Opinion
Docket No. 014901-2009 Docket No. 017001-2010
03-13-2013
Re: Garlatti Realty, L.L.P. v. City of New Brunswick Block 597.02, Lot 4.04
NOT FOR PUBLICATION WITHOUT APPROVAL OF
THE TAX COURT COMMITTEE ON OPINIONS
Mala Sundar
JUDGE
R.J. Hughes Justice Complex
BY ELECTRONIC MAIL
Daniel Kanoff, Esq.
Blau & Blau
223 Mountain Avenue
Springfield, New Jersey 07081
Martin Allen, Esq.
DiFranceso Bateman P.C.
15 Mountain Boulevard
Warren, New Jersey 07059
Dear Counsel:
This is the court's opinion in the connection with plaintiff's motion for reconsideration of this court's final orders of December 20, 2012 and December 21, 2012 which dismissed the above captioned matters with prejudice because plaintiff had failed to seek their reinstatement after they had been dismissed without prejudice. Plaintiff seeks reconsideration on grounds its counsel failed to diary the deadline within which a reinstatement motion had to be filed, and it should not be penalized for its attorney's mistake. Defendant contends that plaintiff's counsel's negligence does not merit application of sparingly considered exceptions for relief from a final judgment under R. 4:50-1. For the reasons explicated below, the court finds that plaintiff's motion is conditionally granted, however, the December 2012 final orders will not be vacated until plaintiff complies with the conditions of (1) serving its expert's appraisal report to defendant's counsel no later than March 22, 2013 (unless such service has already been accomplished), and (2) paying defendant's counsel reasonable fees/costs in connection with opposing plaintiff's motion for reconsideration. If plaintiff fails to comply with either condition, the December 2012 final orders will not be vacated. FACTS
Plaintiff ("Taxpayer") appealed its property tax assessment for tax years 2009 and 2010 for property located at Block 597.04, Lot 4.04 ("Subject"). The 2009 complaint was scheduled for trial on September 14, 2011, but was subsequently rescheduled to December 14, 2011, and then to March 28, 2012. The 2010 complaint was scheduled for trial on March 28, 2012.
Taxpayer also filed separate appeals for Lot 4.02 located in the same Block as the Subject (Block 597.04) for each tax year 2009 through 2012.
At the March 28, 2012 trial call, Defendant ("City") moved to dismiss the 2009 and 2010 complaints for lack of prosecution as Taxpayer had not prepared and filed appraisal reports for the matters. This court denied the motion but directed that the Taxpayer file its appraisal reports within 3 months, i.e., no later than June 27, 2012.
Prior to this, in May 2011, the City had also moved successfully to dismiss the 2010 complaint for failure to provide discovery under 4:23-5(a)(1). Taxpayer then moved to reinstate the complaint with the required fees, prior to the return date of the City's August 2011 motion to dismiss with prejudice under R. 4:23-5(a)(2). The City had also previously filed, but withdrew, its discovery motion to dismiss the 2009 complaint without prejudice.
About 254 months after the March 28, 2012 trial call date, Taxpayer retained a real estate appraiser on or about June 14, 2012. However, there is no indication that these reports were provided to the City.
On July 17, 2012, the City moved to dismiss the complaints without prejudice for lack of prosecution because Taxpayer had failed to provide appraisal reports by the June 27, 2012 deadline set by the court. The City noted that even as of the date of the motion, the reports were yet to be provided. The motion was returnable on August 10, 2012.
After the motion was adjourned (once by Taxpayer's counsel and once by City's counsel), Taxpayer did not oppose the City's motion to dismiss. Therefore, on August 24, 2012, this court entered an Order dismissing both complaints without prejudice. The Order provided Taxpayer the right to seek reinstatement of the complaints if such motion was made within 60 days of the Order and if accompanied by an appraisal report (or alternatively, a stipulation of settlement) plus a $100 reinstatement fee. The Order further provided the complaints would be dismissed with prejudice without further notice if a reinstatement motion was not made within 60 days from August 24, 2012 (i.e., on or before October 24, 2012).
On or about September 17, 2012, a date which was before the deadline to file a reinstatement motion, the real estate appraiser retained by the Taxpayer provided its report to Taxpayer for tax years 2009-2011. There is no indication that the same was provided by Taxpayer's counsel to the City. Nor is there any indication that the court was notified of the report's preparation.
Taxpayer failed to file a reinstatement motion on or before October 24, 2012. Therefore this court, on its own motion, signed final orders on December 20, 2012 and December 21, 2012, dismissing with prejudice, the 2010 and 2009 complaints respectively.
On or about January 4, 2013, Taxpayer filed the instant motion for reconsideration of the court's December 2012 orders, and seeking reinstatement of its complaints. The motion included a $100 reinstatement fee (by check made out to the New Jersey Treasurer). A copy of the appraisal report for tax years 2009-2011 was also attached. However, the moving papers do not indicate whether the City was provided the report. FINDINGS
Taxpayer maintains that it is entitled to relief from the December 2012 final judgments because it diligently pursued its litigation efforts by preparing an appraisal report before the October 24, 2012 deadline for a reinstatement motion, and it should not be penalized because its counsel failed to file a timely motion for both tax years. Taxpayer's counsel certified that his secretary had failed to provide him with a copy of the court's Order dated August 24, 2012 thus he failed to calendar the deadline to file a reinstatement motion.
The City objects to the relief on grounds that the December 2012 orders were final judgments therefore a motion for reconsideration is unavailable. It further argues that counsel's failure to diary a reinstatement date does not warrant relief from judgment pursuant to R. 4:50-1.
A. Reconsideration
A motion for rehearing or reconsideration is governed by R. 4:49-2. See also R. 8:10 (R. 4:49-2 applies to the Tax Court matters). The rule requires that a motion be served not later than 20 days after service of the judgment or order, and "state with specificity the basis on which it is made, including a statement of the matters or controlling decisions which counsel believes the court has overlooked or as to which it has erred." Ibid.
A motion for rehearing or reconsideration will be granted "only for those cases which fall into that narrow corridor in which either, 1) the Court has expressed its decision based upon a palpably incorrect or irrational basis, or 2) it is obvious that the Court either did not consider, or failed to appreciate the significance of probative, competent evidence . . . ." D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990). Despite this restrictive scope, a court may, "in the interest of justice" consider any "evidence" that the litigant claims is "new or additional . . . which it could not have provided" during the initial hearing. Id. at 401. In this connection, the movant must "initially" show that the trial court "acted in an arbitrary, capricious, or unreasonable manner, before the Court should engage in the actual reconsideration process." Ibid.
Taxpayer has failed to point to any law or fact, or other evidence which this court overlooked in entering its dismissal orders. Therefore, R. 4:49-2 is inapplicable.
B. Relief from Final Judgment
Taxpayer can resort to R. 4:50-1 for the relief it seeks since the December 2012 orders were final judgments. This rule provides that:
the court may relieve a party or the party's legal representative from a final judgment or order for the following reasons: (a) mistake, inadvertence, surprise, or excusable neglect; (b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial under R. 4-49; (c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (d) the judgment or order is void; (e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or (f) any other reason justifying relief from the operation of the judgment or order.If a motion is made for reasons (a), (b) and (c), then it should be made within "one year after the judgment, order . . . was entered . . ." or "within a reasonable time" under the other sub-sections. R. 4:50-2. Here, (b), (c), (d), and (e) of R. 4:50-1 are inapplicable. Taxpayer's motion to reinstate is timely for purposes of (a) or (f) of the Rule.
1. Rule 4:50-1(a)
As noted by the Supreme Court, "[t]he four identified categories in subsection (a), when read together, as they must be, reveal an intent ... to encompass situations in which a party, through no fault of its own, has engaged in erroneous conduct or reached a mistaken judgment on a material point at issue in the litigation." DEG, L.L.C. v. Township of Fairfield, 198 N.J. 242, 262 (2009). Thus, "litigation errors that a party could not have protected against" are afforded relief. Id. at 263 (citations and quotations omitted).
Here, Taxpayer's counsel's failure to diary the time to file a reinstatement motion is not of the quality excused by R. 4:50-l(a). Even if true, the secretary's failure to notify counsel of the receipt of the court's August 24, 2012 Order is not an un-protectable mistake. First, in March of 2012 itself, Taxpayer's counsel was fully aware that Taxpayer's complaints could be dismissed if expert report/s was/were not provided by June 27, 2012. Second, Taxpayer sought an adjournment of the City's July 2012 motion to dismiss the complaints without prejudice for failure to comply with the court's June 27, 2012 appraisal report deadline. Third, it wrote a confirming letter to the court of the rescheduled return date of the motion to August 24, 2012. Fourth, it did not oppose the City's motion in this regard. When fully on notice of the motion, it is not unreasonable to expect Taxpayer's attorney (or any attorney) to foresee an Order in this regard, and thus, follow up on the status of the motion. A cursory status check with the court or the City's counsel after the return date of the motion would have circumvented the mistake Taxpayer's counsel now alleges. Under these circumstances, the court finds that Taxpayer's counsel's failure to calendar the date by which it had to move for reinstatement of the 2009 and 2010 complaints is not an excusable mistake, inadvertence, or surprise, covered by R. 4:50-l(a).
R. 4:50-l(a) also provides for relief in the event of "excusable neglect." This term has been defined as "[c]arelessness . . . attributable to an honest mistake that is compatible with due diligence or reasonable prudence." Mancini v. EDS, 132 N.J. 330, 335 (1993) (holding that defendant's consistent failure to respond to plaintiff's insurance claim; complaint; notice of arbitration award; and confirmation of the award; was inexcusable being incompatible with due diligence or reasonable prudence); see also Tradesmens Nat'l Bank & Trust Co. v. Cummings, 38 N.J. Super. 1, 5 (App. Div. 1955) (excusable neglect means that "which might have been the act of a reasonably prudent person under the same circumstances").
However "[m]ere carelessness or lack of proper diligence on the part of an attorney is ordinarily not sufficient to entitle his clients to relief from an adverse judgment in a civil action." Baumann v. Marinaro, 95 N.J. 380, 394 (1984); cf. Febus v. Barot, 260 N.J. Super. 322 (App. Div. 1992) (finding counsel's failure to appear on the return date of a summary judgment motion excusable neglect under R. 4:50-l(a) because although the return date was erroneously diaried by counsel's secretary, counsel discovered the error and sought an adjournment of the motion. Nonetheless, grant of the motion in favor of defendant was proper because plaintiff did not comply with several court orders directing production of expert reports).
The court's analysis of this matter under R. 4:50-1(a) applies equally here. Taxpayer's counsel did nothing to ascertain the status of the City's motion to dismiss without prejudice which Taxpayer had not opposed, an act which a normally prudent attorney would have undertaken. Additionally, unlike in Febus, supra, there was no attempt to seek an extension of the 60-day time period provided for in the court's August 2012 Order.
2. Rule 4:50-1(f)
This rule applies if the court can find "any other reason justifying relief from the operation of the judgment . . . ." R. 4:50-1. Subsection (f) is "designed to provide relief from judgments in situations in which, were it not applied, a grave injustice would occur." Housing Auth. of Morristown v. Little, 135 N.J. 274, 289 (1994). It is read extremely liberally as its "very essence ... is its capacity for relief in exceptional situations. And in such exceptional cases its boundaries are as expansive as the need to achieve equity and justice." Court Investment Co. v. Perillo, 48 N.J. 335, 341 (1966). "The rule is designed to reconcile the strong interests in finality of judgments and judicial efficiency with the equitable notion that courts should have authority to avoid an unjust result in any given case." Manning Eng'g, Inc. v. Hudson Cnty. Park Comm'n, 74 N.J. 113, 120 (1977).
Thus, the court should consider if Taxpayer's counsel's mistake to follow up on the initial motion to dismiss without prejudice (which culminated into the August 2012 Order which Taxpayer's counsel failed to heed) was an "exceptional" situation, and if so, whether relief is warranted. Whether a particular circumstance is "exceptional" depends on the facts.
"Courts disagree . . . on when attorney error or neglect is a ground for relief under R. 4:50-l(f)." Baumann, supra, 95 N.J. at 397. In general, relief under R. 4:50-1(f) for attorney errors would "create a conflict with R. 4:50-1(a)" because case law generally does not recognize attorney carelessness or negligence as "excusable neglect" for purposes of the latter subsection. Manning Eng'g, supra, 74 N.J. at 125 n.5 (citing and quoting 7 Moore's, Federal Practice (1975)), Therefore, only if the "totality of the circumstances" evidence "gross neglect" by an attorney, would relief may be available under R. 4:50-1(f). Baumann, supra, 95 N.J. at 398.
The federal treatise relied upon by the Court in support of its noted that "the greater the negligence involved, or the more willful the conduct, the less 'excusable' it is; on the other hand, the more inexcusable it is, the greater the natural sympathy with the ultimate victim. Some courts have resolved this dilemma by treating 'gross' negligence by counsel as constituting special circumstances taking the case out of . . . [Fed. R. Civ. Proc. 60 (b)(1), and affording relief under (b)(6)." Moore's Federal Practice, supra, at 366. The Court did "not decide whether counsel's conduct, standing alone, would have satisfied the requirement of "exceptional circumstances" implicit in R. 4:50-1(f)" since it permitted relief because of public policy implicated in public contracts, an issue at the heart of the motion in that case. Manning Eng'g, supra, 74 N.J. at 125.
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The facts here do not evidence "gross" negligence by Taxpayer's counsel. It made court appearances, received motions, and even filed a reinstatement motion (with the required fee) of the 2010 complaint which had been initially been dismissed without prejudice for failure to provide discovery requests. Nor does Taxpayer present any truly exceptional circumstance warranting application of R. 4:50-1(f).
Taxpayer contends that its counsel's negligence was not egregious or willful, especially because Taxpayer had prepared an appraisal report on September 17, 2012, well before the court's 60-day deadline, therefore, "absent" counsel's "mistake" the same would have been "submitted . . . in plenty of time." Taxpayer maintains that it should not be penalized for is counsel's mistake because courts are loath to employ the drastic remedy of dismissal. In support of this argument it relies heavily upon Johnson v. Moutainside Hospital Respiratory Disease Assoc., 199 N.J. Super. 114 (App. Div. 1985).
The predominant policy in our courts is to favor finality of judgments because "litigation must eventually be ended and that at some point the prevailing party be allowed to rely confidently on the inviolability of his judgment." Jansson v. Fairleigh Dickinson Univ., 198 N.J. Super. 190, 194 (App. Div. 1985) (citation omitted). Therefore, undoing such finality pursuant to R. 4:50-1 is a relief that must be "granted sparingly." DEG, supra, 198 N.J. at 261 (2009). Thus, attorney errors are normally insufficient to undo final judgments.
However, also running parallel is the principle that "it is a tenet of our jurisdiction that resolution of disputes on the merits are to be encouraged rather than resolution by default for failure to comply with procedural requirements." St. James AME Dev. Corp. v. City of Jersey City, 403 N.J. Super. 480, 484 (App. Div. 2008); see also State v. 1987 Chevrolet Camaro, 307 N.J. Super. 34, 45 (App. Div. 1998) ("[i]n determining whether a procedural omission warrants the ultimate sanction of dismissal with prejudice, interests in compliance with procedural rules and overall judicial efficiency must be considered together with interests of justice and essential fairness.").
These "competing policies" a court should consider the "range of sanctions" as a preferable remedy. Abtrax Pharms. v. Elkins-Sinn, 139 N.J. 499, 513 (1995); see also Johnson, supra, 199 N.J. Super. at 120 (after the court determines that the non-delinquent party suffered any prejudice, it must decide "whether dismissal with prejudice is the only reasonable and just remedy available" and if there is a "lesser sanction could erase the prejudice against the non-delinquent party" failure to award the same is an "abuse of discretion.").
Taxpayer maintains that since the City has not pointed to any prejudice by Taxpayer's failure to comply with this court's August and December 2012 Orders, and further since the City was "reimbursed for its costs of filing the motion to dismiss with prejudice," the complaints should not be reinstated.
Taxpayer's assertion about monetarily redressing the City is wrong. The $100 reinstatement fee in the court's August 2012 Order was payable to the State, and accordingly, Taxpayer's counsel's $100 check was made out to the New Jersey Treasurer. Further, simply focusing on the absence of evidence from the City of prejudice does not automatically entitle Taxpayer to a relief from the final judgments. Indeed, having made no mention of whether it has provided the City with its expert reports, it is not credible for the Taxpayer to claim lack of any fault on its part.
Nonetheless, under the totality of the circumstances here, the court hesitates to penalize the taxpayer due to its attorney's carelessness in filing the reinstatement motion. Taxpayer's counsel presumably did advise Taxpayer that it needs to obtain appraisal reports in furtherance of the litigation because Taxpayer retained a real estate appraiser on or about June 14, 2012. An appraisal report was prepared in September of 2012, before the 60-day time period expired under the August 2012 dismissal without prejudice Order. Within about two weeks after the December 2012 Orders, Taxpayer filed its motions to vacate the final judgments (albeit incorrectly as a reconsideration motion) with the fee. Therefore, the court finds that the complaints should be reinstated but with sanctions. The Taxpayer's counsel must (a) provide copies of the appraisal report to the City's counsel (if this has not been done), and, (b) pay reasonable attorney fees and/or costs to the City's counsel. See Humiec v. Hoffmann-LaRoche, Inc., 221 N.J. Super. 632, 641 (Law Div. 1987) (payment of reasonable expenses and attorney's fees "is not dependent upon a finding of deliberate misconduct or any specified kind of negligence on the part of the party at fault; the patent objective is to discourage failure to comply with the rules, and also to even the balance by reimbursing the other party.").
If applicable, Taxpayer's counsel must serve Taxpayer's expert's appraisal report to the City's counsel no later than March 22, 2013. The City's counsel should file a certification of its fees/costs in connection with preparing and filing the City's opposition to Taxpayer's motion for reconsideration with the court no later than March 22, 2013. Upon receipt of the same, the court will sign an Order awarding reasonable attorney fees/costs. The complaints will be reinstated only if Taxpayer's counsel provides the appraisal report to the City on or before March 22, 2013 (if this condition applies), and pays the City's counsel fees/costs as directed by a separate order of the court. If these conditions are not complied with, upon the City's counsel notice of non-compliance to this court, the December 2012 Final Orders will not be vacated. CONCLUSION
For the aforementioned reasons, the Taxpayer's motion for reconsideration will be kept pending until the conditions imposed as sanctions are satisfied. An Order reflecting this opinion shall be entered by the court.
Very truly yours,
Mala Sundar, J.T.C.