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Figueroa v. Hartford Insurance Co.

February 6, 2008


On appeal from the Superior Court of New Jersey, Law Division, Passaic County, L-3914-04.

Per curiam.


Submitted October 24, 2007

Before Judges Parker and R. B. Coleman.

Plaintiff Carlos Figueroa appeals from a December 15, 2006 order denying his motion to set aside entry of default and from a subsequent December 20, 2006 order granting the motion of defendant Twin City Fire Insurance Company (Twin City) for Final Judgment by Default. We reverse and remand.

The following factual and procedural history is relevant to our consideration of the issues advanced on this appeal. On March 20, 2002, plaintiff reported to the Jersey City Police Department and to his insurance agent that his 2001 Honda Civic was stolen. Sometime thereafter, plaintiff filed a claim for his alleged loss under his automobile insurance policy written and issued by Twin City. Twin City investigated plaintiff's claim and determined that it did not constitute a comprehensive loss and that the vehicle was not stolen. Based on those determinations, Twin City refused to compensate plaintiff for his asserted loss. According to Twin City, the following factors were among those it considered in reaching its determination: (a) a fire caused by an unknown accelerant destroyed the car; (b) there were no signs of forced entry; and, (c) many items typically removed in the course of a car theft remained in the vehicle. Twin City also noted that prior to the expiration of the lease on the Honda Civic, plaintiff had purchased another vehicle, though he is the only licensed driver in his household.

On September 13, 2004, plaintiff filed a complaint naming as defendant Hartford Insurance Company (Hartford). In the two count complaint, plaintiff alleged (1) that Hartford refused to provide comprehensive automobile coverage pursuant to plaintiff's automobile insurance policy and improperly terminated plaintiff's insurance coverage and (2) Hartford breached the covenant of good faith and otherwise acted in bad faith. In May 2005, Twin City, asserting that it had been improperly sued as Hartford, answered the complaint. In that answer, Twin City generally denied the allegations of the complaint but it admitted that it issued an insurance policy to plaintiff and that it had denied coverage under the policy for the alleged loss. In its separate defenses, Twin City asserted, among other things, that plaintiff's claims were barred to the extent plaintiff had engaged in fraudulent conduct.

In the meantime, the trial court had administratively dismissed the complaint for lack of prosecution, which necessitated that plaintiff file an application to restore the complaint to the active trial calendar. That being done, the court granted plaintiff's motion and entered an order, dated December 19, 2005, restoring the complaint.

Thereafter, on March 2, 2006, plaintiff filed an amended complaint that formally included Twin City as a defendant. Twin City filed an answer to the amended complaint and asserted a counterclaim. In the counterclaim, it alleged that plaintiff falsely reported that the vehicle had been stolen and that he had violated the New Jersey Insurance Fraud Prevention Act, more particularly, N.J.S.A. 17:33A-4 and -7(b). Plaintiff did not answer or otherwise respond to the counterclaim. Nor did plaintiff respond to discovery requests that had been served previously by Twin City on June 5, 2005.

Eventually, on September 11, 2006, Twin City moved for entry of default against plaintiff and for dismissal of plaintiff's complaint for failure to respond to interrogatories. In response, plaintiff contacted Twin City and arranged for a two week adjournment so that he could serve a response to the counterclaim and to all outstanding discovery demands. Plaintiff responded to the interrogatories; thus, Twin City withdrew its motion to dismiss the complaint. It did not, however, withdraw its application for entry of default on the counterclaim.

On October 20, 2006, the motion judge granted Twin City's motion for entry of default. Subsequently, on November 14, 2006, the judge issued an amended order entering default that superseded the October 20 order. Plaintiff then moved for an order vacating the November 14 order and allowing plaintiff to file an answer to the counterclaim. Defendant opposed the motion and cross-moved for an order entering final judgment against plaintiff and dismissing plaintiff's complaint.

On December 15, 2006, the motion judge denied plaintiff's motion to vacate the order entering default. On the order, the judge made a hand-written notation that read: "NO SHOWING OF MERITORIOUS DEFENSE OR EXCUSABLE NEGLECT." On December 20, 2006, the judge entered final judgment by default against plaintiff for the amount of $1,227.60 and dismissed plaintiff's complaint with prejudice.

On January 4, 2007, plaintiff filed a motion for reconsideration along with a letter brief setting forth its argument that a meritorious defense and excusable neglect are not required to vacate the entry of default. The court rejected that argument and denied plaintiff's motion. Subsequently, plaintiff filed this appeal, in which he presents the following argument:


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