On appeal from Superior Court of New Jersey, Law Division, Camden County.
King, Dreier and Bilder. The opinion of the court was delivered by Dreier, J.A.D.
Defendant appeals from the denial of his motion to vacate the defaults entered against him, and from an order allowing the entry of judgment out of time. The judgment entered was for $7,146.83 plus costs representing the balance due on a loan made by plaintiff to one Sal Richetti to purchase a used 1979 Cadillac. Defendant co-signed the note and security agreement as a co-maker, and plaintiff has called upon him to pay the balance due, since Richetti has disappeared and taken the car. The defendant's basic defense is that plaintiff failed to perfect its security interest in the car and that it is now unavailable to be sold and thus reduce defendant's responsibility. Defendant further notes that since there had been a substantial down payment ($2,500), if the car were available there would be little or no balance that would be due from defendant after disposition of the security.
The loan had been made on October 31, 1980 in the amount of $6,598.22 plus finance charges of $1,519.78, with the first of 36 payments due December 15, 1980. By the summer of 1981,
plaintiff had filed its complaint in the Law Division alleging defendant's default under the terms of the note. Defendant allegedly was served July 29, 1981, but failed to answer the complaint. Default was entered October 8, 1981, and on February 17, 1982 plaintiff filed a motion to enter judgment out of time, but for some reason no action was taken on plaintiff's motion. On October 8, 1982 defendant filed a motion to vacate the entry of default, but this motion was denied. Defendant again on April 22, 1983 sought to vacate the entry of default and permit the filing of an answer out of time, but this motion also was denied. On June 28, 1983 plaintiff again filed a motion for the entry of a default judgment out of time, and defendant challenged that motion, requesting oral argument. On August 2, 1983 plaintiff's motion was granted. Unfortunately, we have been provided with neither a transcript of the motion (if it actually was argued), nor with any basis for the court's decision.
Two issues are raised in this case. First, should the default have been set aside, and, second, does defendant have a legally meritorious defense. As for setting aside a default judgment under R. 4:50-1, such application is "viewed with great liberality, and every reasonable ground for indulgence is tolerated to the end that a just result is reached." Marder v. Realty Construction Co., 84 N.J. Super. 313, 319 (App.Div.1964), aff'd 43 N.J. 508 (1964). As to the setting aside of defaults that have not yet been reduced to judgment, R. 4:43-3 provides:
For good cause shown, the court may set aside an entry of default and, if a judgment by default has been entered, may likewise set it aside in accordance with R.4:50.
Judge Pressler in her comment to R. 4:43-3 states:
The required showing for setting aside an entry of default pursuant to this rule is clearly less stringent than that imposed by R.4:50-1 for setting aside a default judgment. (Pressler, Current N.J. Court Rules, Comment R.4:43-3 (1984)).
Defendant in applying for the setting aside of the default had contended that he had no recollection of being served, that he had a meritorious defense against the bank, and that plaintiff
had been lax in even applying for the default and default judgment so that plaintiff was in no way harmed by defendant's late filing of an answer. With these reasons, and if a truly meritorious defense was advanced, the default should have been ...