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Renaissance at North Brunswick Master Association, Inc. v. State Farm Fire & Casualty Co.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


December 8, 2008

RENAISSANCE AT NORTH BRUNSWICK MASTER ASSOCIATION, INC., PLAINTIFF-APPELLANT,
v.
STATE FARM FIRE & CASUALTY CO., DEFENDANT, AND COMPLETE PLUMBING REPAIR, DEFENDANT/THIRD-PARTY PLAINTIFF,
v.
WENTWORTH PROPERTY MANAGEMENT CO., INC., THIRD-PARTY DEFENDANT-RESPONDENT.

On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-6728-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 29, 2008

Before Judges Wefing, Parker and LeWinn.

Plaintiff Renaissance at North Brunswick Master Association, Inc. (Association) appeals from an order entered on February 1, 2008 denying plaintiff's motion to vacate a default judgment entered after it failed to answer a cross-claim for indemnification. We reverse and remand.

Renaissance at North Brunswick is a condominium complex under plaintiff's control. The complex includes a pool and pool house. On February 9, 2005, plaintiff discovered that the pool house had developed a leak as a result of frozen pipes. Plaintiff had contracted with third-party defendant Wentworth Property Management Co., Inc. (Wentworth) for Wentworth to supervise and maintain the property, including the pool house. Plaintiff had hired Complete Plumbing Repair (CPR) to winterize the pool house facility the previous fall and had received assurances from CPR that such winterization had been properly performed.

Defendant State Farm Fire & Casualty Co. (State Farm) insured the property, including the pool house. After State Farm denied coverage for the damaged pool house, plaintiff filed its complaint against State Farm and CPR, CPR filed a third-party complaint against Wentworth. Wentworth, in turn, filed a cross-claim against plaintiff for indemnification. Plaintiff did not file an answer to the cross-claim.

Plaintiff engaged in settlement discussions with Wentworth. The discussions bogged down, however, when Wentworth demanded payment of its counsel fees under the indemnity provision in the property management agreement. Wentworth moved to compel the depositions of individual Association board members and plaintiff failed to respond. On August 17, 2007, the court entered an order compelling the board members' depositions within ten days. Wentworth also moved for entry of a default against plaintiff for failure to answer the cross-claim. On August 22, 2007 the default was entered.

On October 17, 2007, Wentworth moved for entry of a judgment by default against plaintiff. The application was made to the clerk of the court pursuant to Rule 4:43-2(a), claiming that it was for a sum certain, namely, attorneys' fees. Wentworth forwarded a copy of its motion to plaintiff's counsel on November 8, 2007. Plaintiff's counsel claims he received only the initial default entry on November 12, 2007. Final judgment by default was entered on December 3, 2007 without plaintiff having an opportunity to oppose it.

On December 24, 2007, plaintiff moved to vacate the default judgment. That motion was argued on February 1, 2008, at which time the trial court denied the application on the grounds that plaintiff failed to demonstrate excusable neglect or a meritorious defense.

In this appeal, plaintiff argues that (1) the default judgment was procedurally defective; (2) plaintiff has a meritorious defense; and (3) there was no neglect between entry of the default judgment and the filing of the motion to vacate it.

Plaintiff initially argues that pursuant to Rule 4:7-5(b), no responsive pleading to a claim for contribution or indemnity need be filed. We agree. If no responsive pleading need be filed, clearly the third-party defendant has no grounds for seeking a default against plaintiff.

Moreover, counsel fees are not a sum certain for entry of a default judgment. In S.N. Golden Estates, Inc. v. Cont'l Cas. Co., 317 N.J. Super. 82, 91 (App. Div. 1998), we remanded a counsel fee award with instructions to the trial court to "make specific findings regarding the reasonableness of the legal services performed." Here, the default judgment was entered by the clerk of the court and the record is devoid of any judicial determination on the reasonableness of the $16,307 in counsel fees/costs awarded to Wentworth.

Accordingly, we reverse the order denying plaintiff's motion to vacate the default judgment, vacate the judgment and remand for further proceedings in accordance with the court rules.

Reversed and remanded.

20081208

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