May 16, 2011
FEDERATED FINANCIAL CORPORATION OF AMERICA, PLAINTIFF-RESPONDENT,
ECO MEDICAL, DEFENDANT, AND DARYL FALLAS, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-4901-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted May 2, 2011
Before Judges Reisner and Sabatino.
Defendant Daryl Fallas appeals from a July 6, 2010 order denying his motion to vacate a default judgment entered against him in favor of plaintiff, Federated Financial Corporation of America ("Federated"). We affirm.
According to Federated's complaint, its predecessor in interest, Advanta Bank Corp., issued a business credit card to a cardholder known as Eco Medical. Over time, over $25,000 in unpaid charges accumulated under the credit card. The complaint further alleged that defendant was an individual guarantor of the debt "[b]y virtue of requesting and using the [c]redit [c]ard[.]" The credit card agreement, and the corresponding right to collect on the unpaid debt, was assigned to Federated.
Defendant was individually served with the complaint, but neither he nor his company filed an answer. However, defendant did write a letter to the trial court on April 1, 2009, indicating that he was found ineligible for representation by Legal Services because the lawsuit "involve[d] a lawsuit on a business[,]" and that he lacked the means to retain counsel or represent himself. In his letter, defendant expressly left it to "the court's good judgment as to whether or not to allow a judgment in favor of the plaintiff." Defendant's letter further stated that he anticipated that Federated would have to prove "every aspect of [its] claims" before obtaining a judgment. Defendant did not deny in his letter that he had used the credit card, nor did he deny that he had personally guaranteed the billings for the card.
Since there was no timely answer by either Eco Medical or Fallas, default was entered. Thereafter, the default judgment was entered against both defendants on April 13, 2009 in the sum of $32,030.63, which included the balance due, plus counsel fees and costs. Defendant then filed three successive motions in an effort to vacate default judgment and to obtain reconsideration of the court's denial of his first application. The trial judge denied reconsideration for the last time on July 6, 2010, which is the only order sought to be reviewed in the notice of appeal.
On appeal*fn1 , defendant argues that the trial court erred in declining to vacate the judgment because plaintiff's "initial claim" allegedly did not refer to him, and was inadequately substantiated in other respects.
The decision whether to grant a motion to vacate a default judgment under Rule 4:50-1 is "left to the sound discretion of the trial court, and will not be disturbed absent an abuse of discretion." Mancini v. EDS, 132 N.J. 330, 334 (1993). Applying that limited review standard, we discern no such abuse of discretion by the trial court in declining to set aside the judgment.
The present appeal concerns the denial of a motion to vacate a default judgment apparently based upon a claim of excusable neglect under Rule 4:50-1(a).*fn2 The law is well-settled that a defendant claiming excusable neglect must also demonstrate that he or she has a meritorious defense. Marder v. Realty Constr. Co., 84 N.J. Super. 313, 318 (App. Div. 1964); see also Schulwitz v. Shuster, 27 N.J. Super. 554, 561 (App. Div. 1953) (requiring the showing of a meritorious defense so "[t]he time of the courts, counsel and litigants [is] not . . . taken up by . . . a futile proceeding").
Even if, for the sake of argument, defendant's failure to file a timely answer was the result of excusable neglect, he presents no meritorious defenses to his personal liability for the credit card debt in this case. Defendant contends that Federated failed to supply any proof that the credit card debt was owed or that he guaranteed its payment. However, Federated has produced the documents that it filed in support of the default judgment, which included a certification of a company employee attesting to the debt, and the servicing agreement which provides that the "signing individual" agrees to pay the debt. In addition, the record reflects that the credit card bills were sent jointly to defendant and to his company, Eco Medical, at the same New Jersey post office box. No evidence was presented by defendant showing that he contemporaneously objected to being billed personally for the charges on the credit card as they mounted.*fn3