December 28, 2012
NEW JERSEY MANUFACTURERS INSURANCE COMPANY, PLAINTIFF-APPELLANT,
HELMRICH TRANSPORTATION SYSTEMS, INC., H. ALFRED KING, JR., INDIVIDUALLY, DEFENDANTS-RESPONDENTS. BURLINGTON COUNTY BOARD OF CHOSEN FREEHOLDERS, INTERVENOR-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-1021-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 19, 2012
Before Judges Messano, Lihotz and Kennedy.
This appeal presents a procedural quagmire almost wholly the making of plaintiff, New Jersey Manufacturer's Insurance Co. (NJM). We begin our opinion by setting forth the history of the litigation, and by stating clearly that our decision is based upon the narrow grounds set forth hereafter. We do not reach the merits of this dispute, leaving NJM the opportunity to properly challenge the essential holding of the trial court in future litigation.
On October 17, 2008, NJM filed a verified complaint and order to show
cause in Mercer County naming Helmrich Transportation Systems, Inc.,
and its principal, Alfred King, Jr., as defendants.*fn1
The complaint alleged violations of the New Jersey Insurance
Fraud Prevention Act, N.J.S.A. 17:33A-1 to -30, and the Consumer Fraud
Act, N.J.S.A. 56:8-1 to -195, and asserted the common law claim of
replevin. The complaint stated that defendant, pursuant to
instructions from the Burlington County Prosecutor's Office (BCPO),
had towed and stored a motor
vehicle, owned by Paul Fontenot (the Fontenot vehicle) and insured by
NJM. The vehicle, which had been reported stolen by Fontenot, was
involved in a traffic accident injuring a police officer, and the BCPO
was investigating the incident.
NJM contacted defendant and advised that neither Fontenot nor NJM consented to, nor would be responsible for, storage fees incurred during the investigative impoundment. Defendant moved for a change of venue, and NJM consented and agreed to "resolve the replevin aspect of the case." An order entered March 18, 2009, reflected settlement of the replevin claim, transfer of the complaint to Burlington County, and permitted defendant to file an answer within thirty days. It also provided that the "interim agreement" was reached without prejudice to NJM's other claims or any potential claims filed by defendant.
Defendant moved to dismiss the complaint and filed a counterclaim, claiming it was owed additional monies associated with the Fontenot vehicle and two other vehicles (the Riegel and Levy vehicles), which were also insured by NJM and impounded by the Camden County Prosecutor's Office (CCPO).*fn2 The judge denied defendant's motion to dismiss, but ordered that NJM amend its complaint within forty-five days of May 5, 2009. NJM failed to do so, and, on June 30, 2009, the judge dismissed the complaint and ordered the matter to proceed only on defendant's counterclaim.
The counterclaim was administratively dismissed, and, when defendant moved for reinstatement, it also sought entry of default against NJM. In a letter to the court dated December 11, 2009, NJM did not oppose reinstatement, seeking only the opportunity to file an answer to the counterclaim because of the "considerable amount of confusion over the procedural status of the case . . . ." NJM never sought to reinstate its complaint, which had been dismissed not on the merits, but for failure to file an amended complaint. Although the record does not include an order permitting NJM to file its answer to the counterclaim, the relief was apparently granted because NJM's answer was filed on February 25, 2010. NJM never asserted a claim against the BCPO, the CCPO or any other parties.
On May 17, the judge entered an order reinstating defendant's counterclaim. A series of emails in the record reflect another interim settlement agreement. Essentially, NJM agreed to pay defendant for the towing and other related charges involved with the "three vehicles." NJM further agreed to abide by defendant's "fee schedule" for the remainder of 2010, "as long as [defendant] can demonstrate that its fee schedule was filed and approved by the local governmental agency requesting the towing services." According to defense counsel, what remained unresolved was defendant's counterclaim relating to fees for "storage subsequent to release from impoundment" and interest. (Emphasis added).
A case management order was entered on October 12, 2010, which permitted additional discovery requests to be served and set a discovery end date of October 29. The order also set December 10 as the date for the filing of summary judgment motions.
NJM timely moved for summary judgment. In his certification in support of the motion, NJM's counsel argued that as to the Fontenot vehicle, NJM was not responsible for storage charges during the time the car was held in defendant's facility pursuant to orders from the BCPO, and after NJM and its insured sought its release. As to the Levy vehicle, NJM agreed to pay storage charges for "a reasonable amount of time," four days, but not for storage "that accrue[d] during the time that the vehicle was stored at law enforcement's direction." As to the Riegel vehicle, NJM offered only to pay for the towing charges, and not "for the storage charges incurred as a result of the impoundment by the [CCPO]." NJM never claimed that defendant's fee schedule was not properly adopted or approved by any government entity or agency involved in the impoundment of the three cars.
NJM argued two legal grounds in support of the motion. First, citing our decision in Harvey v. Twp. of Deptford, 402 N.J. Super. 156 (App. Div.), certif. denied, 197 N.J. 16 (2008), it contended that N.J.S.A. 40:48-2.50 limited the fees that defendant could charge a governmental entity to $400, and, by analogy, this limitation applied to the "owner of the vehicle or its insurer."*fn3 Second, NJM contended that pursuant to the New Jersey Garage Keeper's Lien Act, N.J.S.A. 2A:44-20 to -31 (the Lien Act), defendant was not entitled to maintain possession of the vehicles after a reasonable offer of payment for storage fees was made, and possession of the vehicle was demanded by its owner or his or her representative.
Defendant cross-moved for summary judgment. In support, King certified that defendant had towing contracts with the BCPO and the CCPO, both approved by the "contracting government entity," which included "a uniform rate sheet" on file with the Department of Consumer Affairs. Attached as an exhibit was defendant's statement of rates.*fn4
King certified that the Fontenot vehicle was released from impoundment on August 21, 2008, approximately two months after defendant recovered the car and stored it at the direction of the BCPO. It remained in storage until February 2, 2010, while the litigation ensued. Defendant was owed $7350 in fees. The Levy vehicle was recovered on October 15, 2008, at the request of the CCPO and released by the CCPO on November 3, 2008. It remained in defendant's possession because NJM refused to pay $26,607.90 in fees. The Riegel vehicle was recovered on October 28, 2008 at the request of the CCPO and released from impoundment on November 4, 2008. It, too, had not been removed by NJM or its owner pending payment of $25,827.90 in fees.
Defendant argued that N.J.S.A. 40:48-2.54 governs fees that may be assessed whenever the vehicle's removal and storage was "non-consensual." That statute provides:
a. The governing body of a municipality or county which requires the towing and storage of motor vehicles without the consent of the owners of those vehicles shall adopt an ordinance or resolution . . . setting forth a model schedule of towing and storage services which they require and the rates therefore, which rates shall be based on the usual, customary and reasonable rates of operators towing and storing motor vehicles in the municipality or county, as applicable.
b. The governing body of every municipality or county setting forth a schedule of services and rates pursuant to subsection a. of this section shall implement a procedure to receive complaints and resolve disputes arising from the towing and storage of motor vehicles required by that municipality or county without the consent of the owner. [N.J.S.A. 40:48-2.54.]
Defendant argued that, because N.J.S.A. 40:48-2.50 capped fees that may be charged a governmental entity, the Legislature impliedly intended that owners or their insurers were responsible for any additional fees that arose from non-consensual towing and storage.
Defendant also cited N.J.S.A. 39:10A-1, enacted after the events involved in this case. The statute provides that storage fees chargeable to the owner or secured party "[w]hen a vehicle is abandoned due to the death or incapacitation of the driver or any passenger" are limited to $100 for the first seventy-two hours. Defendant argued that this "remedial legislation" would have been unnecessary if the Legislature intended to make local governmental entities responsible for the charges in the first instance.
On January 5, 2011, Burlington County (the County) moved to intervene; the motion was unopposed and granted. Although it was not named as a party by either NJM or defendant, the County asserted defenses to defendant's counterclaim and a cross-claim against NJM for indemnification. One month later, the County cross-moved for summary judgment.
Oral argument took place on April 8, 2011. The judge issued a written opinion, labeled "a tentative disposition," that accompanied three orders entered on April 11. The judge noted the issue was one "of first impression." Citing N.J.S.A. 40:48-2.54(a), she concluded that the statute "impl[ies] that motor vehicle owners, and their insurers as subrogees, can be required to pay towing and storage fees as the result of non-consensual tows[,]" which she characterized as "no different from storage and towing fees incurred while a vehicle is being repaired" because they are "all just part of the incident involving the insured vehicle." The judge rejected NJM's argument that it should not be responsible for fees incurred because the cars were "impounded for ongoing investigative purposes." She noted, "[I]t would appear critical for the police to investigate issues and not be subject to artificial deadlines imposed by insurers . . . . Each investigation may vary in timeframe." The orders denied NJM's motion for summary judgment, granted the County's motion and granted defendant summary judgment for the amounts that had accrued through January 7 as claimed in King's certification.
Twenty-one days later, on May 2, defendant moved to amend the judgment to include additional storage charges that accrued after King's certification. On May 19, NJM filed opposition and moved for reconsideration. NJM argued that the judge failed to address applicability of the Lien Act, which entitled it to file suit to regain possess of the Fontenot vehicle after its reasonable offer of payment was rejected. Since it filed the replevin action, which was settled, NJM argued that defendant was not entitled to any additional monies because it failed to mitigate its damages by refusing to release the vehicles upon NJM's demand.
NJM further contended that the judge misconstrued its argument in support of summary judgment. NJM was not contesting the right of law enforcement to impound vehicles for investigation; rather, NJM was "only disputing [defendant's] right, as an agent of the prosecutors' offices, to assess impound-related storage charges against the motor vehicle owners or their insurers." NJM contended it was fundamentally unfair to charge its insured these fees.
Oral argument was held on July 8. The judge issued another "tentative decision" that accompanied orders she issued on July
11. The judge noted she had "in fact consider[ed], and reach[ed] a decision on, the threshold issue of whether a vehicle owner . . . can be required to pay towing and storage costs associated with non-consensual tows . . . ." She concluded reconsideration was "not warranted on the basis . . . that the Court overlooked or failed to decide." The judge further noted that NJM's argument was "based on . . . fundamental fairness," and she had "examined th[e] issue in depth, though without the aid of much legal authority, and [NJM] ha[d] simply reiterated the arguments made previously."
The judge also addressed NJM's argument under the Lien Act. She concluded that "[t]here is no basis for reconsideration because [NJM] failed to file a suit for . . . possession."*fn5 The judge denied NJM's motion and granted defendant's motion to amend the order granting summary judgment to include "storage charges on the Levy and Riegel vehicles through April 14, 2011, because that is when the vehicles were actually released . . . . "*fn6
On August 1, 2011, defendant moved for sanctions pursuant to Rule 1:4-8.*fn7 On August 25, NJM filed opposition and again cross-moved for reconsideration pursuant to Rule 4:49-2. NJM argued that reconsideration was appropriate because defendant's actions "deprived . . . plaintiff and its insureds of procedural and substantive due process, equal protection and other privileges secured by the Constitution and laws of the United States and . . . the State of New Jersey." NJM contended that defendant and the County "failed to come forward with any competent evidence of . . . compliance with N.J.S.A. 40:48-2.54(b)[,]" requiring adoption by the local public entity of a procedure to receive complaints and resolve disputes over towing and storage fees. NJM claimed that reconsideration was appropriate because it had discovered "controlling legal authorities and principles which call into serious question the constitutionality of defendants' practices and procedures . . . ." In support of this claim, NJM cited a series of federal court decisions, the most recent of which was issued in 1978.
Defendant filed opposition to the cross-motion, NJM filed a reply and oral argument was again held on October 21, 2011.*fn8 The judge denied defendant's motion for sanctions. Referencing NJM's "ubiquitous motions for reconsideration," the judge concluded the latest motion was an "attempt by NJM to fix some problems in the way that the case came to the Court. And a second motion for reconsideration [wa]s not the vehicle to do that." The judge denied the motion concluding she had "considered and decided this case based upon this record."
The judge again issued a written "tentative disposition" and, on October 21, she entered an order reflecting her decision. This appeal was filed on December 2, 2011.
After the appeal was submitted to this panel for decision, NJM filed a motion seeking "reconsideration" and requesting oral argument. We denied that motion.
In its notice of appeal, NJM seeks review of orders from four dates: the orders of April 11, 2011 (denying NJM summary judgment and granting defendant and the County summary judgment); the orders of July 11, 2011 (granting defendant's motion for reconsideration to include additional charges and denying NJM's motion for reconsideration); an order entered on August 10, 2011 (which is not in the record); and the order dated October 21, 2011 (denying NJM's second motion for reconsideration). We concluded that the only order properly under review is the last one.
Rule 2:4-1 provides that appeals from final judgments must be filed within forty-five days "of their entry." That time limit is tolled by "the timely filing and service of a motion to the trial court . . . for rehearing or reconsideration seeking to alter or amend the judgment or order pursuant to R. 4:49-2."
R. 2:4-3(e) (emphasis added). "The remaining time shall again begin to run from the date of the entry of an order disposing of such a motion." Ibid.
Thirty-eight days elapsed from the April 11, 2011 orders granting defendant and the County summary judgment until May 19, when NJM first sought reconsideration. Rule 4:49-2 requires a motion for reconsideration be filed within twenty days "after service of the judgment or order . . . ." The record is unclear as to when NJM received the April 11 orders, but it seems unlikely that the first motion for reconsideration was timely-filed. "[A]n untimely motion to reconsider does not" toll the time limits of Rule 2:4-1. Eastampton Center, LLC v. Planning Bd. of Eastampton, 354 N.J. Super. 171, 187 (App. Div. 2002).
Assuming arguendo the motion for reconsideration was timely-filed,
only seven days remained in the forty-five-day timeframe during which
NJM could perfect its appeal. The order denying NJM's first motion for
reconsideration was entered on July 11, 2011. NJM did not file an
appeal within seven days thereafter. In fact, it waited until August
25 to file its second cross-motion for reconsideration.*fn9
Therefore, the only order properly before us is the October 21, 2011 order denying NJM's
second request for reconsideration.
The denial of a motion for reconsideration rests within the sound discretion of the trial judge. Fusco v. Bd. of Educ. of Newark, 349 N.J. Super. 455, 462 (App. Div.), certif. denied, 174 N.J. 544 (2002). "Motions for reconsideration are granted only under very narrow circumstances[.]" Ibid. We have long recognized that:
Reconsideration should be used only for those cases which fall into that narrow corridor in which either (l) the [c]court has expressed its decision based upon a palpably incorrect or irrational basis, or (2) it is obvious that the [c]court either did not consider, or failed to appreciate the significance of probative, competent evidence. [Ibid. (quoting D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)).]
NJM's second motion for reconsideration urged the judge to consider a completely different basis for setting aside her original grant of summary judgment. It argued that defendants failed to establish compliance with N.J.S.A. 40:48-2.54(b), and that such failure raised constitutional due process issues. NJM characterized the federal precedent allegedly supporting its claim as newly-discovered.
But reconsideration is not a procedural device that permits "a second bite of the apple." Fusco, supra, 349 N.J. Super. at 463. The federal precedent cited by NJM was more than thirty-years old and could have been discerned and argued much earlier in the litigation. The decision to employ this different tack, e.g., a constitutional challenge, was all that was "newly-discovered."
The judge properly concluded that NJM's decision to invoke constitutional defenses to the counterclaim based upon decades-old precedent provided no basis for reconsideration. In this regard, she did not mistakenly exercise the broad discretion accorded to her. We find no reason to reverse the order denying NJM's last motion seeking reconsideration.