Opinion
DOCKET NO. A-3886-12T1
04-29-2014
FREDDY VELARDE, Plaintiff-Appellant, v. RASHON CARMICHAEL and JOHN CARMICHAEL, Defendants-Respondents.
Fusco & Macaluso, LLC, attorneys for appellant (Robert S. Maider, on the brief). Stephen E. Gertler, attorney for respondents (Mark S. Hochman, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Waugh and Nugent.
On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-5565-11.
Fusco & Macaluso, LLC, attorneys for appellant (Robert S. Maider, on the brief).
Stephen E. Gertler, attorney for respondents (Mark S. Hochman, on the brief). PER CURIAM
In this automobile negligence action, plaintiff Freddy Velarde appeals from two Law Division orders. The first order denied his motion to reinstate his complaint, which the court had dismissed for lack of prosecution pursuant to Rule 1:13-7. The second order denied his motion for reconsideration of the first order. In denying plaintiff's motion to reinstate the complaint, the court found that plaintiff had not shown exceptional circumstances, the standard in Rule 1:13-7 that applies to multi-defendant cases. Because the court applied the exceptional circumstances standard in a situation in which it served no purpose, and because the court's application of that standard barred plaintiff from having his case decided on its merits, we conclude that the court abused its discretion by denying plaintiff's motions. Accordingly, we reverse and remand so that the case can be decided on its merits.
Although the record is somewhat sparse, defendants Rashon Carmichael and John Carmichael (collectively "defendants Carmichael" or "defendants") do not dispute the procedural history upon which the Law Division denied plaintiff's motions. Plaintiff was injured on December 21, 2009, when a vehicle he was driving collided with another vehicle. He sued three defendants: Rashon Carmichael, the driver of the other vehicle; John Carmichael, the owner of the other vehicle; and Geico Insurance Company (Geico), his insurer, whose policy provided personal injury protection (PIP) benefits. Plaintiff filed his complaint on December 8, 2011, two weeks before the statute of limitations would have run. See N.J.S.A. 2A:14-2.
Within two weeks of filing the complaint, plaintiff served all defendants. Geico timely answered and then moved to dismiss the complaint's PIP counts on the basis that plaintiff's PIP claim was subject to mandatory arbitration. The court granted Geico's motion in an order dated March 16, 2012. Thus, before defendants Carmichael answered the complaint, Geico was no longer a party.
Defendants Carmichael had not filed an answer by the end of May 2012, five months after they had been served, so the court issued a notice that in sixty days the complaint as to defendants Carmichael would be dismissed under Rule 1:13-7 for lack of prosecution. Rule 1:13-7 requires that such a notice be issued when an action has been pending for four months without a required proceeding having been taken. Filing an answer and entry of default are required proceedings. R. 1:13-7(b)(2) and (3). Neither had occurred here.
The notice is not included in the appellate record, but the parties do not appear to dispute that the notice was generated sixty days before the July 27, 2012 order dismissing the complaint for lack of prosecution.
After plaintiff's attorney became aware that defendants had not filed an answer, he notified defendants' insurer, who retained counsel. The insurer's attorney then asked that plaintiff's attorney sign a stipulation extending defendants' time to file an answer. Plaintiff's attorney extended that professional courtesy and signed a stipulation. Defendants sent their answer to the court with a transmittal letter dated July 25, 2012. The court apparently did not receive the transmittal letter and answer before July 27, 2012, when it dismissed the complaint for lack of prosecution.
Defendants attempted to file the answer and stipulation more than ninety-five days after they were served with process. They required a showing of good cause and a court order, rather than a stipulation enlarging the time to answer. R. 4:6-1(a) and (c). We presume the answer was rejected not for that reason, but rather because the court received it after dismissing the complaint for lack of prosecution.
The court rejected the answer, but defense counsel did not immediately inform plaintiff's counsel of that event. The parties dispute when or whether defense counsel ever notified plaintiff's counsel that the answer had been rejected. The transcript of oral argument on reconsideration discloses that plaintiff's counsel claimed he had not been notified. Defense counsel had apparently certified that his office twice telephoned someone in plaintiff's counsel's office, in September and again in November, albeit not plaintiff's attorney. Defense counsel admitted at oral argument, however, that no one from his office could have made the second alleged telephone call on November 2, 2012, because Hurricane Sandy had forced plaintiff's counsel to close the office and had disabled telephone service. Defense counsel attributed the error to a secretary.
In any event, plaintiff's counsel learned of the dismissal in December and filed a motion returnable January 25, 2013, "to restore complaint." The court denied the motion, explaining its reason in a handwritten notation below the implementing order's signature line: "Exceptional circumstances not demonstrated why in the multi-defendant case in which at least [one] defendant was served, this matter was allowed to remain dismissed for 180 days."
Plaintiff moved for reconsideration. The court denied the motion. The court rejected plaintiff's argument that reinstatement should be governed by the good cause rather than the exceptional circumstances standard, and it rejected his alternative argument, which was that defense counsel's letter transmitting the complaint for filing and his prompt filing of a motion for reinstatement after learning of the dismissal amounted to exceptional circumstances.
The court characterized as "interesting" plaintiff's argument that the exceptional circumstances standard pertaining to multi-defendant cases should not be applied because Geico had been dismissed from the case. During argument, the court asked plaintiff's counsel how he "g[o]t around" the September and November phone calls from defense counsel. In its decision, however, the court stated that even if it found defense counsel had not notified plaintiff's counsel of the dismissal, it would still have denied the initial motion to reinstate the complaint because plaintiff's counsel had not monitored his file closely enough to realize that the complaint had been dismissed. The court further explained that Rule 1:13-7 was "for case management" and "to make sure that attorneys are monitoring their cases so even . . . a one-defendant case" does not remain dismissed "for nine, ten, eleven, twelve months." Lastly, the court explained that plaintiff had not presented anything it could not have presented on the initial motion, and therefore, had not met the standard for reconsideration.
Plaintiff filed this appeal. He argues two points. First, he contends the trial court erred by requiring him to demonstrate exceptional circumstances, the standard required by Rule 1:13-7 in certain multi-defendant cases. He asserts, without dispute, that Geico had been dismissed from the action well before the court heard his motion to reinstate his complaint. Second, he contends that viewed in combination, his receipt of defendants' letter transmitting their answer for filing, the absence of notice to him that his complaint had been dismissed, and his bona fide belief that the parties were in the discovery period constitute exceptional circumstances.
In response to plaintiff's first point, defendants concede that Geico "was not an 'active' defendant when this matter was dismissed," but they argue that the clear language of Rule 1:13-7(a) requires application of the exceptional circumstances standard to the facts in this case. They submit that the rule should be interpreted and applied in accordance with its plain, unequivocal language.
As to plaintiff's second point, defendants respond that the court did not abuse its discretion when it found that plaintiff failed to establish exceptional circumstances. They claim that defendant made two "miscues": he neglected to enter a default against them and waited until ten days before the scheduled dismissal for lack of prosecution before investigating why the answer had not been filed; and he waited five months before moving to reinstate the complaint, "despite two telephone calls being made . . . to plaintiff's counsel's office." Under those circumstances, argue defendants, the court did not abuse its discretion by finding that exceptional circumstances did not exist.
We begin our analysis with our standard of review. When a plaintiff appeals from an order that has denied his or her motion to reinstate a complaint dismissed for lack of prosecution, we review the trial court's decision for abuse of discretion. Baskett v. Cheung, 422 N.J. Super. 377, 382 (App. Div. 2011).
"Judicial discretion, sound discretion guided by law so as to accomplish substantial justice and equity, is a magisterial, not a personal discretion. It is legal discretion, in which the judge must
take account of the applicable law and be governed accordingly. If the judge misconceives or misapplies the law, his discretion lacks a foundation and becomes an arbitrary act."
[Cosme v. Borough of E. Newark Twp. Comm., 304 N.J. Super. 191, 202 (App. Div. 1997) (quoting In re Presentment of Bergen Cnty. Grand Jury, 193 N.J. Super. 2, 9 (App. Div. 1984)), certif. denied, 156 N.J. 381 (1998).]
Plaintiff argues that the trial court abused its discretion when it denied his motion to reinstate the complaint under Rule 1:13-7. For that reason, we turn to the text of the rule, its purpose, and the principles governing its interpretation.
The text of Rule 1:13-7(a) requires that a court dismiss a case for lack of prosecution
whenever an action has been pending for four months . . . , without a required proceeding having been taken therein . . . , [at which time] the court shall issue written notice to the plaintiff advising that the action as to any or all defendants will be dismissed without prejudice 60 days following the date of the notice . . . unless, within said period, action specified in subsection (c) is taken. If no such action is taken, the court shall enter an order of dismissal without prejudice as to any named defendant and shall furnish the plaintiff with a copy thereof.As we previously pointed out, required proceedings under subsection (b) include filing an answer and entry of default.
The rule permits a plaintiff whose complaint has been dismissed to file a motion to reinstate the complaint. A court ruling on such a motion must decide whether the plaintiff has established good cause on one hand, or exceptional circumstances on the other, depending on the timing of the motion and the number of parties in the case:
After dismissal, . . . [i]f the defendant has been properly served but declines to execute a consent order, plaintiff shall move on good cause shown for vacation of the dismissal. In multi-defendant actions, in which at least one defendant has been properly served, the consent order shall be submitted within 60 days of the order of dismissal, and if not so submitted, a motion for reinstatement shall be required. The motion shall be granted on good cause shown if filed within 90 days of the order of dismissal, and thereafter shall be granted only on a showing of exceptional circumstances.
[R. 1:13-7(a).]
The rule "is an administrative rule designed to clear the docket of cases in which plaintiff has failed to perform certain acts." Pressler & Verniero, Current N.J. Court Rules, comment 1.1 on R. 1:13-7 (2014). The reason the rule requires plaintiff to demonstrate exceptional circumstances in multi-defendant cases is because of a management problem that arises in such cases. Pressler & Verniero, supra, comment 1.2 on R. 1:13-7. In multi-defendant cases where the complaint has been dismissed as to only one defendant,
[t]he case likely will have proceeded and discovery undertaken at least with respect to the action(s) against the remaining defendant or defendants. Thus vacation of
the dismissal has the capacity of substantially delaying all or further proceedings. To permit appropriate case management, the rule requires a consent order to be submitted within 60 days after the dismissal or, in the alternative, on motion for good cause shown within 90 days of the order of dismissal or on a showing of exceptional circumstances thereafter.
[Ibid.]
When interpreting Rule 1:13-7, a court should bear in mind that
[t]he rules in Part I through Part VIII, inclusive, shall be construed to secure a just determination, simplicity in procedure, fairness in administration and elimination of unjustifiable expense and delay. Unless otherwise stated, any rule may be relaxed or dispensed with by the court in which the action is pending if adherence to it would result in an injustice.
[R. 1:1-2.]
The general concept of relaxing a rule when adherence to it would result in an injustice takes on added significance when a rule involves case management and a party is facing the ultimate sanction of dismissal with prejudice.
"We appreciate the desirability of the prompt disposal of cases. Courts should not forget, however, that they merely provide a disinterested forum for the just resolution of disputes. Ordinarily, the swift movement of cases serves the parties' interests, but the shepherding function we serve is abused by unnecessarily closing the courtroom doors to a litigant whose only sin is to retain a lawyer who delays in filing an answer during settlement negotiations. Eagerness to move
cases must defer to our paramount duty to administer justice in the individual case."
[Ghandi v. Cespedes, 390 N.J. Super. 193, 198 (App. Div. 2007) (quoting Audubon Volunteer Fire Co. No. 1 v. Church Const. Co., 206 N.J. Super. 405, 406 (App. Div. 1986)).]
We noted in Ghandi that "[b]ecause . . . 'any rule may be relaxed or dispensed with by the court in which the action is pending if adherence to it would result in an injustice,' [R.] 1:1-2, 'courts should be reluctant to penalize a blameless client for the mistakes of the attorney.'" Ibid. (quoting Familia v. Univ. Hosp. of Univ. of Med. & Dentistry of N.J., 350 N.J. Super. 563, 568 (App. Div. 2002)). We further noted the "'general disinclination to invoke the ultimate sanction of dismissal where the statute of limitations has run.'" Ibid. (quoting Mason v. Nabisco Brands, Inc., 233 N.J. Super. 263, 268-69 (App. Div. 1989)).
With those principles in mind, we turn to the facts in the case now before us. The trial court applied the "exceptional circumstances" standard in Rule 1:13-7 at a juncture in the case when application of that standard did not serve the purpose for which it existed. Geico had been dismissed from the case ten months before the court denied plaintiff's motion to reinstate the complaint. Consequently, the management problem the rule was intended to address — delay of all further proceedings against defendants that have participated in the case and taken discovery — did not exist.
Nor was the rule's implicit purpose of prompting counsel to take action or risk dismissal of a complaint served here. Although plaintiff's counsel was arguably not very diligent in either contacting defendants' insurance company about filing an answer, or alternatively entering a default, he believed that an answer had been filed when he received a copy of defense counsel's transmittal letter to the court enclosing the answer.
Moreover, there is no evidence defendants were prejudiced. Although plaintiff's counsel made some comments at oral argument that defense counsel claimed they could not find their clients, nothing in the record suggests that had anything to do with the acts or omissions of plaintiff's counsel, or any delay caused by those acts or omissions. Defense counsel did not press that position at oral argument on the motion for reconsideration, and has not asserted it in this appeal.
In terms of judicial discretion, we can discern nothing fair or equitable that was accomplished by applying the exceptional circumstances standard in this case. See Cosme, supra, 304 N.J. Super. at 202; Ghandi, supra, 390 N.J. Super. at 197-98. Defendants had delayed answering the complaint for seven months. When their answer was rejected, they did not notify plaintiff for at least another two months, assuming that their representation about the first phone call in September was accurate. The ultimate result was that defendants, who inexplicably delayed filing an answer for seven months, had a complaint against them dismissed with prejudice before filing a responsive pleading because plaintiff's attorney had mistakenly believed that they had filed their answer before the complaint was dismissed. Significantly, the statute of limitations had run.
Although not entirely clear from the record before us, it does not appear that the certifications defendant submitted in opposition to plaintiff's motion were based on first-hand knowledge as required by Rule 1:6-6. Rather, it appears that a lawyer or lawyers in defense counsel's office filed certifications made not on first-hand knowledge, but on the activities of secretaries who did not submit the certifications. In fact, at oral argument, defense counsel explained the inadvertent misrepresentation concerning the November 2 phone call by informing the court: "I went back and spoke to the secretary who gave me the information which we relied on in our opposition. And she made a mistake and she did not call on November 2, because our office was also closed."
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Having considered all of the foregoing circumstances, we are convinced that even if the exceptional circumstances standard applied, and even if plaintiff did not meet it, the court abused its discretion by failing to relax Rule 1:13-7 in the interest of justice. R. 1:1-2. The court, in effect, imposed the ultimate sanction on a plaintiff whose attorney claimed to have been misled by copies of documents he had received from defendants' attorney, which had also been sent to the court, purportedly filing an answer. More importantly, the court applied the exceptional circumstances standard in an instance where it had no relationship to its purpose. We fail to discern how dismissing a case under those circumstances constituted the exercise of "'sound discretion guided by law so as to accomplish substantial justice and equity.'" Cosme, supra, 304 N.J. Super. at 202 (quoting In re Presentment of Bergen Cnty. Grand Jury, supra, 193 N.J. Super. at 9). Rather, we conclude that adherence to Rule 1:13-7 in those circumstances "would result in an injustice." R. 1:1-2. Accordingly, we reverse and remand this matter so that defendants may file an answer, the parties may complete discovery, and the parties may have a just resolution of this action on its merits.
Reversed and remanded.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION