Dismissals for Failure to Prosecute Cannot be With Prejudice

Estate of Semprevivo v. Lahham, ___ N.J. Super. ___ (App. Div. 2021). Judge Rose issued this opinion for the Appellate Division today. It “implicates the proper application and limitations of Rule 1:13-7, long recognized as an administrative ‘docket-clearing rule that is designed to balance the institutional needs of the judiciary against the principle that a just result should not be forfeited at the hands of an attorney’s lack of diligence.'” That Rule deals with dismissals for lack of prosecution.

The appeal, Judge Rose said, addressed “two issues: (1) whether the good cause or exceptional circumstances standard applies for reinstatement of the complaint in a multi-defendant case, where no defendants have appeared in the case and participated in discovery; and (2) whether the rule empowers the trial court to dismiss a complaint with prejudice in response to a motion filed by the nondelinquent party.” The court held that the Law Division had misapplied the exceptional circumstances standard by denying plaintiffs’ motion to restore their dismissed complaint. The Appellate Division also made clear that “Rule 1:13-7 neither empowers a trial court to dismiss a cause of action with prejudice nor authorizes a party in a case to affirmatively seek such a drastic sanction as a form of relief.”

Judge Rose observed that a denial of a motion to reinstate a complaint for lack of prosecution is reviewed for abuse of discretion. Legal issues, though, entailed de novo review.

This was a medical negligence case. “Because this action was dismissed before either defendant answered the complaint or the parties engaged in the process of discovery, the underlying facts are not well developed. The procedural history is somewhat more protracted.” Judge Rose laid out that procedural history in detail. For purposes of this post, however, we can largely gloss over those details.

Rule 1:13-7 states that, in multi-defendant cases where at least one defendant has been properly served, a consent order reinstating the case after dismissal for lack of prosecution is to be submitted within 60 days of the order of dismissal. If that is not done timely, a motion is required. “The motion shall be granted on good cause shown if filed within 90 days of the order of dismissal, and thereafter shall be granted only on a showing of exceptional circumstances.” Here, there was no dispute that plaintiffs filed their motion to reinstate more than 90 days after the order of dismissal.

“The exceptional circumstances standard was intended to avoid delay where a case has proceeded against one or more defendants, and the plaintiff then seeks to reinstate the complaint against a previously-dismissed additional defendant,” Judge Rose said. Quoting the Pressler & Verniero commentary to the Court Rules, Judge Rose noted that the rationale for the exceptional circumstances test is the case management problem that arises in multi-defendant cases when dismissal has been entered as to only one defendant:

“[T]he case likely will have proceeded and discovery undertaken at least with respect to the action(s) against the remaining defendant or defendants. Thus vacation of the dismissal has the capacity of substantially delaying all further proceedings. To permit appropriate case management, the rule requires the consent order to be submitted within 60 days after the dismissal or, in the alternative, on motion for good cause shown within 90 days of the order of dismissal or on a showing of exceptional circumstances thereafter.”

The Law Division erred in applying the exceptional circumstances standard on the facts here. The case was at a point “when application of that standard did not serve the purpose of the rule. The reinstatement motion was filed after plaintiffs filed proof of service as to both defendants, neither of whom had filed an answer and, clearly, discovery had not ensued…. Indeed, the management problem the rule was intended to address –delay of all further proceedings against defendants that have participated in the case and taken discovery –did not exist.” Judge Rose said that the trial court should have invoked Rule 1:1-2(a), which allows relaxation of most Rules if adherence to such a Rule “would result in an injustice.”

Judge Rose then turned to whether plaintiffs had satisfied the “good cause” standard that should have been applied. After discussing precedents about the meaning of “good cause,” she concluded that plaintiffs had shown it. Plaintiffs were blameless, since the delay in service was caused by their counsel’s “staffing issues.” And no prejudice to defendants was shown.

Judge Rose then turned to the dismissal with prejudice that the Law Division ultimately entered, after defendants filed a motion for such relief following the dismissal without prejudice. She noted that Rule 1:13-7 expressly states that dismissals for failure to prosecute are without prejudice. There is no basis in the Rule or any other authority to dismiss with prejudice, and Judge Rose cited case authority and Pressler & Verniero to that effect. Defendants had no right to seek dismissal without prejudice, and the court had no basis to grant that relief. Accordingly, the case was reinstated and remanded for further proceedings