1st COLONIAL COMMUNITY BANK VS. TRACEY FARKAS (L-1613-16, CAMDEN COUNTY AND STATEWIDE) ( 2018 )

NOT FOR PUBLICATION WITHOUT THE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
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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
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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
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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.
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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.
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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
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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.
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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.
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