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Credit Union of New Jersey v. Al's Auto Body Service

December 19, 2007


On appeal from Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-751-06.

Per curiam.


Argued October 17, 2007

Before Judges Lihotz and Simonelli.

Defendant Al's Auto Body Service, Inc. appeals from the denial of its motion to vacate a final order entered on May 22, 2006, which required defendant to pay plaintiff Credit Union of New Jersey $8,300. The money judgment was entered on the return date of plaintiff's application for emergent relief.

The City of Trenton (City) hired defendant as a private contractor to store designated abandoned vehicles towed to its premises. On February 27, 2005, in accordance with the City's towing ordinance, the City police impounded and towed to defendant's premises a 1996 Acura 3.5 (VIN JH4KA9646TC010084). By letter dated December 7, 2005, the City notified plaintiff, which held a security interest in the vehicle, the car was towed and stored. The City's notice advised plaintiff that "[v]ehicles not claimed within twenty days from the [date of the notice] would be disposed of according to New Jersey law." On December 21, 2005, plaintiff wrote to defendant seeking release of the subject car, pursuant to N.J.S.A. 39:10A-20. Defendant declined to release the automobile unless its storage charges were paid. The vehicle was sold on February 21, 2006.

Plaintiff filed an Order to Show Cause (OTSC), summons and complaint for replevin. N.J.S.A. 2B:50-1. In support of its request for emergent relief, plaintiff stated its security interest "takes priority over a garage keeper's lien pursuant to . . . N.J.S.A. 39:10A-20," compelling defendant to release the vehicle. In the alternative, plaintiff sought judgment against defendant for $8,300, representing "the value of the subject vehicle." Defendant was served with the summons, OTSC and complaint.

Defendant did not appear at the May 5, 2006 return date of the OTSC. Correspondence between the parties' counsel dated May 16, 2006, referenced a telephone conversation on May 15, during which plaintiff was told that the vehicle had been disposed of pursuant to the provisions of the City's towing ordinance.

On May 22, 2006, after verifying proper service of plaintiff's motion to which defendant filed no opposition, the trial court entered its order. The order compelled defendant to relinquish possession of the vehicle free and clear of all storage and repair fees, or alternatively, pay plaintiff $8,300. Plaintiff registered the order as a judgment against defendant for $8,300. Defendant filed a motion to vacate the judgment and to add the City as a third-party defendant, which was opposed by plaintiff and the City. The trial judge denied the motion on November 13, 2006, without appearances or oral argument.

On appeal, defendant argues that the trial court erred in denying its motion to vacate the judgment pursuant to Rule 4:50-1(a) (inadvertence or excusable neglect) and -1(f) (the rule's residual clause). Further, defendant asserts plaintiff was not entitled to relief as no writ of replevin was served, Rule 4:61-4, and an award of money damages could not initially issue, N.J.S.A. 2B:50-5.

Plaintiff counters that the trial judge did not abuse his discretion in denying defendant's motion to vacate the default judgment and although plaintiff disputes the applicability of Rule 4:50-1(f) to these circumstances, it maintains that defendant demonstrated neither exceptional circumstances nor a meritorious defense warranting relief. We have carefully reviewed this record in light of both parties' contentions and have concluded that our intervention is necessary.

A motion for relief from a judgment or order is addressed to the sound discretion of the trial court, guided by principles of equity and the need to achieve justice. F.B. v. A.L.G., 176 N.J. 201, 207 (2003); Farrell v. TCI of Northern New Jersey, 378 N.J. Super. 341, 350 (App. Div. 2005) (quoting Housing Auth. of Town of Morristown v. Little, 135 N.J. 274, 283 (1994)). A trial court's decision will be left undisturbed unless a clear abuse of discretion appears. Del Vecchio v. Hemberger, 388 N.J. Super. 179, 186-87 (App. Div. 2006). "Although the ordinary 'abuse of discretion' standard defies precise definition, it arises when a decision is 'made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.'" Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123-24 (2007) (quoting Flagg v. Essex County Prosecutor, 171 N.J. 561, 571 (2002)).

Defendant argues that it was "understandably misled and confused" by the fact that it received a summons and an OTSC. Counsel states he was not aware plaintiff alternatively sought a money judgment on the return date of the OTSC in lieu of possession of the vehicle, because defendant failed to provide him with both pages of the OTSC. Additionally, defendant asserts that the motion judge failed to consider its meritorious defense that liability rested with the City.

We find defendant's argument to vacate bottomed on excusable neglect unavailing. Counsel's failure to request page two of the OTSC from his client was not "attributable to an honest mistake that is compatible with due diligence or reasonable prudence." Mancini v. EDS, 132 N.J. 330, 335 (1993). Counsel should have sought the complete order from his client. We do note, however, that defendant honestly believed, as stated in the summons, it had time to answer the complaint, present its defenses, and file a third-party claim against the City prior to a determination on the merits of ...

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