The Ridge at Back Brook, LLC v. W. Thomas Klenert , 437 N.J. Super. 90 ( 2014 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2345-12T1
THE RIDGE AT BACK BROOK, LLC, APPROVED FOR PUBLICATION
Plaintiff-Respondent, August 12, 2014
v. APPELLATE DIVISION
W. THOMAS KLENERT,
Defendant-Appellant.
_____________________________________________________________
Submitted July 8, 2014 - Decided August 12, 2014
Before Judges Fisher, Grall and Messano.
On appeal from the Superior Court of New
Jersey, Law Division, Hunterdon County,
Docket No. L-611-10.
Steven D. Janel, attorney for appellant.
Wilentz, Goldman & Spitzer P.A., attorneys
for respondent (Robert L. Selvers, of
counsel and on the brief).
The opinion of the court was delivered by
FISHER, P.J.A.D.
Having carefully considered this appeal of an order denying
Rule 4:50 relief, we conclude that the trial judge should have
more liberally indulged the argument that his pro se status
warranted a further opportunity for defendant – once he retained
counsel after entry of final judgment – to argue that the
contract upon which the suit is based is unconscionable.
Accordingly, we vacate the order denying Rule 4:50 relief and
remand the matter for further proceedings.
I
The Ridge at Back Brook, L.L.C. (plaintiff), a New Jersey
limited liability company which owns and operates an eighteen-
hole golf course in Ringoes, filed a complaint against defendant
W. Thomas Klenert, one of its members, on September 17, 2010.
Plaintiff alleged that, by becoming a member, defendant became
obligated to timely pay dues and something labeled "Option B"
payments. In its complaint, plaintiff asserted that defendant
defaulted on these financial obligations in 2004 and, by the
time the complaint was filed nearly six years later, defendant
owed $77,490 in dues and $10,800 in Option B payments, as well
as sales tax and finance charges, for a total obligation of
$160,214.40. Defendant, appearing on his own behalf, filed an
answer denying the material allegations of the complaint.
Thereafter, plaintiff served requests for admissions, pursuant
to Rule 4:22, seeking defendant's admission of essentially every
material aspect of plaintiff's claim. Defendant did not
respond.
2 A-2345-12T1
Relying on the admissions generated by defendant's failure
to respond to the Rule 4:22 requests, as well as by the
certification of plaintiff's managing member, plaintiff moved
for summary judgment. Prior to the motion's return date,
defendant filed a petition in the United States Bankruptcy Court
for the District of New Jersey. The summary judgment motion was
nevertheless granted on April 1, 2011.
Plaintiff recognized the order granting summary judgment
was ineffectual because defendant's bankruptcy petition
triggered the automatic stay provision contained in 11 U.S.C.A.
§ 362. Following the dismissal of the bankruptcy petition on
March 21, 2012, plaintiff moved to vacate the April 1, 2011
order granting summary judgment but moved again for summary
judgment based on the Rule 4:22 admissions, the facts previously
asserted in support of its original motion, and a certification
explaining how the amount due from defendant had increased to
$253,456.01. In a short pro se pleading, defendant cursorily
argued that the membership agreement was a contract of adhesion
and its terms unconscionable.
On June 15, 2012, the trial judge entered an order that:
vacated the earlier summary judgment, which was precipitously
granted in violation of 11 U.S.C.A. § 362; granted the new
summary judgment motion for the full amount sought; and provided
3 A-2345-12T1
that attorneys' fees would be permitted once a certification of
services was submitted.
In his written decision, the trial judge explained the
basis for his ruling. He relied on the fact that defendant had
failed to respond to plaintiff's Rule 4:22 requests, deeming
those assertions to be admitted. The judge recognized that
defendant had asserted that the membership agreement was a
contract of adhesion and unconscionable but that defendant's
brief written response to the renewed summary judgment was
insufficient to demonstrate the existence of a genuine issue of
material fact. That is, the judge determined that defendant had
not provided facts or a further explanation of his view of the
contract,1 nor did he contest the amount claimed to be due. On
April 20, 2012, the judge awarded plaintiff $8000 in counsel
fees and entered final judgment in the amount of $261,456.01.
Plaintiff immediately sought to collect on the judgment,
and obtained an order permitting defendant's deposition for
purposes of identifying available assets; plaintiff also served
an information subpoena. Shortly before the August 2012
1
In this regard, the judge stated in full: "In his
[c]ertification, defendant states that the contract he entered
into with plaintiff is unconscionable and a contract of
adhesion. . . . However, defendant provides absolutely no basis
for such contention." We agree with the judge's view of the
defendant's opposition.
4 A-2345-12T1
deposition, counsel appeared for defendant and advised of
defendant's intent to move for relief from the summary judgment
pursuant to Rule 4:50. Consequently, plaintiff adjourned the
deposition but soon thereafter moved for an order compelling
defendant's response to the information subpoena; those
responses were provided a few days prior to the motion's return
date.
In November 2012, defendant moved, through counsel, for
relief pursuant to Rule 4:50. In his supporting certification,
defendant asserted that he became a member of the golf club in
1999 by providing a $45,000 deposit and by signing all the
documents plaintiff required. He also asserted that the club
did not open until 2002; that year he paid $7500 in dues. In
2003 he paid $10,000, and in 2004 he paid $13,500. Defendant
claimed he later learned his dues "were improperly utilized for
capital and debt service, contrary to the terms of the
membership agreement, which provided it was to be utilized, if
at all, exclusively for operational expenses." Defendant
asserted that plaintiff took this course because "the project
was millions of dollars over budget" even though plaintiff
"affirmatively advised" at the contract's formation that "there
was no debt and construction was within budget."
5 A-2345-12T1
Defendant additionally claimed in support of his Rule 4:50
motion that:
Eventually, I came to learn that the project
was millions of dollars over budget, and it
would be the members who would bear the same
through extra costs and expenses not
disclosed or anticipated at the time in
which the membership agreement was entered
into.
More specifically, all existing members were
forced to either (1) loan money to the
[p]laintiff to finance the construction of
the club house; or (2) pay an extra
$2,400.00 per year to finance the
construction. Again, this was contrary to
my understanding of the agreement entered
into and the representations made.
Although the club opened for play in July
2002, the promised clubhouse and cart barn
were not constructed. The clubhouse was not
opened until June 2004. Moreover, the short
game area was not completed at the time of
my resignation, nor was the cart barn. This
was contrary to the original representa-
tions.
Additionally, the various membership rules
continued to change through my tenure as a
member, in ways which were not anticipated
nor disclosed when I entered into the
membership agreement. Apparently, the rules
and by-laws allowed the [p]laintiff to make
whatever changes they deemed appropriate
regarding membership rights. However, a
member had absolutely no redress regarding
these rule changes, as there was no absolute
right to resign from the club.
From the date of my resignation in 2004
through service of the instant [c]omplaint
in November 2010, I never received any
demand for payment, notice that I was
6 A-2345-12T1
allegedly in breach of the membership
agreement, or any other dunning
correspondence. I did occasionally receive
bills for dues, but never gave them much
thought as I had resigned without objection
from [p]laintiff.
In addressing his failure to make better his case that the
matter was not ripe for summary judgment, defendant asserted
that when served with the complaint he "was in a very stressful
financial condition, and could not afford to retain counsel."
He explained that he attempted to represent himself "as best as
[he] could," and he acknowledged that he "clearly did not meet
the requirements set forth in the Court Rules." Defendant
further asserted that he misunderstood his obligation to timely
respond to plaintiff's Rule 4:22 request for admissions.
Defendant also claimed that the defenses he raised in
opposition to summary judgment, as more fully explained in
support of his Rule 4:50 motion, were found to have credence –
or at least enough substance to avoid summary disposition – in
litigation commenced by other club members in other courts. And
he claimed that even if he could be found liable, the amount due
had been improperly calculated.
The trial judge denied the Rule 4:50 motion on December 21,
2012. In his written decision, the judge rejected defendant's
unconscionability argument on its merits, but without reference
to legal authorities, stating:
7 A-2345-12T1
[D]efendant cannot assert the contract was
unconscionable simply because years later,
he is dissatisfied with the terms and is
belatedly seeking to stop collection of this
[c]ourt's judgment. Defendant was within his
full rights to seek membership at a
different golf club with different terms in
the membership agreement. Instead, defendant
willfully entered into an agreement with
plaintiff and now, after he has resigned
from membership in violation of the [a]gree-
ment, asserts the terms are unconscionable.
This is not a sufficient basis to set aside
a[n] [o]rder of [f]inal [j]udgment. This
[c]ourt declines to rewrite a contract
freely entered into by both parites simply
because defendant has now fully appreciated
the effect of [a] clause that was unam-
biguously included in his agreement at the
time he entered into it. Moreover, the
[c]ourt has previously addressed this issue
and has found the contract to be valid.[2]
The judge also found that defendant, despite being self-
represented up to and through the entry of final judgment, had
sufficient opportunity to dispute the allegations upon which the
judgment was based. And the judge determined that defendant had
not moved for relief from the judgment within a reasonable
period of time, concluding there were "no exceptional
circumstances supplied by defendant that justify vacating a six-
month old summary judgment decision, and a four-month old
[o]rder of [f]inal [j]udgment." The judge lastly took note of
2
The judge then referred to a decision he rendered in another
member's lawsuit with the golf club.
8 A-2345-12T1
the troubles to which plaintiff was put during defendant's delay
in seeking relief from the judgment.
II
On January 30, 2013, defendant filed a notice of appeal
that identified only the December 12, 2012 order – which denied
his Rule 4:50 motion – as the order defendant would have us
review. In his merits brief, however, defendant includes an
argument that the trial judge erred in granting summary judgment
eight months earlier. Even if we were to ignore defendant's
failure to identify the earlier order in his notice of appeal, 3
and even if we were to assume the earlier summary judgment may
be directly appealed at this late date,4 we would reject this
3
Rule 2:5-1(f)(3)(A) declares that, in civil actions, the notice
of appeal "shall designate the judgment, decision, . . . or part
thereof appealed from." We have recognized that the failure to
comply with this rule permits our refusal to consider its
merits. See, e.g., Sikes v. Twp. of Rockaway, 269 N.J. Super.
463, 465-66 (App. Div.), aff’d o.b., 138 N.J. 41 (1994). We
have, however, in appropriate circumstances, overlooked a
party's failure to designate an order in the notice of appeal.
See N. Jersey Neuro. Assoc. v. Clarendon Nat'l Ins. Co., 401
N.J. Super. 186, 196 (App. Div. 2008).
4
Appeals must be filed within forty-five days of entry of final
judgment. R. 2:4-1(a). This period may be extended for thirty
days "on a showing of good cause and the absence of prejudice."
R. 2:4-4(a). Here, the notice of appeal was filed eight months
after entry of the April 20, 2012 final judgment and, thus,
untimely even if an extension were permissible. "Where the
appeal is untimely, the Appellate Division has no jurisdiction
to decide the merits of the appeal." In re Hill, 241 N.J.
(continued)
9 A-2345-12T1
argument. Defendant only factually responded to plaintiff's
summary judgment motion by providing conclusory claims that the
membership agreement was unconscionable and constituted a
contract of adhesion. He never explained why.5 Bald assertions
are not capable of either supporting or defeating summary
judgment. See Puder v. Buechel, 183 N.J. 428, 440-41 (2005);
(continued)
Super. 367, 372 (App. Div. 1990); see also Alberti v. Civil
Service Com., 41 N.J. 147, 154 (1963); In re Pfizer, 6 N.J. 233,
237-38 (1951).
5
Defendant's written opposition states in its entirety:
Defendant asks that the court reinstate the
complaint and list for trial. The com-
plain[t] was stayed because of the
bankruptcy filing. The defendant did not
comply with the time tables because of the
pending bankruptcy. The bankruptcy being
dismissed leaves me the defendant in a
position where I wish to oppose the com-
plaint and the summary judgment.
The basis for the opposition is the UNCON-
SCIONABLE nature of the contract. The
contract is a contract of [a]dhesion and
therefor[e] should have reasonable expecta-
tions.
The denying of the plaintiff's motion in no
way inhibits them from bringing a new motion
or reinstatement of the old motion to pursue
the damages they seek. Whereas granting the
[p]laintiff's motion does not allow defen-
dant his day in court.
I ask with respect that the [p]laintiff's
motion be denied.
10 A-2345-12T1
Cortez v. Gindhart, 435 N.J. Super. 589, 606 (App. Div. 2014);
Brae Asset Fund, L.P. v. Newman, 327 N.J. Super. 129, 134 (App.
Div. 1999).
We, thus, reject the argument that the judge erred in
granting summary judgment.
III
The heart of defendant's appeal lies in the argument that
an impecunious pro se litigant, without the wherewithal to
understand the requirements of the rules governing civil
practice, may be relieved of the consequences of that failure.
We agree that Rule 4:50-1(f), which permits relief from
orders or judgments for reasons not provided in the rule's other
subsections, allows for relief in circumstances such as this.
Our courts have long adhered to the view that subsection (f)'s
boundaries "are as expansive as the need to achieve equity and
justice." Court Invest. Co. v. Perillo, 48 N.J. 334, 341
(1966); see also US Bank Nat. Ass'n v. Guillaume, 209 N.J. 449,
484 (2012); Housing Auth. of Town of Morristown v. Little, 135
N.J. 274, 286 (1994); In re Estate of Thomas, 431 N.J. Super.
22, 34 (App. Div. 2013); Parker v. Marcus, 281 N.J. Super. 589,
593 (App. Div. 1995), certif. denied, 143 N.J. 324 (1996).
Judge Havey explained for this court – in holding that a
litigant may, in appropriate circumstances, be relieved of the
11 A-2345-12T1
consequences of his attorney's negligence in the conduct of a
case – that the application of the rule turns on the timeliness
of the relief sought, the reasons for the movant's earlier
failure to comport with the rules, the movant's degree of fault
or blamelessness as opposed to his attorney's fault or blame,
and the prejudice that would accrue to the other party if relief
were granted. Ibid. Appropriate applications of these factors
have excused litigants from the negligence of their attorneys in
failing to answer interrogatories or other discovery requests.
See, e.g., Jansson v. Fairleigh Dickinson Univ., 198 N.J. Super.
190, 195-96 (App. Div. 1985).
We find this approach equally applicable where a party has
negligently represented himself. To be sure, we do not mean to
suggest a self-represented party is entitled to a second chance
in all instances – far from it. We merely hold that a pro se
litigant is entitled to nothing less than that to which a
litigant is entitled when represented by a negligent attorney.
That is, as we held in Rubin v. Rubin, 188 N.J. Super. 155, 159
(App. Div. 1982), pro se litigants are not entitled to greater
rights than litigants who are represented by counsel. But we
also recognized in Rubin – in concluding that a self-represented
litigant was deprived of a meaningful opportunity to be heard
due to a lack of understanding of motion practice – that it is
12 A-2345-12T1
"fundamental that the court system . . . protect the procedural
rights of all litigants and to accord procedural due process to
all litigants." Ibid. See also Midland Funding LLC v. Alfano,
433 N.J. Super. 494, 500-01 (App. Div. 2013).
Here, in seeking relief from the summary judgment entered
against him, defendant asserted he could not then afford an
attorney and that, in attempting to represent himself, he did
not understand the consequences of his failure to respond to
plaintiff's requests for admissions or what he was required to
submit in order to defeat a motion for summary judgment. Had
defendant been represented by an attorney whose same acts or
omissions led to the same result, the guidelines provided in
cases such as Parker would have authorized the granting of Rule
4:50 relief. We think defendant is entitled to the same
consideration.
To say that the rule authorized relief, however, does not
mean that relief should be granted. We simply remand for a
consideration of these principles in light of defendant's
assertions in his Rule 4:50 motion. The judge appears to have
denied the motion solely because he was satisfied that defendant
had a prior opportunity to respond to the ultimately successful
summary judgment motion. This was insufficient because the
judge did not consider why defendant had so failed and whether
13 A-2345-12T1
principles of fairness and equity permit relief from the
consequences. Defendant was entitled to have his Rule 4:50
motion examined in light of the factors outlined in the
authorities discussed above. We, thus, remand for that purpose.
IV
On remand, the judge should consider defendant's assertions
regarding his earlier failures in the litigation. As to one of
the applicable factors – the timeliness of the Rule 4:50 motion
– we reject the judge's conclusion that defendant's delay was
unreasonable. Indeed, that delay paled in comparison to
plaintiff's long delay in commencing the action. And we would
note in this regard that in many cases – and this may be one –
the prejudice incurred by the opposing party may be redressed in
ways other than the denial of the motion; Rule 4:50-1 authorizes
the granting of relief "upon such terms as are just." See ATFH
Real Prop. v. Winberry Rlty., 417 N.J. Super. 518, 527-29 (App.
Div. 2010), certif. denied, 208 N.J. 337 (2011).6
We would lastly observe that the trial judge's ruling
appears to be based in part on his determination that there was
6
In considering the imposition of just terms, the judge must be
mindful that the terms authorized by Rule 4:50-1 are not "to
punish or sanction" but to ameliorate the prejudice to the other
party resulting from the granting of relief. Regional Constr.
Corp. v. Ray, 364 N.J. Super. 534, 543 (App. Div. 2003).
14 A-2345-12T1
no merit in defendant's contention that the contract was
unconscionable. Certainly, if that were so, the judge's
disposition would have been correct; the granting of Rule 4:50
relief would be a futile exercise if plaintiff remained entitled
to judgment as a matter of law. See US Bank Nat'l Ass'n, supra,
209 N.J. at 469 (observing, in quoting from Schulwitz v.
Shuster, 27 N.J. Super. 554, 561 (App. Div. 1953), that "[i]t
would create a rather anomalous situation if a judgment were to
be vacated . . . only to discover later that the defendant had
no meritorious defense"). But – once defendant provided
substance to his earlier conclusory claims – the judge never
examined the parties' contentions in light of applicable legal
principles. Indeed, the judge largely relied on his earlier
holding. The worth of defendant's contentions should be
examined in light of two factors: procedural unconscionability,
which "can include a variety of inadequacies, such as age,
literacy, lack of sophistication, hidden or unduly complex
contract terms, bargaining tactics, and the particular setting
existing during the contract formation process," and substantive
unconscionability, which generally involves harsh or unfair one-
sided terms. See Sitogum Holdings, Inc. v. Ropes, 352 N.J.
Super. 555, 564-66 (Ch. Div. 2002) (quoted with approval in
Muhammad v. Cnty. Bank, Rehoboth Beach, 189 N.J. 1, 15 (2006),
15 A-2345-12T1
cert. denied, 549 U.S. 1338, 127 S. Ct. 2032, 167 L. Ed. 2d 763
(2007)). These two factors do not "have equal effect but work
together, creating a 'sliding scale' of unconscionability."
Sitogum, supra, 352 N.J. Super. at 565-66 (cited with approval
in Delta Funding Corp. v. Harris, 189 N.J. 28, 40 (2006)). In
concluding that defendant's unconscionability claim was without
merit, the judge did not examine defendant's factual assertions
in light of these principles.
V
The order under review is vacated, and the matter remanded
for further consideration of defendant's motion to be relieved
of the consequences of his failure to adequately represent
himself in conformity with this opinion. We do not retain
jurisdiction.
16 A-2345-12T1