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Friday, December 13, 2019

New Jersey court overturns decision in breach of contract case, states safeguards weren't followed

By David Hutton | Nov 30, 2017

Contract 04

TRENTON, N.J. (Legal Newsline) – The Appellate Division of the Superior Court of New Jersey has overturned a lower court’s ruling in a breach of contract case, saying a judge's sanction was imposed improperly.

Aziz M. Thabo filed an appeal in his complaint against Z Transportation after a Law Division judge dismissed his complaint and levied a hefty discovery sanction provided in Rule 4:23-5. The appeals court's ruling reinstates Thabo's lawsuit.

“We now reverse and remand this matter for further proceedings because the party who filed this motion and the Law Division judge who imposed this sanction failed to follow the procedural safeguards codified in Rule 4:23-5,” Fuentes wrote in the Nov. 17 opinion.

The appeal was heard by a panel including appellate judges Jose L. Fuentes, Thomas V. Manahan and Karen L. Suter. 

According to the opinion, Z Transportation didn’t provide the Law Division judge with sufficient evidence to demonstrate it met the requirements of the rule.

Moreover, Fuentes noted that a misstep that overlooks the due process protections afforded by the rule can only occur when the trial court drops the ball in its role as a gatekeeper.

The case stems from a 2015 truck sale, in which Thabo had contacted Igor Nikolovski, a representative of Z Transportation, regarding a Freightliner truck offered for sale for $19,600.

According to the opinion, Thabo said he only wanted to purchase a truck that met Department of Transportation regulations.

Nikolovski allegedly assured Thabo the truck met those requirements, and the truck was described in an advertisement as being “DOT Ready”

Thabo understood “DOT Ready” to mean the truck would pass inspection and meet all DOT guidelines, the opinion states.

On a test drive, Thabo realized the truck, in fact, was not DOT-compliant. After being told the truck would be made compliant, he provided a $1,000 deposit.

Thabo was later told the truck had an error code message on the instrument panel and he asked for a refund, but was not given one, the opinion states.

Thabo filed his complaint on Sept. 23, 2015, with the Law Division of the Superior Court of New Jersey.

After several exchanges regarding discovery, attorneys for Z Transportation on Jan. 6, 2016, served Thabo with interrogatories and a notice to provide documents.

A month later, Z Transportation filed a motion to dismiss Thabo’s complaint after he allegedly failed to answer the interrogatories or provide responses.

Ultimately, the Law Division had competing discovery motions in the case and Thabo noted that he didn’t receive a notice of the motion to dismiss his complaint without prejudice.

Thabo also stated that the Law Division had found Z Transportation had come up short in its discovery obligations before they had moved to dismiss his complaint.

Ultimately, the Appellate Division panel cited Abtrax Pharm. v. Elkins-Sinn Inc., noting that “the standard of review for dismissal of a complaint with prejudice for discovery misconduct is whether the trial court abused its discretion.”

The appellate panel also noted the attorneys for Z Transportation – Sammarro & Zalartick –  violated the rule when they moved to dismiss the complaint without telling the court their client was delinquent in its discovery obligations.

“Here, the system failed because both the motion judge and the attorney representing the moving party failed to follow the strict procedural requirements of Rule 4:23-5,” Fuentes concluded in the opinion. 

“The order of the Law Division dated July 8, 2016, dismissing the plaintiff’s complaint with prejudice is vacated. Plaintiff's complaint is reinstated and the case is remanded to the Law Division for the judge assigned to this case to conduct a case management conference with the attorneys to determine the status of discovery.”

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Superior Court of New Jersey Appellate Divison