On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-9610-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Lihotz and Ashrafi.
Plaintiffs David Chayon and Susan Chayon filed this action against their homeowners insurance carrier, defendant Great Northern Insurance Company, d/b/a Chubb Insurance, (Great Northern), and the company hired by Great Northern to perform mold remediation, Astrocare Fire and Water Restoration, Inc. (Astrocare).*fn1 Plaintiffs alleged Great Northern improperly rejected their claim for damages to their real and personal property, and Astrocare negligently remediated a mold condition in the home.
The court ordered dismissal of plaintiffs' complaint after finding they failed to comply with defendants' discovery demands. Plaintiffs appealed. Great Northern filed a defensive cross-appeal challenging as error the trial court's earlier denials of its motions for summary judgment and dismissal.
On March 4, 2009, plaintiffs and Great Northern resolved their dispute through the Civil Appeals Settlement Program. The remaining issues on appeal center on the dismissal of plaintiffs' claims against Astrocare. Following our review of the arguments presented in light of the record and applicable law, we affirm.
Initially, we detail the underlying facts and procedural history. Plaintiffs' home experienced water intrusion through a kitchen greenhouse window, causing significant mold contamination behind the kitchen sink, inside the kitchen walls and on multiple surfaces. Mold was also discovered in the basement, resulting from water leakage through the walls and excessive moisture levels in the concrete slab floor, due to a deficient foundation drainage system.
As a result of the toxic mold levels, the home was not habitable. In November 2003, plaintiffs submitted a claim to Great Northern under the terms of their homeowners policy. Great Northern engaged Astrocare to perform mold remediation in the kitchen, expending "over $600,000" for repair of the premises, replacement of personal property, and payment of plaintiffs' alternative living expenses. Citing policy exclusions, Great Northern denied plaintiffs' claims for repairs to the kitchen window and remediation of the basement contamination. Prior to the completion of work in the kitchen, plaintiffs were asked to repair the defective rotted kitchen window and accompanying cracks in the basement walls. They declined. As a result of this impasse, Astrocare's work efforts ceased.
On November 30, 2004, plaintiffs filed a complaint against Great Northern alleging it failed to comply with the policy's coverage terms. The complaint was amended to add Astrocare, alleging it failed to perform and negligently performed the remediation services, resulting in the spread of mold, causing additional damage to plaintiffs' real and personal property.
On August 21, 2006, Astrocare submitted to plaintiffs' interrogatories and notice to produce documents. Thereafter, plaintiffs submitted similar discovery demands to Astrocare. After their attorney withdrew, a second set of interrogatories and notice to produce were sent by Astrocare directly to plaintiffs. Despite repeated requests, these discovery demands went unanswered. In January 2007, a substitution of counsel was filed by plaintiffs' current attorney.
On January 5, 2007, following the discovery end date, Astrocare filed its first motion to dismiss plaintiffs' complaint for failure to respond to discovery. The trial court entered a case management order on January 26, 2007, requiring plaintiffs to respond to Astrocare's discovery demands by February 15, 2007. Astrocare then adjourned its motion to dismiss to February 16, 2007. Trial was scheduled for May 7, 2007.
On February 1, 2007, plaintiffs provided inspection and remediation reports prepared by their expert, August L. DeVico, REM, CSS, of August Compliance Solutions, Inc. On February 5, 2007, plaintiffs re-sent their original discovery requests to which Astrocare responded by February 13, 2007. In a letter dated March 5, 2007, plaintiffs submitted another summary report from Mr. DeVico; a preliminary engineering report from James Cohen, P.E.; an invoice from Miquel Barahona, for work performed totaling $148,500; a proposal from Elegant Stone; three invoices from Czar Incorporated; an invoice from Bury Brothers, Inc.; and an estimate from Lusitana-Liberty Construction. Finally, plaintiffs asserted all of these individuals or entities were to be considered "as fact and/or expert witnesses whom [sic] may be called to testify at the time of trial." No further explanation of the nature of the testimony was included.
In a letter dated April 4, 2007, Great Northern itemized all discovery received and the outstanding documents. The missing proofs included: (1) verification of ownership of the residence; (2) documents, photographs, contractor receipts and purchase orders for any remodeling, renovating, repairing or refurbishing of the home from 1989 to 2007; (3) proof of payment for any of these items; (4) documents showing the purchase and providing the value of the claimed damaged contents; (5) correspondence with Great Northern regarding the claims; and (6) any claims made to insurance carriers other than Great Northern. Later that month, Great Northern moved to dismiss plaintiffs' complaint for failure to provide this discovery.
On May 10, 2007, returnable May 11, 2007, Astrocare filed its motion to dismiss plaintiffs' complaint without prejudice for failure to provide discovery. That same day, plaintiffs sent certain responses to Astrocare's interrogatories and document demand and requested the motion be withdrawn.
The court denied Astrocare's motion to dismiss; then, during a second case management conference conducted on June 19, 2007, entered various discovery deadlines, including dates for the exchange of additional expert reports and conducting depositions, and rescheduled trial for December 10, 2007. Plaintiffs submitted another list of alleged expenditures with some documentation, a report from Dominick Paglia, and photographs of the alleged damages. Also, plaintiffs restated their inability, as a result of the mold contamination, to secure an appraisal of their personal property. However, plaintiffs proposed to provide testimony regarding the items and their value to support their claims.
On August 10, 2007, the court granted Great Northern's motion to dismiss plaintiffs' complaint without prejudice for failure to provide the discovery listed in the April 4, 2007 letter. R. 4:23-5(b). Plaintiffs corresponded to defendants on August 23, 2007, in which, among other things, they (1) reiterated their inability to obtain an expert to appraise their personalty until the mold was remediated; (2) asserted they reserved the right to call any party or expert named and use any document provided in discovery; (3) stated they had no additional documents to support their claims for living expenses, or the remodeling, renovating, repairing or refurbishing of the residence; and (4) identified a prior certification attesting to their ownership of the residence since 1980.
A third case management order, filed on October 22, 2007, reinstated plaintiffs' complaint based upon counsel's representations that plaintiffs had complied with the past discovery orders. The court again addressed outstanding discovery, specifically instructing defendants to move to compel more responsive answers to the interrogatories or seek other relief by November 16, 2007. The order required all discovery to be completed by April 7, 2008, and trial was set for June 9, 2008. After the case management conference, plaintiffs sent correspondence copying their two earlier letters transmitting discovery; no new information was provided.
After obtaining an extension, Great Northern moved to dismiss plaintiffs' complaint with prejudice as a result of their continued non-compliance with its discovery demands. ...