Full Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited . R. 1:36-3. SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2908-24 VAROUJAN KHOROZIAN, Individually, and on behalf of THE ESTATE OF DEREK KHOROZIAN, and KYLE KHOROZIAN, Plaintiffs-Appellants, v. GERALD H. HANSON, ESQ., VICTORIA J. AIRGOOD, ESQ., HILL WALLACK LLP, CHUBB INSURANCE GROUP1, GREAT NORTHERN INSURANCE COMPANY, Defendants-Respondents. ____________________________ Argued September 22, 2026 – Decided October 20, 2026 Before Judges Gilson, Paganelli, and DeAngelis. On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-7290-22. 1 Great Northern Insurance Company was incorrectly pled as Chubb Insurance Group. Michael Confusione argued the cause for appellants (Hegge & Confusione, LLC, attorneys; Michael Confusione, on the briefs). Lisa O. Adelsohn argued the cause for respondents Gerald H. Hanson, Esq., Victoria J. Airgood, Esq. and Hill Wallack LLP (Milber Makris Plousadis & Seiden, LLP, attorneys; Lisa O. Adelsohn and Emily A. Wernicke, on the brief). Jonathan P. McHenry argued the cause for respondent Great Northern Insurance Company (Connell Foley LLP, attorneys; Jonathan P. McHenry, on the brief). PER CURIAM Plaintiffs, Varoujan Khorozian, individually and on behalf of the Estate of Derek Khorozian, and Kyle Khorozian, appeal from an April 11, 2025 order dismissing their complaint with prejudice for failure to provide discovery to defendants Hill Wallack LLP, Gerald H. Hanson, Esq., and Victoria J. Airgood, Esq. (collectively, the HW Defendants), and denying plaintiffs' application to restore the complaint against defendant Great Northern Insurance Company (Great Northern). Based on the applicable standards of review, we affirm in part and remand for proceedings consistent with this opinion. I. This matter arises from plaintiffs' claims that the HW Defendants committed professional malpractice in their representation of plaintiffs in an A-2908-24 2 action filed in the United States District Court for the District of New Jersey in 2015. In that action, C.B.G., a Cameroonian national, sued plaintiffs alleging human trafficking, forced labor, failure to pay minimum wage, fraudulent misrepresentation, and false imprisonment. Great Northern provided defense costs under a homeowners policy issued to plaintiffs, including retention of the HW Defendants. The federal action was ultimately settled, and the settlement was placed on the record in open court. Plaintiffs alleged the HW Defendants failed to secure language in the settlement agreement clearly stating that plaintiffs did not admit liability. According to plaintiffs, deficiencies in the settlement agreement caused them to lose business from the Cameroonian government. Plaintiffs filed their complaint against defendants on December 8, 2022. The HW Defendants filed their answer on March 9, 2023, which included a demand for a written statement of damages. The record contains no proof that plaintiffs served Great Northern with the complaint. Although one motion exhibit included a receipt showing the complaint was received by a process server on December 21, 2022, neither the record on appeal nor the trial court docket contains an affidavit of service. As a result, the complaint against Grea t Northern was dismissed for lack of prosecution in June 2023. A-2908-24 3 In addition to demanding a written statement of damages, the HW Defendants served each of the three plaintiffs with separate interrogatories and notices to produce. Under Rule 4:18-1(b)(2), responses to the notices to produce were due by July 18, 2023, and under Rule 4:17-2, answers to interrogatories were due by August 14, 2023. After plaintiffs failed to respond to the notices to produce, the HW Defendants sent a good-faith letter on July 17, 2023 seeking compliance with plaintiffs' discovery obligations. On August 15, 2023, the HW Defendants sent a second good-faith letter requesting the overdue interrogatory answers and again seeking responses to the notices to produce. Plaintiffs did not serve any discovery responses after receiving those letters. On August 23, 2023, the HW Defendants moved to dismiss the complaint without prejudice under Rule 4:23-5(a)(1) for failure to produce discovery. Plaintiffs neither served discovery responses nor opposed the motion. Accordingly, on September 19, 2023, the complaint was dismissed without prejudice. On November 22, 2023, the HW Defendants then moved to dismiss the complaint with prejudice under Rule 4:23-5(a)(2) for failure to provide discovery. That motion was returnable on December 15, 2023. On December A-2908-24 4 5, 2023, plaintiffs' counsel's assistant emailed the HW Defendants advising that discovery responses would be served by December 8, 2023, and requested a call to discuss a motion to restore and a scheduling order. Plaintiffs, however, did not serve discovery responses on December 8. Oral argument on the motion to dismiss was initially scheduled for January 26, 2024. At plaintiffs' counsel's request, the trial court adjourned the matter and rescheduled oral argument for February 14, 2024. On February 8, 2024, plaintiffs served discovery responses, nearly six months late. The HW Defendants maintained those responses were deficient. That same day, plaintiffs filed a cross-motion to restore the complaint and extend discovery. The HW Defendants opposed the cross-motion and filed reply papers in support of their dismissal motion. On February 29, 2024, the court entered an order requiring plaintiffs to provide fully responsive answers to each of the HW Defendants' discovery demands by March 4, 2024. The court further stated that, if plaintiffs complied, it would consider plaintiffs' motion to reinstate the complaint. Plaintiffs did not serve supplemental discovery responses until March 7, 2024. The HW Defendants asserted those responses remained deficient and did not comply with the court's February 29, 2024 order. Over the next month, the A-2908-24 5 parties exchanged correspondence with the trial court regarding the adequacy of the responses. On April 30, 2024, a clerk's notice was uploaded to the docket directing the parties to file a motion if they sought court intervention in the discovery dispute. Plaintiffs took no action in response to that notice until January 29, 2025, when they filed a motion to reinstate the complaint. Nearly 300 days had elapsed between the clerk's notice and plaintiffs' filing. On February 6, 2025, the HW Defendants filed a cross-motion seeking dismissal of the complaint with prejudice based on plaintiffs' failure to provide fully responsive discovery as required by the February 29, 2024 order. Plaintiffs filed opposition and reply papers on February 10, 2025. Plaintiffs also moved to reinstate the complaint against Great Northern, which had been dismissed for lack of prosecution in June 2023. By then, nearly 800 days had passed since the dismissal, and plaintiffs still had not produced proof that the complaint had ever been served on Great Northern. Plaintiffs also sought a nine-month extension of discovery, and plaintiffs' counsel moved to withdraw as counsel. In support of their motion, plaintiffs asserted that any delays or deficiencies were attributable to counsel and represented that additional A-2908-24 6 information could be submitted to the court for in camera review. The motion, however, did not address the existence of exceptional circumstances, even assuming counsel was responsible for plaintiffs' discovery failures. The court heard oral argument on April 4, 2025. Plaintiffs' counsel attempted to attribute the discovery failures to his circumstances, but the court repeatedly noted that counsel's lack of diligence did not constitute evidence of exceptional circumstances. The court observed that it had afforded plaintiffs multiple opportunities to comply with their discovery obligations, yet plaintiffs failed to take advantage of those opportunities. The court further noted that plaintiffs waited nearly a year after the clerk's notice before filing a motion to reinstate. It specifically found plaintiffs had repeatedly violated the court rules. The court concluded that, even if plaintiffs had encountered difficulties with counsel, they had not demonstrated exceptional circumstances warranting reinstatement of the complaint or an extension of discovery. The court also emphasized that, despite the case having been pending since December 2022, no substantive discovery had been completed and the trial date was approaching. The court added that it had no confidence that, even if discovery were extended, plaintiffs would meaningfully participate. A-2908-24 7 On appeal, plaintiffs contend that the court did not properly apply Rule 4:23-5 to Great Northern. Plaintiffs also argue that they produced all outstanding discovery responses and that the court failed to identify the remaining deficiencies in those responses. Finally, plaintiffs maintain that, to the extent they were required to demonstrate exceptional circumstances, their trial counsel's actions satisfied that requirement. II. We review a trial court's decision to reinstate or dismiss a complaint under an abuse of discretion standard. St. James AME Dev. Corp. v. City of Jersey City, 403 N.J. Super. 480, 487 (App. Div. 2008). "The trial court is deemed to have abused its discretion when the 'decision [was] made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.'" Thabo v. Z Transp., 452 N.J. Super. 359, 368 (App. Div. 2017) (alteration in original) (quoting U.S. v. Scurry, 193 N.J. 492, 504 (2008)) (internal quotation marks omitted). Dismissal under Rule 4:23-5 is a two-step process that must be strictly adhered to before a court may grant a motion to dismiss with prejudice for failure to fulfill a discovery obligation. Thabo, 452 N.J. Super. at 369. In reviewing a trial court's dismissal of a complaint pursuant to Rule 4:23-5, we consider A-2908-24 8 whether the "procedural requirements" have been "scrupulously followed and technically complied with." Thabo, 452 N.J. Super. at 369. Rule 4:23-5(a)(1) permits an "aggrieved party [to] move for dismissal" without prejudice for a delinquent party's "non[-]compliance with discovery obligations." St. James AME Dev. Corp., 403 N.J. Super. at 484. With the motion, the movant's attorney must submit a certification that he or she has "personally conferred orally or has made a specifically described good faith attempt to confer orally with the attorney for the opposing party in order to resolve the issues raised by the motion." R. 1:6-2(c). It is recognized that "Rule 4:23-5(a)(1) applies to demands for interrogatories (R[ule] 4:17), demands for documents (R[ule] 4:18-1), and demands for medical examinations (R[ule] 4:19)." Kwiatkowski v. Gruber, 390 N.J. Super. 235, 236 (App. Div. 2007). If the motion to dismiss plaintiff's complaint without prejudice is granted, Rule 4:23-5(a)(1) provides that: Upon being served with the order of dismissal or suppression without prejudice, counsel for the delinquent party shall forthwith serve a copy of the order on the client by regular and certified mail, return receipt requested, accompanied by a notice in the form prescribed by Appendix II-A of these rules, specifically explaining the consequences of failure to comply with A-2908-24 9 the discovery obligation and to file and serve a timely motion to restore. The Appendix II-A notice form requires the delinquent party's attorney to attach the court's dismissal order without prejudice and include a notice that the pleading may "forever" remain dismissed if outstanding discovery is not provided, a motion to vacate is not granted, and the applicable restoration fee is not paid. Notice to Client, Pressler & Verniero, Current N.J. Court Rules, Appendix II-A to R. 4:23-5(a)(1), at 2132 (2026). After a trial court dismisses a complaint without prejudice for failure to make discovery, the moving party may pursue the second step under Rule 4:23- 5(a)(2) and seek a dismissal with prejudice. See Thabo, 452 N.J. Super. at 370. The party entitled to discovery can file the motion "after the expiration of [sixty] days from the date of the order[]" of dismissal without prejudice. Sullivan v. Coverings & Installation, Inc., 403 N.J. Super. 86, 93 (App. Div. 2008) (quoting R. 4:23-5(a)(2)). The delinquent party may move to restore the complaint at any time prior to dismissal with prejudice if the discovery deficiencies are cured, the restoration fee is paid, and any other court-imposed conditions are addressed. Id. at 94 (citing R. 4:23-5(a)(2)). Before the trial court may grant a motion to dismiss with prejudice for the failure to make discovery, Rule 4:23-5(a)(2) requires that "[t]he attorney for the A-2908-24 10 delinquent party shall, not later than [seven] days prior to the return date of the motion, file and serve an affidavit reciting that the client was previously served as required by subparagraph (a)(1)." Further, the attorney for the delinquent party must also demonstrate the client "has been served with an additional notification, in the form prescribed by Appendix II-B, of the pendency of the motion to dismiss or suppress with prejudice." Ibid. The Appendix II-B notice form provides that the attorney must inform the delinquent party of the motion to dismiss' return date, the court assigned to hear the motion, and the location of the motion hearing. The notice form advises the delinquent party of the "right to appear before the court" and that "[i]f this motion is granted, your claim will be dismissed and may not be subject to restoration." "If the attorney for the delinquent party fails to timely serve the client with the original order of dismissal" and "fails to file and serve the affidavit and the notifications required, " then "the court shall, unless exceptional circumstances are demonstrated, proceed by [OTSC] or take such other appropriate actions as may be necessary to obtain compliance with the requirements of this rule." R. 4:23-5(a)(3). "[B]ecause dismissal with prejudice is 'the ultimate sanction,' it should be imposed 'only sparingly' and 'normally . . . ordered only when no lesser sanction will suffice to erase the prejudice suffered by the non-delinquent A-2908-24 11 party.'" Salazar v. MKGC Design, 458 N.J. Super. 551, 561-62 (App. Div. 2019) (omission in original) (quoting Robertet Flavors, Inc. v. Tri-Form Constr. Inc., 203 N.J. 252, 274 (2010)). This is a multi-defendant case, therefore if reinstatement is sought beyond ninety days, the exceptional circumstances test applies. Id. at 384 (citing R. 1:13-7(a)). If, however, it was a single-defendant case, only a showing of good cause would be necessary. Id. at 383-84. We have construed the term "exceptional circumstances" as used elsewhere in Part IV of our Court Rules. In considering the term's use in the discovery extension rule, Rule 4:24-1, we likened "exceptional circumstances" to "'extraordinary circumstances.'" Rivers v. LSC P'ship, 378 N.J. Super. 68, 78 (App. Div. 2005) (first quoting Flagg v. Twp. of Hazlet, 321 N.J. Super. 256, 260 (App. Div. 1999); and then citing Vitti v. Brown, 359 N.J. Super. 40, 50 (Law Div. 2003)). We have defined extraordinary circumstances as those that "in common parlance, denote[] something unusual or remarkable." Ibid. (quoting Vitti, 359 N.J. Super. at 50). In general, in the discovery setting, delays caused by counsel's failure to diligently prosecute the case do not present exceptional circumstances. Id. at 79-82; see also Huszar v. Greate Bay Hotel & Casino, Inc., 375 N.J. Super. 463, 474 (App. Div. A-2908-24 12 2005) (finding no exceptional circumstances where "the delay rests squarely on plaintiff's counsel's failure to retain an expert and pursue discovery in a timely manner"). As to the motion to dismiss with prejudice, the court correctly determined that counsel's lack of diligence did not satisfy the exceptional circumstances standard. However, the record is unclear as to whether plaintiffs' counsel complied with the notice requirements set forth in Rule 4:23-5(a)(2) or whether the court identified the discovery responses that remained deficient. See St. James AME Dev. Corp., 403 N.J. Super. at 486 ("[W]henever there is either a bona fide dispute over responsiveness or insufficiency . . . the judge should first identify those questions which need to be answered more specifically. The parties' subsequent actions will therefore be informed by a judicial determination and not the subjective view of either party."). Thus, we are constrained to remand this matter for further proceedings to develop the record on those issues. Turning to the denial of the motion to reinstate the complaint against Great Northern, we note there is no evidence in the record of exceptional circumstances that prevented an earlier application to reinstate the complaint against Great Northern. In support of their application, plaintiffs contended the A-2908-24 13 delays associated with seeking reinstatement were caused by their attorney 's lack of diligence or negligence. As noted earlier, inaction or negligence by counsel does not support a finding of exceptional circumstances. We find no abuse of discretion by the trial judge in denying reinstatement and affirm. Affirmed in part and remanded in part. We do not retain jurisdiction. A-2908-24 14