Haylee Olsen v. Zaman Pizza Inc ( 2024 )

NOT FOR PUBLICATION WITHOUT THE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-3628-22
HAYLEE OLSEN,
Plaintiff-Respondent,
v.
ZAMAN PIZZA INC d/b/a
DOMINO'S, MSJ ENTERPRISES
INC. d/b/a DOMINO'S,
DAVANTE PIDILLA,
NICOLETTE OLIVER, ISH (last
name currently unknown),
VICTORIA COLLINS, ANNETTE
BRAILSFORD, and GULUM (last
name currently unknown),
Defendants-Appellants.
______________________________
Submitted January 22, 2024 – Decided February 22, 2024
Before Judges Berdote Byrne and Bishop-Thompson.
On appeal from the Superior Court of New Jersey,
Law Division, Camden County, Docket No. L-1431-
21.
Andaiye Al-Uqdah, attorney for appellant.
McOmber, McOmber & Luber, PC, attorneys for
respondent (Matthew Allen Luber, on the brief).
PER CURIAM
Defendants1 appeal the trial court's denial of a motion to vacate default
judgment, arguing the trial court erred in denying their motion and failing to
find excusable neglect because it erroneously found defendants were lawfully
served with the summons and complaint. They also argue, even if excusable
neglect is not found, the damages portion of the case should be retried because
defendants have meritorious defenses. Having reviewed the record in light of
the applicable legal principles, we discern no errors in the trial court's findings
that defendants were served with the complaint, had notice of the complaint in
June 2021, and failed to establish excusable neglect. Accordingly, we affirm
the denial of the motion to vacate default judgment. However, we conclude the
trial court failed to make sufficient findings with respect to whether defendants
were properly served with notice of the proof hearing, and with respect to the
1
Plaintiff's complaint is filed against Zaman Pizza, Inc., (Zaman) d/b/a
Domino's, MSJ Enterprises Inc. (MSJ) d/b/a/ Domino's, and several individual
defendants, and alleges both Zaman and MSJ have the same registered place of
business. Although unstated by any party, it appears the two franchises are
owned by the same franchisee. Defendants Zaman and MSJ filed one brief on
behalf of both entities and do not distinguish between the two. The individual
defendants did not participate in the proof hearing or this appeal. We use
"defendants" to refer to Zaman and MSJ collectively.
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elements of plaintiff's claims and damages. We, therefore, reverse and remand
for a new proof hearing.
I.
We glean the following facts from the record. Plaintiff was employed
full-time as a customer service representative at Zaman in Millville beginning
in 2019. Plaintiff was later promoted to assistant manager at the same time as
another employee, defendant Davante Pidilla (Pidilla). Plaintiff alleges, while
the two were completing the paperwork for their promotions, Pidilla showed
plaintiff a picture of his genitalia on his phone.
Plaintiff reported the incident to defendant, Victoria Collins (Collins), a
general manager at Zaman. Collins told plaintiff she needed to report the
incident to the district manager, defendant "Ish." Plaintiff reported the incident
to Ish and provided a written statement. After doing so, plaintiff alleges Zaman
launched a "retaliatory campaign" against her by 1) immediately informing her
that her promotion to assistant manager was placed on hold; 2) reducing
plaintiff's hours by more than half; and 3) no one at the company would talk to
her. Ish allegedly told plaintiff she had "no right to report [Pidilla]," that she
"should have kept it to [herself]."
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Pidilla was later transferred to a Philadelphia location. The hold on
plaintiff's promotion continued because Ish allegedly needed to "build trust in
[her]." Nicolette Oliver, another general manager and named defendant, later
said "Ish just wants everything to cool down."
On September 24, 2020, plaintiff broke her hand in an accident unrelated
to work. The next day, Collins granted plaintiff leave to undergo surgery.
Plaintiff underwent surgery on October 2, 2020. On October 11, 2020, while
still on medical leave, a co-worker notified plaintiff that she had been fired.
Plaintiff texted Collins seeking reassurance she still had her job and Collins
responded "I don't see why not. Do you still want your job?" However, on
October 29, 2020, when plaintiff informed Collins she was ready to return to
work, Collins told plaintiff the Millville store was overstaffed , and she would
need to transfer to another store or be "laid off."
On November 12, 2020, plaintiff told Collins she would accept a position
at a different location. On November 16, 2020, she began work as an assistant
manager at the Bridgeton location, owned by MSJ. Shortly after beginning
work, plaintiff realized her co-worker, defendant Annette Brailsford, was
remaining clocked in overnight to receive extra compensation. Plaintiff reported
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the issue to defendant "Gulum," who told plaintiff to "ignore it and keep [her]
mouth shut."
After reporting Brailsford, plaintiff's hours were reduced to eighteen hours
per week and her access to employees' timesheets was revoked. Plaintiff began
work as a general manager around March or April 2021. Soon thereafter,
plaintiff filed her complaint against defendants. Plaintiff alleges she was
harassed and threatened in an effort to have her dismiss the litigation until she
was constructively discharged.
Plaintiff's complaint filed May 13, 2021, alleged violations of New
Jersey’s Law Against Discrimination (NJLAD) N.J.S.A. 10:5-1- to -50, and the
Conscientious Employee Protection Act (CEPA) N.J.S.A. 34:19-1- to -14.
On June 16, 2021, Collins accepted service of the summons and complaint
on behalf of Zaman and MSJ at the 1101 North 2nd Street, Millville restaurant.
Both Zaman and MSJ have the same headquarters address registered with the
state: 335 Evesham Avenue, Lawnside, New Jersey.
Zaman and MSJ failed to answer or file a responsive pleading, which
resulted in the entry of default against them on October 1, 2021. On April 1,
2022, default judgment was entered against Zaman and MSJ as to liability only.
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On September 27, 2022, counsel for plaintiff sent notice of the proof
hearing to Zaman and MSJ at 1101 North 2nd Street, Millville by registered
mail, return receipt requested. The trial court conducted a proof hearing on
October 14, 2022, finding in favor of plaintiff.
At the proof hearing, the trial court found plaintiff met her prima facie
burden. It found plaintiff's testimony credible, and there was "no doubt in the
court's mind that [the Millville location's] . . . conduct certainly constitutes . . .
discrimination, discriminatory conduct, sexual harassment, and further tha t the
failure to then promote plaintiff because she reported inappropriate conduct
would constitute retaliation." The trial court did not find "sufficient evidence"
that the actions of the Bridgeton store, MSJ, were "something likely to constitute
a violation of law or some substantial violation being reported of the assistant
manager."
The trial court awarded $3,640 for the ten weeks plaintiff had her hours
reduced, $75,000 in emotional damages, and $75,000 in punitive damages. On
November 18, 2022, the court further awarded $3,155.30 in pre-judgment
interest, $38,021.25 in attorneys' fees, and $1,330.59 in costs and expenses.
Thereafter, on April 11, 2023, plaintiff filed a writ of execution, which
was granted, and a motion to turnover funds. In response, on June 15, 2023,
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defendants filed opposition to the motion to turnover funds and a cross-motion
to vacate the default judgment, claiming, for the first time, they had no timely
knowledge of the claims because they were not properly served with the
summons and complaint or notice of the proof hearing.
The director of operations for Zaman and MSJ, Sammia Ashraf (Ashraf),
filed an affidavit in support of defendants' motion. Ashraf certified any legal
correspondence concerning Zaman and/or MSJ "should be" directed to her. She
stated Collins resigned from her employment "two to four" weeks after Collins
accepted service of plaintiff's complaint and did not forward the papers to Ashraf
before she left. Collins was rehired in January 2023, at which time she admitted
to Ashraf she received the complaint. Ashraf certified "[o]n March 10, 2022,
[she] received the first papers relating to this case, with the title 'entry of
default.'" Ashraf certified she forwarded the order to the company's insurance
broker to see if it would provide coverage but did not follow up. She did not
hear from the broker until July 7, 2022, when she was told coverage was denied,
and the matter was moot because the complaint had been dismissed. Ashraf
claims the insurance broker made that statement in error. The insurance broker
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did not submit an affidavit. 2 Ashraf claimed defendants did not receive notice of
the proof hearing because they were sent to the Millville location and likewise
"not elevated" to her.
The trial court heard oral argument on the motion to vacate default
judgment. During the hearing, it listened to a recording of Ashraf discussing
the lawsuit with plaintiff in June 2021 to determine if defendants had actual
notice of the lawsuit. Ultimately, the trial court denied defendants' motion,
finding:
[T]he certification of Sammia Ashraf, which denies
knowledge of the suit until March 10 of 2022, [is]
inconsistent with the recorded telephone conversation
from June of 2021 and the text messages. Ms. Ashraf
called plaintiff asking about having sued defendant . . .
and asked another manager to convince plaintiff to drop
the lawsuit in exchange for payment of $1500.
Ms. Ashraf acknowledges being aware of the
entry of default as early as March 10, 2022. But other
than sending information to the insurance broker in
March of 2022, which was nine months after that
telephone call, no other actions were taken until either
– it looks like December of 2022. At this point when
counsel filed a notice of appearance in this case on . . .
2
During the motion hearing, counsel for defendants referenced a certification
submitted by the insurance broker but the trial court stated it was not filed with
the motion. No certification, other than Asraf's, has been included in the record
on appeal.
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February 27 . . .. , 2023, judgment had been entered four
months earlier.
....
But it wasn't until the current motion for the turnover
of levied funds was filed that counsel moved to set
aside the judgment.
....
[T]he problem where I see an issue is the inability to
establish inexcusable neglect here. . . . [T]here were
what could best be . . . described as extraordinary delays
by defendant[s] here. I do find, based upon the
recordings, defendant[s] w[ere] aware of the suit in
June of 2021, two years before the motion to vacate
default judgment was filed. Further, defendant[s]
w[ere] aware in March of 2022, [fifteen] months before
the motion was filed, that default had been entered.
Plaintiff provides appropriate documentation
reflecting notification to defendant[s] of the notice of
default, the scheduling of the proof hearing, and the
notice of the entry of default. Defendant[s'] response
to this lawsuit can best be described as lackadaisical
and the antithesis of excusable neglect. Rather the
conduct here, defendant[s] simply chose to ignore the
suit, hoping it would go away. And that obviously did
not occur.
Defendants' appeal followed.
II.
Pursuant to Rule 4:50-1(a), a default judgment will remain undisturbed
unless the defendant shows the failure to appear or otherwise defend was due to
excusable neglect under the circumstances and the existence of a meritorious
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defense to both the cause of action and damages. U.S. Bank Nat’l Ass’n v.
Guillaume, 209 N.J. 449, 468-69 (2012). Excusable neglect has been defined as
"something the parties could not have protected themselves from during the
litigation." Romero v. Gold Star Distrib., LLC, 468 N.J. Super. 274, 298 (App.
Div. 2021) (emphasis omitted). Corporations are held to a high standard in this
regard because they are "entities that should expect to be sued from time to
time," and they "have an obligation to institute procedures within their
organization for receiving and responding to lawsuits." Id. at 298 (quoting
Davis v. DND/Fidoreo, Inc., 317 N.J. Super. 92, 98 (App. Div. 1998)).
In granting a motion to vacate, trial courts are to exercise their sound
discretion. Id. at 293 (quoting Coryell, L.L.C. v. Curry, 391 N.J. Super. 72, 79
(App. Div. 2006)). Absent an abuse of discretion, their decisions will not be
disturbed by a reviewing court. Ibid. (quoting Hous. Auth. of Morristown v.
Little, 135 N.J. 274, 283 (1994)).
Rule 4.50-1 grants courts the power to relieve a party from a final
judgment under six conditions: a) "mistake, inadvertence, surprise, or
inexcusable neglect," b) newly discovered evidence, c) fraud, misrepresentation,
or other misconduct, d) when the judgment is void, e) when the judgment is
satisfied, released, or discharged, and f) "any other reason justifying relief." A
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motion to vacate pursuant to Rule 4:50-1(a) must be brought "within a
reasonable time" but not later than one year after judgment. R. 4:50-2.
When evaluating motions to vacate judgment, courts weigh a defendant's
promptness in moving to vacate against the prejudice to the plaintiff if default
is vacated. Reg'l Constr. Corp. v. Ray, 364 N.J Super. 534, 543 (App. Div.
2003). Defendants argue that by not receiving proper notice, they have
demonstrated excusable neglect. Defendants rely upon Davis v. DND/Fidoreo,
Inc. in support of their argument. There, we applied Rule 4:50-1(f) to conclude
the trial court mistakenly used its discretion to deny defendant's motion to vacate
default judgment because there was "at least some doubt as to whether the
defendant was in fact served with process" after an assistant manager failed to
forward suit papers to the appropriate person. Davis, 317 N.J. Super. at 100(quoting Goldfarb v. Roeger, 54 N.J. Super. 85, 92 (App. Div. 1959)).
Defendants argue they should have been afforded similar liberality.
A. Service upon defendants.
Service upon a corporation is effected pursuant to Rule 4:4-4(a)(6) upon:
any officer, director, trustee or managing or general
agent, or any person authorized by appointment or by
law to receive service of process on behalf of the
corporation, or on a person at the registered office of
the corporation in charge thereof, or, if service cannot
be made on any of those persons, then on a person at
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the principal place of business of the corporation in this
State in charge thereof, or if there is no place of
business in this State, then on any employee of the
corporation within this State acting in the discharge of
his or her duties . . . .
The service of process rules require a plaintiff provide "notice reasonably
calculated, under all the circumstances, to apprise interested parties of the
pendency of the action and afford them an opportunity to present their
objections." Davis, 317 N.J. Super. at 97 (quoting Mullane v. Cent. Hanover
Bank & Tr. Co., 339 U.S. 306, 314 (1950)). "[I]t is sufficient if the [process
server] serves a person whom he can reasonably expect will deliver the process
to the appropriate person." Id. at 98. However, a default judgment will be
considered void when a substantial deviation from service of process rules has
occurred, casting doubt on proper notice. See Sobel v. Long Island Ent. Prods.,
Inc., 329 N.J. Super. 285, 293-94 (App. Div. 2000); see also Rosa v. Araujo,
260 N.J. Super. 458, 462 (App. Div. 1992).
Defendants argue plaintiff failed to properly serve them at their registered
headquarters in Lawnside and the default judgment must be vacated as a matter
of law. We disagree as defendants' arguments are belied by the record.
Notably, defendants do not dispute Collins was served, nor do they offer
any evidence Collins was not a managing or general agent permitted to accept
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service. Instead, defendants argue service was improper because Ashraf was not
personally served, and Collins allegedly failed to forward the complaint to her.
Collins was a managing agent pursuant to Rule 4:4-4(a)(6). Ashraf's
certification, stating she is the self-appointed, only authorized agent to accept
service for Zaman and MSJ cannot obviate the service of process rules. As
general manager, defendants were properly served with the complaint when
Collins accepted service. Ashraf's certification ignores the disjunctive in the
rule: "any officer, director, trustee or managing or general agent, or any person
authorized by appointment or by law to receive service of process on behalf of
the corporation." (emphasis added).
Further, there is sufficient, credible evidence in the record to support the
trial court's findings that defendants were aware of the litigation in June 2021.
Moreover, defendants admitted they were aware default had been entered by
March 2022, but took no action until February 2023, and then only in response
to plaintiff's motion to turnover funds. Given these facts, defendants have not
established excusable neglect.
B. Defendants' actual notice.
Even if service was technically defective, the record aptly demonstrates
defendants had actual knowledge of the lawsuit in June 2021, shortly after
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Collins accepted service. The recording contains the following statements by
Ashraf:
• Is there any way we can fix the things between
us [sic] than involving a third party. If you feel like we
owe you money, tell me the number if that’s what you
think;
• I’m representing the company and these people
[sic] supposed to be but these people by doing the
lawsuit and all of that, they are not getting hurt . . .
because honestly when it happens in court its totally us
even if you put their name on it, they're not going to get
any kind of hurt . . . whatever the paperwork you sent,
your lawyers sent, we’re getting sued, we the company
are liable for everybody’s fault;
• So are you willing to work with us, is there
anything we can solve without bringing the court or
lawyers in;
• [Plaintiff]: I can give you [my lawyer’s] number
so you can contact her. [Ashraf]: So because if we have
contact we have to give them all the documentation and
paperwork and blah blah blah and it makes the process
bigger and bigger so I am reaching out to you, me and
you the purpose [indiscernible] to drop it all and let me
handle it and I will make sure to do everything possible
to make you happy;
• I can get a lawyer too but I’m trying to avoid
the lawyer fees and everything if there is something I
can directly give you because you are going to have to
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pay lawyer fees . . . so if we can work directly with each
other and avoid all that lets do that.
Ashraf also directed one of her subordinates, "Oscar," to convince plaintiff to
drop her lawsuit in exchange for money. Based upon these statements,
defendants cannot demonstrate they were not aware of the lawsuit in 2021.
Moreover, they admit to being aware of the lawsuit as early as March 2022, but
took no action until February 2023.
C. Whether the trial court erred in not reopening the proof hearing.
Defendants urge us to reopen the proof hearing because they have
meritorious defenses and because plaintiff failed to prove her claims for
damages. On appeal, "[t]he decision granting or denying an application to open
a judgment will be left undisturbed unless it represents a clear abuse of
discretion." Hous. Auth. of Morristown, 135 N.J. at 283. "A court abuses its
discretion when its 'decision is made without a rational explanation, inexplicably
departed from established policies, or rested on an impermissible basis.'" State
v. Chavies, 247 N.J. 245, 257 (2021) (quoting State v. R.Y., 242 N.J. 48, 65
(2020)) (internal quotation marks omitted). "When examining a trial court's
exercise of discretionary authority, we reverse only when the exercise of
discretion was 'manifestly unjust' under the circumstances." Newark Morning
Ledger Co. v. N.J. Sports & Exposition Auth., 423 N.J. Super. 140, 174 (App.
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Div. 2011) (quoting Union Cnty. Improvement Auth. v. Artaki, LLC, 392 N.J.
Super. 141, 149 (App. Div. 2007)).
Where a defendant has defaulted, a court must nevertheless hold a proof
hearing and a plaintiff must establish her claims. R. 4:43-2; see also Chakravarti
v. Pegasus Consulting Grp., Inc., 393 N.J. Super. 203, 210 (App. Div. 2007)
("Judgment should not be entered without a proof hearing . . . although the
question of what proofs are necessary is inherently within the judge’s
discretion."). Generally, the court need only determine the sufficiency of the
allegations. Kolczycki v. City of East Orange, 317 N.J. Super. 505, 514 (App.
Div. 1999). In the context of a proof hearing "trial courts have been directed to
view a plaintiff’s proofs 'indulgently' . . . and the general practice of our courts
has been to require only a prima facie case . . . ." Heimbach v. Mueller, 229
N.J. Super. 17, 20 (App. Div. 1988); see also Pressler & Verniero, Current N.J.
Court Rules, cm. 2.2.2 on R. 4:43-2 (2024) (stating "unless there is intervening
consideration of public policy or other requirement of fundamental justice, the
judge should ordinarily apply to plaintiff's proofs the prima facie case standard
of R. 4:37-2(b) and R. 4:40-1, thus not weighing evidence or finding facts but
only determining bare sufficiency"); Kolczycki, 317 N.J. Super. at 514.
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Nevertheless, plaintiff may be held to the burden of establishing liability
as well as damages, despite defendants' default. See Johnson v. Johnson, 92 N.J.
Super. 457, 465 (App. Div. 1966) ("Even though a defendant’s answer is
stricken for failure to make discovery, the plaintiff may be . . . precluded from
recovery where the proof which he offers in support of his own case reveals a
legal defense to his claim."). Although the assertions made in a complaint are
deemed true where defendants are in default, a court may nonetheless require a
plaintiff to furnish proof on the issue of liability, as well as damages. Ibid.Defendants argue notice of the proof hearing was inadequate, and even if
we conclude there is a lack of excusable neglect in responding to the complaint,
they should be given an opportunity for an adversarial proof hearing . Finally,
defendants argue because the awarded damages were unliquidated, there are
sufficient questions as to the merits of plaintiff's damage calculations to require
the proof hearing be reopened.
1. Notice of the Proof Hearing.
Rule 4:43-2(b) requires the party entitled to a judgment by default to
"apply to the court therefor by notice of motion pursuant to R. 1:6, served on all
parties to the action, including defaulting defendant . . . ." Here, the record is
devoid of proof plaintiff filed and served a motion for a proof hearing. Instead ,
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the record suggests there was a court-generated notice entering default on
September 1, 2022, against defendants, and a court-generated order scheduling
a proof hearing for September 12, 2022. Although plaintiff served the court's
notice of proof hearing on defendants by certified mail promptly on September
27, 2022, the court did not make findings as to whether notice of the proof
hearing was proper pursuant to Rule 4:43-2(b).
2. Defendants' participation in a proof hearing.
Even if defendants received proper notice, they would not have been able
to participate fully in the proof hearing. Default was entered as to liability, and
defendants, unless able to vacate default, would not be able to introduce
evidence to counter liability. Although plaintiff still had to prove the elements
of her claims, defendants could not present direct testimony or documentary
evidence at the proof hearing and would be limited to challenging plaintiff's
evidence in opening and closing statements and in cross-examining plaintiff's
witnesses. Chakravarti, 393 N.J. Super. at 210-11.
3. The trial court's findings at the proof hearing.
For a NJLAD hostile work environment claim, a plaintiff must prove the
harassment "(1) would not have occurred but for the [plaintiff's] protected status,
and was (2) severe or pervasive enough to make a (3) reasonable person believe
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that (4) the conditions of [the workplace] have been altered and that the
[workplace] environment is hostile or abusive." Morris v. Rutgers-Newark
Univ., 472 N.J. Super. 335, 348 (App. Div. 2022) (quoting Shepherd v.
Hunterdon Dev. Ctr., 174 N.J. 1, 24 (2002)); see also Dickson v. Cmty. Bus
Lines, Inc., 458 N.J. Super. 522, 531 (App. Div. 2019).
When a plaintiff asserts a disparate treatment claim pursuant to NJLAD,
we use the framework established in McDonnell Douglas Corp. v. Green, 411
U.S. 792 (1973).3 Grande v. Saint Clare's Health Sys., 230 N.J. 1, 17 (2017). A
plaintiff must demonstrate he or she (1) belongs to a protected group, (2)
performed the job at a level that met the employer's "legitimate expectations,"
(3) was fired nonetheless; and (4) the employer sought to hire or hired someone
to perform the same work after the plaintiff's termination. Meade v. Township
3
We use the test for a claim of discrimination predicated upon circumstantial
evidence as plaintiff does not present direct evidence of discrimination. See
A.D.P. v. ExxonMobil Rsch. & Eng'g Co., 428 N.J. Super. 518, 533 (App. Div.
2012) (first quoting McDevitt v. Bill Good Builders, Inc., 175 N.J. 519, 527
(2003), and then quoting Bergen Com. Bank v. Sisler, 157 N.J. 188, 208 (1999))
(stating direct evidence of discrimination is "evidence 'that an employer placed
substantial reliance upon a proscribed discriminatory factor'" in deciding to
terminate the employee and must "demonstrate . . . a hostility toward members
of the employee's class, [and] a direct causal connection between that hostility
and the challenged" termination).
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of Livingston, 249 N.J. 310, 328 (2021) (quoting Zive v. Stanley Roberts, Inc.,
182 N.J. 436, 450 (2005)); Grande, 230 N.J. at 17-18.
A plaintiff bringing a CEPA claim pursuant to N.J.S.A. 34:19-34 must
establish
(1) he or she reasonably believed that his or her
employer's conduct was violating either a law, rule, or
regulation promulgated pursuant to law, or a clear
mandate of public policy; (2) he or she performed a
'whistle-blowing' activity described in N.J.S.A. 34:19-
3[]; (3) an adverse employment action was taken
against him or her; and (4) a causal connection exists
between the whistle-blowing activity and the adverse
employment action.
[Allen v. Cape May County, 246 N.J. 275, 290 (2021)
(quoting Dzwonar v. McDevitt, 177 N.J. 451, 462
(2003)).]
An award of punitive damages is governed by the Punitive Damages Act,
N.J.S.A. 2A:15-5.9 to -5.17. In re Est. of Stockdale, 196 N.J. 275, 308 (2008).
Such damages must be specifically sought in the plaintiff's complaint and
accompanied by an award of compensatory damages. Ibid. The plaintiff must
4
Plaintiff's complaint brings a claim pursuant to CEPA generally. Plaintiff's
complaint does not allege any facts indicating N.J.S.A. 34:19-3(b) is applicable.
The elements of a prima facie CEPA claim are substantially similar regardless
of whether a plaintiff sues pursuant to subsection (a) or (c). See Allen, 246 N.J.
at 300 (Albin, J., concurring in part and dissenting in part) (quoting Kolb v.
Burns, 320 N.J. Super. 467, 476 (App. Div. 1999)).
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prove, "by clear and convincing evidence, that the harm suffered was the result
of the defendant's acts or omissions, and such acts or omissions were actuated
by actual malice or accompanied by a wanton and willful disregard of persons
who foreseeably might be harmed by those acts or omissions." N.J.S.A. 2A:15-
5.12(a). The factfinder should also consider, but is not limited to, those factors
enumerated at N.J.S.A. 2A:15-5.12(b).
The conduct complained of must be "exceptional or outrageous," Saffos
v. Avaya, Inc., 419 N.J. Super. 244, 263 (App. Div. 2011) (quoting Maiorino v.
Schering_Plough Corp., 302 N.J. Super. 323, 353 (App. Div. 1997)), and
"especially egregious." Ibid. (quoting Rendine v. Pantzer, 141 N.J. 292, 314
(1995)). In unlawful discrimination cases, punitive damages are appropriate
against an employer only if a plaintiff can show "there was actual participation
by upper management or willful indifference." Ibid. (quoting Maiorino, 302
N.J. Super. at 354).
Irrespective of defendants' participation, the trial court did not address the
elements of plaintiff's NJLAD or CEPA claims. Instead, it addressed plaintiff's
credibility and the factual testimony presented.
In awarding $75,000 for emotional distress, the court did not accept
plaintiff’s diagnosis of depression or bipolar disorder because no medical proofs
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were submitted. Nevertheless, it found emotional distress and punitive damages
were warranted as a direct result of defendants' failure to take appropriate action
in response to plaintiff’s complaints.
The entirety of the trial court's ruling as to damages was as follows:
As far as the emotional impact of this, the
employee’s conduct, Pidilla’s conduct, and the failure
to take any action and rather instead to chastise plaintiff
for that conduct certainly is even being generous to the
defendant can best be described as reprehensible.
Nobody should have to endure that type of conduct in
their employment.
The [c]ourt certainly finds that it would be
expected that plaintiff would have had substantial
emotional reaction, had been upset by that conduct.
Plus she had to remain in employment there. So the
[c]ourt does find that is substantial, although the [c]ourt
does not find evidence that could be – at least before
me that plaintiff was diagnosed depressed or bipolar as
a – as related to this. I simply don't have any medical
report or certification before me at this proof hearing.
The [c]ourt finds the appropriate award for that
emotional distress to be $75,000. Additionally, the
[c]ourt believes that the conduct warrants the
imposition of punitive damages for the conduct, and the
[c]ourt will award punitive damages in the amount of
$75,000.
The trial court did not address the elements of a claim for emotional
distress and did not explain how it arrived at the figure of $75,000. It also did
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not address the elements of an award of punitive damages and did not explain
how it arrived at an award of another $75,000. The trial court's failure to make
adequate findings of fact and conclusions of law requires us to remand for a new
proof hearing. Rule 1:7-4(a) obligates the trial court to "find the facts and state
its conclusions of law thereon in all actions tried without a jury . . . ." Our
review is inhibited when the trial court fails to elaborate upon the reasons for its
rulings. Romero, 468 N.J. Super. at 304 (quoting Giarusso v. Giarusso, 455 N.J.
Super. 42, 53 (App. Div. 2018)). Naked conclusions, without supporting
reasoning, cannot satisfy the requirements of Rule 1:7-4(a). Ibid. (quoting
Curtis v. Finneran, 83 N.J. 563, 570 (1980)).
In sum, we affirm the trial court's findings that defendants were properly
served with the complaint and had actual notice in June 2021 of plaintiff's
lawsuit, failed to timely act to preserve their rights, and cannot demonstrate
excusable neglect. Default judgment against defendants is affirmed. However,
because the trial court failed to make sufficient findings as to whether
defendants were properly served with notice of the proof hearing, and because
the trial court failed to make findings of fact and conclusions of law with respect
to plaintiff's claims, particularly with respect to the quantum of damages it
awarded, we vacate the judgment awarding damages and remand to the trial
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court for a new proof hearing. As the trial court made credibility determinations,
we remand for a new proof hearing before a different judge. See Freedman v.
Freedman, 474 N.J. Super. 291, 308 (App. Div. 2023) (first citing J.L. v. J.F.,
317 N.J. Super. 418, 438 (App. Div. 1999); and then citing P.T. v. M.S., 325
N.J. Super. 193, 220-21 (App. Div. 1999)). We take no position regarding the
outcome of the proof hearing.
Affirmed in part, reversed in part, and remanded for a new proof hearing.
We do not retain jurisdiction.
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