Court Opinion

ID: 4430964
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:50:00.576552+00
Date Added: 2024-06-11T14:57:33.127850
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
        parties in the case and its use in other cases is limited. R. 1:36-3.

                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-2772-15T1

CORPORATE REALTY SERVICES, LLC,

        Plaintiff,

v.

KATHLEEN CROGHAN,

        Defendant/Third-Party
        Plaintiff-Respondent,

and

LISA GERSTMANN-BOYLE,

        Defendant/Third-Party
        Plaintiff,

v.

JOSEPH CROGHAN and KRONER
CONTRACTING, d/b/a KRONER C&C, LLC,

        Third-Party Defendants-
        Appellants,

and

STEVEN CRIVELLO,

     Third-Party Defendant.
____________________________________

              Submitted February 26, 2018 – Decided July 10, 2018
           Before Judges Messano and Vernoia.

           On appeal from Superior Court of New Jersey,
           Law Division, Somerset County, Docket No.
           L-1433-15.

           Santo V. Artusa, Jr., attorney for appellants.

           Judith L. Rosenthal, attorney for respondent.

PER CURIAM

     Third-party defendant Joseph Croghan (Joseph)1 appeals from

a December 8, 2015 order suppressing his answer and affirmative

defenses to the third-party complaint pursuant to Rule 4:23-2(b),

and a February 5, 2016 final order entering judgment against him.

Because we are satisfied the court did not abuse its discretion

by suppressing Joseph's answer to the third-party complaint, we

affirm.

                                   I.

     Third-party plaintiff Kathleen Croghan (Kathleen) and Joseph

were married and then divorced years before the events giving rise

to the present litigation.       In 2014, they were embroiled in an

Essex   County   post-judgment   matrimonial   action   over   Joseph's

obligation to contribute to their child's college expenses.

1
   Because third-party plaintiff Kathleen Croghan and third-party
defendant Joseph Croghan share a surname, we refer to them by
their first names. We intend no disrespect in doing so.

                                   2                            A-2772-15T1
     Kathleen and her friend Lisa Gerstmann-Boyle conducted Google

searches to determine if Joseph had assets or income he failed to

report in the matrimonial action.           As a result of their Google

searches,   they    discovered    checks   totaling    $127,246   that    were

issued by Corporate Realty Services, LLC (CRS), a company owned

by Joseph's close friend Steven Crivello, to Kroner Contracting,

LLC (Kroner), a company Joseph owned.          Kathleen submitted copies

of the checks to the court in the matrimonial action, arguing they

showed Joseph failed to fully disclose his actual income.

     In September 2014, CRS filed a verified complaint alleging

Kathleen and Gerstmann-Boyle violated various federal and state

statutes and engaged in tortious conduct by hacking into CRS's

computer    network.      CRS    sought    temporary   restraints    barring

Kathleen and Gerstmann-Boyle from using or disclosing information

they obtained from their Google searches, but the court denied the

request.

     Kathleen      and   Gerstmann-Boyle     filed     an   answer   to    the

complaint. Kathleen filed a counterclaim against CRS, and a third-

party complaint against Joseph, Crivello and Kroner, alleging they

conspired to disguise and hide income earned by Joseph for the

purpose of preventing disclosure of the income in Kathleen and

Joseph's post-judgment matrimonial proceedings.

                                      3                              A-2772-15T1
      CRS's    claims        against      Kathleen        and     Gerstmann-Boyle            were

subsequently dismissed pursuant to a settlement agreement.                                    CRS

agreed to pay Kathleen and Gerstmann-Boyle $7500.                             Following the

settlement, only Kathleen's third-party claims against Joseph and

Kroner      (hereinafter       referred        to   collectively            as    third-party

defendants) remained.

      Kathleen        had       served          third-party            defendants            with

interrogatories        and    document         demands,        and    attempted        to    take

Joseph's deposition. In April 2015, Kathleen first moved to compel

discovery,      requesting          an    order      directing         that       third-party

defendants      provide       full       and    complete        responses         to   certain

interrogatories and document demands, and that Joseph appear for

a deposition. In a May 7, 2015 order, the court granted the motion

in   part    and    denied     it    in    part     as    to    the    responses        to    the

interrogatories        and    document         demands,     and      also    directed        that

Joseph appear for a June 29, 2015 deposition.

      Kathleen       subsequently         served         Joseph      with     a    notice      of

deposition for June 29, 2015, with an attached notice to produce

documents.         Third-party defendants did not provide supplemental

responses to the outstanding interrogatories, did not produce any

documents in response to the notice to produce that was attached

to the deposition notice, and unilaterally adjourned the court-

ordered June 29, 2015 deposition.                   Kathleen again moved to compel

                                               4                                        A-2772-15T1
third-party defendants' provision of full and complete responses

to   the   outstanding   interrogatories       and   document    demands,    and

Joseph's attendance at a deposition.             Kathleen also sought an

award of attorney's fees.

       In a July 10, 2015 order, the court directed that third-party

defendants provide answers to the outstanding interrogatories and

document    demands.     The    court   also   directed   that    third-party

defendants pay Kathleen's counsel fees "representing sanctions

for" their "violation of the May 7, 2015 [o]rder, including legal

fees   incurred   in   having    to   file   repeated   motions    to    obtain

discovery."    The court instructed the parties to confer and agree

on a date for Joseph's deposition.

       The deposition was scheduled for July 23, 2015, but neither

Joseph nor his counsel appeared or informed Kathleen's counsel

they would not attend.     On or about July 27, 2015, Kathleen filed

her third motion to compel discovery, seeking an order directing

third-party defendants to provide answers to interrogatories and

responses to the document demands as directed in the May 7 and

July 10, 2015 orders, and that Joseph appear for his deposition.

Kathleen also requested an award of attorney's fees.

       The judge who heard Kathleen's first two discovery motions

retired, and her third motion to compel discovery was assigned to

Judge Yolanda Ciccone.         In August 2015, Judge Ciccone issued a

                                        5                               A-2772-15T1
preliminary decision prior to the motion's return date, but the

parties did not accept the decision and requested oral argument.

The motion was subsequently assigned to Judge Margaret Goodzeit

for argument and disposition.

     While the motion was pending, Kathleen served third-party

defendants with a second set of interrogatories and document

demands.    The record shows that third-party defendants never

provided responses to either.

     Judge Goodzeit heard argument on Kathleen's third motion to

compel discovery, reviewed the transcript from the hearing on

Kathleen's first motion, and determined third-party defendants

failed to comply with the court's prior orders compelling responses

to certain interrogatories and document demands, and failed to

advise counsel that neither Joseph nor his counsel would attend

the July 23, 2015 deposition.      The judge entered an October 15,

2015 order finding Joseph "in violation of litigant's rights for

failure to comply with the May 7, 2015 and July 2015 orders."         The

judge ordered that Joseph provide fully responsive answers to

designated interrogatories and documents in response to designated

document   demands,   and   directed   that   Joseph   appear   for   his

deposition on October 29, 2015, with all of the documents requested

in the notice to produce attached to the deposition notice.           The

court further ordered that if Joseph failed to comply with the

                                  6                              A-2772-15T1
foregoing directives, Kathleen could file a motion on short notice

requesting that third-party defendants' answer be stricken.                     The

court also granted Kathleen's request for attorney's fees.

      The   parties      subsequently   agreed    to     reschedule       Joseph's

deposition for November 3, 2015.            Joseph opted to appear and

testify without his counsel.         The record shows the deposition was

contentious, with Joseph providing evasive answers to many of the

questions, and offering commentary concerning Kathleen's counsel's

questions and the merits of Kathleen's claims.                  Joseph insulted

Kathleen, calling her a "crook," "skunk," and "that thing," and

made derogatory references about Kathleen's counsel, including

describing    her    as   "scatterbrain[ed],"      "stupid,"       "brainless,"

"dumb," and "the rear end of a dog."        Shortly after a lunch break,

he announced he was leaving the deposition at 4:00 p.m. because

he had forgotten to take his heart medication that morning.                  A few

minutes past 4:00 p.m., he left the deposition in the middle of

counsel's questioning.

      Kathleen      subsequently    filed   a    motion    on     short     notice

requesting the suppression of third-party defendants' answer with

prejudice.       After    hearing   argument,    Judge    Goodzeit    issued       a

comprehensive written statement of reasons detailing Kathleen's

attempts to obtain third-party defendants' discovery responses,

and   third-party     defendants'    provision    of   incomplete     and      non-

                                        7                                  A-2772-15T1
responsive answers to certain discovery requests and complete

failure to provide responses to others in violation of the rules

and the court's prior orders.       The judge also described third-

party defendants' failure to pay certain court-ordered sanctions

and the gamesmanship they employed in their attempts to pay others.

     The judge also determined that during Joseph's November 3,

2015 deposition he failed to provide any of the documents that had

been requested and which the court previously ordered he produce,

and he "instead cho[se] to insult Kathleen and her counsel and

provid[e] evasive responses to relevant questions."                The court

found Joseph "unilaterally terminated his deposition prior to

completion, relying on his purported health issues, which, to

date, he has failed to provide any evidence of whatsoever."               The

court found Joseph failed to produce "a scintilla of evidence

tending to prove that he ha[d] any medical issues, or that he even

takes   medication,"    and   observed    that      Joseph   testified      he

"[s]ometimes" works "24-hour days," "six days [a week]" but claimed

he needed to terminate the deposition because of his purported

medical condition.     The court observed that if Joseph had provided

discovery   responses    as   directed   by   the    court   and    provided

responsive answers, there is a strong likelihood his deposition

would have ended more quickly.

                                   8                                 A-2772-15T1
      The court concluded the sanction of striking third-party

defendants' answer was required because: the discovery Joseph

continuously failed to provide went to the foundation of Kathleen's

claims; Joseph's refusal to comply with the court's prior orders

was   "deliberate     and    contumacious;"     no   lesser   sanction     would

suffice because the outstanding discovery may have been destroyed

and a second deposition is unlikely to produce any probative

evidence; and Joseph, rather than his counsel, is responsible for

the violations and the failure to maintain documents requested in

the discovery demands.          The court determined Joseph failed to

demonstrate    that    his    violations   of    the   court's   orders       was

justified.    The court entered a December 8, 2015 order suppressing

third-party defendants' answer with prejudice and awarding counsel

fees related to Kathleen's counsel's attendance at the deposition

and the suppression motion.

      Joseph filed a motion for reconsideration.               After hearing

argument, Judge Goodzeit entered a January 11, 2016 order denying

the request.    In a detailed written statement of reasons, Judge

Goodzeit found that Joseph's motion was supported by information

that was available prior to the entry of the December 8, 2015

order, but which Joseph failed to provide to the court at that

time.   The judge also rejected Joseph's claims that the evidence

                                      9                                  A-2772-15T1
had not shown that he willfully violated the court's October 15,

2015 order compelling discovery.

    A different judge subsequently conducted a proof hearing on

Kathleen's third-party claims.     Kathleen testified and presented

documentary evidence.   The court entered a February 5, 2016 final

judgment against Joseph awarding Kathleen $22,154.80 as damages.

This appeal followed.

    On appeal, Joseph presents the following arguments for our

consideration.

         Point I: The Trial Court Erred in Striking
         of [Joseph's] Answer[.]

         A. THE COURT'S DISMISSAL WAS IMPROPER AS IT
         WAS BASED ON A VAGUE COURT ORDER AND
         TRANSCRIPT.

         B. THE COURT'S DISMISSAL WITH PREJUDICE WAS
         IMPROPER PURSUANT TO COURT RULE[.]

         Point   II[:]    Joseph Croghan   Suffered
         Irreparable Harm When [N]ot Permitted to
         Review the Documents Presented During the
         Proof Hearing[.]

         Point III[:] DISQUALIFICATION PURSUANT TO R.
         1:12-1 – THE CASE SHOULD HAVE BEEN TRANSFERRED
         AS SOON AS PRESIDING JUDGE MILLER LEARNED OF
         THIRD   PARTY   DEFENDANT   JOSEPH   CROGHAN'S
         INVOLVEMENT IN THE LITIGATION[.]

                                 II.

    Rule 4:23-2(b)(3) permits a court to enter an "order striking

out pleadings or parts thereof . . . with or without prejudice,

                                 10                         A-2772-15T1
or rendering a judgment by default against the disobedient party"

who "fails to obey an order to provide or permit discovery."          In

its consideration of the ultimate sanction of striking a pleading,

a judge must weigh the delinquent party's right to an adjudication

on the merits with the other party's right to expect compliance

with the discovery rules and orders.      Zaccardi v. Becker, 88 N.J.

245, 256-58 (1982).       The sanction of dismissal should be used

"sparingly," id. at 253, in only "those cases where the order for

discovery goes to the very foundation of the cause of action, or

where the refusal to comply is deliberate and contumacious," Abtrax

Pharm., Inc. v. Elkins-Sinn, Inc., 139 N.J. 499, 514 (1995)

(citation omitted); see also Gonzalez v. Safe & Sound Sec. Corp.,

185 N.J. 100, 115-16 (2005).

     We review a court's dismissal of a pleading pursuant to Rule

4:23-2(b)(3) for an abuse of discretion.     Abtrax, 139 N.J. at 517;

see also Allegro v. Afton Vill. Corp., 9 N.J. 156, 161 (1952)

(recognizing "[i]t is peculiarly within the sound discretion of

the trial court" to determine the sanction imposed for a discovery

breach).   An abuse of discretion occurs "when a decision is 'made

without    a   rational   explanation,   inexplicably   departed   from

established policies, or rested on an impermissible basis.'"       U.S.

Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467-68 (2012) (quoting

Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123 (2007)).

                                  11                           A-2772-15T1
     Measured against these standards, we are satisfied Judge

Goodzeit did not abuse her discretion by striking Joseph's answer

with prejudice, and we affirm substantially for the reasons set

forth   in    the   judge's   well-reasoned     December   8,    2015   written

statement of reasons.         The record supports her determination that

Joseph violated the October 15, 2015 order compelling discovery

by failing to provide responses to the written discovery demands

designated in the order, and by being evasive during his court-

ordered deposition and unilaterally terminating the deposition

prior to its conclusion without justification or applying for a

protective order.

     We reject Joseph's contention the October 15, 2015 order was

entered in error because the May 7, 2015 order was vague and Judge

Goodzeit improperly relied on the transcript of the proceedings

before the judge who issued the May 7, 2015 order.              Joseph ignores

the court's July 10, 2015 order, which he does not challenge on

appeal,      directing   that    he   provide   responses       to   Kathleen's

interrogatories and document demands and imposed sanctions for

violating the May 7, 2015 order.           Moreover, on October 15, 2015,

Judge Goodzeit again ordered that Joseph provide responses to

particular interrogatories and document demands.            Joseph does not

challenge the October 15, 2015 order on appeal, and he never

provided the responses as required.         Thus, any purported confusion

                                      12                                A-2772-15T1
over the alleged vagaries of the May 7, 2015 order provides no

justification for Joseph's failure to respond to the discovery

demands in response to either the July 10 or October 15, 2015

orders.

     Joseph also contends the court erred because he attended his

deposition on November 3, 2015, and terminated the deposition

because of his purported medical condition.                As Judge Goodzeit

correctly observed, however, Joseph did not produce any evidence

beyond his bald assertion that a medical condition precluded his

continued participation at his deposition.                 On his motion for

reconsideration, Joseph attempted to revive his contention that a

medical condition prevented the continuation of his deposition,

but failed to provide any competent evidence from a medical

professional supporting his claim.             See R. 1:6-6 (requiring that

motions based on facts not appearing of record must be supported

by affidavits made on personal knowledge setting forth "facts

which are admissible in evidence to which the affiant is competent

to testify").

     In    addition,   Joseph's      abusive     conduct   toward    Kathleen's

counsel    and   evasive   answers    to   her    questions   throughout     the

deposition   support   Judge   Goodzeit's        conclusion   that    an   order

directing the continuation of the deposition would have been

useless.    He argues the court erred in striking his answer because

                                      13                                A-2772-15T1
he attended his deposition, but his words and conduct during the

deposition constituted a clear and unequivocal declaration – he

will answer only those questions he chooses to answer.

     "A    litigant    that   deliberately    obstructs   full    discovery

corrupts one of the fundamental precepts of our trial practice –

the assumption by the litigants and the court that all parties

have made full disclosure of all relevant evidence in compliance

with the discovery rules."         Abtrax, 139 N.J. at 521.      The record

supports     Judge    Goodzeit's    finding   Joseph   deliberately      and

contumaciously breached that precept and the court's prior orders

here.     See id. at 514.

     The discovery Kathleen sought in the interrogatories, demands

for documents and during Joseph's deposition was at the center of

her claim Joseph conspired with CRS and Crivello to hide income

he and Kroner earned for work performed for CRS.           The requested

information related directly to Kroner's receipt of the payments

from CRS and the manner in which the payments were paid and

deposited into accounts in which either Joseph or Kroner had an

interest.     Joseph, however, consistently refused to provide that

information even when ordered to do so by the court.             See ibid.

at 514 (finding that striking a pleading is appropriate where the

discovery violation goes to the foundation of a claim).

                                     14                             A-2772-15T1
     In sum, Joseph fails to demonstrate that Judge Goodzeit's

decision was made without a rational explanation, departed from

established principles or rested on an impermissible basis.             See

Guillaume, 209 N.J. at 467-68.         Finding no abuse in the exercise

of her discretion, we affirm the December 8, 2015 order striking

third-party defendants' answer with prejudice.2

     We are not persuaded by Joseph's claim that he suffered

prejudice when he was not permitted to review documents presented

by Kathleen during the proof hearing.          The record contradicts the

contention. At the outset of the proof hearing, Kathleen's counsel

provided binders to Joseph and the court that included documents

which   had   been   marked   as   potential   trial   exhibits.   It   was

represented at the proof hearing that the exhibits had been

supplied both during discovery and prior to the hearing, Joseph's

counsel did not argue to the contrary, and there is no evidence

showing otherwise.     Thus, Joseph had the opportunity to review all

of the exhibits prior to hearing as they were assembled in the

binder and presented at the hearing.

2
     Joseph does not argue the court erred by denying his
reconsideration motion. We therefore do not address the January
11, 2016 order denying the motion. An issued not briefed on appeal
is deemed waived. Jefferson Loan Co. v. Session, 397 N.J. Super.
520, 525 n.4 (App. Div. 2008); Zavodnick v. Leven, 340 N.J. Super.
94, 103 (App. Div. 2001).

                                     15                            A-2772-15T1
     In addition, the court admitted only three of the exhibits,

and Joseph concedes he was provided with copies of those exhibits.

The remaining exhibits in the binders were collected without

objection     because   they     contained         confidential      financial

information, and Joseph's counsel expressly advised the court he

did not need any exhibits that were not admitted in evidence.

Joseph's counsel did not seek to admit any of the exhibits into

evidence or question Kathleen, the only witness at the hearing,

about them.    Thus, Joseph's claim he was either deprived of the

documents, suffered prejudice because he did not receive them

prior to the hearing, or suffered prejudice because the exhibits

were not admitted in evidence is without merit.

     Joseph also argues he is entitled to a reversal because the

Presiding Judge of the Civil Division had a conflict of interest.

He contends the judge represented Joseph in a matter prior to

becoming a Superior Court judge.             We find the contention lacks

sufficient merit to warrant discussion in a written opinion, R.

2:11-3(e)(1)(E),    noting     that        the   Presiding   Judge    had     no

involvement in the matter and, after Joseph raised the issue in a

motion that was heard in April 2016, Judge Ciccone transferred

venue of the case to Ocean County.

     We do not address the merits of any argument raised for the

first time in Joseph's reply brief, including those related to the

                                      16                               A-2772-15T1
sufficiency     of   the   evidence        supporting   the     court's      final

judgement.      It is improper for a party to use a reply brief to

raise an issue for the first time or enlarge the main argument.

State v. Smith, 55 N.J. 476, 488 (1970); L.J. Zucca, Inc. v. Allen

Bros. Wholesale Distribs. Inc., 434 N.J. Super. 60, 87 (App. Div.

2014);   N.J.   Citizens   Underwriting       Reciprocal      Exch.   v.    Kieran

Collins, D.C., LLC, 399 N.J. Super. 40, 50 (App. Div. 2008).

Accordingly, an issue that is not addressed in a party's initial

merits brief is deemed waived.        See Drinker Biddle & Reath LLP v.

N.J. Dept. of Law & Pub. Safety, 421 N.J. Super. 489, 496 n.5

(App. Div. 2011); Liebling v. Garden State Indem., 337 N.J. Super.

447, 465-66 (App. Div. 2001).

     Affirmed.

                                      17                                   A-2772-15T1