Court Opinion

ID: 4431036
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:51:10.314157+00
Date Added: 2024-06-11T14:51:46.881226
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NOT FOR PUBLICATION WITHOUT THE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-3606-16T3

1st COLONIAL COMMUNITY
BANK,

        Plaintiff-Respondent,

v.

TRACEY FARKAS,

     Defendant-Appellant.
____________________________

              Submitted February 7, 2018 – Decided June 28, 2018

              Before Judges Nugent and Geiger.

              On appeal from Superior Court of New Jersey,
              Law Division, Camden County, Docket No. L-
              1613-16.

              Francis X. Moran, attorney for appellant.

              Saldutti Law Group, attorneys for respondent
              (Thomas B. O'Connell, of counsel and on the
              brief).

PER CURIAM

        A party seeking sanctions against an adversary for engaging

in frivolous litigation must, among other things, file the motion

for sanctions "no later than [twenty] days following the entry of
final judgment."     R. 1:4-8(b)(2).      To be "final," a judgment must

be final as to all parties and all issues.

     In the case before us, the trial court dismissed defendant

Tracey Farkas's motion for sanctions as untimely, because Farkas

filed the motion more than twenty days after the court entered

summary judgment in her favor.        When the court entered the order

for summary judgment, however, plaintiff 1st Colonial Community

Bank (the Bank) had pending a motion to amend the complaint.

Because the issue of the amendment remained unresolved when the

court filed the order for summary judgment, the summary judgment

order was not final.       For that reason, we find Farkas's appeal

meritorious, vacate the order dismissing her claim for frivolous

litigation sanctions, and remand for disposition of the motion on

its merits.

     This action's procedural history began in May 2016 when the

Bank filed a three-count complaint against Farkas.            The complaint

alleged that when the Bank commenced a foreclosure action against

a commercial property primarily operated as a bar and restaurant,

Farkas was a tenant in an apartment on the second floor.                 The

complaint     also   alleged   that   after     the   Bank   commenced   the

foreclosure action, the court appointed a receiver, the receiver

entered into a lease with Farkas, and Farkas made no rental

payments as required by the lease.            Discovery later established

                                      2                             A-3606-16T3
there never was a lease.      The complaint stated causes of action

against Farkas for breach of the lease, negligence, and equitable

and legal fraud.

     Farkas filed an answer, asserted the complaint was frivolous,

and sent a letter demanding the Bank dismiss the complaint to

avoid sanctions under Rule 1:4-8 and N.J.S.A. 2A:15-59.1, the rule

and statute that, among other remedies, permit a party to recover

counsel fees when an adversary has engaged in frivolous litigation.

The Bank did not dismiss the complaint, even though counsel for

the Bank admitted during discovery — contrary to the allegations

in the complaint — that no lease existed between either the Bank

or the receiver and Farkas.     Despite the absence of a lease and

any basis for the complaint's negligence and fraud counts, the

Bank filed a motion for summary judgment, which the court denied.

     Following   discovery,   Farkas   filed   a   motion   for   summary

judgment, which the court granted.      The court entered the order

for summary judgment on December 16, 2016.     Meanwhile, on December

12, 2016, four days before the court decided the summary judgment

motion, the Bank had filed a motion to amend the complaint.            The

court did not dispose of the Bank's motion to amend when it granted

summary judgment to Farkas.

     The Bank's notice of motion to amend the complaint did not

specify the precise relief sought, that is, what the proposed

                                  3                               A-3606-16T3
amendment would entail.   The body of the Bank's supporting brief

suggested the Bank sought to add causes of action against Farkas

based on unjust enrichment and quantum meruit.   In contrast, the

brief's sole point heading stated: "PURSUANT TO R. 4:9-1, THIS

COURT SHOULD PERMIT PLAINTIFF'S MOTION TO AMEND THE COMPLAINT TO

ADD ELIZABETH DEMPSEY AS AN ADDITIONAL DEFENDANT."   The proposed

order did not mention Elizabeth Dempsey and was consistent with

the body of the brief.

     The Bank did not withdraw its motion to amend, either before

or when the court decided Farkas's summary judgment motion, and

the court did not dispose of the Bank's motion to amend when it

granted summary judgment to Farkas.   On January 3, 2017, the Bank

wrote a letter to the court, which stated: "Please allow this

correspondence to serve a[s] [p]laintiff's request to withdraw the

motion to amend, returnable on January 20, 2017."    According to

the court's automated case management system, the motion was

disposed of on the return date when the "proceeding" was noted on

the docket as "cancelled" because the motion had been withdrawn.

     Farkas filed a motion seeking frivolous litigation sanctions

on January 24, 2017, thirty-nine days after the order for summary

judgment, twenty-one days after the date of the Bank's letter

withdrawing the motion to amend, and four days after the return

                                4                          A-3606-16T3
date of plaintiff's motion to amend.     The court denied Farkas's

motion as untimely.

     During oral argument on Farkas's motion for sanctions, in

response to the court's question, Farkas explained the case did

not end with the grant of summary judgment, because she was

required to respond to the motion to amend the complaint.        The

court pointed out the party the Bank sought to add to the case was

not Farkas.    The court questioned Farkas about "what else" there

was "that either [the Bank] could call her into court on, or [the

judge] could call her into court on."        Farkas and the court

apparently overlooked that the Bank sought to add two new counts

against Farkas.1

     When Farkas argued that Rule 1:4-8(b)(2) required a party to

file the motion for sanctions within twenty days following the

entry of a judgment, the court responded: "That was the summary

judgment.     That's why it's called summary judgment."   The court

gave no consideration to the rule's language requiring the party

to bring the motion for sanctions "no later than [twenty] days

1
    For the first time on appeal, the Bank characterizes the
reference in its motion brief to implead another party as a
"scrivener's error." Perhaps the Bank did not point this out to
the trial court because the court did not give the Bank the
opportunity to "argue" during oral argument on Farkas's motion for
sanctions. In any event, the Bank was silent during argument on
the motion, despite the court's consideration of the Bank's pending
motion to amend as a motion to implead another party.

                                  5                         A-3606-16T3
following the entry of final judgment."   R. 1:4-8(b)(2) (emphasis

added).    The court continued, "my rule is, if you're asking for

relief under a Rule or Statute, follow the Rule yourself."

     The court disagreed with Farkas that the pending motion had

anything to do with her.     The court repeated that she was not

"even a necessary party to respond to that motion."      The court

added, "had we gotten there on January 20th, the return date, you

would not have been in court. You might have been as an interested

party, but you wouldn't have had a horse in the race.         Tracey

Farkas had been dismissed.   So, I'm denying the application."      As

noted, the judge's decision overlooked the other relief the Bank

sought, namely, to include two additional causes of action against

Farkas.2

     Farkas moved for reconsideration, which the court denied.

This appeal followed.

     Farkas argues the order for summary judgment became final on

January 20, 2017, the return date of the Bank's motion to amend.

She also argues the trial court misapplied Rule 1:4-8(b)(2) by

2
   The record is not entirely clear as to whether the trial court
was aware of the pending motion, or was merely responding to
Farkas' arguments. Nevertheless, the court did not consider when
a judgment was "final," and the court apparently based its decision
on the inaccurate assumption the Bank sought no relief involving
Farkas in its motion to amend the complaint.

                                 6                           A-3606-16T3
misapprehending what constituted a final judgment and failing to

appreciate the significance of the Bank's motion to amend the

complaint.

     The Bank argues the trial court properly determined the

summary judgment order was final.    Essentially, the Bank contends

that when the court granted summary judgment to Farkas, the Bank's

motion to amend the complaint became moot.

     This appeal does not involve any disputed facts.   Rather, the

issue to be resolved involves the application of legal principles

to undisputed facts.   For that reason, we owe no deference to the

trial court's legal conclusions.     Manalapan Realty, LP v. Twp.

Comm. of Manalapan, 140 N.J. 366, 378 (1995).

     A party seeking frivolous litigation sanctions against an

adversary's attorney and an adversary under Rule 1:4-8 and N.J.S.A.

2A:15-59.1 must follow the procedure set forth in Rule 1:4-8.

State v. Franklin Sav. Account, 389 N.J. Super. 272, 281 (App.

Div. 2006).    One such requirement is that the party seeking

sanctions must file the motion "no later than        [twenty] days

following the entry of final judgment."    Rule 1:4-8(b)(2).     It is

now "well settled that a judgment, in order to be eligible for

appeal as a final judgment, must be final as to all parties and

all issues."   Pressler & Verniero, Current N.J. Court Rules, cmt.

2.2.2 on R. 2:2-3 (2018).   Interlocutory orders are reviewable by

                                 7                             A-3606-16T3
a trial court at any time.         Sullivan v. Coverings & Installation,

Inc., 403 N.J. Super. 86, 96 (App. Div. 2008) (citation omitted).

     Here, the order granting Farkas summary judgment was not

final,    because,   when   the    trial    court   granted   Farkas   summary

judgment,    the   Bank's   motion    to    amend   the   complaint    remained

pending.    Had the Bank not withdrawn the motion, the trial court

would have disposed of it on its return date.3                Contrary to the

trial court's assumption at oral argument, the motion directly

affected Farkas.     Had the court granted the motion, Farkas would

have been required to defend against two additional causes of

action.    She indeed "had a horse in the race."

     Nor do we find persuasive the proposition that Farkas did not

have to respond to the Bank's motion to amend in light of the

summary judgment motion.          Lawyers cannot be expected to predict

with certainty how a trial court will rule on any given motion.

Farkas and her attorney were obligated to respond to the Bank's

motion.

     In any event, the order for summary judgment did not dispose

of all issues as to all parties.           Hence, it was not a final order.

And even if it were a final order, the confusion concerning its

3
   The Bank does not argue the order of summary judgment became
final when it withdrew the motion to amend.

                                       8                                A-3606-16T3
finality — which was left unresolved when the bank did not withdraw

its motion to amend and the court did not resolve the issue during

the hearing on Farkas's summary judgment motion — militated in

favor of the court relaxing the filing deadline in the interests

of justice.   R. 1:1-2(a).

      For the foregoing reasons, the orders denying Farkas's motion

for   frivolous   litigation   sanctions   and   reconsideration   are

vacated.   The matter is remanded for consideration of the motion

on the merits by a different judge.        Our opinion should not be

construed as suggesting in any way the outcome of the motion.        We

do not retain jurisdiction.

      Vacated and remanded.

                                  9                           A-3606-16T3