May 21, 2009
ERIN FASSOLD, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
SUPER CARS UNLIMITED, DEFENDANT-APPELLANT/CROSS-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Middlesex County, Docket No. DC-12175-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted January 26, 2009
Before Judges Carchman and Sabatino.
Defendant Super Cars Unlimited appeals from an order of the Special Civil Part denying its motion to vacate a default judgment for damages incurred as the result of the sale of a used car to plaintiff Erin Fassold. In addition to other causes of action, plaintiff alleged a violation of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to - 184, and recovered a treble damage award of $15,000 together with counsel fees of $6,764 and costs for a total of $22,320. On defendant's motion to vacate the judgment, the motion judge found that defendant did not establish excusable neglect and was not entitled to relief under Rule 4:50-1. We now reverse and remand for trial.
These are the relevant facts adduced from the record. On March 31, 2007, plaintiff purchased a pre-owned car - a 1999 Volkswagen Passat with 95,000 miles - from defendant for a purchase price of $6,382.65. Plaintiff claims that she made a specific inquiry as to whether the used vehicle had ever been involved in an accident. According to her certification, she was told that the vehicle had not been involved in an accident. According to defendant's representative's certification, defendant presented plaintiff with Carfax and Autocheck reports indicating that the vehicle had no history of any accidents and the vehicle was being sold "As Is" with no warranty.
Approximately, three weeks later, the vehicle had some mechanical problems. An examination by an expert revealed that the vehicle had been involved in a prior collision and had substantial bodywork and repairs.
Plaintiff filed an action against defendant alleging among other causes of action, a violation of the CFA. Defendant was served with a summons and complaint on June 29, 2007, and did not file an answer. Also, plaintiff served interrogatories on defendant. Defendant defaulted on August 6, 2007, and on October 25, 2007 plaintiff filed a motion for the entry of default and a default judgment. On November 13, 2007, a judgment was entered that was trebled to the jurisdictional amount of $15,000 and $6,764 in counsel fees and costs were assessed. A copy of the judgment was served on defendant, and on December 5, 2007, defendant moved to vacate the judgment.
In his moving papers, defendant's president, John Lacagnato, certified that he did not respond because he had been involved in other litigation in the Small Claims Division of the Special Civil Part, and he had always received a trial notice advising him when to appear. He received no such notice here and did not respond until he received a copy of the judgment; whereupon, he responded immediately. He also attested to the various facts that we have noted as the basis for his "meritorious defense." See Dynasty Bldg. Corp. v. Ackerman, 376 N.J. Super. 280, 285 (App. Div. 2005) ("In order to achieve relief pursuant to subsection (a) [of Rule 4:50-1], we note that the defendant must be prepared to 'show that [his] neglect to answer was excusable under the circumstances and that he has a meritorious defense.'"). The judge concluded that there was no excusable neglect, and a subsequent motion for reconsideration was also denied.
We recently recounted the standards to be applied on a motion for relief pursuant to Rule 4:50-1(a) (stating that relief from a final judgment may be ordered upon a showing of "(a) mistake, inadvertence, surprise, or excusable neglect"). In Nowosleska v. Steele, 400 N.J. Super. 297, 303 (App. Div. 2008), we said:
When exercising that discretion on an application to vacate a default judgment, courts must exercise "great liberality" and "should tolerate 'every reasonable ground for indulgence'" with a view to opening default judgments in order "that a just result is reached." [Mancini v. EDS, 132 N.J. 330, 339 (1993).] (quoting Marder v. Realty Constr. Co., 84 N.J. Super. 313, 319, (App. Div.), aff'd, 43 N.J. 508 (1964). Indeed, New Jersey courts have always had the inherent equitable power to vacate judgments and, with respect to default judgments, have exercised great liberality in doing so in order that cases may be decided on the merits. Loranger v. Alban, 22 N.J. Super. 336, 342 (App. Div. 1952). A court's liberality in vacating default judgments is justified, since a default judgment is based on only one side's presentation of the evidence without due consideration to any countervailing evidence or point of view, and, thus, may not be a fair resolution of the dispute. As a result, on a motion to vacate a default judgment, "[a]ll doubts . . . should be resolved in favor of the parties seeking relief." Mancini v. EDS, supra, 132 N.J. at 334.
We also noted that the decision as to whether to vacate a judgment is left to the sound discretion of the motion judge, and we will not overturn that decision "absent a mistaken exercise of that discretion." Id. at 302.
In refining the analysis as to those elements relevant to a consideration of relief under R. 4:50-1(a), the Supreme Court observed:
Rule 4:50-1(a) provides relief when a judgment has been entered as a result of "mistake, inadvertence, surprise, or excusable neglect." The four identified categories in subsection (a), when read together, as they must be, reveal an intent by the drafters to encompass situations in which a party, through no fault of its own, has engaged in erroneous conduct or reached a mistaken judgment on a material point at issue in the litigation. [DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 262 (2009).]
Applying these principles here, we are of the view that defendant has established a rational and understandable, albeit incorrect, explanation for his failure to respond in a timely manner to the summons and complaint. His prior litigation experience in the Small Claims Division and the procedures of that court warrant some indulgence as to litigants who anticipate that the Small Claims' unique procedures apply universally throughout the court system. We are also mindful of the fact that defendant acted promptly upon receipt of the judgment and moved for relief without further delay. We conclude that there was a showing of excusable neglect sufficient to warranting relief.
We also observe that defendant has set forth a sufficient factual basis to establish, on its face, a meritorious defense. We need not comment on the merits or offer any suggestion as to the ultimate result, but there is a substantial factual dispute as to what transpired during the sale of the vehicle, which may impact on the ultimate result.
In sum, we conclude that this matter should be resolved with both parties having an opportunity to have the merits of their respective positions heard and considered fully with an appropriate adjudication to follow.
The judgment of November 13, 2007, is vacated,*fn1 and the matter is remanded for further proceedings.