On appeal from the Superior Court of New Jersey, Law Division, Cape May County, Docket No. L-274-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Skillman and Gilroy.
Defendants Paul Stanziale and Lou Ann Stanziale appeal from the October 24, 2008 order that denied their motion to vacate a default judgment. Defendants also appeal from the January 3, 2008 order that dismissed a similar motion without prejudice. We reverse and remand.
Plaintiffs Thomas Ricciardelli and Christina Ricciardelli are the owners of a condominium unit at the Trylon Motel Condominium in North Wildwood. Because plaintiffs and defendants had an amicable relationship, plaintiffs permitted defendants to occupy their condominium unit from June 2003 through October 2005. According to plaintiffs, defendants agreed to pay rent for their occupancy, but failed to do so. On May 4, 2007, after a dispute between the parties, plaintiffs filed two actions in the Law Division.
The first action, filed under Docket No. CPM-L-274-07, sought damages against defendants for non-payment of rent, and against Lou Ann Stanziale only for failure to repay a $2,580 personal loan (the rent action). The second action, filed under Docket No. CPM-L-277-07, alleged causes of action in defamation, invasion of privacy, conspiracy, intentional infliction of emotional distress, and intentional interference with business opportunities (the tort action). This latter action, naming Paul Stanziale and an unrelated third-party as defendants, arose out of Paul Stanziale's and the third-party's actions as officer and trustee, respectively, of the Trylon Motel Condominium Association.
On or about May 19, 2007, plaintiffs served defendants with the two complaints. On May 25, 2007, defendants retained counsel to represent them in both actions and paid counsel a $2,500 retainer fee. On counsel's advice, defendants first tendered the complaints to the condominium association's liability insurance carrier for defense. After that carrier denied coverage, defendants tendered the complaints to their homeowners liability insurance carrier, State Farm Fire and Casualty Insurance Company. State Farm undertook to defend the first two counts of the tort action only.
In the interim, on July 19, 2007, plaintiffs proceeded to enter default against defendants on both complaints. On July 24, 2007, unaware that default had been entered, defendants' counsel wrote to plaintiffs' counsel requesting his cooperation by executing a stipulation extending the time to file an answer in both actions. Three days later, plaintiffs' counsel informed defendants' counsel that he would not execute the extensions of time to answer and that his office had already filed for defaults in both matters. On September 25, 2007, plaintiffs obtained a default judgment in the rent action in the amount of $20,580. On December 10, 2007, State Farm's assigned counsel filed a motion seeking to vacate default on the first two counts of the tort action.
On December 24, 2007, defendants filed a cross-motion, seeking to: vacate default in the rent action;*fn1 vacate default on the remaining counts of the tort action not defended by State Farm; and consolidate the two actions. Although the cross-motion was filed under the tort action's docket number, it specifically referenced the rent action in the body of the notice stating that the relief sought included: "[v]acating default and permitting the defendants Paul Stanziale and Lucille Stanziale to file a responsive pleading in the companion case of Thomas Ricciardelli and Christina Ricciardelli v. Paul Stanziale and Lou Ann McPhail a/k/a Lou Ann (Lucille) Stanziale, Docket No. CPM-L-274-07."
On January 3, 2008, the court entered an order, dismissing defendants' cross-motion to vacate default on the counts not defended by State Farm in the tort action, and consolidating the two actions because: the motion was filed untimely; the motion was not accompanied by a proposed form of an order; and defendants were in default as of July 19, 2007. Although the order did not reference defendants' request to vacate the default in the rent action, the parties interpreted the order as denying the cross-motion without prejudice as to all requested relief.
On the same day, the court entered an order granting State Farm's assigned counsel's motion to vacate default as to the first two counts in the tort complaint. That order further directed that:
All counsel in this case (277-07) and in 274-07 are Ordered to personally appear for a [Case] Management Conference on January 18, 2008, at 1:30 p.m. and be prepared to present an agreement on a Mediator as well as a date for Mediation. Counsel shall discuss these matters beforehand and [have] contacted the Mediator & have an appointment for Mediation.
All counsel appeared for the scheduled case management conference. At that conference, defendants' counsel advised the court that plaintiffs' counsel had just informed him that a default judgment had previously been entered in the rent action. After the court confirmed the entry of the judgment, defendants' counsel advised the court that, if the parties ...