On appeal from the Superior Court of New Jersey, Law Division, Atlantic County.
Approved for Publication June 26, 1997.
Before Judges Dreier, Newman and Villanueva. The opinion of the court was delivered by Dreier, P.j.a.d.
The opinion of the court was delivered by: Dreier
The opinion of the court was delivered by
Defendant, Anthony J. Simei, appeals from the denial of his motion to reconsider the denial of a previous motion to vacate a default judgment entered against him on September 28, 1990. The judgment was docketed within two weeks, and a writ of execution issued ten days later. Plaintiffs contended in their complaint that defendant Simei was an officer, director or principal of defendant 560 Ocean Club and that he was personally responsible to plaintiffs for the refund of approximately $21,000 arising out a lease of an Atlantic City condominium timeshare. Defendant denies that he was an officer or director of 560 Ocean Club, which was not a corporation but a partnership. Nor was he a partner or principal of the partnership. He claims he only worked part-time as a bookkeeper and accountant. He asserts he had only one brief dealing with plaintiffs and in no way participated personally in the lease transaction.
The sole method of service upon both the partnership defendant and Simei was service on a secretary employed by the partnership at its place of business, although plaintiffs also contend that additional copies of the summons and complaint were sent by regular and certified mail to defendant. The service at defendant's place of business is an improper mode of service on a resident individual. See R. 4:4-4(a)(1). Service would have been proper only if 560 Ocean Club was defendant's sole proprietorship, R. 4:4-4(a)(4), but there is no allegation that this is so. The service by regular and certified mail is a permitted alternative form of service on a resident individual, but cannot support a default judgment. See R. 4:4-4(c). Even if defendant were a partner of 560 Ocean Club, our court rules do not permit service of process on him by serving a secretary employed by the partnership, unless the secretary was authorized to accept service on defendant's behalf. R. 4:4-4(a)(1); see Schnitzer & Wildstein, New Jersey Service 1954 to 1967, annotation (e) on R. 4:4-4, AIV-56 (1982).
Plaintiffs relied on the sheriff's return of service, which, if examined, would have revealed the deficient service. The return of service contained the caption of the case listing the plaintiff and only The 560 Ocean Club as a defendant, and then stated that the summons and complaint had been served "April 5, 1990 on Anthony J. Simei by delivering a copy of each [the summons and complaint] personally to: Jan Valvo - Secy. at *fn1 who is authorized to accept process of service on behalf of the above The 560 Ocean Club 3100 Boardwalk Atlantic City, N.J. " (The underlined portion was typed on the otherwise printed return of service form.) Thus the return of service itself apparently indicates only that the secretary was authorized to accept service on the part of the partnership. There is at best a factual issue whether she could accept service on defendant's behalf.
Plaintiffs also argued in the trial court and here that service was properly effected because it complied with the service requirements of R. 4:4-4(a)(4) through (6) or R. 4:4-4(b)(1)(C). These sections, however, are applicable to service upon an individual proprietor where the action arises out of the business, upon a partnership and upon an unincorporated association or corporation, or to service by mail outside of the State of New Jersey. Since service on defendant by regular and certified mail under R. 4:4-4(c) did not result in defendant's answer or otherwise appearing in the suit, such mail service was ineffective.
The court rules provide little help in determining whether defendant had any duty to bring this issue before the court. Rule 4:6-2(b) requires a motion for lack of jurisdiction over the person to be made before pleading. In this case there was no pleading. If an answer had been filed, R. 4:6-3 permits a motion to be made to dismiss for such lack of jurisdiction within ninety days after service of the answer, provided the defense was included in the answer. Rule 4:6-7 provides for a waiver of the defense if the motions are not made. The rules, however, do not provide for an affirmative duty on the part of a party who was improperly served to take any protective action. We would add a proviso, as explained later, that a defendant's conduct after being notified of the action may, however, estop the defendant from challenging the service of process.
Defendant admits that in 1990 he knew of the entry of the judgment against him but thought that the judgment had no effect upon him because the business was taking care of the matter. In fact, plaintiffs contended that in late 1990, after the judgment had been docketed, defendant purchased some real estate (presumably with a mortgage, although this is not stated), and his judgment search did not reveal this judgment. He therefore assumed that 560 Ocean Club had resolved the matter. Apparently, plaintiffs made no claim against defendant during the ensuing six-year period, although Simei had lived in the same residence for over nine years.
The docketed judgment came to light when defendant sold real estate in 1996. *fn2 The amount of the judgment was required to be placed in escrow, and thereafter when defendant's motion to vacate the judgment was denied, the escrow balance was paid to plaintiffs. The court permitted oral argument of defendant's motion for reconsideration, but again denied defendant's motion to vacate the judgment. The Judge stated that since defendant had known of the judgment for six years and had not taken any timely action to vacate, it would be unfair to require plaintiffs now to prove the relationships and their right to reimbursement after so much time had passed.
This is not a case where a defendant had no notice of the institution of the action or the entry of a judgment. Defendant does not deny that the service at his place of business and the regular and certified mail service at his residence resulted in his receiving the summons and complaint and being fully aware of the claim against him. Whatever may have been defendant's assumption concerning the payment of the judgment, the fact remains that he knew of its entry and made no inquiries concerning its status.
But there may be extenuating circumstances here. According to a certification filed by the partnership's former attorney, he also had represented Simei in 1990 and had obtained from plaintiffs' attorney an oral agreement "that he would vacate or satisfy the judgment as to Anthony Simei only." The attorney further stated that he believed "that I sent him a document to sign which would have accomplished this end." Unfortunately, the unpaid bills to the partnership required the attorney to withdraw, and he placed his ten feet of files in storage. He further certified that he "completely lost sight of the fact that [plaintiffs' attorney] ...