Cross-Respondent, v. Cross-Appellant. (2010)

Plaintiff Angela Waltman appeals and defendant FYI Directories cross-appeals from an order entered by the Law Division on August 14, 2009, imposing sanctions in the amount of $5,000 upon her attorney, William Hildebrand, for failure to comply with the court rules and the court's orders in this case.   For the reasons that follow, we reverse on the appeal and affirm on the cross-appeal.

The following facts are pertinent to our decision.   On April 21, 2003, plaintiff filed a complaint against defendant FYI Directories (FYI), in which she alleged that defendant violated the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -42, by paying a similarly-situated male employee a higher weekly salary than the salary paid to plaintiff.   With leave of court, plaintiff filed an amended complaint which added a claim for breach of contract.   Plaintiff alleged that FYI's principal, William Hallessey, had promised to provide her with a fifteen percent ownership interest in the company as additional compensation for her employment but reneged on that promise.

Defendant thereafter filed a motion for summary judgment, which was returnable on September 8, 2006.   Plaintiff did not file papers opposing the motion within the time prescribed by the court rules.   Plaintiff provided no explanation for the late filing of her papers.   In support of her argument that summary judgment should be denied, plaintiff provided the court with a certification dated September 8, 2006, and certain documents that supported plaintiff's contention that she had been offered a fifteen percent interest in FYI as additional compensation for working for the company.

The trial court considered the motion on September 22, 2006.   The court found that there was insufficient evidence to support plaintiff's LAD claim.   The court found, however, that plaintiff had presented sufficient evidence to raise a genuine issue of material fact on her breach of contract claim.   The court entered an order dated September 22, 2006, which denied defendant's motion for summary judgment and allowed the parties to undertake further discovery.

On February 26, 2007, FYI filed a second summary judgment motion, which was returnable on March 30, 2007.   The trial court adjourned the motion to April 13, 2007.   At 4:30 p.m. on the afternoon before the return date, plaintiff filed the same papers that she had filed in opposition to FYI's first summary judgment motion.

The court entered an order dated April 13, 2007, granting defendant's summary judgment motion as unopposed.   The court noted that it had not considered plaintiff's opposition papers because it had not been aware that the papers had been filed.   The court stated on the record that it would treat the motion as unopposed because of plaintiff's repeated failure to follow the rules of court.

Plaintiff appealed from the trial court's April 13, 2007 order, and FYI cross-appealed from the order of September 22, 2006, denying its first summary judgment motion.   We reversed the April 13, 2007 order and affirmed the September 22, 2006 order.  Waltman v. FYI Directories, No. A-5335-06 (App. Div. June 26, 2008) (slip. op. at 16).

In addressing FYI's contention that its first summary judgment motion should have been granted because plaintiff's opposition was filed beyond the time prescribed by the court rules, we noted that the trial courts can address the late submission of motion papers in a variety of ways, including sanctions.   Id. at 11 (citing Audubon Volunteer Fire Co. No. 1 v. Church Constr.   Co., Inc., 206 N.J.Super. 405, 407 (App.Div.1986);  Automatic Washer Serv., Inc. v. Brunswick Burlington, Inc., 153 N.J.Super.   343 (App.Div.1977)).   We stated that we did not:

condone plaintiff's counsel's dilatory conduct, and note that on remand, the court may consider appropriate sanctions therefor, we conclude that, in light of all the circumstances, the Law Division did not abuse its discretion in considering plaintiff's late opposition papers in resolving defendant's first summary judgment motion.

[Ibid.]

We also stated that the evidence before the court on the first summary judgment motion raised a genuine issue of material fact as to whether FYI's owners and representative had orally promised plaintiff a fifteen percent ownership interest in the company as additional compensation for working there.  Id. at 12-13.   We concluded that the trial court had properly denied the first summary judgment motion and ordered an extension of discovery.   Id. at 13-14.

We further concluded that the trial court erred by granting FYI's second summary judgment motion.  Id. at 15-16.   We observed that the additional discovery undertaken by the parties had not eliminated the factual dispute pertinent to plaintiff's breach of contract claim and discerned no basis for the trial court's decision to grant the second summary judgment motion.  Id. at 15.

Accordingly, we reversed the grant of summary judgment dismissing plaintiff's breach of contract claim.  Id. at 16.   We remanded the matter to the trial court for further proceedings consistent with our opinion.  Ibid. We stated that “on remand, the trial court may consider the imposition of sanctions short

of outright dismissal for counsel's dilatory pre-trial conduct.”  Ibid.¹

Prior to trial, FYI filed a motion seeking the imposition of sanctions.   The trial court refused to consider the motion at that time.   The case was tried over several days and on July 7, 2009, a jury returned a verdict in favor of FYI. On July 13, 2009, FYI again filed a motion seeking sanctions, consisting of the attorneys' fees and costs it had incurred for:  plaintiff's first deposition;  a motion to extend discovery;  a motion to compel a deposition;  a motion to compel discovery;  the second summary judgment motion;  and plaintiff's third deposition.   FYI sought the imposition of sanctions in the amount of $13,255.28.   Plaintiff opposed the motion.

The trial court considered FYI's motion on August 14, 2009, and placed its decision on the record on that date.   The court decided to grant the motion in part and imposed sanctions upon plaintiff's attorney in the amount of $5,000.   In its decision from the bench, the court noted that FYI had submitted time records from its attorney that detailed the costs it allegedly incurred as a result of the “violations” of the court rules by plaintiff's counsel.   The court also noted that plaintiff had not disputed that FYI's counsel had put “that time in.”

The court commented that its award of sanctions was not “based on any analysis” of the time records.   Rather, the court stated that the award was made in the exercise of its discretion and its belief “that it would just be harsh to, dollar for dollar, grant a sanction in the full amount requested.”   The court accordingly entered an order dated August 14, 2009, which memorialized its decision.   This appeal followed.

In her appeal, plaintiff raises the following arguments for our consideration:  1) FYI waived its request for sanctions by failing to raise this issue in its prior appeal;  2) FYI's request for sanctions is barred by Rule 4:24-2 because it relates to conduct that occurred during discovery;  3) plaintiff's attorney did not engage in any conduct during discovery for which sanctions should be imposed;  4) the trial court was not required to impose sanctions on remand;  and 5) the court failed to make specific findings of fact and conclusions of law in connection with its ruling.

We note at the outset that we agree with plaintiff's contention that our prior decision did not require the trial court to impose sanctions upon plaintiff or her attorney.   In that opinion, we stated that on remand the trial court could consider the imposition of appropriate sanctions to address what we referred to as the “dilatory conduct” of plaintiff's attorney.  Waltman, supra, slip op. at 11.

Moreover, the “dilatory conduct” that we referred to in our prior opinion was the late filing by plaintiff of papers opposing FYI's first summary judgment motion.   We did not suggest that the trial court should impose sanctions for any other “dilatory conduct” taken by plaintiff's attorney.   Indeed, we are convinced that it was too late in the day for the trial court to sanction plaintiff's attorney for what FYI claims were discovery violations.

Rule 4:24-2 provides in pertinent part that “[u]nless the court otherwise permits for good cause shown, motions to compel discovery and to impose or enforce sanctions for failure to provide discovery must be made returnable prior to the expiration of the discovery period.”   R. 4:24-2.   We agree with plaintiff that sanctions should not have been imposed for the alleged discovery violations because FYI did not seek the imposition of sanctions prior to the discovery end date and never established good cause for seeking discovery sanctions beyond the time prescribed by Rule 4:24-2.

Moreover, FYI sought sanctions for the time devoted by counsel and the costs related to its second summary judgment motion.   Although plaintiff also filed her opposition to that motion beyond the time prescribed by the court rules, there is no indication that FYI's counsel was compelled to devote additional time to the matter by reason of the late filing of those papers or any other violation of the court rules.

In addition, the trial court's decision to award FYI sanctions was flawed because the court failed to make findings of fact and conclusions of law to support the award of sanctions.   Such findings and conclusions are required by Rule 1:7-4(a).  Grow Co. v. Chokshi, 403 N.J.Super. 443, 477 (App.Div.2008) (citing Curtis v. Finneran, 83 N.J. 563, 569-70 (1980);  Shulas v. Estabrook, 385 N.J.Super. 91, 96 (App.Div.2006)).   The court's order states that the sanctions were imposed because plaintiff's counsel failed to comply with the court rules and the court's orders.   The court made no findings as to the rules or orders violated.   The court also imposed sanctions of $5,000 but failed to provide any explanation for the amount awarded.

Accordingly, we reverse the August 14, 2009 order and remand the matter to the trial court.   On remand, the trial court should reconsider its award of sanctions.   The court should limit any such award to sanctions required to address the late filing by plaintiff's counsel of the opposition to FYI's first summary judgment.

In its discretion, the court may award FYI the additional costs, if any, that it incurred by reason of the late filing of those papers.   It should do so only after appropriate review of the time records submitted by FYI's attorney.   Alternatively, the court may impose a reasonable monetary sanction upon plaintiff's attorney to address the violation of the court rules.   In either case, the court shall make appropriate findings of fact and conclusions of law, as required by Rule 1:7-4(a).

In its cross-appeal, FYI argues that the trial court erred by awarding it only $5,000 in sanctions, rather than the $13,255.28 it sought.   However, as we have explained, the trial court should not have imposed sanctions for anything other than the late filing of the response to the first summary judgment.   We therefore reject FYI's contention that the court should have imposed sanctions in the amount of $13,255.28.

Reversed on the appeal, affirmed on the cross-appeal and remanded for further proceedings in conformity with this opinion.   We do not retain jurisdiction.

FOOTNOTES

FN1. FYI filed a petition for certification with the Supreme Court.   The petition was denied.  Waltman v. FYI Directories, 196 N.J. 595 (2008)..  FN1. FYI filed a petition for certification with the Supreme Court.   The petition was denied.  Waltman v. FYI Directories, 196 N.J. 595 (2008).

PER CURIAM