CLAUDE OWEN, III VS. BRIAN GILLIKIN VS. CLAUDE OWEN Â CONSTUCTION, LLC, ETC. (L-4395-13, MONMOUTH COUNTY AND STATEWIDE) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R.1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-5294-14T1
CLAUDE OWEN, III,
Plaintiff-Appellant,
v.
BRIAN GILLIKIN and NORTHWEST
CONSTRUCTION, LLC,
Defendants-Respondents,
and
NORTHWEST CONSTRUCTION, LLC,
Third-Party Plaintiff,
v.
CLAUDE OWEN CONSTRUCTION, LLC,
a/k/a OWEN CONSTRUCTION,
Third-Party Defendant.
________________________________
Submitted December 19, 2016 - Decided August 2, 2017
Before Judges Nugent and Currier.
On appeal from Superior Court of New Jersey,
Law Division, Monmouth County, Docket No. L-
4395-13.
Paul V. Fernicola & Associates, LLC, attorneys
for appellant (Paul V. Fernicola, on the
brief).
Criscione, Ravala & Tabatchouk, LLP, attorneys
for respondents (Thomas F. Verrastro, on the
brief).
PER CURIAM
Plaintiff Claude Owen, III appeals from a June 12, 2015 Law
Division order dismissing his complaint with prejudice for failing
to provide discovery. For the reasons that follow, we affirm.
Plaintiff commenced this action on November 4, 2013, by filing
a complaint against defendant Brian Gillikin. Plaintiff alleged
that following Hurricane Sandy's October 29, 2012 widespread
destruction of oceanfront communities in Monmouth County, he and
Gillikin formed a joint venture to repair or rebuild damaged
properties.1 Although there was no written partnership agreement,
plaintiff alleged the parties intended to share the net profits.
According to the complaint, the parties worked on
approximately twenty construction projects which generated more
than 1.2 million dollars in revenue. Gillikin deposited the money
into the bank account of his construction company, Northwest
Construction, LLC (Northwest). The complaint alleges Gillikin
then diverted funds from the joint venture to pay expenses for his
1
The complaint alleges the parties operated as a joint venture.
Other pleadings refer to a partnership.
2 A-5294-14T1
other company, BG Electric, Inc., and to fund personal expenses.
When plaintiff requested an accounting, Gillikin refused and
vacated the business premises the parties had leased in Eatontown.
Defendant removed plaintiff's electronic equipment from the leased
premises.
Plaintiff sought damages for breach of contract, breach of
fiduciary duty, fraud, and violations of New Jersey's wage and
hour law. Plaintiff also sought an accounting.
Gillikin denied that he personally entered into a partnership
with plaintiff. He claimed that his company, Northwest, entered
into all of the contracts for repair work or rebuilding. Gillikin
further alleged that plaintiff failed to pay for his Aunt's
projects, took payments from one project for his personal use, and
may have taken payments from other customers. According to
Gillikin, plaintiff's company, Owens Construction, LLC, received
a number of payments from Northwest. These payments were either
related to the shore projects or were loans to be repaid from the
shore projects.
For more than a year after plaintiff filed the complaint, the
parties exchanged many recriminations but little discovery. They
filed numerous motions. Plaintiff amended the complaint to include
Northwest as a direct defendant, and Gillikin filed a third-party
3 A-5294-14T1
complaint against Claude Owen Construction, LLC.2 Plaintiff served
defendants with three separate notices to produce documents, and
defendants served plaintiff with one on May 8, 2014. Plaintiff's
repeated failure to produce any responsive documents ultimately
resulted in the order dismissing the complaint, which is the
subject of this appeal.
In their Notice to Produce Documents, defendants enumerated
thirty demands. The majority of the demanded documents concerned
the projects the parties allegedly worked on: contracts for the
projects, documentation of contributions of capital or labor, and
financial documents related to revenue, expenses and
distributions. Defendants also demanded documentary evidence of
the joint venture that plaintiff alleged existed. Other demands
concerned electronic information, including emails and electronic
applications providing corroboration of any of plaintiff's claims.
Another demand was for a group of documents plaintiff brought to
a meeting between the parties. Defendants also demanded that
plaintiff produce certain insurance information, financial
records, personal income tax returns, and corporate income tax
returns.
2
Other motions included motions for summary disposition and for
partial summary judgment. Each party filed a motion to disqualify
opposing counsel.
4 A-5294-14T1
Plaintiff responded to twenty-five of defendants' thirty
demands on June 16, 2014, stating "Any documents in possession of
[p]laintiff responsive to this Request shall be made available for
inspection upon the provision of reasonable notice to
[p]laintiff's attorney." In response to the remaining five
demands, plaintiff stated: "Objection: This request seeks the
production of confidential and privileged communications."3
On July 31, 2014, the trial court denied cross-motions to
proceed summarily and for partial summary judgment. The
memorializing order included a provision with discovery deadlines.
The order stated, in pertinent part:
IT IS FURTHER ORDERED that the parties
exchange all documents with the exception of
personal income tax returns and responses to
already served requests for production by
August 31, 2014, it being understood that the
volume of records may require inspection, and
other discovery to proceed per Court Rules;
and
IT IS FURTHER ORDERED THAT the parties
shall be deposed by October 17, 2014; and
. . . .
3
Although the responses purported to be those of plaintiff, the
responsive pleading did not include a certification or affidavit,
required by R. 4:18-1(c). Plaintiff was obligated to certify that
his responses were "complete and accurate based on personal
knowledge and/or upon information if provided by others, whose
identity and source of knowledge shall be disclosed." R. 4:18-
1(b)(2). Counsel for Gillikin certified in support of a subsequent
motion to dismiss that "[t]he documents were demanded for
inspection but never provided."
5 A-5294-14T1
IT IS FURTHER ORDERED that the parties
and counsel appear before this court for a
case management conference on October 6, 2014
at 9 a.m.
Plaintiff disregarded the court's order. Defendants filed a
motion, returnable December 19, 2014, to dismiss the complaint for
failure to comply with discovery. Following several adjournments,
the court entered a February 6, 2015 order granting the motion.
The order noted: "This motion is meritorious on its face and is
unopposed. It has been granted essentially for the reasons
expressed herein."
Notwithstanding this order, plaintiff continued to disregard
his discovery obligations. On April 7, 2015, defendants filed a
motion seeking an order dismissing the complaint with prejudice
pursuant to Rule 4:23-5(a)(2). In a supporting certification,
defense counsel averred defendants were compliant with discovery,
having produced the documents as ordered by the court, "including
but not limited to at least 1000 pages of accounting reports and
records on August 28, 2014, and revisions and supplements thereto
of at least 500 pages." Defendants also asserted, among other
things, they were unable to fully defend plaintiff's allegations
and were unable to "prosecute their counterclaim without this
discovery."
6 A-5294-14T1
Defendant's motion was returnable on April 24, 2015. On
April 17, 2015, plaintiff prepared a cross-motion to reinstate the
complaint, compel document production, and compel defendants'
depositions. Plaintiff supported the cross-motion with his own
certification, a certification from a former landlord, and a
certification from his attorney. Plaintiff certified that when
Gillikin left the partnership, he removed from the partners'
Eatontown office all the books and records related to the
partnership projects. Gillikin also removed all of the computers,
filing cabinets, and plaintiff's personal financial records.
Consequently, he had no documents to produce in response to
defendants' demands.
The former landlord certified that in August 2013, he
witnessed Gillikin removing "large amounts of items from the
Eatontown office." The landlord confronted Gillikin, who
"explained the [p]artnership was re-doing a kitchen and he was
loading a large truck for the renovation[s] the following day."
Plaintiff's attorney averred that after a meeting among the
parties, he "requested via correspondence additional
documentation," which defendants had not provided. He also averred
defendants had refused to appear for depositions.
Gillikin filed a responding certification. He averred that
his brother moved Northwest Construction, LLC's property out of
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the Eatontown building after that office had closed. He denied
the former landlord's assertions.
Gillikin's attorney also filed a responding certification.
He pointed out that at the hearing resulting in the July 31, 2014
order, plaintiff did not object or claim not to have documents.
Moreover, in plaintiff's response to defendants' Notice to Produce
Documents, plaintiff stated the documents in his possession
responsive to the requests would be made available for inspection.
Defense counsel also pointed out that during a conference among
the parties, he had seen plaintiff holding documents he claimed
were relevant to the case. Lastly, counsel noted plaintiff
obviously had access to his bank accounts and to his own insurance
information.
The trial court granted the motion. The court noted in the
June 12, 2015 memorializing order that plaintiff had neither
demonstrated exceptional circumstances nor provided any
explanation for failing to comply with the prior order. In a
supplemental written opinion, the court noted that "even
[p]laintiff's Motion to Reinstate failed to provide [an]
explanation as to why [p]laintiff ignored all previous Orders and
motions."
The court explained that though plaintiff contended he was
not in possession of the requested documentation, he never opposed
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the previous motions by indicating that fact. Rather, only after
plaintiff was served with a motion to dismiss his complaint with
prejudice did he claim defendant took all of the records, making
it impossible for him to comply with the court's order. To the
contrary, plaintiff had represented that documents "shall be made
available for inspection upon the provision of reasonable notice
to [p]laintiff's attorney." The court also noted:
On July 11, 2014, during a motion hearing, the
[c]ourt specifically directed [p]laintiff's
counsel to provide [p]laintiff's "boxes of
paper" for [d]efendant's inspection, as
representations were made that [p]laintiff
possessed responsive documents. Plaintiff
never complied and has not to the present
time. Plaintiff cannot allege on one hand
that he will produce documents upon reasonable
notice . . ., and then allege that [d]efendant
took all of the documents thereby making
compliance impossible. The inconsistency was,
in this [c]ourt's opinion, disingenuous.
Furthermore, [p]laintiff's counsel failed to
appear on the return date of the Motion to
Dismiss with prejudice despite being sent a
mandatory appearance letter pursuant to R[ule]
4:23-5(a)(2) dated April 15, 2015 by the
[c]ourt. It should be noted, however, that
the return date of the motion was carried
several cycles upon request and consent of the
parties until the ultimate return date of June
12, 2015.
This [c]ourt found that [p]laintiff's
continued willful noncompliance should not be
rewarded and accordingly granted
[d]efendant's Motion to Dismiss [p]laintiff's
[c]omplaint with prejudice.
9 A-5294-14T1
Plaintiff filed this appeal from the trial court's
implementing order. On appeal, plaintiff argues the trial court
abused its discretion when it dismissed his first amended complaint
with prejudice. He maintains he could not produce the documents
demanded by defendants because he did not have them; defendant
wrongfully removed them from the partnership office. Plaintiff
contends that to impose the ultimate sanction — dismissing his
complaint with prejudice — when he was guilty of neither misconduct
nor contumacious behavior is a miscarriage of justice.
Rule 4:23-5 authorizes the dismissal or suppression of a
pleading as a sanction for a party's failure to make discovery.
The rule encompasses a party's failure to respond to a Notice to
Produce documents served "pursuant to . . . [Rule] 4:18." R.
4:23-5(a)(1).
When a party files a motion under Rule 4:23-5(a)(1), "[u]nless
good cause for other relief is shown, the court shall enter an
order of dismissal or suppression without prejudice." The filing
and service of an order dismissing or suppressing a pleading
triggers legal obligations. The rule further provides in part:
Upon being served with the order of dismissal
or suppression without prejudice, counsel for
the delinquent party shall forthwith serve a
copy of the order on the client by regular and
certified mail, return receipt requested,
accompanied by a notice in the form prescribed
by Appendix II-A of these rules, specifically
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explaining the consequences of failure to
comply with the discovery obligation and to
file and serve a timely motion to restore.
[Ibid.]
"If an order of dismissal or suppression without prejudice
has been entered . . . and not thereafter vacated, the party
entitled to the discovery may, after the expiration of 60 days
. . . move on notice for an order of dismissal or suppression with
prejudice." R. 4:23-5(a)(2). The filing and service of the motion
to dismiss or suppress a pleading with prejudice triggers
additional legal obligations:
The attorney for the delinquent party shall,
not later than 7 days prior to the return date
of the motion, file and serve an affidavit
reciting that the client was previously served
as required by subparagraph (a)(1) and has
been served with an additional notification,
in the form prescribed by Appendix II-B, of
the pendency of the motion to dismiss or
suppress with prejudice. In lieu thereof, the
attorney for the delinquent party may certify
that despite diligent inquiry, which shall be
detailed in the affidavit, the client's
whereabouts have not been able to be
determined and such service on the client was
therefore not made. . . . Appearance on the
return date of the motion shall be mandatory
for the attorney for the delinquent party or
the delinquent pro se party. . . .
[Ibid.]
The delinquent party can prevent his or her pleading from
being dismissed or suppressed by filing "a motion to vacate the
11 A-5294-14T1
previously entered order of dismissal or suppression without
prejudice . . . and either [providing] the demanded and fully
responsive discovery . . . or [demonstrating] exceptional
circumstances." Ibid.
"[T]he standard of review for dismissal of a complaint with
prejudice for discovery misconduct is whether the trial court
abused its discretion, a standard that cautions appellate courts
not to interfere unless an injustice appears to have been done."
Abtrax Pharm., Inc. v. Elkins-Sinn, Inc., 139 N.J. 499, 517 (1995).
In the case before us, we cannot conclude from our review of the
record that an injustice has been done, so we heed our Supreme
Court's cautionary note.
We begin by noting nothing in the record shows that plaintiff
provided any discovery. Plaintiff now claims he has no discovery
responsive to any of defendants' document demands. That is not
what he said when he answered them. Rather, he represented he had
documents responsive to twenty-five of the demands and they could
be inspected on reasonable notice in his attorney's office. Yet,
when defendants attempted to arrange for an inspection, he thwarted
their efforts. Significantly, plaintiff did not deny during motion
practice in the trial court, nor does he deny on appeal, either
that he represented he had documents responsive to defendants'
12 A-5294-14T1
demands or that he thwarted defendants' efforts to inspect those
documents.
Additionally, in explaining the dismissal with prejudice, the
trial court noted: "On July 11, 2014, during a motion hearing, the
[c]ourt specifically directed [p]laintiff's counsel to provide
[p]laintiff's 'boxes of paper' for [d]efendant's inspection, as
representations were made that [p]laintiff processed responsive
documents." Plaintiff does not deny that this is what took place
during the hearing. Plaintiff does not claim he corrected the
court's belief — which was based on plaintiff's representations —
that plaintiff was in possession of boxes of documents.4
Lastly, plaintiff does not explain why he could not respond
to defendants' demands for some of the documents, such as insurance
information and the documents plaintiff had in his possession at
a conference among the parties.
Plaintiff's failure to provide explanations for the
inconsistencies in his statements concerning discovery was
inexcusable and untenable, as was his apparent failure to appear
in court on the return date of defendants' motion to dismiss the
complaint with prejudice. Plaintiff's inconsistent statements,
4
Plaintiff has provided neither the transcript of this hearing
nor the transcript of the final hearing when the court dismissed
the complaint with prejudice.
13 A-5294-14T1
defiance of court rules, and disregard of the trial court's order
warranted the court's characterization of his conduct as
disingenuous. Plaintiff's conduct had every appearance of being
both obstructionist and contumacious. Given these circumstances,
we cannot find the trial court abused its discretion when it
dismissed plaintiff's complaint with prejudice.
Affirmed.
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