New Jersey Appellate Division confirms timing options for filing a motion to dismiss pursuant to New Jersey Court Rule 4:6-2(e)

In the recent case of Bank, et al. v. Lee, the New Jersey Appellate Division addressed a significant procedural issue regarding the timing for parties to file a motion to dismiss pursuant to New Jersey Court Rule 4:6-2(e).

Plaintiffs-Respondents Noah Bank and Edward Shin filed a complaint against defendant-appellant Marie Lee, alleging breach of confidentiality and non-disparagement provisions. In response, Lee counterclaimed, asserting violations of the Conscientious Employee Protection Act (CEPA), defamation, and trade libel. The plaintiffs subsequently filed an answer to Lee’s counterclaims, explicitly reserving in that answer the defense of failure to state a claim pursuant to Rule 4:6-2(e). Approximately three months after filing the answer in which this defense was preserved, defendant Bank moved to dismiss Lee’s counterclaims under Rule 4:6-2(e). The judge denied the motion as untimely.

After procedural delays involving a stay pending criminal proceedings against Shin and the replacement of the original judge assigned to the case, the new judge considered the plaintiffs’ newly filed motion to dismiss Lee’s CEPA claim for failure to state a claim under Rule 4:46-2(e). Lee argued that the later-filed motion to dismiss her counterclaims was untimely because Rule 4:6-2 provides that: “the following defenses may at the option of the pleader be made by motion, with briefs: … (e) failure to state a claim upon which relief can be granted…. If a motion is made raising any of these defenses it shall be made before pleading if a further pleading is to be made.”

The new judge court disagreed and granted defendant Bank’s motion to dismiss the CEPA claim for failure to state a claim pursuant to Rule 4:6-2(e).  In doing so, the court ignored the prior ruling of the original judge. Lee appealed.

Faced with this apparent precedent as to the mandatory filing of a Rule 4:6-2(e) motion before the defense is asserted in an answer, the Appellate Division analyzed the different defenses available under Rule 4:6-2 in light of Rule 4:6-3, noting that Rule 4:6-3:

“… requires a party who initially stated a Rule 4:6-2 (b) [lack of jurisdiction over the person], (c) [insufficiency of process], or (d) [insufficiency of service of process] defense in their answer to raise it by filing a motion within ninety days after service of the answer. However, Rule 4:6-2(a) [lack of jurisdiction over the subject matter], (e) [failure to state a claim upon which relief can be granted], and (f) [failure to join a party without whom the action cannot proceed] defenses do not have that ninety-day requirement, but the defenses must be “heard and determined before trial on application of any party, unless the court for good cause orders that the hearing and determination thereof be deferred until the trial.”

From this distinction in R. 4:6-3, the Bank Court ruled that a Rule 4:6-2(e) motion to dismiss is not considered untimely if it is filed post-answer, as long as the defense of failure to state a claim is preserved in the answer. This decision underscores the flexibility afforded to parties in litigation, allowing them to raise such defenses even after the initial pleadings have been filed. The court emphasized that these motions can be made during or after the discovery phase, akin to summary judgment motions.

This ruling has several important implications for clients forced to defend claims that have no legitimate basis as alleged:

1. Strategic Flexibility: Clients can strategically plan their litigation approach, knowing that they have the option to file a Rule 4:6-2(e) motion after answering a complaint or counterclaim. This flexibility allows for a more comprehensive evaluation of the opposing party’s claims during the discovery process before deciding to pursue a motion to dismiss.
2. Preservation of Defenses: It is crucial for clients to ensure that any potential defenses, such as failure to state a claim, are explicitly reserved in their initial pleadings. This reservation is essential to preserve the right to file a motion to dismiss at a later stage.
3. Efficient Use of Resources: By allowing motions to dismiss to be filed after discovery, clients can make more informed decisions based on the evidence gathered, potentially leading to more efficient use of legal resources and a stronger position in litigation.
4. Alignment with Summary Judgment Motions: The court’s decision aligns the timing of Rule 4:6-2(e) motions with that of summary judgment motions, providing a consistent framework for addressing claims that may lack legal sufficiency.
5. Stay Tuned: Notably, the Appellate Division referred this matter to the “Civil Practice Committee for further consideration because of the potential ambiguity in Rule 4:6-2 and Rule 4:6-3.”

The ruling in Bank, et al. v. Lee offers valuable guidelines for procedural strategies available to litigants defending groundless claims. By understanding and leveraging the flexibility in timing for Rule 4:6-2(e) motions, clients have more options for defending against such claims, can preserve critical defenses, and make informed decisions which will influence the timing and form for asserting certain defenses. This decision highlights the importance of careful planning and strategic foresight in asserting defenses in pleadings and motions.

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