April 14, 2011
METAL STRUCTURES, INC., PLAINTIFF-RESPONDENT,
HILLIER BARN AND PAUL HILLIER, INDIVIDUALLY, DEFENDANTS-APPELLANTS.
On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket No. DC-015423-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted March 29, 2011
Before Judges Carchman and Waugh.
Plaintiff Metal Structures, Inc. brought a contract action against defendants Paul Hillier and Hillier Barn*fn1 alleging monies due and owing on account of construction on defendants' building located in Pennsylvania. Plaintiff submitted a certification of diligent inquiry and claimed that defendants could not be served in New Jersey. It sought to serve defendants by regular and certified mail. R. 6:2-3(b), R. 4:4-5(b).
The Superior Court forwarded the summons and complaint by regular and certified mail to defendants' Pennsylvania address, and the regular mail was never returned while the certified mail was unclaimed. Defendants failed to answer or otherwise respond to the complaint and on January 20, 2010, plaintiff obtained a default judgment. Within three weeks, on February 12, 2010, defendants moved to set aside the judgment and for leave to file an answer and counterclaim. The motion judge, acknowledging that defendants may have a meritorious defense, denied the motion finding no excusable neglect. This appeal followed.
On appeal, defendants assert that plaintiff failed to properly serve defendants, and there was no personal jurisdiction over defendants. Defendants further urge that plaintiff breached the contract and is not entitled to a judgment.
The issue on appeal is narrow. While the parties and the judge recognized that the standards to be applied to vacating a default judgment require a showing of excusable neglect as well as a meritorious defense, R. 4:50-1, we focus on the sufficiency of the certification of diligent inquiry that enables the service by mail that was effected in this cause of action.
Generally, personal jurisdiction is obtained by personal service of the summons and complaint upon individuals at their place of abode. R. 4:4-4(a)(1). However, where service can not be effected in New Jersey, upon the submission of a certification of diligence inquiry attesting to the inability to serve a defendant within the State, in personam jurisdiction can be effected by mailing a copy of the summons and complaint by registered or certified mail and regular mail to defendants' out-of-state address. R. 4:4-4(b)(1)(C). According to plaintiff, that is how service was made here.
The contents of the affidavit of diligent inquiry are found in Rule 4:4-5(b). See R. 4:4-4(b)(1), cross-referencing R. 4:4-5(b). Rule 4:4-5(b) provides:
Contents of Affidavit of Inquiry. The inquiry required by this rule shall be made by the plaintiff, plaintiff's attorney actually entrusted with the conduct of the action, or by the agent of the attorney; it shall be made of any person who the inquirer has reason to believe possesses knowledge or information as to the defendant's residence or address or the matter inquired of; the inquiry shall be undertaken in person or by letter enclosing sufficient postage for the return of an answer; and the inquirer shall state that an action has been or is about to be commenced against the person inquired for, and that the object of the inquiry is to give notice of the action in order that the person may appear and defend it. The affidavit of inquiry shall be made by the inquirer fully specifying the inquiry made, of what persons and in what manner, so that by the facts stated therein it may appear that diligent inquiry has been made for the purpose of effecting actual notice. (Emphasis added).
We have noted that under appropriate circumstances, a court must carefully scrutinize whether there was diligent inquiry. M & D Associates v. Mandara, 366 N.J. Super. 341, 353 (App. Div.), certif. denied, 180 N.J. 151 (2004). The certification of diligent inquiry here is, at best, sparse. The sole reference to inquiry is "Based on our investigation through our clients database, it appears that defendant is not located in the State of New Jersey." No further explanation is forthcoming nor is there any suggestion as to the scale, scope or content of the "clients database." Although counsel alluded to another search engine in his oral argument, that, too, was neither developed nor explained.
The issue of service and ultimately, jurisdiction, implicates due process and traditional notions of fair play and substantial justice. See Pressler & Verniero, Current N.J. Court Rules, comment 3.1.1 on R. 4:4-4(b) (2011). Our court rules are not so onerous that diligent inquiry overburdens a litigant. It requires, however, that a diligent and full inquiry be made before utilizing a form of service that is less reliable than personal service.
Our standard of review of a motion to vacate a default judgment is whether there has been an abuse of discretion. Nowoleska v. Steele, 400 N.J. Super. 297, 302 (2008) (citing Mancini v. E.D.S., 132 N.J. 330, 334 (1993)). Our review of the record fails to demonstrate that the judge addressed the issue of diligent inquiry although it was raised by defendant. A judgment based on defective service typically renders the judgment void. M & D Associates, supra, 366 N.J. Super. at 352-53; Jameson v. Great Atl. & Pac. Tea Co., 363 N.J. Super. 419, 425 (App. Div. 2003), certif. denied, 179 N.J. 309 (2004). We conclude that the judgment here was void and should have been set aside. Failure to do so is an abuse of discretion. Accordingly, the motion to vacate the default judgment was erroneously denied. We vacated the judgment and remand for trial.
Reversed and remanded for trial.