Molnar v. Hedden

• Decision Date: 27 October 1992
• Citation: 260 N.J.Super. 133,615 A.2d 647
• Parties: Susan L. MOLNAR, Plaintiff-Respondent, v. Douglas M. HEDDEN, Defendant-Appellant.
• Court: New Jersey Superior Court — Appellate Division

Page 133

260 N.J.Super. 133

615 A.2d 647

Susan L. MOLNAR, Plaintiff-Respondent, v. Douglas M. HEDDEN, Defendant-Appellant.

Superior Court of New Jersey Appellate Division.

Argued Oct. 1, 1992.

Decided Oct. 27, 1992.

Ronald M. Katkocin, Marlton, for defendant-appellant (Markwardt & Katkocin, attorneys).

Elizabeth Macron, Fanwood, for plaintiff-respondent (Gertler & Hanna Wall, and Brotman & Graziano, Trenton, attorneys; Elizabeth Macron, Fanwood and Nicholas Krochta, Trenton, on the joint brief).

Before Judges PRESSLER, R.S. COHEN and MUIR, JR.

The opinion of the court was delivered by

PRESSLER, P.J.A.D.

The important procedural question posed by this appeal is whether a counterclaim arising out of the transaction that gave rise to the complaint is barred if not filed within the applicable limitations period. We hold that although all the considerations generally governing disposition of an untimely motion to amend pleadings are relevant to a late motion to assert a counterclaim, the running of the statute of limitations before the motion is made does not preclude the claim.

On July 16, 1988, plaintiff Susan Molnar, while driving her automobile, collided with a motorcyclist, defendant Douglas Hedden. Both were injured, defendant grievously so. He was rendered a paraplegic. Plaintiff filed a personal injury complaint against defendant in late May 1990, about six weeks prior to the running of the two-year statute of limitations. Defendant turned the complaint over to his carrier for defense, and counsel was assigned to represent him. In due course, some six weeks later, insurance counsel filed an answer in defendant's behalf, alleging, by way of separate affirmative defenses, that plaintiff had been "guilty of contributory negligence in failing to exercise due and proper care under the existing circumstances and conditions" and that her right to recover damages, if any, was limited by "the comparative negligence law." The responsive pleading contained no counterclaim. It also appears that defendant had not, at this time, himself retained an attorney to protect and advance whatever affirmative claims he might have had arising out of the accident, but was represented only by counsel provided by his carrier.

In August 1990, a second complaint was filed in plaintiff's name against defendant. ¹ This was actually a subrogation claim in which the real party in interest was plaintiff's carrier, who was seeking reimbursement for the personal injury protection benefits (PIP) it had paid to her. This second complaint was filed by counsel retained by the plaintiff's insurer, not plaintiff's personal injury attorney. It does not appear that an answer to the subrogation complaint was ever filed. In any event, the two complaints were consolidated by order entered on September 14, 1990. Contrary to the prescription of R. 4:38-1(c) requiring the order of consolidation and all subsequent pleadings to include the docket number of each separate action, the September consolidation order referred only to the docket number of the first complaint, a fact which accounts for some of the subsequent procedural confusion.

Nothing in this record suggests what, if any, discovery ensued following the joinder of issue. It does, however, appear that during the summer of 1991, about a year after the filing of the first complaint, negotiations for a settlement of plaintiff's claim were successful. We gather from correspondence between plaintiff's personal injury attorney and defense counsel that plaintiff's personal injury claim was to be settled for $15,000, defendant's policy limit. The snag in consummating the settlement was defense counsel's insistence that the subrogation claim of plaintiff's carrier also be dismissed and defendant be released therefrom. Accordingly defense counsel refused to sign and return the stipulation of dismissal, already executed by plaintiff's personal injury attorney, until appropriate assurances were given by plaintiff's "subrogation" attorney. It does not appear that defense counsel ever signed that stipulation.

Insofar as we are able to reconstruct from this markedly truncated record, this series of procedural steps and missteps ensued. On September 18, 1991, a different stipulation of dismissal was filed which bore the single docket number of the consolidated action. It contained a signature block only for plaintiff's subrogation attorney, and was signed only by that attorney. In his later certification in opposition to this motion, plaintiff's personal injury attorney described that stipulation as a "dismissal in regard to ... [the] subrogation claim." Although not expressly so stated by any of the parties, it appears that the single-signature stipulation of dismissal can be accounted for only if viewed as intending to dismiss the subrogation claim alone. That is, since no answer to that complaint appears to have been filed, the subrogation attorney, overlooking the consequences of consolidation, might have assumed that he could unilaterally dismiss his complaint under R. 4:37-1(a), which permits a plaintiff to do so prior to service of a responsive pleading or motion.

About a month later, the subrogation complaint, under its own separate original docket number, was listed for dismissal for lack of prosecution under R. 1:13-7, presumably because the omission of its docket number from the consolidation order precluded the court's tracking of that action as part of the consolidated action. In any event, an order of dismissal was entered on October 22, 1991, bearing the docket number only of the subrogation complaint. At some unspecified time between June and October 1991, defendant's carrier paid the $15,000 settlement sum to plaintiff. Defendant asserted in his certification in support of his motion for leave to file the counterclaim that he had no knowledge of the settlement and had never been consulted about it by his attorney or the carrier.

In any event, as these matters were proceeding, defendant finally consulted his present attorneys and retained them to act for him and to assert such affirmative claims against plaintiff as he might have. A substitution of attorney dated October 29, 1991, and filed on November 1, 1991, was signed both by defendant's present counsel and the attorney originally assigned by his carrier to defend against plaintiff's complaint.

On November 12, 1991, present counsel filed the instant motion seeking leave for defendant to amend his answer in order to assert a personal-injury counterclaim against plaintiff. Since defendant's cause of action against plaintiff had accrued, as did hers against him, on July 16, 1988, the date of the accident, that motion was consequently filed sixteen months after the running of the statute of limitations. It was on that ground that the trial judge, rejecting defendant's relation-back argument under R. 4:9-3, denied the motion. Defendant appealed, and we reverse.

We start our analysis of the relation-back problem raised by this appeal with a consideration of whether, on November 12, 1991, when the motion for leave to assert a counterclaim was filed, there was still an action pending. We think it plain that the predicate for relation back of a pleading to the date of the filing of an earlier pleading is the pendency of that earlier pleading when the later pleading is asserted. Otherwise, there would be nothing to relate back to. We are therefore satisfied that if plaintiff's action against defendant had been entirely disposed of on the record and was consequently no longer pending on November 12, 1991, the cause of action defendant sought to assert by his late counterclaim would be barred both by the two-year statute of limitations prescribed by N.J.S.A. 2A:14-2 and by the entire controversy doctrine incorporated by R. 4:30A. See Burrell v. Quaranta et al., 259 N.J.Super. 243, 612 A.2d 379 (App.Div.1992) (holding that a defendant in a personal injury action who fails to file a counterclaim seeking damages from plaintiff for the injuries he suffered in the same accident is barred by the entire controversy doctrine from instituting a separate personal injury action against plaintiff after record termination of plaintiff's action).

We are satisfied that unlike Burrell, in which a stipulation of dismissal executed by all parties was filed prior to the commencement of defendant's action, plaintiff's action against defendant here was still technically pending when he sought to assert his affirmative claim. This is so because there was no record dismissal of that action in its entirety. The order of dismissal bore only the docket number of the subrogation action. The filed stipulation of dismissal was apparently also intended to address only the subrogation action. In any event, that stipulation could not have been effective as a dismissal of the personal injury action in view of an answer to that action having been previously filed. R. 4:37-1(a) requires a stipulation of dismissal to be filed by all parties who have appeared in the action. The stipulation here was defective on its face because it was not signed by defendant or in his behalf. Nor was it signed by the attorney of record for plaintiff who had filed the original complaint.

Holding, therefore, that plaintiff's action was still pending when the motion for leave to amend to assert the counterclaim was filed, we address the question of whether the then pendency of that action saved the counterclaim from the bar of the statute of limitations. The relation-back provisions of R. 4:9-3 have not been considered by our appellate courts in the context of a counterclaim. We are, however, satisfied that application of our well-settled and liberal procedural jurisprudence dictates the conclusion that a counterclaim arising out of the same transaction as pleaded by the complaint and therefore meeting the test of R. 4:9-3--that is to say, a litigation component embraced by the...