A-6(b)(1). The judgment awards Mogull $360,000 against Pototschnig and $25,000 against Care Products, Inc., and Lawrence and Thomas Lawrence Co. $745,036 against Pototschnig.*fn1

On appeal the Pototschnig defendants argue that the court should have determined that "extraordinary circumstances" and their substantial compliance warranted relaxation of Rule 4:21A-6(b)(1). We affirm substantially for the reasons stated by Judge Joseph S. Conte in a written statement appended to the order of May 19, 2009 confirming the arbitration and entering judgment.

The litigation involves loans, but the facts pertinent on this appeal are procedural. On October 2, 2008, Mogull was granted partial summary judgment in the amount of $360,000 against defendant Lawrence, and Mogull was granted leave to file an amended complaint.

Arbitration was scheduled for and conducted on December 9, 2008. According to the Pototschnig defendants, the arbitrator did not issue an award because the parties were not present, and Mogull did not have proof of her claim against them.

Although a second arbitration had been scheduled for February 10, 2009, Mogull filed a second motion for partial summary judgment against the Pototschnig defendants in the amount of $360,000. On January 23, 2009, the court denied that motion without prejudice. The return date was adjourned in light of the pending arbitration.

At the conclusion of the second arbitration on February 10, 2009, the arbitrator entered awards against the Pototschnig defendants and in favor of Mogull in a total amount of $385,000 and in favor of Lawrence in the amount of $745,036.

Pursuant to Rule 4:21A-6, the Pototschnig defendants had thirty days, until March 12, 2009, to file a notice rejecting the arbitrator's award and demanding a trial de novo, and Mogull and Lawrence had until April 1, 2009 to file a motion for confirmation of the award and entry of judgment.

On March 3, 2009, the Pototschnig defendants filed a response to Mogull's pending motion for partial summary judgment in the amount of $360,000. They did not, however, file a notice and demand for trial de novo by March 12, 2009. On March 30, 2009, Mogull filed a request for confirmation of the arbitrator's award and entry of judgment, and on April 1, 2009, Lawrence moved for an order of judgment on the arbitration award.

On April 22, 2009, the Pototschnig defendants filed a cross-motion opposing entry of judgment and seeking leave to file for trial de novo as within time. In support of the relief sought, the Pototschnig defendants challenged the arbitrator's award on the merits, asserting that the loan was illegal and the interest rates usurious. With respect to their delay in filing for a trial de novo, they claimed to have been misled by Mogull's consent to and requests for adjournment of the return date on her motion for partial summary judgment.

The Supreme Court has clearly articulated the standard applicable to motions for relaxation of the thirty-day period within which a party may demand a trial de novo following arbitration conducted pursuant to Rule 4:21A-1. There must be "'extraordinary circumstances' . . . that . . . did not arise from an attorney's 'mere carelessness' or 'lack of proper diligence.'" Hartsfield v. Fantini, 149 N.J. 611, 618 (1997) (quoting In re T., 95 N.J. Super. 228, 235 (App. Div. 1967)). "Generally, substantial compliance with the filing limitation and allegations that [the other party] used negotiations to lull the plaintiffs into missing the filing date will not constitute 'extraordinary circumstances' sufficient to relax the thirty-day rule." Ibid.; see id. at 617 (disapproving opinion of this court suggesting the standard should be applied as it is "in deciding a motion for relief under Rule 4:50-1"). Moreover, this court has held that allegations of legal error in the ...

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