July 3, 2012
MARIE TEMPLIER AND DAPHNEY TEMPLIER-BARNES, PLAINTIFFS-APPELLANTS,
PETRO OIL COMPANY, DEFENDANT-RESPONDENT, AND A. FRANCISCO TRUCKING COMPANY AND ANTONIO FRANCISCO, DEFENDANTS/THIRD PARTY PLAINTIFFS-RESPONDENTS,
INSURANCE RESTORATION SPECIALISTS, INC., THIRD-PARTY DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-1474-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued April 24, 2012 --
Before Judges Messano, Yannotti and Kennedy.
Plaintiffs Marie Templier and Daphney Templier-Barnes appeal from an order entered by the Law Division on July 8, 2011, denying their motion to reconsider an order entered on December 17, 2010, that dismissed their complaint with prejudice for failure to provide discovery. We reverse and remand for further proceedings.
On April 8, 2009, plaintiffs filed a complaint in the Law Division against defendants Petro Oil Company (Petro)*fn1 , A. Francisco Trucking Co. (FTC), Antonio Francisco (Francisco), and certain fictitious defendants.*fn2 They alleged that on February 26, 2007, Francisco was delivering oil for Petro and mistakenly pumped heating oil into their home, causing severe environmental damage. Plaintiffs further alleged that, Petro, Francisco and FTC retained a remediation company to repair the damage but the company failed to do so and caused more damage to the property. The remediation company was identified by a fictitious name.
In October 2009, FTC filed an answer denying liability and a third-party complaint against Insurance Restoration Specialists, Inc. (IRS), the remediation company retained to repair the damage. FTC alleged that IRS was liable for a proportionate share of the damages that plaintiffs may recover. FTC and Francisco further claimed that they were entitled to be indemnified by IRS for any damages and costs assessed against them, including those attributable to their own negligence or fault. Petro filed an answer, dated December 23, 2009, denying liability and asserting cross-claims against FTC and Francisco for contribution and indemnification.
On April 19, 2010, FTC served discovery requests upon plaintiffs including interrogatories, special interrogatories, and a notice to produce documents, including expert reports.
Plaintiffs then filed an amended complaint, dated June 11, 2010, in which they named IRS as a defendant, in lieu of the fictitious restoration company named in the complaint.
In July 2010, after twice writing to plaintiffs' counsel to request the overdue discovery, FTC filed a motion to dismiss plaintiffs' complaint without prejudice for failure to provide discovery. In its motion, FTC argued that although plaintiffs had provided answers to Uniform Form "A" Interrogatories, they had not responded to the special interrogatories or the notice to produce. Plaintiffs did not oppose the motion and on August 6, 2010, the court entered an order dismissing the complaint without prejudice.
In September or October 2010, plaintiffs moved to reinstate the complaint and vacate the order dismissing the complaint without prejudice. In support of their motion, plaintiffs submitted a certification from their attorney, Ben Payton (Mr. Payton), who said that he "ha[d] been seriously ill for approximately [nine] months, was hospitalized for two weeks in May 2010, suffered a cardiac arrest on June 20, 2010, . . . remained critically ill . . . and [wa]s still recuperating." Plaintiffs' answers to the special interrogatories were attached to Mr. Payton's certification.
On October 12, 2010, FTC filed a motion to dismiss the complaint with prejudice pursuant to Rule 4:23-5(a)(2). FTC noted that sixty days had passed since the court had dismissed plaintiffs' complaint without prejudice. FTC noted that plaintiffs had moved to reinstate the complaint and provided answers to the special interrogatories but had not responded to the notice to produce.
FTC filed a letter memorandum with the trial court opposing plaintiffs' motion to reinstate. FTC again noted that plaintiffs had not fully complied with all discovery demands and therefore the complaint should not be reinstated.
The trial court filed a letter opinion dated November 4, 2010, addressing both motions. The court said that it had spoken with Mr. Payton and suggested that, if he had a continuing medical problem, his clients should obtain another attorney. The court also said that Mr. Payton had not explained why some of the discovery remained outstanding. The court concluded plaintiffs' motion to reinstate the complaint would be denied because they had not fully responded to the notice to produce.
The court also denied FTC's motion to dismiss the complaint with prejudice. The court said that FTC's motion could be re-listed for December 17, 2010 if plaintiffs "remain unresponsive." The court entered two orders dated November 4, 2010. One order erroneously stated that the complaint was reinstated. The other order stated that FTC's motion was denied without prejudice.
On November 29, 2010, FTC filed another motion to dismiss plaintiffs' complaint with prejudice pursuant to Rule 4:23-5(a)(2), which was returnable on December 17, 2010. In his supporting certification, FTC's attorney stated that the motion should be granted because plaintiffs still had not responded to their notice to produce.
The trial court considered the motion on December 17, 2010. Mr. Payton was not present for the argument. The court observed that Mr. Paytons' absence was "not unusual." The court acknowledged that plaintiffs had argued their failure to provide discovery was due to exceptional circumstances, specifically Mr. Payton's serious medical problems.
The court again noted that he had spoken to Mr. Payton and suggested that if he had a continuing medical condition, he should advise his clients to retain another attorney. The court said that Mr. Payton had not confirmed his medical condition by a medical certification, medical report, affidavit or otherwise. The court commented that plaintiffs' counsel "has just failed to do anything in this case. . . ."
The court stated that it had "strived" to impose sanctions other than dismissal of the complaint with prejudice. The court said it had given plaintiffs' attorney an opportunity to participate, to comply with its orders, and to verify his excuses for noncompliance, but all of this had "fallen on deaf ears." The court determined that the complaint would be dismissed with prejudice because no lesser remedy was available. The court entered an order dated December 17, 2010, dismissing the complaint with prejudice.
In January 2011, plaintiffs filed a motion for reconsideration of the December 17, 2010 order and reinstatement of their complaint. Mr. Payton filed a certification in support of the motion. He said the delays in responding to the discovery requests were a direct result of his illnesses, which amounted to exceptional circumstances. Mr. Payton asserted that his condition had improved and he could fully prosecute the case on behalf of plaintiffs.
Plaintiffs both filed certifications in support of their motion. They stated that Mr. Payton had been "extremely ill" for about one year and, due to his illnesses, he had "not been able to fully perform his duties" including attending to their case. In addition, Mr. Payton provided the court with copies of his medical records, which indicated he had gone to the emergency room of a hospital on December 23, 2010, and was treated for a "diabetic foot wound."
FTC opposed the motion. FTC argued the motion was untimely. FTC alternatively argued the motion should not be granted because plaintiffs had not fully complied with the discovery demands. IRS wrote a letter to the court, indicating that it joined FTC in opposing plaintiffs' motion for reconsideration.
The motion was argued on February 18, 2011. At the motion hearing, FTC's attorney stated that, with the exception of the expert reports, plaintiffs had complied with the notice to produce. Mr. Payton told the court he had decided not to pay an expert for a report until the complaint was reinstated. FTC's attorney said that if the complaint was reinstated, sanctions should be imposed on plaintiffs since FTC had been forced to incur extensive costs on the motions.
The trial court presented Mr. Payton with a choice of two sanctions - a prohibition against seeking further discovery or monetary sanctions. Mr. Payton did not agree to either sanction. The court determined that, because plaintiffs had refused to agree to any sanctions, and because there was no competent medical proof to support their claim of exceptional circumstances for the discovery delays, the motion for reconsideration would be denied. However, an order to that effect was not filed until March 8, 2011.
On January 28, 2011, Mr. Payton was suspended from the practice of law and his suspension became effective on February 28, 2011. In re Payton, 205 N.J. 103 (2011). Even so, in March 2011, plaintiffs filed another motion for reconsideration of the dismissal order and reinstatement of the complaint.*fn3 On March 18, 2011, the court denied the motion. The court said it could not consider the new motion because Mr. Payton had been suspended from practicing law.
On April 13, 2011, Queen Payton (Ms. Payton), who is Mr. Payton's wife and a partner in Mr. Payton's law firm, wrote to the court and asked for reconsideration of the March 18, 2011 order. Ms. Payton said she was the attorney who had filed the latest motion. She asserted that Mr. Payton had permissibly submitted a certification in support of the motion because he was not suspended from the practice of law at the time. It seems that the court did not reply to Ms. Payton's letter.
Therefore, at the end of April 2011, plaintiffs filed another motion to reconsider the December 17, 2010 order of dismissal and reinstate the complaint. In a certification submitted in support of that motion, Ms. Payton reiterated the arguments made in her April 13, 2011 letter.
FTC opposed the motion. IRS submitted a letter to the court indicating that it was joining FTC's opposition. IRS's letter suggested that Petro had also opposed the motion, although Petro's letter is not part of the record before us.
Plaintiffs' motion was argued on May 13, 2011. Ms. Payton informed the court that plaintiffs had fully complied with the discovery demands, except for the production of the expert report that was "in progress." The court filed a letter opinion dated May 13, 2011, in which it stated that:
[w]hile it is axiomatic that an attorney's dereliction should not be visited upon the client, neither should it be visited on the opposing party. Therefore, before any similar motion by plaintiffs' attorney will be considered . . . that office [must] supply an appropriate expert report and comply with all previous orders, it must also reimburse defendants' attorneys for all services reasonabl[y] related to the opposition [to] plaintiffs' attorney's motions.
The court entered an order dated May 13, 2011, denying the motion.
In June 2011, plaintiffs filed another motion for reconsideration and to vacate the order dismissing the complaint with prejudice. In her certification, Ms. Payton stated that she had served a draft expert report upon defendants but she had not paid defendants' attorneys' fees. She sought reconsideration of the requirement that plaintiffs reimburse defendants for their counsel fees. Ms. Payton asserted that this requirement was "unfair and unjust[.]"
The motion was argued on July 8, 2011. The court denied the motion because plaintiffs had not paid defendants' counsel fees. The court stated that it would not reconsider its determination regarding the attorneys' fees. The court said that it had considered the matter numerous times and it was "not reconsidering anything." The court entered an order dated July 8, 2011, denying the motion. Plaintiffs filed a notice of appeal on August 24, 2011.
FTC and Petro argue that the appeal should be dismissed because it was not filed within the time required by the court rules. FTC and Petro maintain that plaintiffs are appealing from the order dated December 17, 2010, dismissing the complaint with prejudice, but plaintiffs did not file the appeal within forty-five days of the entry of that order, as required by Rule 2:4-1(a). They argue that the time for appeal was not tolled by Rule 2:4-3(b) or 3(e) because plaintiffs never filed a timely motion for reconsideration of the December 17, 2010 order.
We note initially that there is some doubt that the December 17, 2010 order was a final judgment from which an appeal could be taken as a matter of right pursuant to Rule 2:2-3(a)(1). A judgment is final if it resolves all issues as to all parties in the case. N.J. Schools Constr. Corp. v. Lopez, 412 N.J. Super. 298, 308 (App. Div. 2010) (citing Janicky v. Point Bay Fuel, Inc., 396 N.J. Super. 545, 549-50 (App. Div. 2007)); S.N. Golden Estates, Inc. v. Cont'l Cas. Co., 317 N.J. Super. 82, 87 (App. Div. 1998) (citing Family First Fed. Sav. Bank v. Devincentis, 284 N.J. Super. 503, 511 (App. Div. 1995)).
Rule 4:23-5(a)(1) provides that if a party fails to comply with a demand for discovery, "the party entitled to the discovery" may move for dismissal of the non-compliant party's pleading without prejudice. In addition, Rule 4:23-5(a)(2) states that if an order of dismissal without prejudice was granted, "the party entitled to the discovery" may seek dismissal of the pleading with prejudice. Moreover, Rule 4:23-5(a)(3) provides in pertinent part that "[a]n order of dismissal or suppression shall be entered only in favor of the moving party."
We note that in its July 8, 2011 bench decision the trial court said that FTC had sought dismissal of the complaint and "all parties tagged onto it by letters." The record indicates that IRS submitted letters to the court stating that it joined in opposing two of plaintiffs' motions for reconsideration. In one of those letters, IRS suggested that Petro had also opposed one of the motions.
The record before us does not, however, indicate that Petro or IRS were parties entitled to discovery or ever joined in FTC's dismissal motions. As we noted previously, Rule 4:23-5(a)(3) provides that an order of dismissal with prejudice may only be entered in favor of "the moving party." The only moving party was FTC.
Therefore, the court's December 17, 2010 order dismissed the complaint as to FTC, not any other parties in the case. Indeed, the order stated that FTC's motion had been granted. It did not state that the complaint was dismissed as to any other defendant. Thus, the December 17, 2010 order did not resolve all issues as to all parties and it was not a final judgment from which an appeal could be taken as of right pursuant to Rule 2:2-3(a)(1).
Furthermore, even if the December 17, 2010 order had dismissed the complaint as to all defendants, the time for appeal did not begin to run from that order because the trial court did not treat the order as a final judgment in the case. As we have explained, the court repeatedly entertained plaintiffs' motions for reconsideration, which would have been untimely if the December 17, 2010 order was a final judgment. See R. 4:49-2 (requiring motions for reconsideration to be filed within twenty days after service of the judgment or order).
The court never indicated that the matter had been finally resolved as to all parties until it rendered its decision and order on July 8, 2011, in which it emphatically stated that it was not "reconsidering anything." The court told plaintiffs' attorney that it would not entertain any other motions and they should take the matter to the Appellate Division.
We therefore conclude that, in light of this procedural history, the time for appeal under Rule 2:4-1(a) ran from the entry of the order of July 8, 2011, and the notice of appeal was timely filed.
We turn to plaintiffs' contention that the trial court erred by dismissing the complaint with prejudice and refusing thereafter to reconsider that determination and reinstate the complaint.
As we have explained, Rule 4:23-5(a)(1) permits a party entitled to discovery to file a motion to dismiss the pleading of the delinquent party for failing to comply with the discovery request. If the court grants the motion and the pleading is dismissed without prejudice, under Rule 4:23-5(a)(2), the party entitled to discovery may move to dismiss the delinquent party's pleading with prejudice sixty days after the date of the order dismissing the pleading without prejudice. The trial court must grant the motion unless the delinquent party has filed "a motion to vacate the previously entered order of dismissal" without prejudice, and has either provided the discovery demanded or demonstrated exceptional circumstances. R. 4:23-5(a)(2).
In addition, Rule 4:23-5(a) establishes the procedures that the court must follow before it can enter an order dismissing a pleading with prejudice. The rule provides that, upon the entry of an order dismissing a pleading without prejudice, counsel for the delinquent party shall . . . serve a copy of the order on the client by regular and certified mail, return receipt requested, accompanied by a notice . . . explaining the consequences of failure to comply with the discovery obligation and to file and serve a timely motion to restore.
The notice must be "in the form prescribed by Appendix II-A of these rules[.]" Ibid.
Furthermore, when the motion to dismiss the pleading with prejudice is filed, the attorney for the delinquent party must "file and serve an affidavit reciting that the client was previously served as required by [Rule 4:23-5(a)(1)] and has been served with an additional notification . . . of the pend[ing] . . . motion to dismiss or suppress with prejudice."
R. 4:23-5(a)(2). This notice must be in the form prescribed by Appendix II-B and must be filed and served "not later than [seven] days prior to the return date of the motion[.]" R. 4:23-5(a)(2).
The rule additionally states that an "[a]ppearance on the return date of the motion shall be mandatory for the attorney for the delinquent party. . . ." Ibid. Moreover, if the delinquent party's attorney does not timely serve the client with the original order of dismissal or suppression without prejudice, fails to file and serve the affidavit and the notifications required by this rule, or fails to appear on the return date of the motion to dismiss or suppress with prejudice, the court shall, unless exceptional circumstances are demonstrated, proceed by order to show cause or take such other appropriate action as may be necessary to obtain compliance with the requirements of this rule. If the court is required to take action to ensure compliance or the motion for dismissal or suppression with prejudice is denied because of extraordinary circumstances, the court may order sanctions or attorney's fees and costs, or both.
Although "a plaintiff is not 'automatically entitled' to relief merely because there has been some failure to comply with all the procedural requirements of the rule[,]" A & M Farm v. Am. Sprinkler Mech. 423 N.J. Super. 528, 536, 539 (App. Div. 2012) (quoting Feinsod v. Noon, 272 N.J. Super. 248 (App. Div.), certif. denied, 137 N.J. 314 (1994)), some level of compliance is necessary to ensure that a litigant is aware of the pending consequences. Ibid. Failing to do so amounts to an abuse of discretion. Ibid.
In A & M Farm & Garden Ctr., we stated that the trial court was required to take steps to ensure that the counsel for the delinquent party complied with the procedural requirements of Rule 4:23-5(a) before dismissing the pleading with prejudice. Id. at 539. We stated that: when a court considers a motion to dismiss or suppress a pleading with prejudice, and there is nothing before the court showing that a litigant has received notice of its exposure to the ultimate sanction, the court must take some action to obtain compliance with the requirements of the rule before entering an order of dismissal or suppression with prejudice. Further, the court must set forth what effort was made to secure compliance on the record or on the order. [Ibid.]
In this case, there is no indication in the record that Mr. Payton complied with the requirements of the rule. There is no indication in the record that the August 6, 2010 order dismissing the complaint without prejudice was served upon plaintiffs as required by Rule 4:23-5(a)(1). There also is no indication in the record that Mr. Payton ever filed the affidavit required by Rule 4:23-5(a)(2).
Although plaintiffs submitted certifications to the trial court dated January 15, 2011, in which they stated that they were aware that their complaint was dismissed with prejudice, plaintiffs did not state that they were served with the previous order dismissing the complaint without prejudice. Plaintiffs also did not state whether they were told a motion had been made seeking dismissal of their pleading with prejudice.
In addition, Mr. Payton did not appear in court on December 17, 2010, when the court considered FTC's motion to dismiss the pleading with prejudice. The record indicates that the court was informed that Mr. Payton would not be able to appear for the motion argument. He claimed to have fallen on ice that day. The court elected to proceed in his absence, even though Rule 4:23-5(a)(2) makes the appearance of counsel for the delinquent party mandatory. Moreover, the court took no action to ensure compliance with the requirements of the rule.
We are therefore convinced that, under these circumstances, the trial court erred by dismissing the pleading with prejudice. Because the order of December 17, 2010 was erroneously entered, the trial court should have granted plaintiffs' motion for reconsideration and vacated that order. Furthermore, since plaintiffs demonstrated when they filed their motion for reconsideration in June 2011, that they had essentially complied with all discovery requests, the court should have reinstated the complaint.
Plaintiffs also argue that the trial court erred by stating that it would not reconsider the dismissal of their complaint unless they paid the counsel fees incurred by FTC, Petro and IRS in connection with FTC's dismissal motions and plaintiff's motions for reconsideration. The court said that defendants were entitled to reasonable fees and costs.
We note, however, that the court never issued an order specifically stating the amount of counsel fees that plaintiffs would be required to pay. Thereafter, the court refused to reconsider the dismissal of the complaint in part because plaintiffs had not paid defendants' counsel fees.
Rule 4:23-5(a)(1) provides in pertinent part that after an order dismissing a pleading without prejudice has been entered, the delinquent party may move on notice for vacation of the dismissal or suppression order at any time before the entry of an order of dismissal or suppression with prejudice. The motion shall be supported by affidavit reciting that the discovery asserted to have been withheld has been fully and responsively provided and shall be accompanied by payment of a $100 restoration fee to the Clerk of the Superior Court, made payable to the "Treasurer, State of New Jersey," if the motion to vacate is made within 30 days after entry of the order of dismissal or suppression, or a $300 restoration fee if the motion is made thereafter. If, however, the motion is not made within 90 days after entry of the order of dismissal or suppression, the court may also order the delinquent party to pay sanctions or attorney's fees and costs, or both, as a condition of restoration.
Suffice it to say, this case did not take the procedural course envisioned by the rule. Plaintiffs' motion to vacate the August 6, 2010 dismissal order, while filed within ninety days after entry of that order, could not be granted because the discovery had not been "fully and responsively provided[.]" Furthermore, they filed several motions for reinstatement of the pleading after the order of dismissal with prejudice was entered, but did not fully comply with the discovery requests until June 2011.
We are convinced that, under the circumstances presented here, the trial court had the discretion to require plaintiffs to pay the reasonable attorney's fees incurred by FTC in seeking dismissal of the complaint and in opposing the reconsideration motions, as a condition for reinstatement of the complaint.
While Petro and IRS did not file motions to dismiss the pleading without prejudice pursuant to Rule 4:23-5(a)(1), they were parties to the case and therefore were drawn into the motion practice, which was due entirely to plaintiffs' failure to provide discovery in a timely manner. In our view, it was not an abuse of discretion for the court to require plaintiffs to pay the reasonable attorneys' fees and costs incurred by Petro and IRS for their participation in the reconsideration motions, as a condition for reinstatement of the complaint.
In summary, we reverse the trial court's order of December 17, 2010, dismissing plaintiffs' complaint with prejudice as well as the court's orders denying plaintiffs' motions for reconsideration and reinstatement of the complaint. We remand the matter to the trial court for further proceedings.
On remand, the trial court shall afford the parties additional time to complete discovery and, after affording the parties an opportunity to be heard, shall enter an order requiring plaintiffs' attorneys to pay the reasonable attorneys' fees and costs incurred by FTC, IRS and Petro for the dismissal and reconsideration motions.
Reversed and remanded for further proceedings in accordance with this opinion. We do not retain jurisdiction.