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November 20, 2014


Argued October 28, 2014 Decided

Before Judges Yannotti and Whipple.

On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-1265-12.

William Kalas argued the cause for appellant (Law Office of William Kalas, attorneys; Jeff Thakker, of counsel; Mr. Kalas, on the briefs).

Michael Chelland argued the cause for respondent (Law Office of John Kennedy, attorneys; Mr. Chelland, on the brief).


Plaintiff Steven Jarosz appeals from an order entered by the Law Division on December 20, 2013, which granted a motion by defendant David Maryles to confirm an arbitration award pursuant to Rule 4:21A-6(b)(3), and an order entered on January 17, 2014, denying his cross-motion to set aside the award and extend discovery. We affirm in part, reverse in part, and remand for reconsideration of plaintiff's motion to set aside the arbitration award.


In March 2012, plaintiff filed a complaint, alleging that in March 2010, the motor vehicle he was operating collided with a vehicle being operated by defendant. Plaintiff claimed that defendant operated his vehicle negligently and, as a result, caused plaintiff to sustain painful bodily injuries, which required medical treatment. In June 2012, defendant filed an answer denying liability, and alleging, among other things, that if plaintiff suffered damages in the accident, they were caused by plaintiff's sole negligence.

Following discovery, the matter was referred to mandatory arbitration pursuant to Rule 4:21A-1(a)(1). The arbitration took place on October 3, 2013. On that date, the arbitrator entered an award, finding that both parties were responsible for the accident and allocating ninety percent of liability to defendant and ten percent to plaintiff. The arbitrator found gross damages of $150,000, with a net award to plaintiff of $135,000.

On November 4, 2013, plaintiff's counsel filed a notice of demand for a trial de novo pursuant to Rule 4:21A-6(b)(1) with the Civil Part of the Law Division. However, at that time, plaintiff's counsel did not serve the notice upon defendant, as required by the rule. On November 14, 2013, defendant filed a motion to confirm the arbitration award. On that date, plaintiff's attorney faxed a copy of the notice of demand for a trial de novo to defendant's attorney.

On December 12, 2013, plaintiff opposed defendant's motion, and filed a cross-motion to extend discovery and, if necessary, "to obtain relief from the submission of this matter to arbitration on October 3, 2013." In a certification submitted with the cross-motion, plaintiff's counsel asserted that discovery should be extended because plaintiff had sustained injuries to his lumbar spine in the accident, and he was not a candidate for surgery on the lumbar spine until November 2013. The surgery was performed in January 2014.

In addition, counsel stated that the arbitration award should be set aside because the arbitrator had a conflict of interest which precluded him from rendering a fair and impartial award. Counsel noted that the arbitrator did defense work for New Jersey Manufacturers Insurance Co. (NJM), plaintiff's insurer. Counsel said that plaintiff had a potential underinsured-motorist (UIM) claim against NJM under his policy. Counsel asserted that, because of this potential claim, the arbitrator should have disqualified himself.

Counsel essentially argued that, while he did not serve the notice of his demand for a trial de novo upon defendant's attorney within thirty days of the award, the court should find that he substantially complied with the service requirement. Plaintiff's counsel said that, after the arbitration, he spoke with the adjuster for GEICO, defendant's insurer, and told him he was going to file the de novo demand.

Counsel said that after he filed the notice demanding a de novo trial, he called the adjuster and left a message, indicating that the notice had been filed. He stated that he did not serve the notice on counsel because he was waiting for receipt of a "filed" copy of the notice. Counsel served a copy of the notice upon defendant's attorney by fax on November 14, 2013, which was the date he received defendant's motion to confirm the award.

Defendant's attorney opposed the cross-motion. Defense counsel wrote to the court on December 19, 2013, stating that the motion to confirm the award and plaintiff's cross-motion, which were returnable on December 20, 2013, had been "carried" to January 17, 2014.

However, on December 20, 2013, the motion judge filed an order confirming the award and entered judgment for plaintiff in the amount of $135,000. The judge provided a statement of reasons for the order. The judge stated that relaxation of the standard for service of the notice of the trial de novo was not required for good cause or in the interests of justice.

The judge wrote that plaintiff's counsel did not substantially comply with the rule, which requires that the notice be served on counsel within thirty days of the date the award was filed. The judge noted that counsel "did not even attempt" to inform defendant's counsel of his intention to file the notice until November 14, 2014.

In addition, the judge wrote that plaintiff had advanced several other arguments in support of relaxing the rule's requirements and reopening discovery. The judge noted that plaintiff's counsel had asserted that the arbitrator should have recused himself, but the judge wrote that plaintiff's counsel and the arbitrator "were on notice of [the] potential conflict based on the conversation they had prior to the arbitration." The judge determined that the arbitration did not go forward "with an improper conflict." Rather, the relations between the arbitrator and NJM, which was not a party to the action, "did not reach the level of [partiality] that would warrant vacation of the award."

The judge also found that plaintiff had not shown exceptional circumstances to reopen discovery. The judge noted that the discovery end date had passed and the arbitration had been held. The judge pointed out that almost two months after discovery had closed, and "a mere three days before the arbitration," plaintiff was still not a candidate for surgery. Plaintiff did not return to his doctor until after defendant filed his motion to confirm the award. The judge wrote that the recommendation for surgery was not based on any change in the MRIs, but rather on plaintiff's "subjective pain intolerance."

On January 17, 2014, the judge entered another order, which granted defendant's motion to confirm the award, and denied plaintiff's cross-motion. In the attached statement of reasons, the judge reiterated what he said in the statement of reasons appended to the prior order.

On appeal, plaintiff argues: (1) the motion judge erred by failing to hear oral argument on the motions; (2) the judge denied plaintiff due process by disposing of the case on December 20, 2013, when neither the motion nor cross-motion was returnable; (3) the judge's statement of reasons reflects a lack of understanding of the facts; (4) plaintiff established exceptional circumstances to reopen discovery; (5) after discovery is reopened, another arbitration proceeding should be conducted; and (6) the notice of a demand for a trial de novo was timely filed with the court and defendant suffered no prejudice as a result of the late service of the notice.


We turn first to plaintiff's contention that the motion judge erred by failing to relax the requirements for service of the demand for a trial de novo.

Rule 4:21A-6(b)(1) provides that a notice of demand for a trial de novo must be filed with the court and served on the other parties within thirty days of the filing of the arbitration award. The filing requirement in the rule may not be relaxed in the absence of a showing of "extraordinary circumstances," which do not include an attorney's "mere carelessness" or "lack of proper diligence." Hartsfield v. Fantini, 149 N.J. 611, 616-18 (1997) (citation and internal quotation marks omitted); see also Wallace v. JFK Hartwyck at Oak Tree, Inc., 149 N.J. 605, 607 (1997).

The rule's requirement for service of the demand for a trial de novo within thirty days also must be "strictly enforced." Jones v. First Nat'l Supermarkets, Inc., 329 N.J. Super. 125, 127 (App. Div.) (citations omitted), certif. denied, 165 N.J. 132 (2000). We have held, however, that the service requirement may be relaxed if the party who failed to serve the notice within the time required substantially complied with the rule. Corcoran v. St. Peter's Med. Ctr., 339 N.J. Super. 337, 343 (App. Div. 2001).

To establish substantial compliance, a party must show: (1) lack of prejudice to the other party; (2) that a series of steps was taken to comply with the requirement; (3) "'general compliance with the purpose of the [requirement]'"; (4) reasonable notice of the claim; and (5) a reasonable explanation for failure to strictly comply with the requirement. Ibid. (quoting Alan J. Cornblatt, P.A. v. Barow, 153 N.J. 218, 239 (1998)).

Here, the motion judge correctly determined that plaintiff did not establish substantial compliance with the service requirement of Rule 4:21A-6(b)(1). Plaintiff failed to show general compliance with the purpose of that requirement. Counsel's phone call to the adjuster, indicating that a notice demanding a trial de novo would be filed later, and the other call to the adjuster indicating that the notice had been filed, are not a substitute for service of the notice upon defendant's attorney. As the motion judge noted, defendant's counsel did not receive notice that the demand had been filed until after he filed a motion to confirm the award.

Furthermore, plaintiff did not provide a reasonable explanation for the failure to timely serve the notice upon defendant's attorney. It was unreasonable to delay service until plaintiff's counsel had received a "filed" copy from the court. Plaintiff's counsel says he wanted to provide defendant's attorney with a "filed" copy as a courtesy, but the rule requires timely service of the notice.

In addition, plaintiff's counsel asserts that he was not sure which attorney should receive service. He says that the attorney who filed the answer and was designated counsel was handling other matters for the firm, and another attorney handled the arbitration proceeding. However, both attorneys are members of the same firm. The notice could have been served upon either attorney.

In support of his arguments on this point, plaintiff relies upon Woods v. Shop-Rite Supermarkets, 348 N.J. Super. 613 (App. Div.), certif. denied, 174 N.J. 38 (2002). In that case, the plaintiff filed a timely demand for a trial de novo but failed to serve the demand upon defendant. Id. at 615. The plaintiff's attorney stated that he inadvertently failed to serve the notice upon the defendant's counsel, but he said he told defense counsel immediately after the arbitration hearing that "'we would definitely de novo the award.'" Ibid. The defendant's attorney denied that such a conversation took place. Ibid.

We held that the plaintiff did not substantially comply with the service requirement of Rule 4:21A-6(b)(1). Id. at 617-18. We noted that the plaintiff's attorney "completely failed" to serve the demand. Id. at 617. We also stated that

Even if plaintiff's counsel gave his adversary oral notice of an intention to file a demand for a trial de novo, this would not constitute substantial compliance with the service requirement. It is not unusual for an attorney or party to express an intent to take further legal action immediately after a hearing or trial but then, after an opportunity for further reflection, to have a change of mind. Consequently, such an expression of future intent is not equivalent to notice that further legal action actually has been initiated. Moreover, oral notice is not an adequate substitute for service of a written pleading. As this case illustrates, a person's recollection of giving or receiving oral notice may be fallible, and if we were to hold that oral notice could constitute substantial compliance with a service requirement, this would necessitate an evidentiary hearing any time there was a dispute as to whether such notice had been given.


Plaintiff argues that Woods may be distinguished because he informed the adjuster for defendant's insurer that the notice had been filed. However, the rule requires service of the de novo demand upon the party, not the adjuster for the party's insurer. Moreover, as we stated in Woods, oral notice is not an adequate substitute for service of a written pleading. Thus, plaintiff's reliance upon Woods is misplaced.

We conclude that the motion judge correctly determined that plaintiff failed to serve his notice on defendant's counsel within the time required by Rule 4:21A-6(b)(1), and did not establish that he substantially complied with the rule's service requirement.


Next, plaintiff argues that the motion judge erred by refusing to set aside the arbitration award based on what plaintiff asserts was a disqualifying conflict of interest on the part of the arbitrator.

We note initially that Rule 4:21A-6(b) does not expressly provide for the vacation of an arbitration award on the ground that the arbitrator had a disqualifying conflict of interest. However, implicit in the rule is the understanding that the hearing will be conducted by an impartial arbiter.

We note that the arbitration rules were originally adopted to implement the automobile insurance arbitration provision of N.J.S.A. 39:6A-24 to -35. Pressler & Verniero, Current N.J. Court Rules, comment 1 on R. 4:21A-1 to -9 (2014). N.J.S.A. 39:6A-31 allows the court to modify or vacate an award for the reasons set forth in N.J.S.A. 2A:24-1 to -11. Moreover, N.J.S.A. 2A:24-8(b) allows a court to set aside an arbitration award for, among other reasons, "the evident partiality" of an arbitrator.

Here, plaintiff claims that the arbitrator had a conflict of interest, which necessarily affected his ability to render a fair and impartial decision. Plaintiff notes that defendant has liability insurance of $300,000 with GEICO, and that plaintiff has UIM coverage of up to $500,000 through his carrier, NJM. Plaintiff claims that, because the arbitrator did "defense work" for NJM, he might have been disposed to keep the award low, to avoid a potential UIM claim against NJM.

Plaintiff's counsel asserts that before the arbitration, he spoke to the arbitrator in the hallway, and the arbitrator asked whether he had a conflict in the matter. The arbitrator noted that he had already had to disqualify himself from several matters that day. Plaintiff's counsel states that, before the hearing, the arbitrator did not tell him that he did "NJM defense work." He says he never would have permitted the arbitrator to conduct the hearing if he knew that the arbitrator handled matters for NJM.

Plaintiff's counsel also says he confronted the arbitrator after the hearing, since he was "shocked" by the arbitrator's findings. Counsel asserts that the gross award of $150,000 was "inconceivable." He also asserts that the finding that plaintiff had ten percent of the responsibility for the accident was not sustainable because no evidence had been presented to dispute the police officer's opinion as to the cause of the accident.

According to counsel, the arbitrator "attempted to explain himself" and stated that he gave plaintiff's claim a value he "felt his carrier would pay." Plaintiff's counsel then asked the arbitrator which carrier he was referring to, and the arbitrator said it was NJM.

In his statement of reasons, the motion judge wrote that plaintiff's counsel and the arbitrator were on notice of the potential conflict based on the conversation they had before the arbitration. In addition, as we noted previously, the judge found that, because NJM was not a party in the case, the arbitrator's relationship with NJM "did not reach the level of [partiality] that would warrant vacation of the award."

We are convinced that the judge's decision warrants reconsideration. First, the record does not support the judge's finding that plaintiff's counsel and the arbitrator were on notice of a potential conflict before the hearing. In his certification, plaintiff's counsel mentions the conversation with the arbitrator in the hallway, but states that the arbitrator did not inform him of his relationship with NJM until after the arbitration took place.

Second, plaintiff's counsel asserts as a matter of fact that the arbitrator does "defense work" for NJM. However, there is nothing in the record to confirm this assertion. The record does not disclose the extent of the arbitrator's relationship with NJM. The record also does not indicate whether the arbitrator regularly disqualifies himself from matters that involve potential UIM claims against NJM policies. Such information may have a significant bearing upon whether the arbitrator could reasonably have been expected to decide this matter in an impartial manner.

Third, the judge placed great weight on the fact that NJM was not a party to the arbitration. It appears, however, that the judge may not have considered the potential for a UIM claim against plaintiff's policy and whether that would affect the arbitrator's ability to be impartial.

We are therefore convinced that the judge should reconsider his decision that the arbitrator's alleged relationship with NJM did not rise to a level of partiality that might compromise the fairness of the arbitration proceedings. The parties should be permitted to supplement the information that was previously provided on this issue, and the motion judge should make appropriate findings of fact and conclusions of law.

If the judge finds that the arbitrator should have disqualified himself, the award should be set aside and the matter scheduled for a new arbitration proceeding.


Last, we consider plaintiff's contention that the judge erred by failing to extend the time for discovery.

As we stated previously, plaintiff did not seek to extend the time for discovery until after the discovery end date and the arbitration had taken place. Therefore, plaintiff had to show "exceptional circumstances" to re-open discovery. R. 4:24-1(c). To secure the discovery extension, plaintiff had to

satisfy four inquiries: (1) why discovery has not been completed within time and counsel's diligence in pursuing discovery during that time; (2) the additional discovery or disclosure sought is essential; (3) an explanation for counsel's failure to request an extension of the time for discovery within the original time period; and (4) the circumstances presented were clearly beyond the control of the attorney and the litigant seeking the extension.

[Rivers v. LSC Partnership, 378 N.J. Super. 68, 79 (App. Div.) (citing Vitti v. Brown, 359 N.J. Super. 40, 51 (Law Div. 2003)), certif. denied, 185 N.J. 296 (2005).]

The motion judge correctly found that plaintiff failed to establish "exceptional circumstances" warranting an extension of time for discovery. Here, the discovery end date was August 6, 2013. Plaintiff did not provide a reasonable explanation for the failure to have the need for lumbar surgery addressed prior to that date.

An April 2012 report by Dr. Scott C. Woska of the Shore Orthopedic Group (SOG) notes that plaintiff was then experiencing neck and back pain, which the doctor attributed to the subject accident. MRI scans performed in May 2010 and August 2011 revealed, among other things, a disc herniation at L5-S1. Dr. Woska noted that plaintiff had received extensive conservative care and several injections but continued to have neck and back pain.

Dr. Woska also wrote that plaintiff had undergone a lumbar discography in October 2011, which showed a non-painful response at L4-L5. He "noted that the L5-S1 disc could not be tested at the time of his discogram due to anatomical considerations." He wrote that plaintiff continued to have cervical and lumbar pain, and the lumbar discogram had ruled out the L4-L5 disc as a pain generator, but did not provide sufficient information regarding the L5-S1 disc.

Dr. Woska issued another report in January 2013, in which he stated that, after reviewing further records, there was no change in the opinions stated in his previous report. He again noted the lumbar disc herniation at L5-S1, as seen on the MRI. He wrote that plaintiff would continue to have neck and back pain on a permanent basis.

On September 30, 2013, plaintiff was seen by Dr. Cary D. Glastein of the SOG, who ordered a new MRI to determine if further treatment was required. Plaintiff returned to Dr. Glastein in November 2013, and reported that he could not tolerate his back pain. The doctor stated that, if plaintiff could not tolerate his symptoms, he would be a candidate for lumbar surgery, specifically discectomy and stabilization along with second-stage posterior decompression and fusion at L4-L5. The surgery was performed on January 24, 2014.

Thus, the record shows that plaintiff has long complained of back pain, and the MRIs performed in May 2010 and October 2011 indicated that plaintiff had a disc herniation at L5-S1 with mild facet hypertrophy at L4-L5 and L5-S1. Plaintiff reported to Dr. Glastein on September 30, 2013 that he was experiencing severe pain in his back, radiating to his legs, but plaintiff did not submit a certification in support of his discovery motion indicating that the pain he was experiencing in September 2013 was more severe than the pain he experienced prior to that time.

Moreover, Dr. Glastein did not seek a new MRI and did not find plaintiff to be a candidate for back surgery until after the arbitration was concluded, and plaintiff failed to explain why the doctor did not seek the new MRI and make the surgery determination prior to the discovery end date and arbitration. We therefore conclude that the motion judge did not err by denying plaintiff's motion to extend discovery.

We have considered plaintiff's other arguments and conclude that they are without sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E).

Affirmed in part, reversed in part and remanded for further proceedings in conformity with this opinion. We do not retain jurisdiction.