July 3, 2008
EUNICE ELLISON, PLAINTIFF-RESPONDENT,
ALFRED TECHNICAL SERVICES, EVERGREEN LABS, EVERGREEN RECYCLING, INC., EVERGREEN INDUSTRIES, INC., EVERGREEN OF EL PASO, INC., DEFENDANTS, AND ROLAND D. HALE, DEFENDANT-APPELLANT, AND BENJAMIN FEINSOD, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-855-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted April 1, 2008
Before Judges Fuentes and Grall.
Defendant Roland D. Hale appeals from the order of the Law Division denying his motion to vacate a default judgment entered against him in connection with his failure to repay a business loan. Defendant's motion to vacate the judgment sought relief under Rule 4:50-1(d) or (f). After reviewing the record before us, we affirm. We will limit our recitation of the procedural history of this case to the events necessary to address defendant's arguments on appeal.
On June 16, 2005, plaintiff Eunice Ellison filed a complaint in Somerset County against defendants Alfred Technical Services, Evergreen Labs, Evergreen Recycling, Evergreen Industries, Evergreen of El Paso, Roland D. Hale, and Benjamin Feinsod. The complaint alleged one count of fraud and one count of breach of contract in connection with a $70,000 business loan plaintiff had made to defendants in January 2001.
On September 23, 2005, defendants Evergreen Industries and Benjamin Feinsod filed a responsive pleading denying plaintiff's allegations, and asserting a cross-claim for contribution and indemnification against the other named defendants. Defendants Roland D. Hale, Alfred Technical Services, Evergreen Labs, Evergreen Recycling, and Evergreen of El Paso ("the Evergreen companies") did not respond to plaintiff's complaint. It is undisputed, however, that defendants Hale and the Evergreen companies were properly served with the summons and complaint. On April 27, 2006, at plaintiff's request, the court entered a default judgment against Hale and the Evergreen companies.
Plaintiff's case against Evergreen Industries and Feinsod was tried in the Law Division over a five-day period from April 24 to April 28, 2006. On April 26, 2006, Hale appeared and testified at that trial as a witness. Two days after Hale's testimony, the jury returned a verdict against Feinsod and Evergreen Industries. On May 22, 2006, the trial court entered a final judgment in favor of plaintiff and against Feinsod in the amount of $121,602.80. That same day, the court entered a final judgment as to Feinsod's cross-claim for indemnification against Hale for the entire $121,602.80.
On October 13, 2006, plaintiff filed a motion for summary judgment in lieu of a complaint in the Supreme Court of New York, Nassau County, seeking to enforce the New Jersey judgments against defendants Hale and Feinsod. Hale, represented by counsel, opposed plaintiff's motion; Feinsod defaulted. On December 14, 2006, the New York Supreme Court entered an order granting plaintiff summary judgment. The New York court stayed its judgment, however, to afford Hale the opportunity to vacate the New Jersey judgment in Somerset County.
On April 24, 2007, Hale obtained an order to show cause in Somerset County, challenging the April 27, 2006 default judgment against him. On the return date, Hale argued before Judge Ciccone that: (1) New Jersey did not have personal jurisdiction;
(2) he never personally guaranteed the loan from plaintiff; and
(3) the terms of the loan were unlawfully usurious.
In denying Hale's motion to vacate the default judgment, Judge Ciccone addressed and rejected each of the substantive issues raised. The Judge concluded her analysis by emphasizing that Hale had been served with the summons and complaint and "[c]hose not to submit an answer or pleading, until default was entered against him." After reviewing the record, we agree with Judge Ciccone and affirm.
"An application to vacate a default judgment is 'viewed with great liberality, and every reasonable ground for indulgence is tolerated to the end that a just result is reached.'" Pressler, Current N.J. Court Rules, comment 4.1 on R. 4:50-1 (2008) (quoting Marder v. Realty Constr. Co., 84 N.J. Super. 313, 319 (App. Div.), aff'd, 43 N.J. 508 (1964)).
In order to set aside a default judgment, a defendant must demonstrate: (1) that the failure to answer or appear was the result of excusable neglect; and (2) that defendant possesses a meritorious defense. Ibid. Here, Hale has not offered any explanation for his failure to timely respond to plaintiff's complaint. Indeed, it is not even disputed that he was properly served with process. The record also shows that Hale was personally aware of the procedural history of this case, because he testified as a witness at the trial of his co-defendant two days before the jury returned its verdict.
Under these circumstances, we need not reach the second prong of the analysis. Hale has not produced evidence to satisfy the first prong: requiring him to show excusable neglect for his failure to respond to plaintiff's complaint in a timely fashion.
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