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Ramnarian M. Joeglal v. Paccar Financial Corp


July 15, 2011


On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket Nos. L-5046-08 and L-1169-09.

Per curiam.


Argued May 17, 2011

Before Judges Wefing and Baxter.

Plaintiff, Ramnarian M. Joeglal ("Joeglal") challenges four trial court orders on appeal; one granted summary judgment to defendant Paccar Financial Corp. ("Paccar"); one denied plaintiff's motion for summary judgment; one denied plaintiff's motion for reconsideration; and one barred late amendment to plaintiff's answers to interrogatories. After reviewing the record in light of the contentions advanced on appeal, we reverse and remand for further proceedings.

Plaintiff owns and operates a small trucking business while defendant is a truck financing company. Plaintiff purchased three trucks, two in August 2006 and one in October 2007, and financed the transactions through defendant, pledging the trucks as collateral under three separate security agreements. These security agreements each contained identical terms and required plaintiff to insure the trucks "against fire, theft, [and] collision. . . ." The security agreements specified that the insurance was to be for either "the full insurable value of the Collateral or the full amount of all obligations this Contract secures, whichever is greater." In addition, the agreements included as events of default a failure by plaintiff "to pay on or before the due date the full amount of any . . . insurance premium, or other obligation secured by this Contract" as well as a failure by plaintiff "to perform any of [plaintiff's] obligations" under the security agreement.

In the event of a default by plaintiff, defendant had the right to declare the entire unpaid balance "immediately due and payable." In addition, defendant had the following rights with respect to its collateral:

(a) On [defendant's] demand, [plaintiff] shall deliver possession of the Collateral to [defendant] at a place [defendant] designates reasonably convenient to both parties.

(b) [Defendant] may enter any premises, where the Collateral may be found and take possession of it without notice, demand, or legal proceeding, provided such entry is in compliance with law.

(c) [Defendant] shall give [plaintiff] at least ten (10) days written notice of any sale of the Collateral which [plaintiff] agrees to be reasonable notice. . . .

(d) Expense of retaking, holding, preparing for sale, selling and the like shall include, to the fullest extent permitted by law (i) the fees of any attorneys retained by [defendant], and (ii) all other legal expenses incurred by [defendant].

(e) [Plaintiff] agrees that it is liable for and will promptly pay any deficiency resulting from any disposition of the Collateral after default.

Further, each security agreement stated, "[t]his contract is entered into in the State of New York and is governed by its laws."

Following plaintiff's purchase of these trucks, his broker, Inter-America Insurance Agency, L.L.C., obtained insurance for plaintiff through Lloyd's of London.

Plaintiff remained current in all of its installment payments, but defendant became concerned that the insurance on the vehicles had expired on December 2, 2007. On April 16, 2008, Paccar sent plaintiff a letter, headed "URGENT NOTICE," requesting plaintiff to forward within ten days proof of insurance. Plaintiff's office manager, Vishwanand Gangadin, repeatedly assured his counterpart at defendant that the vehicles were insured, but she was not assuaged by his oral assurances.

On July 16, 2008, plaintiff's insurance broker forwarded to Paccar certificates indicating the vehicles were insured through Clearwater Insurance Company commencing March 1, 2008. These certificates did not satisfy Paccar because they did not account for the period from December 2, 2007, through February 29, 2008. On July 28, 2008, Paccar repossessed two of the trucks, and on October 3, 2008, it repossessed the third. The delay in repossessing this truck was due to the fact that it was in a body shop, being repaired for damage sustained in a collision. The record indicates that the cost of the repairs was borne by insurance but does not specify which policy covered the damage. After repossessing the vehicles, Paccar sold them and claimed that plaintiff remained responsible for a deficiency, which Paccar computed at $117,666.10.

Plaintiff, on the other hand, claimed that defendant's repossession and sale of these trucks was wrongful and that his business had been damaged in at least three ways: (1) he lost valuable contracts with distributors because the trucks were not available to handle their regular shipments; (2) he was unable to obtain other financing to purchase other trucks because Paccar had informed credit reporting agencies that plaintiff had defaulted; and (3) the business's "diminished trucking capacity" would result in a loss of future earnings.

Plaintiff filed suit in October 2008, shortly after repossession of the third truck, seeking damages. In February 2009, Paccar filed a separate action, seeking to collect the balance it alleged was due and owing from plaintiff. The two actions were consolidated for discovery and trial.

Paccar's original complaint alleged that plaintiff had not remained current in its payment obligations. When, during the course of discovery, plaintiff produced proof of timely payment of all scheduled payments, Paccar amended its complaint to allege a default in plaintiff's obligation to maintain insurance on the three trucks. Thereafter, as discovery continued, Paccar sought proof of insurance coverage for the three-month gap, and plaintiff responded repeatedly that it was attempting to obtain that proof from the broker and the carrier.

The discovery end date was August 15, 2010, and plaintiff had still not produced proof of coverage for that three-month period. On August 19, 2010, defendant filed a motion for summary judgment, returnable on September 16. Plaintiff responded with opposition to defendant's motion and a cross-motion that was not filed in time to be returnable on the same date; instead it was scheduled to be heard in October.

As part of its opposition, plaintiff submitted a certification from Gangadin that defendant had been pressuring plaintiff to change his insurance broker to one of defendant's selection. Plaintiff refused to do so, noting that the insurance on his eleven other trucks was all procured through the same agency.

On September 16, plaintiff delivered to defendant and the trial court a certification seeking to amend his previous answers to interrogatories to include proof of insurance coverage from December 2, 2007, through March 1, 2008. Annexed to his certification was a letter from plaintiff's broker forwarding the certificate of insurance and explaining the delay:

I am sorry it has taken me so long to get the information you requested; however, the problem was that my file was misplaced and I have had to look up what work was previously done. . . .

The carrier that was on the risk requested that I replaced [sic] coverage since some of the insured's drivers did not meet their underwriting criteria. They extended the coverage until such time that I was able to replace it.

When calling the carrier, it took them some time to locate their files but they finally were able to confirm coverage.

The trial court granted defendant's motion, entering judgment for defendant for $117,666.10 plus costs. The trial court noted the untimely submission but concluded it failed to dispute defendant's arguments "in detail sufficient to overcome Plaintiff's burden in demonstrating a genuine issue of material fact."

Plaintiff filed a timely motion for reconsideration. He supported his motion with a certification in which he admitted that he had been late in providing proof of insurance coverage but asserted that was due to circumstances beyond plaintiff's control. Gangadin certified that he called the broker several times a week and visited the broker's office at least once a week seeking proof of coverage. Gangadin's certification stated that the broker's response was that he was seeking a certificate of insurance but noted he did not control the producer. Defendant responded by filing a motion to bar plaintiff from amending his answers to interrogatories and opposing plaintiff's motion for reconsideration.

Plaintiff's motion for summary judgment, his motion for reconsideration and defendant's motion to bar plaintiff from amending his answers to interrogatories were all returnable on October 29, 2010. The trial court, after hearing oral argument, denied the motions filed by plaintiff and granted the motion filed by defendant. The trial court issued a brief letter opinion that noted the standards governing a motion for reconsideration, the standards governing a motion for summary judgment and stated that the court had, in its discretion, determined not to consider plaintiff's late submission. It noted that plaintiff had failed to provide evidence that it had acted with due diligence to obtain in a timely manner the necessary proof of insurance. In denying plaintiff's motion to amend its answers to interrogatories, it noted on the order that plaintiff had not complied with Rule 4:17-7. This appeal followed.

We have concluded that we are constrained to reverse and remand for further proceedings. Although the trial court in its written opinion did not cite any case authority for the proposition that a party who seeks to submit a late amendment to its interrogatory answers and fails to supply sufficient evidence of its diligence in seeking the requested information in a timely fashion does so "to its detriment,"*fn1 we acknowledge that the Supreme Court, in Bender v. Adelson, 187 N.J. 411, 429 (2006), stated that "[a] precise explanation that details the cause of delay and what actions were taken during the elapsed time is a necessary part of proving due diligence as required by Rule 4:17-7 for untimely amendments to interrogatory answers . . ."

We consider Bender, however, to be distinguishable. The matter was a complex medical malpractice action in which defendants delayed in naming their proposed experts and submitting reports. Id. at 418. The only explanation defendants proffered for the delay was the complexity of the matter and the difficulty in locating appropriate expert witnesses. Id. at 419. It is hardly surprising that the Court rejected such a conclusory and generalized explanation.

Here, on the other hand, the issue before the court was purely factual: were these three trucks covered by insurance for this three-month period. Plaintiff explained the efforts made to obtain proof of coverage and that plaintiff was dependent upon the cooperation of third parties, not under its control. If the trial court was not satisfied with the level of information plaintiff had provided, it could have considered the possibility of adjourning the motion to permit plaintiff the opportunity to submit more particularized details. If the trial court was of the view that plaintiff's delays had caused extra work for defendant's attorney, it could have considered whether defendant was entitled to be reimbursed for its additional counsel fees. We find wholly unpersuasive defendant's attempt to analogize plaintiff's insurance broker, whom plaintiff was evidently imploring to find the necessary documents, with plaintiff's "staff" and thus under plaintiff's direction and control.

"'[T]he interests of justice standard continues fully viable under Best Practices and . . . time constraints will yield to exceptional circumstances and fundamental litigation fairness.'" Brun v. Cardoso, 390 N.J. Super. 409, 419 (App. Div. 2006) (quoting Pressler, Current N.J. Court Rules, comment 1.1 to R. 4:17-7 (2007)). If, as plaintiff contends, defendant repossessed these trucks at a time when plaintiff was fully current in his obligations under the security agreements, permitting defendant to recover on its deficiency action does not serve the "interests of justice."

The parties have briefed before us the issue whether defendant was entitled under New York law, which as we have noted, the parties agreed governed their relationship, to repossess these trucks. The trial court never considered the applicability of New York law, and we decline to address the question in the first instance. We note only that the dispute does not involve liability insurance, and thus cases that turn on providing late notice of an incident are not applicable.

We therefore reverse the orders entered by the trial court and remand this matter for further proceedings.

Reversed and remanded.

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