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Horizon Blue Cross Blue Shield of New Jersey v. Avolio

October 22, 2010

HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
LOUIS F. AVOLIO, D.C., WOOD-RIDGE CHIROPRACTIC CENTER, INC., BERGEN NEURODIAGNOSTIC AND PHYSICAL THERAPY, INC., DEVON RALLS, AND LINDA MAIMONE, P.T., DEFENDANTS-APPELLANTS.



On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-2650-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 6, 2010

Before Judges Cuff, Simonelli and Fasciale.

Defendants Louis Avolio (Avolio) and Wood-Ridge Chiropractic Center, Inc. (Wood-Ridge Chiropractic) appeal from the March 5, 2010 Law Division order denying their motion for reconsideration of the January 22, 2010 order denying their motion to vacate default judgment. We reverse and remand for further proceedings.

Wood-Ridge Chiropractic is a New Jersey corporation with its principal place of business located at 225 Valley Boulevard in Wood-Ridge (the Wood-Ridge address), and its registered office located at 15 Boulevard in Hasbrouck Heights. Avolio is a chiropractor and the president and registered agent of Wood-Ridge Chiropractic. Avolio resided at 806 Sussex Road in Franklin Lakes (the Franklin Lakes address). He claims to have resided in Florida at all times relevant to this appeal.

On September 25, 2006, plaintiff Horizon Blue Cross Blue Shield of New Jersey filed a complaint against Avolio, Wood-Ridge Chiropractic and other defendants in the Superior Court, Camden County, alleging they had engaged in a scheme to defraud plaintiff. Plaintiff sought damages of approximately $2 million for insurance and common law fraud, unjust enrichment and restitution, negligent misrepresentation, tortious interference, and professional negligence and misconduct. Plaintiff also sought treble damages pursuant to the New Jersey Insurance Fraud Prevention Act (NJIFPA), N.J.S.A. 17:33A-1 to -30, and punitive damages.

In October 2006, plaintiff's counsel retained Selective Subpoena & Investigative Services, Inc. (Selective) to personally serve Avolio and Wood-Ridge Chiropractic at the Franklin Lakes address. Selective's process server allegedly notified plaintiff's counsel of his inability to effect service because the residence was located in a gated community and Avolio would not permit entry.

Plaintiff's counsel then attempted to serve Avolio and Wood-Ridge Chiropractic by regular and certified mail at the Franklin Lakes and Wood-Ridge addresses. The certified mail sent to the Wood-Ridge address was returned "unclaimed." The certified mail sent to the Franklin Lakes address was also returned; however, it is unclear from the record why it was returned. According to plaintiff's counsel, the regular mail was not returned from either address.

Despite this alleged mail service, Selective's process server allegedly personally served Avolio and Wood-Ridge Chiropractic at the Wood-Ridge address on October 24, 2006. However, the Affidavits of Service contain no description of the person served.

All defendants failed to file an answer, prompting plaintiff to file a request to enter default on December 21, 2006. As to Avolio and Wood-Ridge Chiropractic, plaintiff relied on the October 24, 2006 personal service, not the mail service. The record contains no competent proof that Avolio and/or Wood-Ridge Chiropractic received a copy of the request to enter default.

Avolio learned of the litigation in early 2007 through counsel for a co-defendant. Avolio's attorney, Santo Bonanno, Esq., contacted plaintiff's counsel on March 16, 2007, advising that his clients had not been served, and that counsel should so advise the judge who was to conduct a proof hearing on March 21, 2007.*fn1 Bonanno also sent counsel a copy of Avolio's passport and letter from Continental Airlines confirming that Avolio was on a return flight from Panama at the time of the alleged personal service.

In subsequent letters to plaintiff's counsel, Bonanno again disputed service, advised that Avolio currently resided in Florida and resided there at the time of the alleged personal and mail service, and instructed counsel to send him a copy of any future motion to set a proof hearing. In an April 30, 2007 letter to plaintiff's counsel, Bonanno stated, "Since I have not heard from you, I can only assume that all of Dr. Avolio's proof of where he had been has deterred you from filing another motion. Please contact me if this is not true."

On May 8, 2007, Avolio wrote to plaintiff's counsel denying personal or mail service and challenging counsel's attempt to proceed with a proof hearing. He claimed he did not reside in New Jersey and was out of the country at the time personal and mail service allegedly occurred, and Wood-Ridge Chiropractic's office had been closed since 2005. Avolio also advised plaintiff's counsel that Bonanno represented him and counsel must contact Bonanno regarding the matter. ...


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