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Llanfair House Nursing Home v. Estate of Litchult

December 22, 2008


On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-2236-06.

Per curiam.


Argued September 8, 2008

Before Judges Carchman, R. B. Coleman and Simonelli.

Defendants Estate of Ethel Litchult by its Executrix, Janis Campagna and Janis Campagna (Campagna), individually, appeal from a September 7, 2007 order of the Law Division denying defendants' motion to set aside a default judgment. We affirm.

The essential facts are not in dispute. In June 2003, Ethel Litchult, Campagna's mother, was admitted to plaintiff Llanfair House Nursing Home (Home) as a resident. At that time, Campagna executed an admission agreement on behalf of her mother wherein Campagna agreed to act as the resident's representative. She represented that she would be filing a Medicaid application on her mother's behalf. The Private Admission Agreement further provided that the "[r]esident and/or resident's representative accept full responsibility for and agree to pay the full amount charged by the Home in the event that any third party payor shall deny coverage of or responsibility for resident's claim or any part thereof."*fn1

Eventually, Litchult's assets were exhausted, and in April 2005, Campagna represented to plaintiff that she would file the application. Despite plaintiff not receiving payment for defendant's care, Litchult remained at plaintiff's facility as the Medicaid application presumably moved forward. Ultimately, the application was denied in August 2005 because certain requested information had not been provided.*fn2 Mrs. Litchult died on October 24, 2005, and her Medicaid application was never approved. At the time of Litchult's death, $48,882.77 was due to plaintiff for her care.

In May 2006, plaintiff filed an action against defendants in the Law Division to recover the amount due, alleging breach of contract, quantum meruit, detrimental reliance and equitable estoppel. After service of the summons and complaint on June 12, 2006, defendants requested and were granted a thirty-day extension to file an answer. No answer was filed within that time, and another thirty-day extension was requested and granted on August 17, 2006. Again, no answer was filed. On September 15, defendants requested yet another extension to file an answer; this extension was to expire on October 2, 2006. No answer was filed within that time period.

Finally, on October 23, 2006, plaintiff requested the entry of a default and default judgment. Four days later, on October 27, 2006, defendants requested another extension but were informed that a request to enter default and default judgment had been filed. At this point, defendant Campagna submitted a copy of the Medicaid documentation for plaintiff's review and requested that no further action be taken. Although, plaintiff took no further affirmative action, the previously requested default judgment was entered by the clerk on November 13, 2006.

On December 15, 2006, defendants forwarded a consent order to plaintiff to both set aside the judgment and file an answer within fourteen days. Plaintiff returned the executed consent order to defendants' attorney on December 21, 2006, but no answer was forthcoming. According to defendants' attorney, he never received the returned consent order nor the follow-up phone call on January 18, 2007. Defendants made no inquiry nor took any further action until six-months later when in July 2007, defendants requested consent to vacate the default judgment. Plaintiff refused to consent.

In August 2007, defendants moved to vacate the default judgment, seeking relief under R. 4:50-1(a)(c) and (f). The motion judge denied the application and endorsed the order indicating:

This application is denied. Despite 3 extensions to answer the complaint, despite the fact that Plaintiff signed a consent order allowing for the defendant to vacate default judgment and file an answer to this on 12/26/06 and despite plaintiff's follow-up regarding the consent order, defendant still has not filed an answer. Defendants were originally served on 6/12/06. Excusable neglect clearly not demonstrated. This appeal followed.

The thrust of defendants' arguments on appeal focus on R. 4:50-1 (a), (c) and (f). The applicable rules provide:

On motion, with briefs, and upon such terms as are just, the court may relieve a party or the party's legal representative from a final judgment or order for the following reasons: (a) mistake, inadvertence, surprise, or excusable neglect; . . . (c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse ...

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