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First Resolution Investment Corp. v. Seker

May 8, 2002

FIRST RESOLUTION INVESTMENT CORPORATION, PLAINTIFF-APPELLANT,
v.
BILAL SEKER, DEFENDANT.



On certification to the Superior Court, Law Division, Passaic County.

SYLLABUS BY THE COURT

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

VERNIERO, J., writing for a unanimous Court

The issue in this appeal is whether ordinary mail constitutes valid service when the certified mail is returned marked "unclaimed."

This matter arises out of an application for wage garnishment following a default judgment. Plaintiff sent the required wage garnishment notice via regular and certified mail to defendant's last known address. The regular mail was not returned and the certified mail was returned marked "unclaimed." Following the expiration of the ten-day objection period provided under R. 4:59-1(d), plaintiff submitted a proposed order and certification of service indicating that the certified mail was returned "unclaimed." Citing Morristown Memorial Hospital v. Tureo, 329 N.J. Super 154 (App. Div.), certif.. denied, The opinion of the court was delivered by: Verniero, J.

Argued November 26, 2001

We directly certified this appeal, 169 N.J. 596 (2001), to resolve a conflict in the Appellate Division in respect of certain provisions governing service of process under our Rules of Court. Plaintiff sent a written notice of its application for wage execution to defendant by certified and regular mail. The post office returned the certified letter, marking it "unclaimed." The letter sent by regular mail was not returned. Plaintiff submitted the wage execution application to the trial court along with a certification of service specifying that plaintiff had sent the notice to defendant by regular and certified mail to his last known address, and that the certified letter was returned "unclaimed."

The trial court denied plaintiff's requested relief, concluding that plaintiff did not satisfy the requirements of Morristown Memorial Hospital v. Tureo, 329 N.J. Super. 154 (App. Div.), certif. denied, 165 N.J. 487 (2000). The Tureo court held that a creditor seeking a post-judgment wage execution must indicate in a proof of service certification that the notice sent by certified mail to the debtor was refused or not accepted before ordinary mail constitutes valid service. Id. at 157. Relying on Tureo, the trial court held that "even though regular mail was not returned, service was not effected. 'Unclaimed' is not the same as 'Refused' or 'Not Accepted'."

A subsequent panel of the Appellate Division held that service by regular mail of a notice seeking to levy on a debtor's bank accounts was valid even without proof of the results of service by certified mail. Morristown Mem'l Hosp. v. Caldwell, 340 N.J. Super. 562, 564 (App. Div. 2001). The Caldwell court explicitly rejected the rule announced in Tureo. Ibid.

We conclude that the Caldwell court's construction is more in keeping with the policies that underlie the service rules. Accordingly, we hold that plaintiff's proof of service certification was adequate under the rules. Apart from that issue, however, we further conclude that the content of notices served on debtors should contain information heretofore not required under Rule 4:59-1(d). The new information is intended to help debtors better understand their procedural rights. We direct the Civil Practice Committee to review that and other possible rule changes as described more fully below.

I.

The facts are straightforward. Defendant owed plaintiff approximately $3000 for an unpaid credit card balance in addition to annual interest as set forth in the parties' credit card agreement. On March 24, 2000, plaintiff sued defendant in the Special Civil Part to recover the monies owed. Plaintiff sent the summons and complaint to defendant by regular and certified mail. The certified mail return-receipt card was returned unsigned, and the reason for the non-delivery is unknown. (The notation of the post office that usually describes the reason for non-delivery is illegible.)

Defendant did not answer, appear, or otherwise respond to the complaint. Consequently, a default judgment was entered against defendant in the amount of $5,206.30 in addition to costs and attorneys' fees. The record does not indicate how the original indebtedness grew to that amount.

Seeking to garnish defendant's wages to recover on the judgment, plaintiff sent a notice of application for wage execution by regular and certified mail to defendant's last known address. After three attempts to notify defendant of the certified mailing, the post office returned the certified mail envelope to plaintiff. A postal official checked off a box on a notation stamped on the outside of the envelope indicating that the letter was "unclaimed." The regular mail notice was not returned. Defendant filed no objection within the ten-day period provided under Rule 4:59-1(d). Thereafter, plaintiff forwarded a proposed order for wage execution to the trial court. Along with the proposed order, plaintiff provided a certification of service indicating that it had sent the notice to defendant by regular and certified mail to defendant's last known address, and that the certified mail had been returned "unclaimed."

The trial court denied plaintiff's application. Citing Tureo, supra, 329 N.J. Super. at 157, the court stated in a brief, unreported decision: "Plaint[iff] does not show that the certified mail service was 'refused or not accepted'. Plaintiff shows that certified mail was 'unclaimed'. Therefore, even though regular mail was not returned, service was not effected. 'Unclaimed' is not the same as 'Refused' or 'Not Accepted'."

Plaintiff appealed the trial court's determination to the Appellate Division. After the Appellate Division docketed the case and granted amicus curiae status to the New Jersey Creditors Bar Association (Bar Association), we granted plaintiff's motion for direct certification. We also granted amicus curiae status to Legal Services of New Jersey (Legal Services), which participated on behalf of defendant. Defendant himself has not appeared at any stage of these proceedings.

II.

A.

We begin our analysis by setting forth the relevant Rules of Court that are at the heart of the conflict between Tureo and Caldwell. Rule 4:59-1(d) governs the procedure for enforcing judgments through wage executions. It states, in part, that

[t]he notice of wage execution shall be served on the judgment debtor in accordance with R. 1:5-2. A copy of the notice of application for wage execution, together with proof of service in accordance with R. 1:5-3, shall be filed with the clerk ...


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