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Demauro v. Lindsay


August 29, 2007


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, L-5057-03.

Per curiam.


Submitted August 21, 2007

Before Judges Lisa and Holston, Jr.

Defendant appeals from the trial court's order of June 19, 2006, granting plaintiff's motion for reconsideration of an April 3, 2006 order that had granted defendant's motion to vacate default. The court found that, upon reconsideration, defendant had not shown the requisite good cause to set aside default pursuant to Rule 4:43-3. We find no mistaken exercise of discretion and affirm.

The subject matter of this suit was a physical altercation that occurred on September 9, 2002, in which defendant, plaintiff's brother-in-law, punched plaintiff in the face, causing him injury. The two men apparently had a dispute over a debt that led to the physical altercation. Defendant was charged with simple assault. Represented by counsel, Gerald Tyne, Esquire, defendant pled guilty to the charge in municipal court, but subject to a provision that the plea would not be evidential in any civil proceeding. See R. 3:9-2.

Plaintiff filed the complaint in this case on July 15, 2003, alleging intentional tort and negligence. Defendant was served on July 31, 2003. The record is not clear as to the specific time when he took the papers to Tyne. In any event, Tyne advised defendant that he would not represent him in the civil suit, but he suggested that a request be made of defendant's homeowner's insurance company to enter a defense because the complaint contained a negligence count.

No answer was filed and default was entered on October 31, 2003. It was not until March 31, 2004 that Tyne wrote to defendant's carrier advising that his office "represents Thomas Lindsay," transmitting a copy of the complaint for review and consideration of entering a defense, and advising that "[i]t is my understanding from the plaintiff's attorney that default has already been entered and he is prepared to seek a judgment." Therefore, eight months elapsed between the time defendant was served and the date on which the papers were sent to his carrier with a request for entry of a defense. And that was done at a time when it was known that default had been entered many months earlier.

In addition to plaintiff's claim, defendant was in financial difficulties and unable to meet the mortgage obligations on his home, as a result of which foreclosure proceedings were begun. Tyne advised defendant to consider filing for bankruptcy and referred him to a bankruptcy attorney, Jerrold McDowell, Esquire. McDowell filed a Chapter 13 Petition for defendant on April 2, 2004.

On April 14, 2004, defendant's homeowner's carrier responded by letter directly to defendant, with a copy to Tyne, denying coverage, informing him the carrier would not provide a defense, and recommending that defendant retain counsel to protect his interests with respect to the allegations in the complaint. According to defendant, both McDowell and Tyne informed him that because of the pending bankruptcy, he would not be prejudiced by the lack of a defense because of the automatic stay against state court proceedings resulting from the pending bankruptcy action.

The bankruptcy petition was dismissed on September 13, 2004. Nevertheless, defendant took no action with regard to this case. On plaintiff's motion, an order was entered on September 17, 2004 restoring the action. During this same timeframe, McDowell became ill and died in November 2004, and defendant's wife experienced medical difficulties requiring surgery on her cervical spine. On December 22, 2004, plaintiff's attorney wrote to defendant, sending a copy of the order restoring the case.

In January 2005, plaintiff engaged the services of another bankruptcy attorney, Robert Johnson, Esquire. He also engaged the services of his present appellate counsel who, on February 7, 2005, filed a motion to vacate the default. The motion was argued and the judge reserved decision. Before the decision was rendered, on March 28, 2005, defendant's bankruptcy petition was restored. With that information passed on to the court, orders were entered on April 8, 2005 and May 13, 2005 denying without prejudice the motion to vacate default, pending further consideration when the automatic stay would no longer be in effect.

At some time prior to March 9, 2006, the bankruptcy proceeding was concluded. On March 9, 2006, defendant moved to vacate the default. Over objection, the motion was granted on April 3, 2006. Defendant filed an answer on April 13, 2006.

Plaintiff filed a motion for reconsideration on April 26, 2006. Oral argument was conducted on June 2, 2006. After reserving decision, the court issued an order, including a statement of reasons, granting reconsideration and vacating the order of April 3, 2006. The court found:

Not disputed is the fact that Defendant was served with "Plaintiff's suit" on July 31, 2003. From there, he handed the papers to his then retained attorney for the parallel criminal proceeding that arose from this same September 9, 2002 incident, Gerald Tyne, Esq., who tried, but was declined a defense though Defendant's homeowner's insurance policy. After failing to file any responsive pleading to the Complaint, default was entered on October 31, 2003. Despite knowledge of service of the Summons and Complaint and access to at least one attorney, no application to vacate the default was filed either by Mr. Tyne or by Defendant Pro Se until the motion was filed that rendered the April 3, 2006 order.

Notwithstanding the extensive passage of time since having been served with the lawsuit papers on July 31, 2003, the Court finds that the myriad of explanations offered by Defendant for not having filed an Answer to the Complaint or a motion to vacate default sooner, including the threatened bank foreclosures, being sued by banks, filing bankruptcy after declination by his homeowner's insurance company of a defense in this matter, the dismissal of his bankruptcy petition and his wife's surgery to cervical area, do not amount collectively as excusable neglect. A careful and frank review of the timeline, instead, bears out that the Defendant tried to stall the prosecution of this matter and ignored the obligation to file a responsive pleading or to move to vacate default.

After a proof hearing the court entered final judgment on October 17, 2006 in plaintiff's favor in the total amount of $53,874.85.

As correctly pointed out by defendant on appeal, the court was incorrect in stating that no application to vacate default was filed until the motion that resulted in the April 3, 2006 order. Indeed, an earlier motion had been filed on February 7, 2005, which was ultimately denied without prejudice because of the restoration of the bankruptcy proceeding. Notwithstanding that erroneous statement, the judge's conclusion that good cause was not demonstrated is well supported by the record.

From the time defendant was served on July 31, 2003 until his first motion to vacate default on February 7, 2005, more than eighteen months elapsed. During that entire time, defendant consulted with several attorneys regarding the subject matter of this complaint and indeed was represented by several attorneys regarding various aspects of the subject matter. He was clearly aware that default had been entered against him on October 31, 2003, yet, fifteen months elapsed after that date before the first motion to vacate was filed. And, he knew on April 14, 2004 that he had no coverage and it was incumbent upon him to respond to this suit. He knew on September 13, 2004 that the protection of the automatic stay from the bankruptcy proceeding was no longer available. Yet, he continued to delay. Then, when a motion was made to vacate and while it was pending decision, defendant had the bankruptcy proceeding restored.

Defendant did not simply ignore the complaint when he was served or when he was informed that default was entered against him. However, five months elapsed between the initial dismissal of his bankruptcy petition on September 13, 2004 and the filing of his initial motion to vacate default on February 7, 2005. During that entire timeframe, defendant knew he was not covered by insurance and it was incumbent upon him to address this litigation. Defendant had no problem in contacting lawyers for assistance in this case over its long history. While a five-month period may be considered relatively short, we do not view it in isolation, but on the heels of the fifteen months that had already elapsed since the filing of this lawsuit on July 15, 2003.

Litigants should be given every reasonable opportunity to have their day in court, but there is also a strong public policy favoring an end to litigation. Nemeth v. Otis Elevator Co., Inc., 55 N.J. Super. 493, 497 (App. Div. 1959). Our standard of review requires that we evaluate whether the trial court properly exercised its discretion. O'Connor v. Abraham Altus, 67 N.J. 106, 129 (1975). Considering the overall circumstances, we cannot say that the trial court's action constituted a mistaken exercise of discretion.



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