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United Leasing Group, Inc. v. Hillside Fidelco


March 1, 2010


On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-1837-06.

Per curiam.


Submitted December 15, 2009

Before Judges Wefing, Grall and LeWinn.

Defendants Tony D'Angelo Service Center, Inc. and Tony D'Angelo, individually, ("defendants") appeal from trial court orders denying their motions to set aside a default judgment entered against them and to reduce the amount of that judgment. After reviewing the record in light of the contentions advanced on appeal, we reverse.

Defendants operate a tow-truck business in Newark. Defendant Hillside Fidelco Associates ("Hillside") owns premises located in Hillside at which plaintiff United Leasing Group, Inc. ("United") stored certain vehicles and furniture. United's business includes leasing vehicles for weddings and proms and it used the Hillside premises to store its vehicles when they were not in use. When a dispute developed between Hillside and United as to whether United was current in its rental payments, Hillside contacted defendants in May 2006 and authorized the removal of eight specified vehicles from the premises. Hillside's letter listed eight vehicles, including one stretch limousine, three other limousines, a Lincoln Town Car, a Ford Focus, a Dodge Durango, and a Porsche.

Bruce Buccolo, United's president and general manager, went to the site on or about May 12 to retrieve a vehicle which had been leased for a prom and found that the locks had been changed. He managed to obtain access and found two vehicles had been removed and the others tampered with so they could not be started.

On May 15, 2006, United filed a complaint and order to show cause, seeking to have its property returned and to enjoin any further interference with its business. The order to show cause was returnable on May 17, 2006. Defendants were notified of this date by fax but did not appear. Tony D'Angelo attributed his absence to the need to care for his elderly and sick father. The trial court entered an order on May 17 directing that the two vehicles that had been removed be returned to United, together with any property that had been removed from the vehicles. The order further provided that United was to be provided access to the premises as it needed vehicles. The two vehicles that had been removed were returned to United in accordance with the court's order.

A further hearing in the matter was scheduled for June 1, 2006. Tony D'Angelo appeared, and the trial court instructed him to retain counsel. Defendants took no further action and an answer was never filed on their behalf. On August 28, 2006, plaintiff requested the clerk to enter a default against defendants, and default was entered in accordance with Rule 4:43-1.

Following entry of default, a proof hearing was held on December 21, 2006. Bruce Buccolo testified at that hearing, and the trial court subsequently entered a judgment against Tony D'Angelo Service Center Inc. and Tony D'Angelo individually, in the sum of $31,993.28. This included $2,389.47 for towing charges; $16,380.11 for repairs; $2,950.70 for parts; $5,352 for furniture alleged to be missing; and $4,921 for lost profits. Plaintiff's attorney said that he forwarded a copy of this judgment to defendants in January 2007.

In January 2008, defendants filed a motion to vacate this judgment. At the hearing on this motion, D'Angelo contended that once the vehicles were returned to United, he believed the matter had been concluded. He also noted that he had filed a criminal complaint, contending that plaintiff had attempted to recover the vehicles by breaking and entering into defendants' property. This, he asserted, led him to believe that the matter was not being litigated in the civil courts. Finally, he also noted that he was distracted by the necessity of caring for his elderly, sick father.

The trial court concluded defendants had not established excusable neglect and denied the motion. Defendants later filed a subsequent motion to reduce the amount of the judgment. The trial court denied that motion as well. After all of United's claims against Hillside were disposed of, defendants appealed from the two trial court orders.

Defendants present a number of arguments in support of their position that the trial court erred in denying their motion to vacate the default judgment. We do not find it necessary to address all of those arguments; we are satisfied that the motion should have been granted for both procedural and substantive reasons.

Rule 4:43-2(b) governs the entry of final judgment by default by the court. In 2006, the rule provided that notice of the proof hearing had to be provided to the defaulting party. The record before us contains no indication that notice was provided to defendants of this proof hearing.

Further, we have reviewed the transcript of the proof hearing and can find no evidence which would warrant the entry of a judgment against Tony D'Angelo, individually. In addition, we are troubled by the lack of foundation for certain of the damages to which Buccolo testified. He attributed to defendants, for instance, responsibility for the missing furniture. The record does not contain any basis for that assertion other than mere speculation. Buccolo also alleged that defendants had damaged certain of the vehicles. We are unable to discern how Buccolo knew that defendants were responsible for this damage, as opposed to the co-defendants, or an unrelated third party.

In our judgment, the combination of these factors warrants granting relief to defendants. See Morales v. Santiago, 217 N.J. Super. 496 (App. Div. 1987) (setting aside a default judgment where the plaintiff produced inadequate proof of liability at a proof hearing).

The decision to grant relief from a judgment may be conditioned upon such terms as may be just, including an award of counsel fees for services performed in obtaining the default judgment. John Reiner & Co. v. Dorsey Roofing Co., 187 N.J. Super. 51 (Law Div. 1982). The trial court did not have the opportunity to consider whether it would be appropriate to impose such terms in this matter. The trial court is free to consider that matter in connection with the remand.

The order under review is reversed, and the matter is remanded to the trial court for further proceedings in accordance with this opinion.


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