On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Monmouth County, Docket No. DC-13179-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted August 27, 2008
Before Judges A. A. Rodríguez and Lihotz.
Plaintiff Kevin T. Birch (Landlord) appeals from the denial of his motion to vacate a default judgment, which dismissed with prejudice his complaint against Mike Brown and Jeff Levy (Tenants) and which entered judgment in favor of Tenants on their counterclaim in the amount of $8,482.77. Landlord also appeals from the order denying his motion for reconsideration. We reverse.
These are the salient facts. Landlord sued Tenants in the Special Civil Part seeking $5,398 for non-payment of rent and damage to personal property. The judge entered a default judgment on February 2, 2006, in the amount of $5,454, including costs against Tenants. A wage execution order was entered on April 16, 2006. However, because service on Tenants was defective, they moved to vacate the default judgment.
Tenants filed an answer and counterclaim. The trial date was rescheduled several times. Finally, trial was scheduled for January 8, 2007. Tenants appeared with their attorney. Landlord failed to appear. The judge entered a judgment by default on the counterclaim in the amount of $8,482.77. The judge also dismissed Landlord's complaint with prejudice. Subsequently, a levy was placed on Landlord's bank account.
Landlord moved to vacate the judgment and levy. In support of the motion, Landlord certified:
I did not register the court date in my diary and, therefore, I had missed the court date. I wasn't notified of a default judgment and the [Tenants] received a default judgment on their counterclaim which has no basis for merit. The [Tenants] also garnished $9,678.26 from my checking account which I am asking the court to Vacate the Bank Levy on my account. The [Tenants] owe me over $4,000 in back rent as well as considerable amount of damages to my apartment.
Tenants opposed the motion. The judge denied Landlord's motions to vacate. The order dated May 1, 2007, indicated that "plaintiff has not proven excusable neglect or meritorious defense under _____." A separate order, dated May 29, 2007, directed the turnover of funds levied on Landlord's bank account in the amount of $9,628.76.
On June 26, 2007, Landlord moved for reconsideration. In support of the motion, Landlord provided another certification. Tenants opposed the motion for reconsideration. A different judge denied the motion for reconsideration because it was not timely. The judge noted that Landlord's attorney asserted that he had not been served the May 1, 2007 and May 29, 2007 orders before filing the motion for reconsideration. However, the judge concluded that the Landlord "had oral notice of the result of the decision." Thus, the judge concluded that "the motion was filed June 26, two months after the motion had been denied and a month after the latest point where the [Landlord] knew about the decision."
On appeal, Landlord contends that he "has met the requirements of Rule 4:50-1, entitling [him] to a vacation of the default judgment," and that Tenants' "position that [he] does not have a meritorious defense of claim is unfounded." We agree.
A trial court's decision to grant or deny an application to vacate a judgment will not be disturbed unless there is a clear abuse of discretion. Housing Authority of Morristown v. Little, 135 N.J. 274, 283 (1994); Mancini v. EDS, 132 N.J. 330, 334 (1993). A judge should view "the opening of default judgments . . . with great liberality, and every reasonable ground for indulgence is tolerated to the end that a just result is reached." Marder v. Realty Construction Co., 84 N.J. Super. 313, 319 (App. Div.), aff'd, 43 N.J. 508 (1964). Any doubts regarding the decision should be resolved in favor of the party seeking relief. Mancini, supra, 132 N.J. at 334; Arrow Mfg. Co. v. Levinson, 231 N.J. Super. 527, 534 (App. Div. 1989). Relief from a judgment or order is covered by Rule 4:50- 1(a), which "'is designed to reconcile the strong interests in finality of judgments and judicial efficiency with the equitable notion that courts should have authority to avoid an unjust result in any given case.'" Baumann v. Marinaro, 95 N.J. 380, 392 (1984) (quoting Manning Eng'g, Inc. v. Hudson County Park Comm'n, 74 N.J. 113, 120 (1977)). The trial court's discretion should be guided by equitable principles in determining whether the requested relief should be granted or denied. Housing Authority, supra, 135 N.J. at 283; Hodgson v. Applegate, 31 N.J. 29, 37 (1959).
A defendant seeking to reopen a default judgment due to excusable neglect must show (1) that the failure to answer was excusable under the circumstances, and (2) that there is an available meritorious defense. Housing Authority, supra, 135 N.J. at 284; Marder, supra, 84 N.J. Super. at 318. A careless but honest mistake may be excusable if ...