SARAH GORE v. JOHN E. GORE, III

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

SARAH GORE,

Plaintiff-Respondent,

v.

JOHN E. GORE, III,

Defendant-Respondent.

__________________________________

December 3, 2015

Argued October 27, 2015 Decided

Before Judges Fisher and Currier.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Somerset County, Docket No. FM-18-553-11.

Peter J. Kurshan argued the cause for appellants William Edward Durnan, Jr., and Durnan & Associates, LLC (Chase Kurshan Herzfeld & Rubin, LLC, attorneys; Mr. Kurshan, on the briefs).

Respondents have not filed a brief.

PER CURIAM

During the pendency of this matrimonial action, defendant John E. Gore (John)1 sought discovery from Durnan & Asociates, LLC (the LLC) as to his wife, plaintiff Sarah Gore's (Sarah) interest in the entity. Appellant, William Durnan (Durnan) is Sarah's father and the manager of Durnan & Asociates. Durnan appeals the trial court's orders awarding attorney's fees and costs to John as sanctions for Durnan's non-compliance with the discovery requests and the subsequent denial of reconsideration.2 After reviewing the record in light of the contentions advanced on appeal, we affirm.

Discovery revealed in this divorce action that Sarah reported non-passive income and dividends from her ownership in the LLC.3 As a result, John issued a subpoena for Durnan to produce business records and appear for a deposition regarding the LLC. In response, Durnan moved to quash the subpoena, stating, among other reasons, that there was no income available to Sarah as a consequence of her ownership interest in the LLC and therefore, any discovery into the entity was "irrelevant, futile and harassing."

In a comprehensive written decision, the family court judge handling the motion determined that John was permitted to "probe and determine whether the asset is one that is relevant to the issue of determining support in this matter." After noting that Sarah listed the LLC as an asset on her case information statement and the parties had filed a joint federal income tax return reporting the non-passive income and dividends, the judge found that the LLC was "a relevant consideration when considering the alimony factors and/or equitable distribution factors . . . of this matter and [is] within the reasonable range of matters that should be discoverable." The motion to quash was denied under order of September 27, 2013, with the judge reserving the right to assess fees against any party that was uncooperative or failed to negotiate in good faith.

On February 7, 2014, another subpoena was issued requesting the production of specific documents from Durnan. Although Durnan provided some documents and an affidavit in response to the second subpoena, John asserted that the supplied documentation was "materially deficient" and failed to address specific requests set forth in the subpoena. The family court judge subsequently ordered, on two separate occasions, that Durnan comply with the subpoena. In January 2015, John filed a motion seeking 1) to direct Durnan to produce the records requested in the subpoena; 2) to find Durnan and the LLC in contempt of the previous orders; and 3) to impose counsel fees and costs against Durnan. Durnan provided a seven page letter to the judge in response to the motion and appeared pro se at oral argument on the motion.4 He argued that he had either provided the requested documents or the documents did not exist and continued to state that Sarah had never received any monies from the LLC.

The second family part judge noted in his ruling that Durnan remained deficient in his document production and responses and that neither Sarah nor Durnan had provided him with sufficient documentation to determine if Durnan had fully complied with the subpoenas. He, therefore, again ordered Durnan to comply with the subpoenas and specifically to provide statements from the LLC accounts. The judge also granted counsel fees and costs under Rule 4:23-2 to be paid within ten days. In the event Durnan failed to pay the assessed monies, the order provided that John could submit a proposed civil arrest warrant to the judge for his consideration.

Durnan presented an order to show cause for reconsideration, arguing substantial compliance with the subpoena requests and that the judge lacked authority to assess sanctions against him as a non-party. The application was denied as non-emergent. We granted Durnan leave to file an interlocutory appeal. The trial judge thereafter supplemented the record pursuant to Rule 2:5-1(b).

We begin with a review of governing principles. We are required to accord deference to the Family Court's decisions because of the court's "special jurisdiction and expertise in family matters." Cesare v. Cesare, 154 N.J. 394, 413 (1998). However, we owe no special deference to the trial judge's "interpretation of the law and the legal consequences that flow from established facts." Manalapan Realty, L.P. v. Twp., Comm. of Manalapan, 140 N.J. 366, 378 (1995).

Durnan contends on appeal that as a non-party to this action he cannot be subject to the sanctions authorized in Rule 4:23-2(b). Durnan was issued a subpoena under Rule 1:9-2 for the production of documents and his attendance at a deposition. In lieu of a response, Durnan filed a motion to quash the subpoena. The motion was denied in a comprehensive written opinion. Over the next two years, additional documents were requested of Durnan; his failure to comply with the requests required the issuance of two more subpoenas and ultimately John filed the motion to find Durnan in contempt of the prior orders and failure to obey the subpoena, see Rule 1:9-5. Durnan opposed all of these requests and subpoenas, adamant in his belief that the LLC and his monetary matters were of no import to the divorce litigation. At that point the judge acted properly in considering the request for sanctions which he deemed appropriate.

We find Durnan's reliance on Anzalone v. Anzalone Bros., Inc., 185 N.J. Super. 481 (App. Div. 1982), to be misplaced. In that matter, the family part judge awarded counsel fees under Rule 4:42-9 for a court-appointed accountant against a corporate defendant in a matrimonial action. We found that to be an improper use of that rule as "it has been customary to award court costs and such additional sum of money for counsel fees as is necessary to prosecute or defend a matrimonial action in an efficient manner." Id. at 486. The corporate defendant had been added to the case to set aside a fraudulent conveyance and was "a party to the action based upon general equity rather than matrimonial principles." Id. at 488. Therefore, we ruled that "the corporate defendant . . . did not thus become a party to the matrimonial litigation for the imposition of counsel fees." Ibid. The matter before us is distinguishable. The judge did not rely on Rule 4:42-9 for his authority. As the family judge noted: "Anzalone does not suggest third parties or non-parties in matrimonial actions may never be imposed counsel fees." Rather, Anzalone is confined to limiting Rule 4:42-9 counsel fees to only the parties in matrimonial actions.

"A trial court has inherent discretionary power to impose sanctions for failure to make discovery, subject only to the requirement that they be just and reasonable in the circumstances." Calabrese v. Trenton State Coll., 162 N.J. Super. 145, 151-52 (App. Div.) aff'd, 82 N.J. 321 (1980) (citing Lang v. Morgan's Home Equipment Corp., 6 N.J. 333 (1951)). An appellate court generally will not interfere in the trial court's ruling on discovery matters unless there is an abuse of discretion. Payton v. New Jersey Tpk. Auth., 148 N.J. 524, 559 (1997).

We find the judge was justified in imposing sanctions against Durnan and the LLC. The award of attorney's fees was in response to Durnan's "flagrant" disobedience and non-compliance with three years of orders.

Finally, as to the denial of the order to show cause we find Durnan's arguments to be without sufficient merit to warrant discussion in a written opinion, Rule 2:11-3(e)(1)(E), and affirm substantially for the reasons expressed by the judge. There was no imminent arrest order for Durnan. If Durnan failed to comply with the order, there was a provision for an arrest order to be presented to the judge for his consideration of its enforcement. Therefore, we find the judge did not abuse his discretion in denying the order to show cause as a non-emergent matter. Durnan could have subsequently filed a motion for reconsideration and presented his arguments to the judge in that manner.

Affirmed.

1 Because the parties share the same last name, we refer to them by their first names for clarity. No disrespect is intended.

2 Neither John nor Sarah filed a brief in this matter.

3 Other than a federal tax form, Sarah did not provide any other documents pertaining to the LLC in response to a request for production of documents.

4 This motion was handled by a different judge than the one who had heard the earlier motion to quash the subpoena.