Opinion
DOCKET NO. A-0289-11T4
05-29-2012
CHANDLER GROUP, L.L.C., Plaintiff-Appellant, v. LANFRIT & TULLIO, L.L.C., Defendant-Respondent.
Peter A. Ouda argued the cause for appellant. Patrick J. McCormick argued the cause for respondent (Hardin, Kundla, McKeon & Poletto, P.A., attorneys; Mark S. Kundla, of counsel; Jonathan P. Holtz and Mr. McCormick, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Payne and Reisner.
On appeal from Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-0432-10.
Peter A. Ouda argued the cause for appellant.
Patrick J. McCormick argued the cause for respondent (Hardin, Kundla, McKeon & Poletto, P.A., attorneys; Mark S. Kundla, of counsel; Jonathan P. Holtz and Mr. McCormick, on the brief). PER CURIAM
Plaintiff Chandler Group, L.L.C. (Chandler or plaintiff) appeals from an August 1, 2011 order granting summary judgment dismissing its complaint against defendant Lanfrit & Tullio, L.L.C. For the reasons that follow, we reverse the order on appeal and remand this matter to the trial court.
I
This appeal arises from a legal malpractice case that Chandler filed against the law firm of Lanfrit & Tullio (L&T or defendant). According to the complaint filed on March 5, 2010, Chandler entered into a contract in 2006 to sell a piece of property to Lee Sakol. Under the contract, the closing was to take place five days after a subdivision deed was filed. After the filing occurred, Chandler's attorney, Peter Lanfrit (Lanfrit), sent Sakol a time of the essence letter setting a closing date of December 28, 2006. However, Sakol failed to close and Chandler sold the property to a third party for a lower price. Sakol then sued for the return of his deposit. Chandler allegedly was unable to defend against that lawsuit, or successfully assert a damage claim against Sakol, because Lanfrit had committed errors in framing the time of the essence letter. Chandler settled the lawsuit with Sakol and sued L&T for malpractice.
In later answers to interrogatories, plaintiff claimed that in the time-of-the-essence letter, Lanfrit named a closing date on which plaintiff's president was unavailable.
Defendant filed an answer in May 2010, and plaintiff filed a timely affidavit of merit. In answers to interrogatories, plaintiff named an expert witness but did not attach a report. Defendant filed a motion, pursuant to Rule 4:17-4(e), to set a date certain for the filing of plaintiff's expert report. On April 18, 2011, the court ordered plaintiff to "serve its expert report against defendants [sic] on all issues, including proximate causation and damage[s] by May 18, 2011." The order provided that if expert reports were not submitted timely they would be barred.
After plaintiff failed to serve its expert report by May 18, defendant filed a summary judgment motion returnable July 8, 2011. The motion was premised solely on plaintiff's inability to prove its malpractice claim without an expert report. The motion recited that there was "no case management, arbitration or trial date assigned" to the case. In fact, the discovery end date had not yet passed.
Plaintiff cross-moved to extend discovery and vacate the April 18, 2011 case management order. The motion was supported by a certification from plaintiff's attorney, Peter A. Ouda, attesting that he had received a draft of the expert report and would be able to serve and file the final report "within 48 hours." Ouda explained that he had not objected to the prior motion to set May 18 as the cut-off date for filing expert reports, because Sakol's deposition was scheduled to take place before that date. He believed that he needed Sakol's deposition before obtaining his expert report. However, Sakol's attorney adjourned the deposition. Ouda explained that he had an extremely busy litigation schedule, leading to his inadvertently missing the cut-off date for filing the expert report or seeking a timely extension.
Sakol's deposition was originally scheduled for April 6, 2011.
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Ouda further asserted that although plaintiff's expert report was "about 40 days late," the discovery end date was not until August and there would be no prejudice to defendant in extending discovery. He proposed a "realistic schedule" for completing discovery, which would result in the discovery end date being pushed back from August to October 30, 2011. By letter dated June 30, 2011, Ouda served plaintiff's expert report on defense counsel.
That report, which was dated July 22, 2010, addressed both the alleged malpractice and its proximate causation of damages. The expert opined that "Mr. Lanfrit deviated from the accepted standards of practice in not properly advising the client that they had to be prepared to close on the date set for time of the essence." He also opined that since Sakol's lawyer did not advise Lanfrit that Sakol could not satisfy the mortgage contingency, that contingency may have been waived.
The report next addressed the issues of proximate cause and damages, noting that to prevail in a malpractice claim, plaintiff would have to prove these elements as well as proving the deviation. The expert opined that based on "what I have reviewed thus far," Chandler would have been in a strong litigation position had Lanfrit sent a proper time of the essence letter. Based on the evidence thus far, Sakol had not claimed that he could not obtain a mortgage commitment and there was no evidence "of what he did to seek other avenues to obtain financing." Thus the financing issue appeared to be a "mere pretense" for Sakol's failure to close. Nor had Sakol "communicate[d]" that any delay in filing the subdivision deed was a breach of the contract. However, the report indicated that the expert would "gladly supplement" the report "as information is forthcoming."
On July 6, 2011, Ouda faxed the motion judge a letter advising that he had served his expert report on his adversary and enclosing a copy of the report. The letter asserted that "good cause" for a discovery extension had been "established under [R.]4:24-1(c)," that there was no prejudice to defendant, and the original discovery period had not expired. At the oral argument of the motion, defense counsel admitted that there was no prejudice to his client from the late service of the expert report, other than that his client would have to go to trial if the court denied his summary judgment motion.
The motion judge granted summary judgment, for reasons stated in a written opinion dated August 1, 2011. The judge treated plaintiff's cross-motion as an application to vacate a judgment, under Rule 4:50-1, as opposed to an untimely motion to extend discovery. Applying the "excusable neglect" standard in Rule 4:50-1(a), the judge concluded that plaintiff's counsel's heavy workload was not good cause to extend discovery, and did not justify vacating the May 18 order. The judge also reasoned that the adjournment of Sakol's deposition was not good cause to extend the time to file the expert report, because it was not relevant to Lanfrit's alleged malpractice in failing to send a proper time-of-the-essence letter.
II
We review the motion judge's decision for abuse of discretion. See Baldyga v. Oldman, 261 N.J. Super. 259, 260 (App. Div. 1993).
On this appeal, as in the trial court, plaintiff claims that a discovery extension should have been granted, because the discovery end date of August 2011 had not expired when it served its expert report, and there was no prejudice to defendant from the late service of the report. Plaintiff claims its counsel delayed serving the expert report because Sakol had canceled his deposition, and plaintiff's counsel did not want to be "locked in" to an expert report that might not account for any facts Sakol might provide in his deposition. We agree that, under all the circumstances, this constituted good cause to extend the time to serve the expert report.
As the May 18 order clearly recognized, in order to prove its case, plaintiff needed to establish not only defendant's professional negligence but that the negligence proximately caused plaintiff's damages. McGrogan v. Till, 167 N.J. 414, 425 (2001). Accordingly, plaintiff's expert report addressed both of those issues. However, before his expert issued a final report, plaintiff's counsel understandably wanted to pin down Sakol, at a deposition, concerning the facts relevant to proximate cause. We therefore cannot agree with the motion judge that Sakol's deposition was irrelevant to the expert's report.
We also agree with plaintiff that Rule 4:50-1 was not applicable to the cross-motion, because it was not a motion to vacate "a final judgment or order." R. 4:50-1. Rather, in substance, plaintiff's cross-motion was an application to extend discovery under Rules 4:24-1 and -2. Clearly, plaintiff's motion should have been filed prior to the May 18 deadline for filing the expert report. R. 4:23-2. However, our courts have repeatedly cautioned against depriving a litigant of its cause of action due to attorney errors that can be corrected short of dismissing the action with prejudice. See Ponden v. Ponden, 374 N.J. Super. 1, 11-12 (App. Div. 2004), certif. denied, 183 N.J. 212 (2005); Tucci v. Tropicana, 364 N.J. Super. 48, 51-52 (App. Div. 2003).
This is particularly the case where a discovery extension is sought and neither an arbitration date nor a trial date has been set. Ponden, supra, 374 N.J. Super. a 11-12. In addressing a late-filed expert report submitted in opposition to a summary judgment motion, we confirmed that: "'It is a mistaken exercise of judgment to close the courtroom doors to a litigant whose opposition papers are late but are in the court's hands before the return day for a motion which determines the meritorious outcome of a consequential lawsuit.'" Baldyga, supra, 261 N.J. Super. at 267-68 (quoting Tyler v. N.J. Auto. Full Ins., 228 N.J. Super. 463, 468 (App. Div. 1988)).
In this case, the expert report was served more than a month in advance of the end of the discovery period; no trial or arbitration had been scheduled; and there was no showing that the forty-day delay in serving the report caused any prejudice to defendant. Further, although plaintiff's counsel should have made a timely motion to extend the deadline, he had a litigation-related reason to delay having the expert finalize the report until Sakol's deposition was completed. Finally, a sanction short of dismissal would have sufficed to address the late submission of the expert report. See Ponden, supra, 374 N.J. Super. at 12. For all of these reasons we conclude it was a mistaken exercise of the court's discretion to deny the cross-motion and dismiss the complaint on summary judgment. Accordingly, we reverse the order on appeal and remand this matter to the trial court for further proceedings consistent with this opinion.
Reversed and remanded.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION