The Appellate Division Redresses a “Train Wreck”

Zahl v. Eastland, 2019 WL 2025237 (App. Div. May 8, 2019). [Disclosure: I argued this appeal for the successful defendants-appellants, having come into the case after the Law Division entered judgment against defendants]. This was a legal malpractice case in which the Law Division entered a default judgment against defendants of over $1,057,000. Defendants appealed, and today the Appellate Division (Judges Messano and Fasciale) reversed in an unpublished opinion.

The panel adopted defendants’ characterization of the proceedings that led to the default judgment as a “train wreck,” and that it was. As the Appellate Division observed, there was a failure by the parties and the Law Division “to abide by and follow Part IV rules governing practice and procedure of civil actions in the Law Division. R. 4:1. These transgressions individually and certainly collectively led to a mistaken exercise of the judge’s discretion, satisfying the highly deferential standard of review we apply before reversing a motion court’s resolution of discovery disputes. “

Plaintiff seized on the fact that defendants did not originally respond to discovery. Plaintiff filed a motion to compel production of discovery. When defendants still had not provided discovery, plaintiff move to suppress defendants’ defenses, and that motion was granted, without prejudice. But plaintiff had failed to comply with the requirement of Rule 4:23-5(a)(1), the rule under which the panel assumed that plaintiff was proceeding, that he certify that he himself was in compliance with his own discovery obligations when he filed the motion to suppress defenses. Plaintiff was admittedly not in compliance with those obligations.

Plaintiff then sought a proof hearing, which the panel noted was not proper procedure. The Law Division scheduled a proof hearing, but before the hearing date arrived, defendants provided discovery responses and requested that the hearing not occur. The Law Division proceeded anyway, and entered judgment for plaintiff after brief testimony by one witness.

But it was improper, the Appellate Division said, to conduct a proof hearing when the suppression of defenses was only without prejudice. The panel cited several Appellate Division cases and the authoritative commentary on the Court Rules in support of that position. Moreover, it was not clear how the Law Division determined that the $1,057,000+ amount was the correct one.

For all those reasons, the Appellate Division reversed the judgment against defendants. The case was remanded to the Law Division, with the panel noting that defendants’ “pleading remains stricken unless and until they comply with the rule that governs its restoration,” which defendants had not done below.