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Salazar v. MKGC Design

Superior Court of New Jersey, Appellate Division

April 8, 2019

JOSIE SALAZAR and BIJAY SHAH, Plaintiffs-Appellants,
v.
MKGC DESIGN, MILTON KISLINGER and HELEN LEU, Defendants-Respondents.

          Argued March 20, 2019

          On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-3095-16.

          Jessica A. Tracy argued the cause for appellants (Curcio Mirzaian Sirot, LLC, attorneys; Jessica A. Tracy, of counsel and on the briefs).

          Robert F. Ball argued the cause for respondents (Weber Gallagher Simpson Stapleton Fires & Newby, LLP, attorneys; Robert F. Ball, of counsel and on the brief; Mark J. Heftler, on the brief).

          Before Judges Nugent, Reisner, and Mawla.

          OPINION

          NUGENT, J.A.D.

         Plaintiffs appeal several orders culminating in the involuntary dismissal at trial of their action against defendants alleging breach of a home improvement contract and consumer fraud. The trial judge granted defendants' motion for an involuntary dismissal because plaintiffs could not prove damages. Plaintiffs could not prove damages because another judge had granted defendants' pretrial motion to bar plaintiffs' damage claims as a sanction for failing to respond to defendants' notice to produce documents.

         The judge who granted defendants' pretrial motion for sanctions, including their request to bar expert testimony, did so even though defendants had filed the motion in violation of multiple court rules. Defendants filed the motion belatedly, without demonstrating good cause to do so, and despite their never having demanded an expert report from plaintiffs. They did not certify they were not delinquent in their discovery obligations, which they were, as they had not responded to plaintiffs' discovery. They also disregarded the rule requirements that are prerequisites to having a motion for discovery sanctions listed for disposition.

         The grant of defendants' motion despite their multiple missteps resulted in the functional equivalent of a dismissal of plaintiffs' complaint with prejudice for a discovery violation; a sanction the Supreme Court has characterized as "drastic" and has cautioned against imposing if a lesser sanction will suffice. Abtrax Pharm., Inc. v. Elkins-Sinn, Inc., 139 N.J. 499, 514 (1995). Perhaps more significantly, the sanction could be viewed as the uneven-handed administration of court rules, resulting in an unjust determination and the needless expenditure and delay caused by a meaningless trial; all anathema to the purpose for which the rules exist. See R.1:1-2. We thus reverse and remand for further proceedings.

         I.

         This civil action arose out of a home improvement contract, which plaintiffs alleged defendants failed to complete, leaving them with an uninhabitable house. Plaintiffs filed a six-count complaint in August 2016, and defendants filed an answer and counterclaim the following month. Defendants served plaintiffs with requests for admission and a notice to produce documents, including documentary evidence of plaintiffs' damage claim. Defendants did not serve interrogatories. Their demand for documents did not demand experts' reports. Plaintiffs served defendant with interrogatories and a notice to produce documents. None of the parties answered discovery.

         The discovery end date was July 25, 2017. In October the parties proceeded to mandatory arbitration as required by Rule 4:21A-1(a)(3). The arbitrator rendered an award for plaintiffs. Defendants rejected the award and demanded a trial de novo, as permitted by Rule 4:21A-6(b)(1). Two weeks after arbitration and three months after the discovery end date, defendants filed the motion that resulted in the orders from which plaintiffs have appealed. Plaintiffs filed a cross-motion seeking an order "Extending Discovery with Consent of All Parties."

         Defendants entitled their motion for discovery sanctions "Motion for Plaintiffs' Failure to Serve Discovery and to Bar Plaintiffs' Late Service of Liability or Damage Experts Reports Pursuant to Rule 4:23-5(3)(b) [sic]." They supported the motion with a certification from their attorney. In his certification, the attorney did not explain why he did not file the motion before the discovery end date. He summarized the pleadings, explained plaintiffs had not responded to defendants' requests for admission and notice to produce documents, and omitted to disclose defendants had not responded to plaintiffs' interrogatories and notice to produce documents.

         Plaintiffs informed the motion judge in their cross-motion that defendants had not responded to plaintiffs' discovery demands. Nevertheless, the judge granted defendants' motion and denied plaintiffs' cross-motion. He barred plaintiffs from presenting any evidence of damages not documented during discovery, knowing plaintiffs had produced no such documentary evidence, as attested to by defendants in their motion. He gave this explanation, typed below his signature on the order: "The [discovery end date] expired on July 25, 2017. The documents sought to be introduced were only made available on the eve of arbitration. This results in substantial and undue prejudice to the [d]efendant[s]."

         The motion judge denied plaintiffs' motion for reconsideration. In the decision he delivered from the bench at the close of oral argument, the judge noted that "discovery rules are designed to reach the substantive merits of a matter rather than permitting reliance on procedural mechanisms that might result in concealment and surprise." He did not, however, cite to any rule concerning the timing of motions seeking sanctions for discovery violations, nor did he cite to the requirements of any rule authorizing such sanctions. Citing Abtrax, 100 N.J. at 521, for the proposition that the "underlying purpose [of the discovery rules] is to assure full disclosure of all material facts and documents to the parties, to the end the trial will serve the ends of justice rather than function as a trap for the unwary," the judge neither noted nor discussed defendants' violation of the same discovery rules and consequent undermining of their purpose.

         Accepting the representation of plaintiffs' counsel that his non-compliance with discovery was not intended to obfuscate the issues in the case, the judge explained:

The fact still remains that the prejudice that will result in this case, both procedurally and also substantively, particularly since the discovery end date has passed, is not persuasive to the [c]ourt to allow for reconsideration of this case or this particular matter ...

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