Trial Courts Must be Proactive in Ensuring Compliance With Rules Regarding Dismissal With Prejudice for Failure to Make Discovery

A&M Farm & Garden Center v. American Sprinkler Mechanical, LLC, 423 N.J. Super. 528 (App. Div. 2012).  No matter how often the courts inveigh against the failure of attorneys and parties to follow the detailed procedures of Rule 4:23-5 as regards dismissals with prejudice for failure to make discovery, cases presenting that problem continue to pop up.  This case, in which Judge Espinosa wrote for the Appellate Division and reversed a dismissal with prejudice, is one of those instances.

Rule 4:23-5 imposes two particular obligations on the attorney for a party who is delinquent with discovery and who faces a motion to dismiss as a result of that delinquency.  First, when an order is entered dismissing the case without prejudice, the first of the two steps provided by Rule 4:23-5, the attorney is required by Rule 4:23-5(a)(1) to “forthwith serve a copy of the order on the client by certified and regular mail, return receipt requested, accompanied by a notice in the form prescribed by Appendix II-A of these rules, specifically explaining the consequences of failure to comply with the discovery obligation and to file and serve a timely motion to restore.”  Second, if the case proceeds to the second step, a motion to dismiss with prejudice, the attorney must certify that the client was notified as above, or that the client could not be found and therefore was not notified.  Additionally, the attorney must appear in person for oral argument on the return date.  Rule 4:23-5(a)(2).

In this case, the attorney for plaintiff, the delinquent party, did neither of those things.  Despite that, the Law Division granted dismissal with prejudice.  Shortly thereafter, plaintiff provided the missing discovery and moved to reinstate the case.  Plaintiff explained that the motion to dismiss was received in its attorney’s office, but that the papers were not forwarded to the attorney, which was allegedly why the discovery was not provided before the dismissal.  The Law Division found that an insufficient basis to restore the case.

On plaintiff’s appeal, the Appellate Division reversed.  Judge Espinosa acknowledged that a party or its counsel could not block dismissal by the simple expedient of failing to follow the requirements of Rule 4:23-5(a)(1) and (2), and that the mix-up in the office of plaintiff’s counsel did not constitute “extraordinary circumstances.”  Nonetheless, it was an abuse of discretion to dismiss with prejudice. 

Under Rule 4:23-5(a)(3), the court “shall, unless exceptional circumstances are demonstrated, proceed by order to show cause or take such other appropriate action as may be necessary to obtain compliance with the requirements of this rule.”  Here, the Law Division did not take any action to inform itself as to whether plaintiff’s attorney had complied with the requirements.  “The court had no way of knowing that plaintiff had received the protections afforded by the rule and therefore could not make an informed decision to dismiss the complaint with prejudice.”  This was a material issue here, as evidenced by the fact that once plaintiff learned of the dismissal, plaintiff promptly supplied the missing discovery and moved to reinstate.  Thus, ‘minimal action by the court would have assured compliance with both the rule and plaintiff’s discovery obligations.”

Judge Espinosa emphasized that the panel’s ruling was not meant to excuse non-compliance with the rules or to shift the burden of compliance to the courts.  But when a court has no informed basis to know whether the litigant’s rights have been protected, the court must take “some action” to ensure such protection.  That action may be as simple as having a law clerk call the office of counsel for the delinquent party or as involved as issuing an order to show cause.

Counsel for a delinquent party cannot dodge the requirements of Rule 4:23-5 as a way of keeping a case alive.  Counsel for the opposing party, when proceeding through the two-step dismissal process, may want to urge the court to take affirmative action to ensure that the delinquent party has been made aware of its rights before a dismissal with prejudice occurs, and thereby avoid the delay and expense of a situation like that of this case.