JOSIE SALAZAR VS. MKGC + DESIGN (L-3095-16, HUDSON COUNTY AND STATEWIDE) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3617-17T2
JOSIE SALAZAR and
BIJAY SHAH,
Plaintiffs-Appellants, APPROVED FOR PUBLICATION
April 8, 2019
v.
APPELLATE DIVISION
MKGC + DESIGN, MILTON
KISLINGER and HELEN LEU,
Defendants-Respondents.
____________________________
Argued March 20, 2019 – Decided April 8, 2019
Before Judges Nugent, Reisner, and Mawla.
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).
The opinion of the court was delivered by
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
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"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
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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
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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, 139 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.
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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
barring the late service of the liability and the damages
expert report.
For that reason, the judge denied plaintiffs' motion for reconsideration.
For reasons unnecessary to detail in this opinion, the trial proceeded,
notwithstanding the pretrial order barring plaintiffs from proving damages.
Plaintiffs developed the proofs they were permitted to present. Defendants
moved for an involuntary dismissal. The court granted the motion, based on the
absence of any damage proofs. The court also dismissed defendants'
counterclaim. This appeal followed.
II.
On appeal, plaintiffs argue it was fundamentally unfair for the motion
judge to bar them from proving damages when defendants had committed the
identical discovery violations. Plaintiffs add that the motion judge compounded
his error by overlooking defendants' non-compliance with virtually every
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prerequisite for filing a motion for sanctions based on discovery violations. In
doing so, plaintiffs argue, the court imposed a draconian sanction unaut horized
by any court rule applicable to a discovery violation. Plaintiffs also contend the
motion judge erroneously denied their motion for reconsideration, and the trial
judge erred by involuntarily dismissing their action. Last, they contend the
motion judge erred by denying their motion to extend discovery.
Defendants do not dispute that they did not comply with their discovery
obligations, nor do they dispute that they did not comply with the provisions of
certain rules concerning discovery sanctions. Rather, they argue a court has
inherent discretionary power to impose sanctions for failure to make discovery,
a power the motion judge did not abuse. They point out that plaintiffs did not
argue to the motion judge several points they now raise on appeal. Defendants
assert that because the motion judge did not abuse his inherent power to impose
sanctions for failure to make discovery, he properly denied plaintiffs' motion for
reconsideration, and the trial judge properly dismissed plaintiffs' action when
they failed to prove damages at trial.
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III.
A.
We begin our analysis with some fundamental observations. In our
judicial system, "justice is the polestar and our procedures must ever be moulded
and applied with that in mind." New Jersey Highway Auth. v. Renner, 18 N.J.
485, 495 (1955) (citing X-L Liquors v. Taylor, 17 N.J. 444, 454 (1955)). "There
is an absolute need to remember that the primary mission of the judiciary is to
see justice done in individual cases. Any other goal, no matter how lofty, is
secondary." Santos v. Estate of Santos, 217 N.J. Super. 411, 416 (App. Div.
1986).
In that vein, the Court Rules "shall be construed to secure a just
determination, simplicity in procedure, fairness in administration and the
elimination of unjustifiable expense and delay." R. 1:1-2(a). For that reason,
"[u]nless 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." Ibid.Fairness in administration of the Court Rules requires that they be applied
evenhandedly and, to the extent possible, uniformly. The current Court Rules
have been amended to achieve these, as well as other objectives:
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The project known as Best Practices, resulting in a
number of significant rule amendments effective
September 2000, was undertaken by the Conference of
Civil Presiding Judges for the purpose of attempting to
improve the efficiency and expedition of the litigation
process as well as to restore state-wide uniformity to
the wide range of discretionary and increasing disparate
judicial responses to such matters, among others, as the
resolution of discovery problems and disputes, the
fixing of trial calendars and adjournments of trial
dates. . . .
[Pressler & Verniero, Current N.J. Court Rules, cmt. 4
on R. 1:1-2 (2019) (emphasis added).]
With these principles in mind, and applying an abuse-of-discretion
standard of review, Quail v. Shop-Rite Supermarkets, Inc., 455 N.J. Super. 118,
133 (App. Div. 2018), we turn to the rules applicable to the motion at issue on
this appeal.1
B.
Rule 4:24-2 is entitled "Motions Required to Be Made During Discovery
Period." The rule provides in pertinent part: "Unless the court otherwise permits
for good cause shown, motions to compel discovery and to impose or enforce
sanctions for failure to provide discovery must be made returnable prior to the
expiration of the discovery period." R. 4:24-2(a). When defendants filed their
1
This appeal does not involve sanctions imposed for violating a discovery
order. The trial court had issued no such order.
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motion for sanctions, they offered no explanation for their failure to file the
motion within the discovery period. That they had not done so was obvious
from their certification, in which they referred to the arbitration and the
arbitrator's award. For that reason alone, the motion judge would have acted
well within his discretion by denying the motion. Carbis Sales, Inc. v.
Eisenberg, 397 N.J. Super. 64, 81 (App. Div. 2007).
On the other hand, the rule expressly permits a judge to consider a
belatedly filed motion for good cause shown. Here, however, defendants did
not even attempt to make a showing of good cause, and the trial court did not
find defendants had made such a showing.
Defendants had ample opportunity during the discovery period to compel
plaintiff to provide discovery responses. Their failure to do so, without
explanation, suggests they did not have good cause to wait until after the
arbitration to file the motion. When the motion judge granted defendants'
motion for sanctions, he emphasized the undue prejudice to them. But the
possible prejudice was not "undue." Defendants' wholesale disregard of the
discovery rules refutes that proposition. Moreover, in weighing the prejudice to
the parties, we fail to discern how the possible prejudice to defendants — who
could still offer a defense, rely on their requests for admission, and offer proofs
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to support their counterclaim — was somehow greater in magnitude than the
prejudice to plaintiffs, who the motion judge effectively barred from proving
their case at trial.
If a trial court declines to enforce a mandatory rule — particularly a rule
designed to provide uniformity and fairness in its application — the court should
explain its reasons for doing so. A brief explanation would demonstrate the
court is not acting in an arbitrary manner and would permit appropriate appellate
review.
C.
The Rules of General Application provide specific, mandatory
requirements for Civil and Family Part discovery and calendar motions. Rule
1:6-2 requires, with exceptions not applicable here, the following:
Every motion in a civil case or a case . . . involving any
aspect of pretrial discovery or the calendar, shall be
listed for disposition only if accompanied by a
certification stating that the attorney for the moving
party has either (1) personally conferred orally or has
made a specifically described good faith attempt to
confer orally with the attorney for the opposing party in
order to resolve the issues raised by the motion by
agreement or consent order and that such effort at
resolution has been unsuccessful, or (2) advised the
attorney for the opposing party by letter, after the
default has occurred, that continued non-compliance
with a discovery obligation will result in an appropriate
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motion being made without further attempt to resolve
the matter. . . .
[R. 1:6-2(c).2]
Here, defense counsel did not claim that during the discovery period he had
made a good faith effort to resolve the matter without resorting to the motion.
The rule that authorizes motions and sanctions concerning a party's failure
to make discovery is Rule 4:23-5. This rule "codified a two-step procedural
paradigm that must be strictly-adhered to before the sanction of dismissal of a
complaint with prejudice for failing to answer interrogatories or provide other
discovery can be imposed." Thabo v. Z Transp., 452 N.J. Super. 359, 369 (App.
Div. 2017) (citing St. James AME Dev. Corp. v. City of Jersey City, 403 N.J.
Super. 480, 484 (App. Div. 2008)). "These procedural requirements must be
scrupulously followed and technically complied with." Ibid. (citing Sullivan v.
Coverings & Installation, Inc., 403 N.J. Super. 86, 95 (App. Div. 2008)).
We have explained the need for trial courts to follow the procedural
safeguards of Rule 4:23-5:
2
This subsection of Rule 1:6-2 makes an exception for actions that have "been
specially assigned to an individual judge for case management and disposition
of all pretrial and trial proceedings and . . . all cases pending in the Superior
Court, Chancery Division." R. 1:6-2(b) & (c). Nothing in the appellate record
identifies this action as such a "specially assigned" case.
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The best way to foster the public confidence in our civil
courts is to decide cases on their merits. Discovery
rules are intended to create a level playing field for all
litigants and promote the resolution of civil dispute on
the merits. Judges are entrusted to ensure that these
rules are properly and fairly enforced.
[Id. at 371.]
Rule 4:23-5(a)(1) requires that a movant support the motion by an
affidavit that recites the facts of the delinquent party's default, and states that
the moving party is not in default in any discovery obligations owed to the
delinquent party. This requirement safeguards against the unilateral imposition
of sanctions upon one party when all parties have disregarded their discovery
obligations. In the case before us, defendants could not provide the required
certification because they had disregarded their discovery obligations.
Rule 4:23-5 also authorizes a court to sanction a party who has failed to
furnish an expert's report. The rule states: "The court at trial may exclude the
testimony of a treating physician or any other expert whose report is not
furnished pursuant to [Rule] 4:17-4(a) to the party demanding same." R. 4:23-
5(b) (emphasis added). Rule 4:17-4(a) provides in pertinent part: "If the
interrogatory requests the name of an expert or treating physician of the
answering party or a copy of the expert's or treating physician's report, the party
shall comply with the requirements of paragraph (e) of this rule."
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Defendants in this case invoked the authority of Rule 4:23-5(b) to bar
plaintiffs from presenting expert testimony at trial even though they had never
demanded an expert report pursuant to Rule 4:17-4(a), as they had never served
interrogatories. Defendants and the motion judge overlooked this deficiency in
defendants' motion.
The provisions of Rule 4:23-5 are intended, among other objectives, "[t]o
ensure the delinquent party is aware of its derelictions and has the opportunity
to correct them." Thabo, 452 N.J. Super. at 369. Here, like Thabo, "the system
failed because both the motion judge and the attorney representing the moving
party failed to follow the strict procedural requirements of Rule 4:23-5." Id. at
371.
IV.
We conclude by reiterating the Supreme Court's admonition that because
dismissal with prejudice is "the ultimate sanction," it should be imposed "only
sparingly" and "normally . . . ordered only when no lesser sanction will suffice
to erase the prejudice suffered by the non-delinquent party." Robertet Flavors,
Inc. v. Tri-Form Const. Inc., 203 N.J. 252, 274 (2010). Here, that admonition
was overlooked when the motion judge, in effect, dismissed plaintiffs' complaint
by precluding them from presenting proofs of damage at trial.
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Defendants' motion was filed in disregard of the following requirements ,
deficiencies readily apparent from the motion and supporting certification: (1)
the motion was filed out of time without a showing of good cause (Rule 4:24-
2(a)); (2) defendants did not certify they had made a good faith effort to obtain
the discovery before filing the motion (Rule 1:6-2(c)); (3) defendants did not
certify they were not in default in discovery obligations owed to plaintiffs (Rule
4:23-5(a)(1)); and, (4) defendants invoked Rule 4:23-5(b) to bar plaintiffs from
presenting expert testimony at trial even though defendants had never demanded
an expert as required by Rule 4:23-5(b).
Plaintiffs were subjected to the functional equivalent of the "ultimate
sanction" even though defendants had not only disregarded their own discovery
obligations, but had also disregarded in their entirety the mandatory provisions
of the rules authorizing the imposition of sanctions for failing to make
discovery. The trial court misapplied its discretion by disregarding these
mandates without an explanation for doing so and by imposing the equivalent of
the ultimate sanction when the moving parties were delinquent and lesser
sanctions would have sufficed to erase the prejudice to all parties. We thus
vacate the order precluding plaintiffs from presenting expert or other testimony
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concerning their damages. We also vacate the order denying their motion for
reconsideration, as well as the order involuntarily dismissing their case.
We remand this matter to the trial court for further proceedings. The trial
court shall conduct a conference and issue an order imposing reasonable
deadlines for completion of discovery, dispositive motion practice, and if
necessary, trial. Because defendants had a full opportunity to present their
counterclaim and have not cross-appealed from its dismissal at trial, there is no
need to litigate that issue a second time.
Reversed and remanded for further proceedings consistent with this
opinion. We do not retain jurisdiction.
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