A Capehart Scatchard Blog

Appellate Division Rejects Strict Application of One-Year Rule on Dismissals For Lack of Prosecution

By on December 1, 2014 in Key Defenses with 0 Comments

Workers’ compensation practitioners are very familiar with N.J.S.A. 34:15-54, which is the provision that allows a case to be dismissed for lack of prosecution, allowing the claimant one year to reinstate the case for good cause shown.  But the one-year period in the statute may not be as rigid as practitioners thought in light of Planes v. Village Townhouse, A-6026-12T3 (App. Div. November 25, 2014).

The case went back to an initial injury in 2000, which had led to a judgment for a foot injury.  That judgment was reopened in 2002 with further medical treatment provided by the respondent.  In fact, the case languished for nine years as a result of authorized treatment, discovery and expert reports.  The case was dismissed once for lack of prosecution on March 26, 2009, but that dismissal was vacated on October 22, 2009.  Then petitioner underwent hip surgery, which caused further delays.  Petitioner had diabetes and heart problems which further delayed his planned authorized foot surgery.

A hearing was set for December 16, 2010, but petitioner’s attorney requested an adjournment because he was serving as a court-appointed arbitrator in Essex County on that date.  The Judge of Compensation denied the adjournment request and entered an order dismissing the case for lack of prosecution pursuant to N.J.S.A. 34:15-54.  On the order were the handwritten words, “case not to be restored unless P.A. is ready to settle or try.”

After the dismissal occurred, petitioner finally had his foot surgery on September 15, 2011.  Petitioner’s attorney did not obtain the operative report from the treating physician until May 2, 2012.  The following day he forwarded the report to respondent’s attorney.   On May 17, 2012, petitioner moved to vacate the December 16, 2010 order of dismissal and restore the case to the active list.  That was one year and five months after the case had been dismissed.  Respondent opposed the application to restore the case.  The Judge of Compensation ruled on June 20, 2013 that he had no power to extend the one-year rule in N.J.S.A. 34:15-54.

The Appellate Division studied cases from the 1940s -1960s that suggested that the Division has the power to reopen judgments for fraud, mistake, inadvertence, or other equitable grounds comparable to the power that Superior Court judges have under Superior Court Rule 4:50.  Under Superior Court Rule 4:50 motions to set aside judgments should be made within a year after entry of judgment but can be made beyond that time frame for any reason justifying relief from the operation of the judgment or order.

In this case, the Appellate Division cited three reasons favoring restoration of the case.  One was that petitioner’s attorney had a legitimate reason not to attend the December 10, 2010 hearing since he was a court-appointed arbitrator that day.  “We are unable to determine on this record why, under these circumstances, counsel’s seemingly valid adjournment request was denied.”   The Court was also troubled by the language that was inserted in the order of dismissal on December 10, 2010, stating that the case could not be restored until the case was ready or had to be tried. Finally, the court observed that authorized surgery occurred in September 2011, within the one year period of the dismissal.

Arguably these circumstances may suffice to warrant equitable relief under Rule 4:50-1(f), especially should respondent be unable to demonstrate prejudice due to the delay beyond the one-year statutory period.

The Appellate Division remanded this case to the Judge of Compensation for a further hearing.  This is a significant case for all practitioners because it loosens what practitioners thought was a hard and fast rule that a case that has been dismissed for lack of prosecution can only be restored after one year.  The last comment that the court made about respondent having to demonstrate prejudice caused by the delay drives a wide wedge into the one-year rule.  It is always difficult for a respondent to prove prejudice when dealing with limited time frames.  Defense practitioners should be cautious in light of the Planes case in advising clients that Section 54 dismissals cannot be reopened after one year.  Cases that employers thought were closed for good may become the subject of future applications for restoration.  Although the Planes case has not been reported, it will now be the leading case in the Division on Section 54 issues.

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About the Author

About the Author:

John H. Geaney, a shareholder and co-chair of Capehart Scatchard's Workers' Compensation department, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.

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