November 8, 2012
PEDRO ACOSTA AND ANTONIO ACOSTA, PLAINTIFFS-RESPONDENTS,
JOHN M. JACKOVINO, DEFENDANT-APPELLANT, AND LEONARD GREENE, DEFENDANT.
On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-2465-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: October 3, 2012
Before Judges Axelrad and Nugent.
Defendant John Jackovino appeals from an order of the Law Division entered on December 2, 2011, vacating the court's order administratively dismissing plaintiffs' automobile negligence, personal injury complaint and permitting reinstatement, and confirming a June 9, 2011 arbitration award of $25,000.
Defendant also appeals from a March 2, 2012 order denying reconsideration. We reverse and remand.
On or about June 26, 2009, plaintiffs filed suit for personal injuries sustained in an automobile accident occurring on June 30, 2007. On June 9, 2011, the matter was submitted to non-binding arbitration pursuant to Rule 4:21A-1(a)(1), after which the arbitrator found defendant 100% liable, and awarded plaintiffs $25,000 in damages.
By order of August 26, 2011, the court administratively dismissed the action under Rule 4:21A-6(b). Neither party had rejected the award and demanded a trial de novo within thirty days of the arbitration award. R. 4:21A-6(b)(1). Nor had either party submitted a consent order for dismissal or entry of judgment or moved for confirmation of the arbitration award and entry of judgment within fifty days of the arbitration award. R. 4:21A-6(b)(2) and (3).
On or about November 4, 20ll, plaintiffs filed a motion to vacate the administrative dismissal for failure to file a timely motion and to confirm the arbitration award. In support, plaintiffs' attorney submitted a certification that recited the procedural history and stated, in pertinent part:
6. Immediately after the arbitration award of June , 20ll counsel for the plaintiff and defendant discussed settlement of the matter leading plaintiffs' counsel to believe that the case had been settled.
7. On October 26, 2011, after dismissal of the case, defendant informed plaintiff of defendant's intention to no longer offer settlement.
Defendant opposed plaintiffs' motion. Defense counsel submitted a certification stating, in pertinent part:
5. As the undersigned and plaintiffs' attorney, Michael Alvarez, were departing from the room where arbitration was conducted, Mr. Alvarez asked me my opinion about w[h]ether the defendant's insurance carrier, New Jersey Manufacturers Insurance Company, would accept or reject that award. I informed Mr. Alvarez that I had no foresight or knowledge of what would be the carrier's inclination on the matter. I told Mr. Alvarez that my procedure was and would be to report to the carrier and await its instruction. I did not ask Mr. Alvarez what was his feeling about the award. I did not make any offer in settlement, for indeed I had no authority to make any such offer. Mr. Alvarez did not indicate to me that his clients would accept the award, but rather commented to [the arbitrator] that the award was "a little light." Plaintiffs' attorney and I had no further significant discussion at arbitration. At arbitration I said nothing to plaintiffs' attorney that would have induced any reasonable person to conclude that an offer in settlement had been made and plaintiffs' attorney said nothing suggesting that an offer in settlement had been perceived or accepted.
6. Under cover of June 10, 2011, the undersigned drafted a letter to New Jersey Manufacturers Insurance Company, reciting events at arbitration, informing the company of the award and requesting instruction on the acceptance or rejection of the award. We attach hereto as exhibit "B" a redacted copy of our report, showing the sentence in which the undersigned requested the carrier's instruction. Nowhere in that report was there an indication that the case had been settled. Should the court request a complete copy of the report for its review in camera, we shall provide that report.
7. On June 20, 2011, the undersigned telephoned plaintiffs' attorney to ask what his clients would be willing to accept in settlement. Mr. Alvarez was not in his office. I left a message identifying the case and simply asking Mr. Alvarez to call me. In that message, I said nothing about settlement or any sum that would be offered in settlement.
8. I received from Mr. Alvarez no response to that telephone call.
9. On or about August 31, 2011, we received the court's order of August 26, 2011, dismissing the case with prejudice.
10. The next communication I received from Mr. Alvarez was on October 5, 2011. He asked me what was happening with the case. He seemed confused. He asked if the case had been settled. I told him that the case had not been settled and that neither party had filed a demand for trial de novo. Mr. Alvarez informed me that his clients would accept the sum of $25,000 in settlement. He said that if the carrier would not pay that sum he would have to get "the case back on."
11. Thereafter I spoke with a representative of New Jersey Manufacturers Insurance Company. I was informed that the carrier would not pay any sum in settlement.
12. On October 18, 2011, I telephoned Mr. Alvarez, and spoke with someone else in his office, a paralegal I believe, who I informed that that carrier had declined to make an offer.
13. During that conversation that paralegal informed me that plaintiffs would accept in settlement the sum of $20,000. Thereafter I spoke with the carrier's representative and informed him of the latest demand. I was informed by the carrier that it declined to pay any sum in settlement. I conveyed that information to the man with whom I had spoken with previously in the office of plaintiffs' attorney.
14. The next communication we received from plaintiffs was the notice of motion "to vacate administrative dismissal . . ."
Defense counsel further certified that in his lengthy experience representing New Jersey Manufacturers Insurance Company and attending hundreds of arbitrations on its behalf, it was standard procedure for him to inform the carrier, by written report, of what occurred at arbitration. The carrier would consider the award and reply to him.
By order and letter opinion of December 2, 2011, the court granted plaintiffs' motion on the papers, vacating the administrative dismissal, reinstating plaintiffs' complaint, and confirming the $25,000 arbitration award. The court recited the procedural history, counsels' certifications, the parties' arguments, and Rule 4:21A-6 and Rule 4:50-1. The court concluded:
A motion to vacate an administrative dismissal for failure to confirm the arbitration award within 50 days is governed by R. 4:50-l(a) and will be granted upon a showing of excusable neglect. Here, plaintiffs' attorney certified that he believed the parties agreed to a settlement. Although defendant's attorney objects to this characterization of the discussion between him and plaintiffs' attorney following the arbitration, this Court notes that motions to vacate dismissal for failure to file a timely confirmation are viewed with great liberality [relying upon Allen v. Heritage Court Assocs., 325 N.J. Super. 112, 118 (App. Div. l999)]. Therefore, plaintiffs' motion to vacate the dismissal and confirm the arbitration award is GRANTED.
Defendant moved for reconsideration. He submitted virtually the same certification with the following additional language, in pertinent part:
14. In the certification of plaintiffs' attorney dated November 4, 2011, submitted in support of the motion, plaintiffs' attorney does not state as a fact that the case was settled. The attorney provides no description of the discussion leading to the purported settlement. The attorney does not identify the sum of settlement. In his certification aforesaid plaintiffs' attorney does not state that the undersigned extended to him expressly any sum in settlement. Plaintiffs' attorney states simply that "the plaintiffs and defendant discussed settlement of the matter leading plaintiffs' counsel to believe that the case had been settled." The attorney does not recite any purported statement by the undersigned that led to the attorney to "believe that the case had been settled."
15. At no time before the return date of the motion did plaintiffs' attorney issue to the undersigned or to anyone else, apparently including his own clients, a letter confirming a purported settlement. Plaintiffs' attorney at no time before the return date of the motion mailed to the undersigned a purported release. Plaintiffs' attorney has attached to his certification no letter issued to his clients informing them that the case had been settled. Plaintiffs' attorney in his certification offers no explanation for his failure to have his clients come to his office to subscribe a release or his failure to send a release to the defendant.
16. In his certification plaintiffs' attorney has offered no explanation for why, in the five months between the date of arbitration and the date he filed his notice of motion, the attorney did not have his clients come to the office and did not forward a release. The plaintiffs' attorney has submitted in support of his motion no certification by the plaintiffs themselves confirming that the attorney spoke to them about any proposed settlement. In his certification plaintiffs' attorney states no factual basis for a conclusion that the case had been settled but rather, the attorney uses more circumspect language, and states simply that he  "believe[d] that the case had been settled."
17. In his brief plaintiffs' attorney states that defendant "revoked its offer to settle . . ." That statement is a falsehood because there was not ever an offer in settlement. Such a statement is tellingly absent from the certification of plaintiffs' attorney, in which the attorney must declare facts, under penalty of law in the event of perjury.
l9. The [court's] opinion contains no finding of fact or determination of credibility. In the opinion the only statement of fact identified by the court is contained in the ultimate paragraph, in a single sentence: "Here, plaintiffs' attorney certified that he believed the parties agreed to a settlement."
By order and letter opinion of March 2, 2012, the court denied defendant's motion for reconsideration on the papers. The court noted defendant's arguments: (1) the court should have conducted either a plenary or summary hearing and permitted cross-examination of plaintiffs' attorney in order to adequately assess credibility and then state its findings of fact as to whether or not plaintiffs' attorney had a reasonable basis to believe the case had settled; (2) the court did not conduct a fact-sensitive analysis as required by Hartsfield v. Fantini, 149 N.J. 6ll (l997), where a party seeks relief from a failure to timely file a motion for relief under Rule 4:50-1; (3) the court did not address any of the facts presented in defense counsel's certification; and (4) the court did not state a factual basis for finding good cause or excusable neglect. The court further noted defendant's arguments that plaintiffs did not, in fact, demonstrate excusable neglect and that the court should have applied the standard of extraordinary circumstances.
The court noted plaintiffs' response: (1) the correct standard was utilized; (2) Allen was factually similar; (3) the decision of defendant, the losing party in the arbitration, not to file for a trial de novo was indicative of a belief that the case was settled; and (4) it would be prejudicial to plaintiffs' legal rights to grant the reconsideration motion.
The court concluded that the proper standard in determining the motion to vacate dismissal is that provided in Rule 4:50-l: mistake, inadvertence, surprise, or excusable neglect. The court also found any factual distinctions in Allen not to be dispositive even though in that case the parties did not dispute that they engaged in post-arbitration settlement discussions.
The court concluded:
Plaintiffs' counsel certified that he and defense counsel discussed settlement of the matter, and that it was his belief that the case had settled. While defendant has argued that such a belief is unreasonable and unsupported by the facts in this matter, the Court finds that plaintiffs' mistaken belief as to the existence of settlement, when viewed with great liberality pursuant to Allen v. Heritage Court Associates and Sprowl v. Kitselman, constitutes excusable neglect. The Court notes that defendant did not move for a trial de novo or for modification or vacation of the arbitration award within the thirty day period allowed by R. 4:21A-6(b)(1), and that defendant would be required to demonstrate extraordinary circumstances in order to so move at this time. The Court finds that allowing plaintiff an extension of time to confirm the arbitration award is equitable and comports with the judicial policy in support of the finality of arbitral awards. As such, the court finds that its Order of December 2, 2012 was neither arbitrary nor capricious. Therefore, defendant's motion for reconsideration is DENIED.
This appeal ensued.
On appeal, defendant urges that the court should have permitted cross-examination of the attorneys summarily or conducted a plenary hearing, its reliance on Allen was misplaced, and the facts were insufficient to support the orders. We agree.
Contrary to the trial judge's conclusion, the facts as presented in the certifications present a significant factually distinguishable situation from Allen. There, we held the "plaintiff's allegations concerning the parties' post- arbitration settlement discussions, which [the] defendant does not dispute, were sufficient to justify reinstatement of the complaint to enable [the] plaintiff to obtain confirmation of the award." Supra, 325 N.J. Super. at ll9 (emphasis added).
The arbitrators found the defendants 100% liable, and awarded the plaintiff $15,000 in damages. Id. at 115. Subsequent to the thirty-day period for requesting a trial de novo, the defendant sent the plaintiff a written offer to settle the case for that amount, which the plaintiff rejected and demanded an additional sum. Ibid. The court entered an administrative order of dismissal and the defendant withdrew its settlement offer. Ibid. The plaintiff promptly moved to reinstate the complaint, supported by a certification of her attorney regarding the offers and counteroffers, which the trial court denied as not demonstrating "extraordinary circumstances." Id. at 115-16. We reversed, noting the proper standard was "excusable neglect," which we were satisfied the plaintiff had demonstrated. Id. at 120. We were convinced the defendant's failure to act within the thirty-day period and its written offer of the amount of the arbitration award gave the plaintiff a reasonable expectation that the defendant would pay her at least that amount. Id. at ll9-20. Moreover, the plaintiff promptly moved for relief when she was advised the defendant was withdrawing its offer. Id. at l20.
Here, there is a significant dispute about whether or not there was a settlement. On one hand, there is a vague, conclusory statement by plaintiffs' attorney which simply states the attorneys "discussed settlement of the matter leading [him] to believe that the case had been settled" -- there is no description of any purported discussions or any statements made by defense counsel leading him to believe the case had been settled, reference to any notes or other documentation, identification of any sum to which the parties purportedly agreed in settlement, or explanation for the delay in filing the motion.
In contrast, defense counsel presented a detailed certification in opposition to plaintiffs' motion and a supplemental certification on reconsideration, advising that at arbitration he made no settlement offer to plaintiffs' attorney and "said nothing to [plaintiffs' attorney] that would have induced any reasonable person to conclude that an offer in settlement had been made and plaintiffs' attorney said nothing suggesting that an offer in settlement had been perceived or accepted." He also certified to his standard practices with his client and to subsequent conversations with plaintiffs' attorney and paralegal.
We fail to discern how the trial court could have resolved the factual disputes on the record presented and, in particular, to have summarily concluded that plaintiffs' counsel's "mistaken belief" as to the existence of a settlement constituted "excusable neglect." Accordingly, we reverse and remand for a plenary hearing for the court to take the testimony of the two attorneys and make credibility determinations and findings of fact as required by the case law. We take no position as to the merits of the case other than that the record before us does not support the orders entered by the court.
Reversed and remanded. We do not retain jurisdiction.
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