LUIS H. YUBE v. CHARLES J. BIRNBERG

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1859-04T51859-04T5

LUIS H. YUBE,

Plaintiff-Appellant,

v.

CHARLES J. BIRNBERG,

Defendant-Respondent.

_________________________________

 

Submitted October 11, 2005 - Decided April 12, 2006

Before Judges Axelrad and Levy.

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-1926-02.

Thomas A. McCarter, attorney for appellant (Mr. McCarter and Greg D. Shaffer, on the brief).

Slowinski, Atkins, attorneys for respondent (Matthew S. Slowinski and Kurt E. McCue, on the brief).

PER CURIAM

Luis H. Yube appeals from the dismissal of his automobile negligence complaint with prejudice for failure to produce income tax returns or certify to their non-existence and for failure to produce an expired automobile insurance policy insuring plaintiff prior to, but not at the time of, the accident. We reverse.

Plaintiff brought suit to recover damages suffered as a result of an accident on March 28, 2001. Although he claimed he suffered serious and permanent injuries that substantially affected his life, he did not seek to recover economic damages.

During his deposition on September 19, 2002, plaintiff testified that he was employed by Valencia Restaurant at the time of the accident and, thereafter, continued to work there three to four days per week. Defendant served a subpoena duces tecum on Valencia seeking records of plaintiff's employment. In response, on March 25, 2003, Valencia's attorney wrote a letter stating "Valencia Restaurant, Inc. has no employment records relating in any way to the employment of Luis Yube." As a result, on April 9, 2003, defendant served a notice on plaintiff to produce income tax returns for the years 1999 through and including 2002.

Plaintiff also testified at his deposition that he had been involved in a previous automobile accident, was insured by Prudential Insurance Company and was paid $600 for vehicle damage. However, Prudential denied having insured plaintiff. Upon being made aware of this, plaintiff's counsel, on February 25, 2003, advised defendant's counsel that Allstate had in fact insured plaintiff. On March 17, 2003, Allstate advised defendant's counsel that it was unable to identify the claim in its system and requested additional information. There is no indication that any additional information was provided.

Defendant filed two motions to dismiss plaintiff's complaint for failure to provide discovery. The first, filed on May 21, 2003, was based on plaintiff's failure at his deposition to provide the correct name of the automobile insurance carrier that insured plaintiff at the time of his previous accident. The certification in support of the motion did not allege any failure to respond to interrogatories or demand for production of documents.

The second motion, filed on June 4, 2003, was based on plaintiff's failure to produce income tax returns in response to a demand for production served April 9, 2003. In a certification in support of the second motion, defendant's counsel stated that he had written three times to Valencia Restaurant "seeking clarification as to whether Mr. Yube was ever employed" there, but the restaurant failed to respond. Defendant also argued that the income tax returns were needed to resolve uncertainties about plaintiff's identity caused by medical records identifying him by two different names as well as plaintiff's statement that he had no social security number, even though a social security number identified as plaintiff's is contained in those records.

On June 20, 2003, the trial court entered two orders dismissing plaintiff's complaint without prejudice. One order was based upon plaintiff's failure to produce income tax returns, while the second was based upon his failure to provide the automobile insurance information. In its order of dismissal for failure to file income tax returns, the court stated: "[Plaintiff] indicates he was working but failed to file his tax returns. [Plaintiff] still has an opportunity to do so [and] the complaint can be reinstituted."

On July 8, 2003, plaintiff moved for reconsideration and to restore his complaint. The motion, however, was not supported by the personal certification of plaintiff. Instead, plaintiff's counsel provided a supporting certification. In it, he pointed out that Valencia Restaurant had not denied plaintiff's employment, but had asserted only that it had no records of plaintiff's employment. In addition, he noted defendant's statement that "subsequent communications [directed to Valencia Restaurant] for clarification as to whether Mr. Yube was employed by Valencia have been unsuccessful." Plaintiff's counsel further stated that "also at issue is [Valencia Restaurant's] compliance with record maintenance pursuant to the requirements of the U.S. Department of Justice Immigration and Naturalization Service and the Internal Revenue Service."

The certification also acknowledged that plaintiff had not filed income tax returns for the years in question. However, plaintiff argued that defendant waived his right to request income tax returns when his attorney, during plaintiff's deposition, stated that he was not asking for the returns because plaintiff was not asserting a lost-wage claim.

The court denied plaintiff's motion for reconsideration on July 25, 2003, reasoning that the tax returns were discoverable because there was a "serious issue as to the identity of this plaintiff and where and when he was employed, if at all." The court further noted plaintiff's testimony that he was employed by Valencia Restaurant and then stated "Valencia Restaurant denies plaintiff was ever employed there."

The court's decision also cited the fact that plaintiff had been identified by different names in medical records notwithstanding his testimony that he had never been known by any other name, and the fact that the records contained a social security number for plaintiff notwithstanding his testimony that he had no social security number. The court also cited the fact that, before stating he had no social security number, plaintiff had testified that the number was wrong. Finally, the court stated that plaintiff had completely ignored the court's order "to supply to defendant the automobile policy of plaintiff in force and effect at the time of this alleged accident."

On August 14, 2003, plaintiff moved for leave to appeal. That motion was denied on September 9, 2003. A notice of appeal previously filed was also dismissed at the same time. The order denying leave to appeal and dismissing the notice of appeal also stated that defendant should move for a dismissal with prejudice pursuant to R. 4:23-5(a)(2). The order further noted that, if the trial court granted the motion over plaintiff's opposition, plaintiff would then be able to appeal as of right. Notwithstanding the above order, defendant failed to move for dismissal with prejudice. Therefore, on February 9, 2004, plaintiff moved to restore his complaint. By separate motion, he also moved for a protective order to seal or impound plaintiff's deposition. On March 11, 2004, defendant cross-moved to dismiss plaintiff's complaint with prejudice.

Plaintiff's motion to restore the complaint was denied without prejudice on March 22, 2004. The motion for a protective order was dismissed as moot. The cross-motion to dismiss the complaint with prejudice does not appear to have been decided, although the court's written decision, by implication, denied the cross-motion. In that decision, the court instructed plaintiff to re-file the motion to restore and to support it with a personal certification "(1) that his income tax returns for the years 1999, 2000, 2001 and 2002 do not exist and the reasons therefore, and (2) that Plaintiff either was or was not insured at the time of this accident and, if so, by whom." The court's decision also stated:

[O]nly a certification from Plaintiff himself will satisfy the Court that this information - which is both discoverable and highly relevant for the reasons set forth in this Court's order and decision of July 25, 2003 (which the Court herein incorporates by reference) - is not reasonably available. . . .

If Plaintiff fails to so re-file with the requisite certification within thirty (30) days of the date of this Order, Defendant may renew its motion to dismiss with prejudice.

On September 20, 2004, plaintiff once again moved to restore the complaint and for a protective order. Again, the motion was supported only by a certification from counsel. On October 14, 2004, defendant cross-moved to dismiss plaintiff's complaint with prejudice. The court heard oral argument on the motion and cross-motion on November 5, 2004. Plaintiff's counsel explained that he sought a protective order because he was concerned about his client's immigration status. He then addressed the failure to produce the income tax returns:

Unfortunately, the employer who, apparently, is retaining the services of an illegal alien in paying plaintiff off the books in cash doesn't want to incriminate himself in any way. So, you know, we're - we're sort of between a rock and a hard place here, Your Honor. And, I can't produce the income tax records. They don't exist.

However, after the court again asked why plaintiff could not provide a personal certification and noted its refusal "to blind itself to a potential sham that's ongoing," plaintiff's counsel agreed to have plaintiff sign a personal certification stating that he had no income tax returns for the years in question.

In spite of the offer to have plaintiff sign a certification, the court, on November 5, 2004, dismissed plaintiff's complaint with prejudice for failure to comply with discovery. In a written decision, the court, in relevant part, stated:

Plaintiff has still failed to comply with this Court's March 22, 2004 order and decision. See this Court's March 22, 2004 order and decision, its July 25, 2003 order and decision and the June 20, 2003 orders, all of which are incorporated by reference.

. . . .

Plaintiff testified under oath that he was employed by Valencia Restaurant and that his inability to work at the restaurant was affected because of the subject motor vehicle accident. The restaurant stated it had no record of plaintiff working there. That is when defendant sought the income tax returns, which are relevant as to plaintiff's identity and whether he was employed at the restaurant, whether plaintiff sustained a loss of income and/or ability to work full time or part time at this occupation or another and whether this accident has had a serious impact on plaintiff's life.

Plaintiff's complaint is therefore dismissed with prejudice and the Court need not address plaintiff's application for a protective order, as same is rendered moot by this decision.

The "standard for review for dismissal of a complaint with prejudice for discovery misconduct is whether the trial court abused its discretion, a standard that cautions appellate courts not to interfere unless it appears that an injustice has been done." Abtrax Pharmaceuticals, Inc. v. Elkins-Sinn,Inc., 139 N.J. 499, 517 (1995). "The dismissal of a party's cause of action, with prejudice, is drastic and is generally not to be invoked except in those cases where the order for discovery goes to the very foundation of the cause of action, or where refusal to comply is deliberate and contumacious." Lang v. Morgan's Home Equip. Corp., 6 N.J. 333, 339 (1951)(citations omitted).

Based upon our review of the record, we conclude that the dismissal with prejudice did an injustice to plaintiff and, therefore, constituted an abuse of discretion requiring reversal. Initially, we do not find that the discovery sought from plaintiff "goes to the very foundation of the cause of action," nor do we find that plaintiff's inability to produce tax returns constituted a "refusal to comply." Ibid.

Plaintiff was not seeking lost wages. Therefore, the income information was not directly implicated. Moreover, to the extent tax returns could lead to information relevant to plaintiff's claim that he suffered serious and permanent injuries that substantially affected his life as evidenced by the fact that he lost time from work, the discovery would still not go "to the very foundation of the cause of action." Ibid. We reached the same result in Familia v. Univ. Hosp., 350 N.J. Super. 563, 568 (App. Div. 2002), a medical negligence case in which plaintiff's complaint was dismissed with prejudice for failure to produce tax returns she did not have. There, we reversed the dismissal, stating:

The records in question went to the quantum of any possible damages, not to the fundamental issue whether defendant had been negligent in his care and treatment of the decedent. In such context, if any sanction were appropriate, it should have been crafted with an eye to the harm incurred. A more appropriate sanction, for instance, might have been to preclude any claim for loss of income, rather than dismissal of the entire case with prejudice. To the extent possible, cases should be disposed of on their merits, not on the basis of discovery violations.

[Id. at 568.]

As in Familia, the income tax returns of plaintiff have no relevance to the issue of whether defendant's negligence contributed to the automobile accident in this case.

In addition, as in Familia, plaintiff did not have income tax returns to produce. This was made clear by plaintiff's attorney at the oral argument on November 5, 2004 when he candidly acknowledged that plaintiff was an illegal alien who was paid in cash and filed no tax returns. Indeed, it is apparent the court's ultimate concern was not plaintiff's refusal to produce tax returns, but his refusal to personally certify that he had failed to file them with the Internal Revenue Service. In fact, plaintiff's counsel finally gave in and represented at the November 5, 2004 hearing that his client would comply and provide the certification required by the court. The court, however, would not accept belated compliance. Nevertheless, we conclude that plaintiff's complaint should not have been dismissed with prejudice for a failure to comply with the court's demand.

Furthermore, the court's concern about the identity of the plaintiff was not an appropriate basis for dismissing the complaint. As stated by the court in its July 25, 2003 decision, incorporated by reference in its final decision of November 5, 2004: "There is a serious issue as to the identity of this plaintiff and where and when he was employed, if at all. That is why the tax returns are discoverable." However, any issues concerning the identity of plaintiff or where he was employed do not go to the fundamental issue in the case.

Moreover, the record indicates that neither the plaintiff's identity nor whether he had worked for Valencia Restaurant should have been considered serious issues. Although medical records identified the patient by several names, including "Homero Yube," "Luis Yube," "Homero L. Yube," "Yube Homero," "Yube Luis H.," and "Yuve Homero," they all appear to be variations of plaintiff's name, "Luis H. Yube." Furthermore, the differences may well be attributable to difficulties plaintiff had communicating with medical staff. In that regard, we note that plaintiff was born in Ecuador and was deposed through an interpreter. In any event, each medical record contained plaintiff's correct birth date, which was established at his deposition. Given these facts, we conclude that plaintiff's identity was not a fundamental issue in the case.

Likewise, we do not find plaintiff's employment at Valencia Restaurant to be a significant issue. Contrary to the court's conclusion in its July 25, 2003 decision, the restaurant did not "[deny] plaintiff was ever employed there." It merely denied that it had any "employment records relating in any way to the employment of Luis Yube." In fact, the restaurant's denial is consistent with plaintiff's contention that he was employed there, but paid "off the books." In any event, it is not a fundamental issue.

Finally, we conclude that dismissal with prejudice resulted in an injustice to plaintiff because, in effect, it denied him access to our courts primarily on the basis of his status as an illegal alien. In Montoya v. Gateway Ins. Co., 168 N.J. Super. 100 (App. Div. 1979), we specifically held that illegal aliens may not be deprived of access to our courts. Although plaintiff's case was not dismissed because he was an illegal alien, requiring him as a condition of continuing his lawsuit to certify that he had failed to file income tax returns, had the same result.

In Langley v. Allstate Ins. Co., 206 N.J. Super. 365 (App. Div. 1985), in order to be eligible for survivor benefits after the death of her son in an automobile accident, plaintiff was required to prove that her son was an "income producer" within the meaning of the personal injury protection statute, N.J.S.A. 39:6A-2(d) and 39:6A-4(b). Her son's employment for the two months before his death was undocumented because, according to plaintiff's testimony, her son had been paid "under the table" in violation of federal and state law. Id. at 370.

In reversing the trial court's denial of plaintiff's motion for a new trial to present new evidence intended to establish her son's final employment, we recognized that "[plaintiff] was trapped by an underground sub-culture of illegal wage payments which cheats government of taxes and deprives employees of social security benefits and minimum wage protections." Ibid. We concluded that the illegal conduct of employers "should not serve to deprive individuals of benefits properly owing from an insurance company." Ibid. In so holding, we noted "the particular difficulty which confronted plaintiff in attempting to obtain information which collaterally would evidence violations of federal and state tax and social security laws." Id. at 371.

In this case, plaintiff was faced with circumstances similar to those in Langley. Plaintiff did not file income tax returns because he was paid off the books. His employer apparently kept no records of plaintiff's employment and presumably provided no income information to plaintiff or the taxing authorities. Plaintiff could not produce income tax returns because they did not exist. Given those circumstances, dismissal with prejudice for failure to produce such returns or, in the alternative, to certify to their non-existence, constituted an inequitable result.

Reversed and remanded for further proceedings.

 

Although the court referenced and incorporated its prior orders, it specifically addressed only plaintiff's failure to produce income tax returns. In that regard, it is noted that on March 26, 2004, plaintiff's counsel had advised the court that plaintiff's response to defendant's interrogatories supplied insurance information concerning the prior accident. That response stated that plaintiff had been injured in an accident involving his brother's automobile at a time when plaintiff did not own an automobile himself. The company that insured his brother's vehicle was identified as Metropolitan Property and Casualty Insurance Company.

(continued)

(continued)

15

A-1859-04T5

April 12, 2006