August 6, 2010
ASHRAF A. MAHMOUD, PLAINTIFF-RESPONDENT,
HELEN K. KOECK, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-1079-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted April 12, 2010
Before Judges Rodríguez and Reisner.
Defendant Helen K. Koeck appeals from two orders: the first one dated July 29, 2008, awarding attorney's fees and costs to plaintiff Ashraf A. Mahmoud as a result of Koeck's counsel terminating a court-ordered deposition; the second one dated July 31, 2009, awarding an additional attorney's fee for failure to comply with the first order. We affirm.
On March 8, 2007, Mahmoud filed a complaint to recover damages for personal injury stemming from a motor vehicle accident. The accident was unusual. Koeck was driving her 1987 Cadillac when its transmission exploded. Mahmoud, a passerby, came to her aid. Both Mahmoud and Koeck were injured when the Cadillac's emergency brake was released by one of them. The Cadillac rolled backwards and both were injured.
Koeck filed an answer. During the discovery period, Mahmoud moved for a court-ordered deposition of Koeck. The judge granted the motion.
The deposition of Koeck took place on March 28, 2008. Koeck's counsel made numerous objections. Mahmoud's counsel asked Koeck's lawyer to refrain from "touching" Koeck. Further, defense counsel objected to Mahmoud's counsel requesting Koeck to read her answers to interrogatories without asking a question first. According to defense counsel, opposing counsel's examination of Koeck was abusive. At that point, his client, who was then eighty-one years old, told him that she did not feel well and wanted to go home. Defense counsel then terminated the deposition over the objections of his adversary because Koeck "wanted to go home."
Mahmoud moved to have Koeck's answer stricken and her defenses suppressed with prejudice due to her failure to comply with the court ordered deposition. Judge Thomas F. Brogan awarded Mahmoud reasonable attorney's fees due to defense counsel's improper termination of the deposition. The judge found that, although defense counsel had good intentions to protect his elderly client, he "overreacted." Further, the judge stated that, although defense counsel may not have been satisfied with Koeck's answers, he should have permitted the deposition to proceed. In particular, the judge noted that defense counsel repeatedly objected on relevancy grounds, which was improper. Finally, the judge found that the record of the deposition indicated that Mahmoud's counsel did not violate any rules when questioning Koeck.
Judge Brogan ordered that Koeck's answer be stricken and her defenses suppressed with prejudice for failure to comply with the court ordered deposition and awarded Mahmoud attorney's fees and costs. Koeck moved for reconsideration. Judge Brogan heard the parties' arguments, reinstated Koeck's answer and awarded Mahmoud $2,000 in attorney's fees and $464.25 in costs to be paid to Mahmoud's counsel within twenty days. This ruling was memorialized in the July 29, 2008 order.
Koeck moved to strike the award of attorney's fees and costs. Judge Brogan denied this motion noting that the actions of Koeck or her counsel in terminating the deposition necessitated that Koeck or defense counsel be responsible for the time wasted in the incomplete deposition.
Koeck moved for leave to appeal. We denied the motion. Mahmoud v. Koeck, No. AM-94-08T1 (App. Div. October 27, 2008).
Six months later, on the day set for trial, Mahmoud requested voluntary dismissal with prejudice because Mahmoud's wife, a necessary witness, was out of the country. Mahmoud's counsel requested, however, that the dismissal not affect the July 29, 2008 order awarding attorney's fees. Judge Anthony J. Graziano dismissed the case with prejudice but did not disturb the July 29, 2008 order. Mahmoud moved to enforce the July 29, 2008 order. Koeck cross-moved to impose sanctions, attorney's fees, costs and expenses related to Mahmoud's voluntary dismissal with prejudice. Judge Brogan held Koeck and her counsel in contempt for failure to comply with the July 29, 2008 order. The judge entered an order on July 31, 2009 providing that defense counsel and/or Koeck pay Mahmoud's counsel the amount set forth in the July 29, 2008 order and an additional $500 in attorney's fees within ten days and denied Koeck's cross-motion.
Koeck filed this appeal. Judge Brogan stayed the payment of attorney's fees to Mahmoud's counsel pending appeal.
On appeal, Koeck contends that "the orders awarding counsel fees and expenses to Mahmoud's attorney were inconsistent with the facts and are legal[ly] unsupportable." She argues that Judge Brogan abused his discretion and that her "request" to terminate the deposition was warranted in light of her health and age. Further, she argues that the record reflects that her attorney did not intentionally frustrate the deposition. We disagree.
The Supreme Court has established that "[i]f the discovery rules are to be effective, courts must be prepared to impose appropriate sanctions for violations of the rules." Abtrax Pharms., Inc. v. Elkins-Sinn, Inc., 139 N.J. 499, 512 (1995). Trial courts, therefore, have inherit discretionary power to award attorney's fees and costs for failure to make discovery, subject only to the requirement that they are just and reasonable in the circumstances. Id. at 513; Calabrese v. Trenton State Coll., 162 N.J. Super. 145, 151-52 (App. Div. 1978), aff'd, 82 N.J. 321 (1980). However, the court's power to impose financial sanctions is limited to reimbursement of a party's unnecessary fees and expenses caused by the discovery violation. Wolfe v. Malberg, 334 N.J. Super. 630, 637 (App. Div. 2001); see also Oliviero v. Porter Hayden Co., 241 N.J. Super. 381, 387 (App. Div. 1990). Additionally, Rule 4:23-1 permits award of attorney's fees for abuses of the discovery process. This rule provides:
[a] party, upon reasonable notice to other parties and all persons affected thereby, may apply for an order compelling discovery as follows:
(a) Motion. If a deponent fails to answer a question propounded or submitted under R. 4:14 or 4:15, or a corporation or other entity fails to make a designation under R. 4:14-2(c) or 4:15-1, the discovering party may move for an order compelling an answer or designation in accordance with the request. When taking a deposition on oral examination, the proponent of the question may complete or adjourn the examination before applying for an order. If the court denies the motion in whole or in part, it may make such protective order as it would have been empowered to make on a motion pursuant to R. 4:10-3. . . .
(c) Award of Expenses of Motion. If the motion is granted, the court shall, after opportunity for hearing, require the party or deponent whose conduct necessitated the motion to pay to the moving party the reasonable expenses incurred in obtaining the order, including attorney's fees, unless the court finds that the opposition to the motion was substantially justified or that other circumstances make an award of expenses unjust.
If the motion is denied, the court shall, after opportunity for hearing, require the moving party to pay to the party opposing the motion the reasonable expenses incurred in opposing the motion, including attorney's fees, unless the court finds that the making of the motion was substantially justified or that other circumstances make an award of expenses unjust.
If the motion is granted in part and denied in part, the court may apportion the reasonable expenses incurred in relation to the motion among the parties and persons in a just manner. [Ibid.]
Therefore, it is clear that the Law Division has the authority to assess sanctions and attorney's fees against a party or the party's attorneys for inconveniences and expenses incurred resulting from the conduct of the party's counsel. See Oliviero, supra, 241 N.J. Super. at 388.
Moreover, we have rejected the assessment of attorney's fees that were unsupported by any specific findings of fact. Wolfe, supra, 334 N.J. Super. at 637-38. In Wolfe, the Law Division awarded counsel fees and imposed sanctions against a party's attorney for objecting fifty-four times during a deposition. Id. at 634. We noted that the assessment of fees was necessary due to the other attorney's wasted time and unnecessary expenses incurred. Id. at 638. However, we held that the award of attorney's fees was punitive in nature after finding that the assessment assumed that the misconduct required that another deposition be conducted. Ibid. Thus, the moving party did not incur "unnecessary" expenses resulting from having to conduct another deposition. Ibid.
We review the Law Division's imposition of sanctions pursuant to the abuse of discretion standard. Cavallaro v. Jamco Prop. Mgmt., 334 N.J. Super. 557, 571 (App. Div. 2000). We should not disturb the trial court's exercise of that discretion unless an injustice has occurred. Cunningham v. Rummel, 223 N.J. Super. 15, 19 (App. Div. 1988). Rule 4:14-3(d) requires that all depositions be conducted continuously and without adjournment unless a party seeks suspension of the deposition in order to seek a protective order, Rule 4:14-4, or to seek an order to compel the deponent to answer a question, Rule 4:23-1(a). That did not occur here.
Applying this deferential standard here, we conclude that there is sufficient, credible evidence in the record to support Judge Brogan's decision to award attorney's fees. We perceive no abuse of discretion.
Defense counsel's conduct caused Mahmoud to incur "unnecessary" expenses, specifically in attending and paying expenses in connection with the interrupted deposition and filing a motion to compel Koeck to attend another deposition. Further, unlike the situation in Wolfe, the award of attorney's fees here was not punitive in nature. The award was designed to reimburse Mahmoud for the aborted deposition and filing of a motion. We conclude that the sanction imposed constituted reasonable attorney's fees and costs incurred, not penalties.
Additionally, the record reflects that defense counsel made no showing that his opposition to the motion was substantially justified or that other circumstances made the award of attorney's fees unjust. See R. 4:23-1(c). Defense counsel argued before us that his conduct was justified due to the opposing counsel's conduct. However, assuming that to be true for argument's sake, defense counsel could have recessed the deposition and contacted Judge Brogan's chambers to obtain a ruling. That is the preferred manner of handling such a situation and would have avoided the award of attorney's fees and costs. The record shows that defense counsel did not present any evidence that Koeck was in fact ill, justifying his termination of the proceeding. See R. 4:23-1(c).
Finally, we do not perceive an abuse of discretion in imposing an additional $500 in attorney's fees and holding Koeck and defense counsel in contempt for failing to comply with the time limit set by the July 29, 2008 order. Rule 1:10-3 provides for monetary sanctions in circumstances in which a party has been held in contempt of a court's order or judgment. Such a sanction is not for the purpose of punishment, but instead serves as a coercive measure to facilitate the enforcement of a court order. Ridley v. Dennison, 298 N.J. Super. 373, 381 (App. Div. 1997). Moreover, Rule 1:10-3 provides that attorney's fees may be awarded to a party who has obtained relief pursuant to the Court Rules. See Hynes v. Clarke, 297 N.J. Super. 44, 57 (App. Div. 1997). Thus, we conclude that it was within the judge's discretion to award Mahmoud additional attorney's fees for being required to file a motion to enforce the earlier motion.
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