New Jersey Trial Court Can Sua Sponte Reconsider and Vacate Interlocutory Summary Judgment

Everyone makes mistakes — even judges. And a recent ruling by the New Jersey Supreme Court in Lombardi v. Masso declared it well within a trial court’s discretion to correct its own error. Specifically, the Supreme Court held that a trial court can sua sponte revisit and vacate an interlocutory order (including one granting summary judgment) provided that specific procedures are followed. In so holding, the court rejected the argument that the law-of-the-case doctrine barred such reconsideration.

The case involved claims of breach of contract, fraud, misrepresentation and conspiracy against seven defendants, one of whom defaulted. The trial court granted summary judgment in December 2006 to five defendants and later denied the plaintiff’s motion for reconsideration of that decision. But, during an August 2007 proof hearing regarding a defaulting defendant, the trial court recognized that the case was more complicated than originally believed and that there were conflicts in the summary judgment certifications that did not become evident until the proof hearing. Consequently, after the proof hearing, the trial court informed the parties (including the dismissed defendants) that it would reconsider on its own initiative its grant of summary judgment during a hearing in November 2007. The order granting summary judgment was ultimately vacated.

The New Jersey Supreme Court affirmed the trial court’s actions, emphasizing that is “well established” that trial courts have “the inherent power to be exercised in its sound discretion, to review, revise, reconsider and modify its interlocutory orders at any time prior to the entry of final judgment.” According to the Supreme Court, that power emanates both from common law and New Jersey Court Rule 4:42-2(b), which provides in relevant part that any order is subject to revision prior to entry of final judgment if all claims have not been adjudicated. Further, interlocutory orders are always subject to being revised “in the interests of justice” if the trial court sees “good cause” and if such revision is necessary to insure that “substantial justice” results, which is what distinguishes an interlocutory decision from a final judgment.

Before revisiting any decision, however, the Supreme Court articulated two critical procedural safeguards: (1) the parties must be given a fair opportunity to be heard and raise whatever issues may be applicable such as, for example, prejudice if evidence no longer exists or witnesses are no longer accessible and (2) the court must articulate the proper legal standard, apply it to the facts, and explain the reasons for the revision — not just restate the conclusion. In Lombardi, the Supreme Court noted that the trial court indeed adhered to these procedures.

While this result may seem drastic, it is clear from the decision that judges should invoke this mechanism in rare circumstances when the only alternative would be to “sit idly” and “permit injustice to prevail.” Moreover, the Supreme Court makes clear that the decision does not require judges to second guess themselves; only that they should “right the proverbial ship” when justice so requires.

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