Opinion
DOCKET NO. A-3601-11T2
04-30-2013
RIDGEWOOD AVENUE SHOPPING CENTER, LLC, a New Jersey limited liability company, Plaintiff-Respondent, v. I SCREAM, LLC, a New Jersey limited liability company, and JOSEPH TASHJIAN, SALVATORE DONADIO, and ROBERT DONADIO, individually and jointly and severally, Defendants-Appellants.
Law Offices of Charles Shaw, attorneys for appellants (Mr. Shaw, on the brief). Freundlich & Reisen, LLP, attorneys for respondent (Lawrence J. Freundlich, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Waugh and Leone.
On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-1825-11.
Law Offices of Charles Shaw, attorneys for appellants (Mr. Shaw, on the brief).
Freundlich & Reisen, LLP, attorneys for respondent (Lawrence J. Freundlich, of counsel and on the brief). PER CURIAM
Defendants I Scream, LLC (I Scream), Joseph Tashjian, Salvatore Donadio, and Robert Donadio appeal from the trial judge's January 20, 2012 order and March 2, 2012 order. Those orders arose from their failure to serve their demand for trial de novo (demand) on plaintiff Ridgewood Avenue Shopping Center, LLC. In the January 20 order, the judge vacated their demand, dismissed plaintiff's complaint with prejudice, and denied as moot defendants' motion for leave to file an amended answer, a counterclaim, and a third-party complaint. In the March 2 order, the judge denied reconsideration. We affirm.
Defendants assert that I Scream's proper name is I Scream Ice Cream, LLC.
I.
Plaintiff owns commercial property on East Ridgewood Avenue in Paramus that it rented to I Scream under a lease guaranteed by the other defendants. Plaintiff filed a complaint against defendants, alleging that they owed and refused to pay rent for July 2010 through March 2011. Plaintiff sought a total of $36,808.68, plus interest, attorney's fees, costs, and future rent.
Defendants filed a pro se answer. The answer alleged that I Scream terminated the lease and vacated the premises in November 2010 because plaintiff had failed to do repairs required by the lease, resulting in issues with the Health Department. Defendants failed to serve their answer on plaintiff, a failure which plaintiff only discovered when it tried to file for default.
I Scream's name was scratched out on the answer, presumably because as a limited liability company it cannot appear without counsel. See R. 1:21-1(c).
At the October 25, 2011 arbitration hearing, the arbitrator noted that the lease required plaintiff to keep the premises in good repair, and credited defendants' testimony that leaking water and mold caused damage to the tenant's business in an amount which exceeded plaintiff's losses. The Report and Award of the Arbitrator awarded plaintiff $0 and stated that "[p]arties desiring to reject this award and obtain a trial de novo must file with the division manager a trial de novo request together with a $200 fee within thirty (30) days of today." It also cited R. 4:21A-6(c).
Because the courts were closed on Thanksgiving and the day after Thanksgiving, the deadline for defendants to file a demand was November 28, 2011. R. 1:3-1; Supreme Court Order (Nov. 4, 2011).
On November 23, 2011, defendants filed pro se Notice of Demand for Trial De Novo. The demand stated: "this notice having been served on all parties, trial de novo is hereby requested . . . pursuant to RULES 4:21A-6(b)(1) and 4:21A-6(c)." It is undisputed that defendants did not in fact serve the demand.
Tashjian signed "individually and as president of I Scream, LLC."
After receiving the demand, the court clerk issued two computer-generated notices dated November 23, 2011, scheduling a settlement conference and a trial, respectively. When plaintiff received the notice of settlement conference, it contacted the clerk because it thought the matter had been resolved in arbitration. The clerk advised that defendants had demanded a trial de novo. Plaintiff obtained a copy of the demand from the clerk's office. On December 16, 2011, plaintiff wrote the trial judge, explaining that defendants had never served a demand, and that "if they plan on moving to amend their [answer] to add a Counterclaim," plaintiff would oppose that.
On January 4, 2012, defendants, now represented by counsel, moved to file an amended answer with a counterclaim and third-party complaint, to extend discovery, and to adjourn the trial date. The proposed counterclaim asserted nine causes of action seeking damages for losses resulting from leaking water, mold and other defects in the premises, which caused defendants to fail health inspections, and which plaintiff failed to repair. The proposed third-party complaint asserted seven causes of action against a realtor and plaintiff's purported owner.
On January 20, 2012, the trial judge held a telephone hearing with counsel for both sides. Defendants' counsel stated that defendants filed the demand before counsel was retained. Although he was unable to "speak to why they didn't serve it," he thought "they weren't aware that they had to serve it." Defendants' counsel asked for "relaxation of the rules" because they had represented themselves, and because plaintiff had not been prejudiced.
The trial judge ruled that defendants had failed to serve their demand on plaintiff within thirty days of the arbitration, as required by Rule 4:21A-6. The judge recognized that it could relax the rule for good cause or in the interest of justice, but found no reason to do so. The judge vacated the demand, sua sponte dismissed the complaint with prejudice and denied as moot the motion for leave to file an amended answer, counterclaim, and third-party complaint.
Defendants filed a motion for reconsideration, which was heard on March 2, 2012. Citing one of our unpublished opinions, they argued that the clerk's notices of settlement conference and trial put plaintiff on notice that a demand had been filed. The trial judge found no basis for reconsideration.
II.
On appeal, defendants argue that the trial judge abused his discretion and ignored controlling precedent in denying their motion to amend. We must hew to our standard of review. We review only for abuse of discretion the determination whether there was substantial compliance with Rule 4:21A-6(b)(1), or good cause to relax its requirements. See Schor v. FMS Fin. Corp., 357 N.J. Super. 185, 195 (App. Div. 2002). We similarly review only for abuse of discretion the trial court's denial of reconsideration, Del Vecchio v. Hemberger, 388 N.J. Super. 179, 189 (App. Div. 2006), and the denial of a motion to amend, Kernan v. One Wash. Park Urban Renewal Assocs., 154 N.J. 437, 457 (1998). "When reviewing the trial court's exercise of discretion, we do not 'decide whether the trial court took the wisest course, or even the better course, since to do so would merely be to substitute our judgment for that of the lower court . . .'" Burns v. Hoboken Rent Leveling & Stabilization Bd., 429 N.J. Super. 435, 443 (App. Div. 2013) (citations omitted). We review only whether the trial judge pursued a manifestly unjust course. Ibid.
III
Rule 4:21A-6(b) provides in pertinent part:
(b) Dismissal. An order shall be entered dismissing the action following the filing of the arbitrator's award unless:Rule 4:21A-6(c) then states that "[a]n action in which a timely trial de novo has been demanded by any party shall be returned, as to all parties, to the trial calendar for disposition."
(1) within 30 days after filing of the arbitration award, a party thereto files with the civil division manager and serves on all other parties a notice of rejection of the award and demand for a trial de novo and pays a trial de novo fee as set forth in paragraph (c) of this rule; ....[(emphasis added).]
It is undisputed that "[t]he express language of R. 4:21A-6(b)(1) provides that both filing and service of the demand must be accomplished within thirty days of the entry of an arbitration award." Jones v. First Nat'l Supermarkets, Inc., 329 N.J. Super. 125, 127 (App. Div.), certif. denied, 165 N.J. 132 (2000). In Jones, we held "that the requirement of service should be strictly enforced." Ibid. Thus, we ruled that the trial court properly ignored a timely-filed demand because the "demand was not mailed to plaintiffs' counsel until . . . thirty-four days after the award." Ibid.
Here, it is undisputed that defendants never served their demand on plaintiff. Similarly, in Woods v. Shop-Rite Supermarkets, 348 N.J. Super. 613 (App. Div.), certif. denied, 174 N.J. 38 (2002), the plaintiff "completely failed to serve the demand upon anyone." Id. at 617. Because the plaintiff "did not take any steps to satisfy the requirement that a demand for a trial de novo be served on the opposing party," ibid., we held that he could not invoke the substantial compliance doctrine, which requires a showing of "a series of steps taken to comply" with the rule. Id. at 616 (quoting Alan J. Cornblatt, P.A. v. Barow, 153 N.J. 218, 239 (1998) (citation omitted)).
In the trial court, defendants' counsel suggested that the self-represented defendants might have been ignorant of the service requirements in Rule 4:21A-6(b)(1). Appellate counsel has not renewed that argument, and with good reason. Defendants' demand falsely stated, right above their signatures, that the demand had "been served on all parties," citing the very rules that require such service within thirty days, namely Rules "4:21A-6(b)(1) and 4:21A-6(c)."
In any event, as the trial judge ruled, defendants' choice to represent themselves did not justify non-compliance with the rules. Venner v. Allstate, 306 N.J. Super. 106, 110 (App. Div. 1997) (a party's "status as a pro se litigant in no way relieves her of her obligation to comply with the court rules"); accord State v. Drew, 383 N.J. Super. 185, 200 (App. Div.), certif. denied, 187 N.J. 81 (2006).
Instead, defendants emphasize that because the clerk mailed plaintiff a notice setting a trial date, that alerted plaintiff that a demand had been filed as promptly as if defendants had served the demand. They also note that plaintiff subsequently was informed, when it contacted the clerk, that a demand had been filed. Defendants argue that such notice achieved the purpose of Rule 4:21A-6's service requirement.
A similar argument was made in Woods. There, the plaintiff's counsel argued that he had orally notified the defendant that a demand would be filed. We rejected oral notice as an inadequate substitute for service of a written demand, and because, "if we were to hold that oral notice could constitute substantial compliance with a service requirement, this would necessitate an evidentiary hearing any time there was a dispute as to whether such notice had been given." Woods, supra, 348 N.J. Super. at 617.
For similar reasons, oral inquiries to the clerk's office, and notices from the clerk are inadequate substitutes for service of a written demand. These too would necessitate evidentiary hearings to determine when an opposing party learned that an unserved demand had been filed. Finally, a party required by rule to serve the demand cannot "shift the burden to opposing counsel 'to ferret out' whether such a demand actually had been filed." See id. at 616 (quoting trial judge).
Indeed, we have acknowledged that a demand generally triggers a court notice setting a trial date. Nascimento v. King, 381 N.J. Super. 593, 598 (App. Div. 2005); Flett Assocs. v. S.D. Catalano, Inc., 361 N.J. Super. 127, 134 (App. Div. 2003); Corcoran v. St. Peter's Med. Ctr., 339 N.J. Super. 337, 343 (App. Div. 2001). Nonetheless, we have required parties who failed to timely serve the demand to show "substantial compliance," Nascimento, supra, 381 N.J. Super. at 600; Corcoran, supra, 339 N.J. Super. at 343, or "good cause," Flett, supra, 361 N.J. Super. at 134. Furthermore, if we accepted defendants' argument, "every unsuccessful party missing the deadline for [serving a demand] challenging the result of an arbitration could make a similar argument, and the Rule would have no impact." See Accilien v. Consol. Rail Corp., 32 3 N.J. Super. 595, 598 (App. Div.) (refusing to allow parties to avoid the filing requirement of Rule 4:21A-6(b)(1)), certif. denied, 162 N.J. 486 (1999). That is contrary to the language and intent of Rule 4:21A-6(b)(1), which placed on the party seeking trial de novo the burden of serving the opposing party.
As in Woods, defendants here have failed to provide "any explanation" for their failure to serve the demand as required by Rule 4:21A-6(b)(1). Woods, supra, 348 N.J. Super. at 618. In addition, it is undisputed that defendants also failed to serve their answer. The trial judge found it unacceptable that defendants were aware of and chose to ignore the rules' service requirements, either because they again sought to gain tactical advantage, or because they thought they could act "according to their own rules." We agree that to grant relief would reward non-compliance with the rules, and encourage gamesmanship.
Defendants claim that plaintiff suffered no prejudice from their failure to comply with the service requirement. Even assuming that is correct, the lack of prejudice is only the first of five requirements for "substantial compliance." Woods, supra, 348 N.J. Super. at 616. Parties seeking relief must also show "'(2) a series of steps taken to comply with [Rule 4:21A-6(b)(1)], (3) a general compliance with the purpose of [that rule], (4) a reasonable notice of [their] claim, and (5) a reasonable explanation why there was not a strict compliance with [that rule].'" Ibid. (citations omitted). Similarly, "the absence of prejudice" is not itself enough under Flett; a party seeking relief must also show "good cause." Flett, supra, 361 N.J. Super. at 134.
Defendants here cannot meet these other requirements because they failed to take any steps to serve the demand. Woods, supra, 348 N.J. Super. at 616. This failure stands in stark contrast to cases in which parties attempted to make timely service of a demand but were thwarted. See Nascimento, supra, 381 N.J. Super. at 595-96, 601 (finding substantial compliance where defense counsel made a "good faith attempt" to serve the demand, but his secretary inadvertently enclosed a notice of deposition instead of the demand); Flett, supra, 361 N.J. Super. at 134 (finding "good cause" in the "unusual circumstance" where "[d]efendant's counsel prepared the demand and instructed his secretary to file it with the court and serve plaintiff," but before the secretary could do so, she broke her wrist and was unable to return to work); Corcoran, supra, 339 N.J. Super. at 339-40 (finding substantial compliance where defense counsel timely served the demand on plaintiffs' former attorney, and then served the demand upon plaintiffs' current attorney a few days after the thirty-day period).
Consequently, we hold that the trial judge did not abuse his discretion in finding neither substantial compliance nor good cause to relax the rule. Accordingly, the judge properly followed the rule's requirement that "[a]n order shall be entered dismissing the action." R. 4:21A-6(b); see Woods, supra, 348 N.J. Super. at 615; see also Accilien, supra, 323 N.J. Super. at 600.
In their reconsideration motion, and on appeal, defendants assert that the trial judge failed to consider "controlling precedent." As the judge properly recognized, defendants cite an unpublished decision of this court, which cannot "constitute precedent or be binding upon any court." R. 1:36-3; accord Stengart v. Loving Care Agency, Inc., 201 N.J. 300, 317 n.4 (2010). Because defendants failed to show "matters or controlling decisions which counsel believes the court has overlooked or to which it has erred," R. 4:49-2, the judge did not abuse his discretion in denying their motion for reconsideration. See Palombi v. Palombi, 414 N.J. Super. 274, 288-89 (App. Div. 2010).
In denying reconsideration, the trial judge also noted that defendants had prevailed at arbitration, distinguishing this case from those cases in which the party seeking relaxation of the service requirement was seeking a trial de novo from an adverse arbitration ruling. The judge also emphasized that defendants were moving to amend, after arbitration, to file an extensive counterclaim and a new complaint against third parties, and seeking to reopen discovery. The judge stressed that defendants could not use arbitration as a screening event to determine how to reshape the litigation. See Szalontai v. Yazbo's Sports Cafe, 183 N.J. 386, 397 (2005) (upholding the refusal to extend the discovery deadline after arbitration because that would permit a party to use the arbitration procedure as "a screening event to figure out where the weaknesses are" in the case). Because we hold that the trial judge did not abuse his discretion either in its original order, or in finding defendants had not offered a basis for reconsideration, we need not consider the judge's additional reasons for denying reconsideration. Because we affirm its order of dismissal of the complaint with prejudice, we need not consider defendants' arguments in favor of their motion to amend the dismissed complaint.
See Nascimento, supra, 381 N.J. Super. at 595; Flett, supra, 361 N.J. Super. at 129; Corcoran, supra, 339 N.J. Super. at 339.
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Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION