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New Century Financial Services v. Scanlon

December 10, 2007


On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Burlington County, Docket No. DC-3646-06.

Per curiam.


Argued: November 8, 2007

Before Judges Axelrad and Payne.

Defendant Mildred Scanlon appeals from a February 16, 2007 order denying her motion to vacate an unopposed summary judgment entered against her on September l3, 2006 in a Special Civil Part collection action. Appellant argues the trial court abused its discretion in denying her motion seeking to vacate the judgment pursuant to Rule 4:50-1 (a) and (f). We reverse and remand.

In May 2005 plaintiff, New Century Financial Services, Inc., assignee of Citibank, represented by present counsel, filed a Special Civil Part complaint against appellant, alleging she owed $8,404.35 plus interest from August 22, 2003, on a delinquent Visa card account. Appellant filed a pro se answer stating the account was paid in full on December 28, 2000, pursuant to a real estate refinance, and cancelled at that time. She provided a copy of a cancelled check in the amount of $4850 and a January 2001 Citibank Visa statement reflecting a $33.76 credit after posting of her payment. Appellant also informed New Century's counsel she had received a letter dated December 8, 2004 from a credit agency on behalf of Citibank claiming she owed $11,954.11 on this account, to which she responded with the history and sent copies of the cancelled check and real estate settlement statement. In her response to the collection agency, appellant advised she had provided the same information to other agencies that had contacted her in the interim making similar inquiries. Appellant informed plaintiff's counsel she had heard nothing further from any of the collection agencies, and provided him with copies of all documentation.

On the eve of trial, plaintiff's counsel sent a fax to the court stating the case would be dismissed without prejudice "based on evidence that shows the balance of the Citibank credit card was paid off at a real estate closing," and a signed stipulation would follow, which it did. Counsel's letter to appellant informed her that if, in the future, the creditor obtained credit card statements that might suggest subsequent activity on the account, he would forward them to her for her review, and ask for her comments to determine if there was fraudulent use of her credit card; otherwise, the case would be marked "closed" by the office once the stipulation was filed.

Despite that representation, plaintiff's counsel filed the identical complaint in April 2006, without providing appellant the statements promised in his September 2005 letter. Appellant filed an answer on May 25, 2006, denying any money was owed; claiming the account was closed, no goods or services were received, and the bill was paid; and referencing her answer and responses in the prior suit. Appellant again attached copies of the cancelled check and January 2001 Citibank Visa statement.

On June 9, 2006, the court sent a notice to the parties scheduling trial for September 14, 2006. On June 21, plaintiff filed a motion seeking summary judgment in the amount of $8,824.56. The notice of motion required a response in writing and further provided that the order sought would be entered in the discretion of the court unless an objection was filed within ten days of service of the motion. See R. 6:3-3(c)(2). In its statement of material facts, plaintiff contended the evidence supported a claim that the outstanding debt accrued after appellant made the January 2001 payment. Plaintiff attached to its motion: (1) a February 21, 2003 Citibank billing statement addressed to appellant reflecting a $7,193.97 previous balance, a $5 "Congrats- All E Statement Credit" posted on January 31, 2003, and a $407.89 "Click-To-Pay Payment" posted in February of 2003; (2) March through August 2003 statements showing interest and finance charges, but no additional charges or payments, and reflecting a new balance of $8,405.47; and (3) an electronic transmittal from Citibank of appellant's placement information listing "last purchase date of July 29, 2002," a last payment date and amount as reflected in the billing statement, and an August 23, 2003 balance substantially similar to the billing statement.*fn1 Appellant did not respond to the motion, and the court entered judgment in plaintiff's favor on September 13, 2006, noting appellant's lack of response to plaintiff's allegation of later charges to the account.

On January 30, 2007, appellant retained counsel and filed a motion to vacate the judgment, certifying facts and procedural history and attaching documentation previously recited and provided. Specifically, appellant certified that upon paying the $4850, she cancelled the account; was refunded the $33.76 credit; and never received another statement from Citibank. She further certified that when she received plaintiff's summary judgment motion immediately after the trial notice, "she did not realize what [the motion] was and that [she] had to respond in writing to this document" and she "believed [she] would have the opportunity to explain [her] position in court at the trial date." Appellant explained that she had asserted a consistent defense in both proceedings -- she "paid the account in full in December 2000, cancelled the account, did not use the card again and did not make any payments on the card." Appellant also noted that contrary to plaintiff's counsel's September 2005 letter, he never provided her with any statement from Citibank showing purchases to the account after it was paid in full and cancelled. Plaintiff responded with its counsel's certification basically asserting legal arguments.

Following oral argument, the court issued a written decision and order dated February 16, 2007, denying appellant's motion. The court found appellant failed to show "exceptional circumstances" to justify relief from the summary judgment order under Rule 4:50-1(f). Moreover, the court found the failure of appellant, a school teacher, "to read the statements [in the motion] regarding filing a written response" did not constitute "excusable neglect" under Rule 4:50-1(a). Even if it did, the court found appellant did not demonstrate a "meritorious defense" to the collection action, as she offered no proof that she did not continue to use the account after she made the December 2000 payment, such as a letter from Citibank or a credit report showing the account was closed, and she provided no explanation as to how she missed the statements being sent to her home address, such as problems with her mail. See, e.g., Marder v. Realty Construction Co., 84 N.J. Super. 313, 318 (App. Div.), aff'd, 43 N.J. 508 (1964) ("Generally, a defendant seeking to reopen a default judgment must show the neglect to answer was excusable under the circumstances and that he has a meritorious defense.").

We are satisfied the circumstances here are sufficiently exceptional to entitle appellant to vacate the unopposed summary judgment and permit her to have her day in court. See Mancini v. EDS, 132 N.J. 330, 336 (1993). Relief under Rule 4:50-1(f) is based on considerations of equity and fairness:

[T]he very essence of (f) is its capacity for relief in exceptional situations. And in such exceptional cases its boundaries are as expansive as the need to achieve equity and justice. [Court Inv. Co. v. Perillo, 48 N.J. 334, 341 (1966).]

For relief under subsection (f), "strict boundaries should never confine its scope." Mancini, supra, 132 N.J. at 336 (quoting Hodgson ...

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