November 7, 2007
LARCHMONT-ARK ASSOCIATES, A DELAWARE GENERAL PARTNERSHIP, PLAINTIFF-RESPONDENT,
MT. LAUREL SANDWICH CO., KULWANT SINGH, AND MOHAMMAD SHAHID, DEFENDANTS, AND SUKHTEJ SINGH, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Law Division, Burlington County, L-2670-91.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 29, 2007
Before Judges Graves and Sabatino.
This appeal arises out of an application to the Law Division by Sukhtej Singh ("appellant"), to obtain relief under R. 4:50-1 from a money judgment entered against him in favor of respondent, Larchmont-Ark Associates ("Larchmont"). After reviewing the motion and opposition papers and hearing oral argument, the Law Division denied the application on September 8, 2005.
Because appellant's sworn assertions and several of the related documents raise troubling factual matters that, if proven credible, could rise to the level of exceptional circumstances under R. 4:50-1(f), we vacate the September 8, 2005 order and remand the matter for a plenary hearing. We do so without prejudice to the Law Division's ultimate disposition of appellant's motion on the merits after such a hearing.
Subject to further amplification of the facts on remand, the record provides the following chronology relevant to our analysis. In the late 1980s appellant and two other men, Mohammad Shahid and Kulwant Singh,*fn1 decided to go into the restaurant business together. The three men identified for that purpose a retail establishment in a Mount Laurel strip mall known as the Mount Laurel Sandwich Company ("Mt. Laurel Sandwich"). Appellant and his two colleagues thereafter acquired the business from Mt. Laurel Sandwich.
Concurrently, Mt. Laurel Sandwich's landlord, Larchmont, agreed to assign the lease to Shahid, Kulwant Singh and appellant. As part of the assignment, the three men each signed a "Memorandum of Assurance Concerning Additional Rent" for the premises, through which they all personally guaranteed payment of the rent through the lease's scheduled expiration in August 1989. The restaurant was renamed Dingledorf's King of Asia, and, for a time, appellant and the other two men worked there.
In February 1989, Larchmont's property manager inquired whether the restaurant operators wanted the lease renewed. The property manager received back a handwritten letter, dated February 11, 1989, requesting that the lease be renewed another three years. The letter purports to bear the signatures of Shahid, Kulwant Singh and appellant. Larchmont accordingly renewed the lease, as requested, for another three years.
In two certifications he filed in support of his R. 4:50-1 motion, appellant flatly denied signing the February 11, 1989 letter or otherwise authorizing the lease renewal. As corroborating proof, appellant attached copies of his passport, showing that he was in India from January 18, 1989 through March 13, 1989. Moreover, as Larchmont's attorney candidly acknowledged at oral argument before us, appellant's purported signature on the February 11, 1989 renewal letter does not match his other signatures on several other documents in the record.
Appellant stated that disagreements emerged with the two other investors, which led him to transfer all of his interests in the business to Kulwant Singh. That alleged transfer is memorialized in a corporate*fn2 resolution, prepared with the assistance of a lawyer named Rosenberg, in December 1990. Appellant stopped working at the restaurant and thereafter earned a living in unskilled or semi-skilled jobs at a gas station, a local warehouse and with other employers. He claims that he has not seen Shahid or Kulwant Singh since that time. Their present whereabouts are apparently unknown.
During the course of the renewed lease, the restaurant fell behind in the rent. Those mounting rent arrears prompted Larchmont to file an action in the Law Division in 1991 against its former tenant, Mt. Laurel Sandwich, as well as Shahid, Kulwant Singh and appellant. Attorney Rosenberg filed an answer to the complaint, purportedly on behalf of Shahid and appellant. The case was tried before a judge in October 1994, resulting in a judgment against Shahid and appellant in the sum of $59,766.17, plus costs. Appellant did not testify or otherwise appear at the trial. It also does not appear that he was deposed or participated in discovery.
Appellant certifies that he had no notice of Larchmont's rent action while it was pending. He contends that he was not served with process, and that he never spoke about the case with Rosenberg before the case was tried. To the contrary, appellant maintains that he first learned of Larchmont's judgment eleven years later in 2005, when it surfaced in a title search as appellant was selling his home.
In support of his lack-of-notice contentions, appellant points out that the Sheriff's return of service for the summons and complaint, ostensibly reflecting that he was served at his apartment unit on August 8, 1991, contains no physical description of him. He also notes that the return of service misstates the case's docket number, which he argues is suggestive of sloppiness and the document's overall unreliability.
Appellant further represents that, at the time of the alleged service of process, at least two other families with the surname "Singh" were living in his apartment complex. He posits that the Sheriff's officer who signed the return could have been mistaken about his identity. Additionally, a certification from appellant's wife attested that, as of August 1991, he was rarely at home because he was regularly working two jobs, respectively, from 7:30 a.m. to 4:00 p.m. at a warehouse and from 5:00 p.m. to 10:00 p.m. at a gas station. The wife denied that any Sheriff's officer ever came to their apartment to serve legal papers during that time frame. Appellant also tendered an unsworn letter from his former warehouse employer, confirming that appellant's weekday hours during August 1991 were from 7:30 a.m. to 4:00 p.m.
Apart from these service issues, the record also raises numerous questions about attorney Rosenberg's relationship with appellant. These questions include whether Rosenberg properly alerted appellant to his exposure in the landlord's case, whether Rosenberg consistently acted as appellant's counsel in the matter, and whether one should assume that appellant had fair notice of the proceedings through Rosenberg.
In this regard, Rosenberg's files, which were retrieved from archives, contain two letters from him to appellant. One letter is dated July 17, 1992, just two weeks before an arbitration scheduled for July 31, 1992, seeking that appellant confirm his desire to have Rosenberg represent him in the case. The second letter in the file is dated October 5, 1994. That letter advised, after-the fact, that a trial "was" scheduled for the previous day, October 4, 1994. Although appellant's wife appears to have signed the certified return receipt card for the July 17, 1992 letter, there is no such signed acknowledgement for the October 5, 1994 letter in the file. Nor is there any indication that Rosenberg ever heard from appellant in response, except for a vague "August 19" telephone message slip indicating a call had been placed that day to Rosenberg from a "Mr. Sing[h]." Moreover, we have no proof that, after the trial, Rosenberg ever forwarded a copy of the final judgment to appellant.
Further equitable concerns arise with respect to Rosenberg's actions after the judgment was entered. On June 26, 1992, Rosenberg sent a letter to Larchmont's counsel, identifying "my [his] clients" as Mohammad Shahid and Sukhtej Singh, and requesting a settlement demand, noting that both men were of modest means. Not long thereafter, Rosenberg wrote Larchmont's counsel another letter on September 3, 1992, making a settlement offer solely on behalf of "my [his] client," Mohammad Shahid. That letter specifically asserted that Rosenberg did not represent appellant, and that Larchmont was free to pursue the full balance due from him, or from Kulwant Singh.
Eventually, Rosenberg negotiated for Shahid a settlement with Larchmont for $10,000, without obtaining a release of the other sums due. Then, on March 30, 1995, Rosenberg filed a complaint in the Special Civil Part on behalf of Shahid against appellant, seeking reimbursement of one-half of the $10,000, plus counsel fees. The complaint did not refer to the 1994 trial or the judgment obtained by Larchmont. After being served with the complaint, appellant filed a pro se answer in the Special Civil Part denying that he owed Shahid any money. At that point, Rosenberg filed a substitution of attorney on June 15, 1995 and ceased handling the case. Shahid's case was voluntarily dismissed, apparently for lack of prosecution, on July 7, 1995.
Larchmont docketed its 1994 judgment but took no other steps to collect on it until 2005 when the judgment appeared as a lien at appellant's house closing. Appellant then sought Rosenberg's assistance in convincing Larchmont to forbear from seeking to enforce the judgment. Rosenberg attempted to do so, but was unsuccessful. After Rosenberg declined to do anything more, appellant retained his present counsel, who filed the R. 4:50-1 motion after undertaking an investigation.
In his brief oral ruling, the Law Division judge did not comment on appellant's contentions in detail. The judge concluded, on the whole, that appellant had failed to show exceptional circumstances to vacate a judgment that had been on the books for twelve years. As part of his analysis, the judge relied on the validity of the Sheriff's return of service from 1991. The judge also reasoned that appellant at least should have found out, after he was sued by Shahid in 1995, that there was an outstanding judgment, and should have pursued remedial action at that time. As the judge put it, "too much water is over the dam in this case."
In his appeal to us, appellant contends that, at a minimum, the motion judge should have conducted a plenary hearing with live testimony before ruling on the R. 4:50-1 motion. On the unusual and incomplete record before us, we agree that such a hearing was warranted here.
Because appellant's motion was filed more than a year after the entry of Larchmont's judgment, we assess it under the catch-all terms of R. 4:50-1(f). Subsection (f) embraces, in addition to the specific grounds mentioned forth in subsections (a) through (e) of the Rule, "any other reason justifying relief from the operation of the judgment or order." R. 4:50-1(f). See also R. 4:50-2 (limiting the grounds for relief under R. 4:50-1 where the judgment is more than a year old). The Rule has no outside time limit for judicial intervention.
A claim for relief under the R. 4:50-1(f) catch-all must be founded upon a showing of inequity and unfairness. Rosen v. Rosen, 225 N.J. Super. 33, 36 (App. Div.), certif. denied, 111 N.J. 649 (1988). The very essence of subsection (f) is to provide recourse in exceptional and compelling circumstances, for which the relief may be "as expansive as the need to achieve equity and justice." Court Inv. Co. v. Perillo, 48 N.J. 334, 341 (1966). Whether such exceptional circumstances are present hinges upon the totality of the facts and is assessed on a case-by-case basis. Ibid.; In re Guardianship of J.N.H., 172 N.J. 440, 473 (2002). To obtain relief, the movant must demonstrate that the circumstances are exceptional and that continued enforcement of the judgment would be "unjust, oppressive or inequitable." Quagliato v. Bodner, 115 N.J. Super. 133, 138 (App. Div. 1971).
In some instances where credibility is pivotal and the actual course of events relating to the judgment is disputed, the court may need to conduct a plenary hearing, in order to make proper factual findings about the merits of the R. 4:50-1 application. See, e.g., Nolan v. Lee Ho, 120 N.J. 465, 474 (1990); Amatuzzo v. Kozmiuk, 305 N.J. Super. 469, 474-75 (App. Div. 1997); Wolkoff v. Villane, 288 N.J. Super. 282, 291-92 (App. Div. 1996).
Larchmont argues that a plenary hearing is not needed in this case for several reasons. Among other things, it relies upon the strong presumption that the Sheriff's return of service from 1991, representing that appellant had been personally served at his apartment, was valid. See Garley v. Waddington, 177 N.J. Super. 173, 180-81 (App. Div. 1981) (requiring clear and convincing proof to overcome the presumption of service shown by a Sheriff's return). Larchmont further argues that even if service was ineffective, appellant's interests at trial were adequately protected by Rosenberg, who did manage to reduce the overall rental claim with proofs of mitigation.
With respect to the lease, Larchmont contends that even if appellant's signature on the lease renewal was not genuine, he would still be personally liable for the accrued*fn3 rental charges, as an actual or implied partner of Shahid and Kulwant Singh. The landlord also maintains that any conflicts of interest or other possible ethical lapses by Rosenberg*fn4 are not its concern, and appellant has other remedies against the attorney as an actual or putative client.
Having examined the record as a whole, we are convinced that there are simply too many issues here to enable appellant's R. 4:50-1 motion to be resolved on the basis of conflicting certifications and documents that, in large measure, raise more questions than they answer. A plenary hearing is warranted, at which time the judge can hear and consider the testimony of appellant, appellant's wife, attorney Rosenberg, and any other witnesses who can shed light on what happened.
After such a hearing, the trial court shall make specific findings of fact on the following items: (1) whether appellant was actually served with Larchmont's complaint; (2) if not, whether appellant otherwise had timely notice of the action before the case was tried and final judgment was entered; (3) whether appellant's signature on the lease renewal was genuine and, if not, the consequences of any forgery; (4) the extent to which the sums contained in the judgment reflect arrears accruing before, rather than after, the lease was renewed; (5) whether the validity of the judgment against appellant is undermined by any improper conduct by Rosenberg, including whether Rosenberg ever confirmed his representation of appellant with him before the trial and whether he promptly served appellant with a copy of the judgment after the trial; (6) whether Shahid's 1995 indemnification lawsuit was sufficient to put appellant on notice of the outstanding judgment; and (7) any other facts deemed relevant by the judge to a showing of "exceptional circumstances."
We remand this case with a clear recognition of, and respect for, the importance of finality in litigation. Baumann v. Marinaro, 95 N.J. 380, 395 (1984). We also are mindful that this matter is an old case. Even so, the factual allegations of impropriety and injustice that appellant has presented to us are so unusual and numerous that we cannot, in good conscience, allow the result to stand without an evidentiary proceeding to test the bona fides of those allegations. We also, of course, do not preordain the outcome of a plenary hearing, but simply require that it be conducted before the trial court reaches a final determination.
Reversed and remanded for a plenary hearing, consistent with this opinion. We do not retain jurisdiction.