Opinion
DOCKET NO. A-5228-13T4
06-03-2016
LIBERTY MUTUAL INSURANCE, Plaintiff-Respondent, v. DORIS HUGGINS, Defendant-Appellant.
Cho Legal Group, LLC, attorneys for appellant (Jae H. Cho, on the briefs). Law Office of Miriam R. Rubin, attorneys for respondent (Miriam R. Rubin, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Fasciale and Nugent. On appeal from Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-2586-13. Cho Legal Group, LLC, attorneys for appellant (Jae H. Cho, on the briefs). Law Office of Miriam R. Rubin, attorneys for respondent (Miriam R. Rubin, on the brief). PER CURIAM
Defendant Doris Huggins appeals from a May 30, 2014 Law Division order denying reconsideration of an April 7, 2014 order. The April order dismissed her uninsured (UM) or underinsured (UIM) motorist claim, with prejudice, on plaintiff Liberty Mutual Insurance's (Liberty) ex parte application, because Huggins' attorney had missed deadlines for providing discovery and naming an arbitrator. We reverse and remand for further proceedings.
The parties and the trial court at different times referred to Huggins' claim as a UM claim and a UIM claim.
We use the parties' names to avoid confusion with their status and designations in the New York action.
This action's procedural history began on November 27, 2013, when Liberty filed a verified complaint and order to show cause. In the complaint, Liberty alleged the following facts.
Liberty insured Huggins when she was injured in an automobile accident in New York City on January 31, 2004. On May 26, 2004, Huggins' attorneys notified Liberty of a potential UM claim. Liberty heard nothing about the Huggins' claim again until January 27, 2010. In the meantime, Huggins filed a personal injury action in New York that was pending until 2010 "due to numerous delays caused by the pro se defendant."
On January 27, 2010, Huggins, now representing herself, informed Liberty she intended to pursue an uninsured motorist claim. More than three years later, on February 4, 2013, "[a]fter the New York litigation resolved," Liberty served Huggins with a "Notice to Produce." In May 2013, Liberty served defendant with a second Notice to Produce. Following numerous unsuccessful written and oral requests by Liberty of Huggins, who repeatedly said "she has experienced numerous delays for a variety of reasons," Liberty filed the complaint and order to show cause, seeking to obtain responses to the discovery demands.
The February 4, 2013 Notice to Produce demanded medical records and expert reports plaintiff intended to rely on at arbitration or trial, as well as any deposition transcripts or transcripts of examinations under oath concerning the New York City accident.
The May 29, 2013 Notice to Produce demanded defendant sign seventeen authorizations that would enable plaintiff to obtain files from insurance companies relating to claims identified by claim number; proof of any wage loss sustained as a result of the New York City accident; copies of medical bills related to the accident; and copies of "all other expenses" related to the accident. --------
On December 6, 2013, the court signed the order to show cause and scheduled the return date on February 21, 2014. On February 19, 2014, Huggins, now represented by counsel, filed an answer and counterclaim. In the counterclaim, she alleged Liberty: breached the insuring agreement by failing to compensate her for her claim; acted in bad faith; and negligently spoliated evidence.
On February 21, 2014, the court conducted a telephonic conference. Counsel for Huggins explained he had been retained within the previous sixty days, that a representative of Liberty had contacted him and represented she had records "going back as far as 2004, 2005, and even as late as 2011," but said Liberty did not have all Huggins' records. Counsel said he had eight "bank boxes" filled with records that Liberty could inspect.
In response, Liberty's attorney represented that
[o]n at least eight occasions we sent her authorizations and requests for discovery, and I've spoken to her on the phone any number of times and there's got to be a point where I stopped taking her phone calls, because . . . she's not sensible. She would babble on and she would have these excuses that were unbelievable, actually.
Liberty's attorney told Huggins they could communicate either by email or letter. Liberty's attorney also explained that every time she and Huggins spoke, Huggins "would tell [her] printers were broken, things were lost, people were dying, and every time I spoke to her she told me she was going to file an ethics complaint against me, so I said we need to document these communications." The attorney also said Huggins claimed to have many masters degrees in a variety of areas. Lastly, the attorney represented Huggins had filed five prior UM and UIM claims against Liberty.
According to Liberty's attorney, each of the prior claims had been dismissed because Huggins had not cooperated. The attorney simply wanted to move the UM or UIM claim along, but could not do so without Huggins' cooperation.
When Huggins' counsel attempted to ask for an initial deadline different from the one in Liberty's proposed order, the court interrupted and said: "[y]es, and, counsel, you know what? If that was a problem, you should've put it in writing and told me why, but you didn't, so I am signing this order." The court had made clear throughout the proceeding that it was giving counsel for Huggins some leeway to speak even though Huggins had not responded to Liberty's order to show cause.
The court signed Liberty's order, which required Huggins to: respond to the notices to produce within thirty days; sign authorizations within forty-five days; appear for an examination under oath within sixty days; appear for an independent medical examination within ninety days; and appoint an arbitrator within thirty days. The order also required Liberty to appoint an arbitrator within thirty days, and the two arbitrators to select a third arbitrator within forty-five days. The order required that arbitration take place within 150 days. Lastly, the order provided that if defendant did not comply with any date contained in the order, the claim against Liberty for UIM benefits as a result of the accident would be dismissed with prejudice, "upon [Liberty's] ex parte application to the [c]ourt." The court did not explain why it was willing to impose the ultimate sanction, on an ex parte application, for what would be, in essence, a discovery violation.
On March 28, 2014, Liberty's attorney wrote to the court and reported Huggins had not provided the previously requested discovery and had not selected an arbitrator. As a courtesy, Liberty's attorney sent a copy to counsel for Huggins, who wrote the following to the court:
Your honor's Order was written the same day of the conference and since that date this office has sent [Liberty's counsel] whatever she has asked for within reason. First, she was to provide me with three dates her staff is available to come to our office to retrieve any and all files. The medical files are five separate bankers' boxes, and they are cumbersome. I do not know what she wants and doesn't want. [Liberty's counsel] has failed to provide those three dates. I asked her for three available dates for an arbitration, and she has not replied. Furthermore, Liberty Mutual themselves on the same date of the conference (2/12/14) sent me an email outlining what records they were sending her. (See A). Finally, Ms. Huggins has executed all the HIPAA request forms [Liberty's counsel] has sent, and we returned them to her. In reality, Liberty Mutual and their providers have all these records. Any records contained in the banker's boxes in our office are duplicated from their files.
This morning we were notified that [Liberty's counsel] is no longer counsel in this matter. (See B). They have requested a twenty day (20) extension to Answer, which I will gladly agree with. My client and
this firm have tried to cooperate with [Liberty's counsel], but now that a new firm is in place, I will try to again cooperate with them.
I vigorously object to the assertion by [Liberty's counsel] that we have not cooperated at all, when in fact it takes two parties to cooperate.
Liberty's counsel responded and denied Huggins' counsel's version of events. Liberty's counsel explained that defense counsel was to provide dates for inspection of the bankers' boxes he claimed were in his office, but never provided the dates. Liberty's counsel enclosed a letter both confirming Huggins' counsel had offered to permit the inspection and requesting dates when the inspection could occur. According to Liberty's counsel, Huggins' counsel never provided any dates. Additionally, Huggins had not named an arbitrator.
The court granted the ex parte motion, without argument, explaining:
Because of the years that this matter has been pending, and Liberty Mutual says they've been attempting for years to move the matter forward, but moreover, because I pretty much laid it all out on the record on February 21st for [Huggin's counsel], so it wasn't just a matter of maybe Ms. Huggins not understanding, but we reached out to him, got him on the phone, told him there was an order to show cause that I was signing, he gets served with the order and there's still not compliance with the first two paragraphs, and for those reasons I am granting the ex parte relief that's
requested and I am signing this order which now dismisses Ms. Huggins' UM and UIM claims pertaining to this one motor vehicle accident, January 31, 2004, and they are dismissed with prejudice, and any claims pertaining to that accident are barred. I am signing this order this date.
Defendant moved for reconsideration. During argument on the motion, defense counsel claimed he timely obtained HIPAA forms from his client and forwarded them to plaintiff's counsel, but he could not produce a transmittal letter or any other verification they were sent. Defense counsel also acknowledged he did not appoint an arbitrator as required by the court's order. After the court verified the first two paragraphs of the order, the following exchange took place:
THE COURT: There's no compliance. I made it clear. I spent a half hour. I reached out to you despite the fact that you never filed any opposition to the order to show cause that was served on you. I signed an order. I tell you get her the authorization. I tell her - - you get her the name of an arbitrator. I go on the record, I give my reasons again, so if you want to get the transcript, it's all there. I'm giving you the dates. And now you file a motion and in the motion you tell me that it was a case management conference. You tell me that she executed and retuned all HIPAA request forms, but you can't prove it, not in the motion papers and not here today.
And I had my law clerk reach out to you and say the Judge read the papers, the Judge issued a tentative decision denying it, but if you want to come in for oral argument, if I'm missing something that's not in these
papers, then come in and you can have your argument. And you know what? I ask you, okay, so where are the HIPAA request forms, proof that it was sent to [plaintiff's counsel]. I get nothing. So no, motion is denied.Huggins appealed from the implementing order.
[COUNSEL]: May I speak on the record, Your Honor?
THE COURT: No, counsel, at this point you may not.
[COUNSEL]: You're denying me to have my moment in court, my client - you're denying my client to have her moment, to have her say?
THE COURT: She's had her moment, counsel. You've had your moment.
[COUNSEL]: Yes, before - before you -
THE COURT: No, we are done.
[DEFENSE COUNSEL]: - on several occasions.
THE COURT: We are done.
[COUNSEL]: Ms. Huggins has been before you, Your Honor, on several occasions.
THE COURT: Counsel, we're done. We're off the record. Wait for a copy of the order.
Our Supreme Court has addressed the issue of dismissing cases with prejudice for discovery violations:
In respect of the ultimate sanction of dismissal, this Court has struck a balance by instructing courts to impose that sanction only sparingly. The dismissal of a party's cause of action, with prejudice, is
drastic and is generally not to be invoked except in those cases in which the order for discovery goes to the very foundation of the cause of action, or where the refusal to comply is deliberate and contumacious. Since dismissal with prejudice is the ultimate sanction, it will normally be ordered only when no lesser sanction will suffice to erase the prejudice suffered by the non-delinquent party, or when the litigant rather than the attorney was at fault. Moreover, the imposition of the severe sanction of dismissal is imposed not only to penalize those whose conduct warrant it, but to deter others who [might] be tempted to violate the rules absent such a deterrent.
[Abtrax Pharms. v. Elkins-Sinn, 139 N.J. 499, 514-15 (1995) (alteration in original) (citations omitted).]
Here, the trial court overlooked the Supreme Court's caution about dismissing cases with prejudice. We understand the trial court's frustration with counsel, who did not abide by the court's order. But the violations — not giving dates to Liberty's counsel to inspect documents, and not naming an arbitrator — were easily remedied. The court could have simply ordered that the inspection take place on one day's notice by Liberty's counsel to any personnel in Huggins' counsel's office. Concerning selection of an arbitrator, the court had a number of options available, including appointing an arbitrator upon Huggins' failure to do so within a short time frame.
Of greater significance, the court did not even address any potential prejudice to Liberty, let alone prejudice incapable being erased by a lesser sanction. We also note the case had been pending before the court for only five months when the court entered the April 2014 order barring Huggins' claim, and Huggins' counsel had not been involved in the case when Liberty filed its verified complaint.
We understand this action was filed to compel Huggins' cooperation with Liberty, as required by her policy, and we further understand this was not a civil action subject to the discovery rules contained in Part IV of the New Jersey Rules of Court. Nevertheless, Liberty did not seek a declaration its policy was void because Huggins had breached the policy's cooperation clause; rather, Liberty sought discovery from Huggins. Huggins' counsel, not Huggins herself, did not meet the deadline in one court order. To the extent the trial court accepted Liberty's assertions about Huggins' pre-complaint delays, when she was representing herself, it did so without providing her a reasonable opportunity to be heard and to explain the delays.
Liberty points out that Huggins has appealed only from the order denying reconsideration, not the order dismissing her claim with prejudice. That may be so, but the court should have granted Huggins' motion for reconsideration. A motion for reconsideration is addressed to the "'sound discretion of the [c]ourt, to be exercised in the interest of justice.'" Cummings v. Bahr, 295 N.J. Super. 374, 384 (App. Div. 1996) (quoting D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)). Reconsideration is reserved for "cases which fall into that narrow corridor" where the prior decision was "based upon a palpably incorrect or irrational basis"; or failed to consider or appreciate "probative, competent evidence"; or where a "litigant wishes to bring new or additional information to the [c]ourt's attention which it could not have provided on the first application." D'Atria, supra, 242 N.J. Super. at 401. The trial judge in this case overlooked the Supreme Court's pronouncements on dismissing cases with prejudice for discovery violations, and thus the trial court's previous ruling was based upon a palpably incorrect basis.
Liberty also contends the court acted well within its discretion in dismissing Huggins' claims with prejudice because Huggins' counsel made deliberate misrepresentations to the court during the argument on Huggins' reconsideration motion. We fail to discern where in the record the court made findings of fact and conclusions of law on that issue. Moreover, had the court done so, we would have difficulty accepting those findings when the court effectively denied counsel for Huggins oral argument on the issue.
One final note. We identify our concern about the court entering an order permitting the ultimate sanction of dismissal on an ex parte application for two reasons. First, Rule 4:23-5 was amended in 1990 to address using dismissal for discovery failures, "[s]crapping the former practice of an ex parte motion for dismissal by the offended party." Zimmerman v. United Servs. Auto Ass'n, 260 N.J. Super. 368, 373-74 (1992). Second, and more importantly, the court provided no explanation supporting its conclusion, which is a prerequisite. See R. 1:7-4. These flaws in the underlying order provide ample legal bases to reverse and vacate the order of dismissal.
Reversed and remanded. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION