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Joseph D. Demaio, D.D.S v. Edward Karmin

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


September 30, 2011

JOSEPH D. DEMAIO, D.D.S., PLAINTIFF-RESPONDENT,
v.
EDWARD KARMIN, DEFENDANT-APPELLANT.

On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Union County, Docket No. DC-010249-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted September 14, 2011

Before Judges Graves and J. N. Harris.

The matter on appeal involves the entry of a default judgment for unpaid emergency dental services in favor of plaintiff Joseph D. DeMaio, D.D.S. Defendant Edward Karmin appeals from the June 30, 2010 order denying his motion to vacate the default judgment and the September 15, 2010 order denying his motion for reconsideration. We affirm.

I.

In April 2005, defendant, then age nineteen, underwent an emergency dental procedure performed by Dr. DeMaio. Defendant's father, Alan Karmin, signed Dr. DeMaio's necessary forms, which designated the father as the responsible party for his son's bills that were incurred at the time of treatment.*fn1 Defendant does not dispute the necessity of the treatment or the reasonableness of the amount charged.

Plaintiff billed $2,550 for the emergency services. According to plaintiff's brief, over the next twenty-eight months, he received a total of $1,175 in payments. The unpaid balance was referred to a collection agent, after which a payment of $375 was made.*fn2

On May 9, 2008, plaintiff filed a civil action -- against defendant only, and not against the father*fn3 -- in the Law Division's Special Civil Part seeking to recover $1,085.99 in unpaid dental fees, interest, and costs. Defendant was served with process on May 19, 2008, at his home address in Westfield. On June 30, 2008, defendant sent a letter to the court in lieu of an answer asking it to dismiss plaintiff's entire complaint and order plaintiff to accept a payment plan of fifty dollars per month for the next eighteen months to satisfy the outstanding debt.

On July 29, 2008, a default judgment was entered against defendant. A notice of entry of default judgment was sent to defendant on August 8, 2008, advising him of the opportunity to negotiate a payment plan with plaintiff. Defendant did not avail himself of this opportunity.

Approximately one year later, in August 2009, defendant purportedly filed a motion to vacate the default judgment. The disposition of this motion is not revealed by the record. On May 25, 2010, defendant filed a second motion to vacate the default judgment. In it, he asserted that his father was the "responsible party of record" and as such, plaintiff and his attorney were "actually committing an act of wrongful prosecution" against him.

Plaintiff opposed the motion on the ground that it was untimely under Rule 4:50-2 and otherwise without merit. On June 30, 2010, the court denied the motion to vacate.

On July 22, 2010, defendant moved for reconsideration. By order dated September 15, 2010, the court denied defendant's motion, noting that his application to vacate the default judgment "fail[ed] to factually establish any basis for relief under Rule 4:50-1 . . . [and that] good cause has not been shown."

On October 25, 2010, defendant appealed the June 30, 2010 and September 15, 2010 orders. Plaintiff moved to dismiss defendant's appeal of the June 30, 2010 order as untimely under Rule 2:4-1, which provides that appeals from final judgments shall be taken within forty-five days of their entry. On December 9, 2010, we granted the motion to dismiss the appeal of the June 30, 2010 order only, ruling that the appeal "may continue as to the order of September 15, 2010."

II.

On appeal, defendant raises the following arguments for our consideration:

POINT I: UNITED STATES CODE PROVIDES THAT A DEBT COLLECTOR ONLY HAS STANDING AGAINST A CONSUMER WHO HAS ACTUALLY SIGNED THE CONTRACT.

POINT II: UNIFORM COMMERCIAL CODE ALLOWS FOR PURSUIT ONLY AGAINST PARTY THAT HAS SIGNED THE CONTRACT.

POINT III: THE FAIR DEBT COLLECTIONS PRACTICES ACT STATES THAT A DEBT COLLECTOR CAN ONLY PURSUE THE CONSUMER THAT SIGNED THE CONTRACT.

POINT IV: COURT RULES REQUIRE AN ATTORNEY TO MAKE "REASONABLE INQUIRY" AS TO WHETHER THE FACTS PRESENTED BY THEIR CLIENT ARE ACTUALLY TRUE AND ACCURATE BEFORE PRESENTING COMPLAINT TO THE COURT.

POINT V: SUPERIOR COURT OF NEW JERSEY, APPELLATE DIVISION RECOGNIZES THAT PATIENT'S PARENTS WERE CONTRACTUALLY OBLIGATED BY VIRTUE OF THE "AUTHORIZATION/RESONSIBILITY AGREEMENT."

POINT VI: SUPERIOR COURT OF NEW JERSEY, APPELLATE DIVISION RECOGNIZES THAT LAW FIRMS ACTING AS DEBT COLLECTORS MUST COMPLY WITH THE FAIR DEBT COLLECTION PRACTICES ACT. POINT VII: AMERICAN JURISPRUDENCE PROVIDES THAT SIGNATURE IS NEEDED TO PURSUE LITIGATION IN REGARD TO CONTRACTS OF SALE.

We are not persuaded by these arguments.

The prime function of a motion for reconsideration is to highlight "the matters or controlling decisions which counsel believes the court has overlooked or as to which it has erred."

R. 4:49-2. It is not a vehicle through which to raise new arguments or to simply reprise the initial motion. Guido v. Duane Morris LLP, 202 N.J. 79, 87 (2010) (citing Capital Fin. Co. of Del. Valley, Inc. v. Asterbadi, 398 N.J. Super. 299, 310 (App. Div.), certif. denied, 195 N.J. 521 (2008)). Many of defendant's arguments on appeal -- largely grounded in federal jurisprudence -- were presented neither in his initial motion to vacate the default judgment nor in the motion for reconsideration, and therefore need not be considered on appeal. Cipala v. Lincoln Tech. Inst., 179 N.J. 45, 52 (2004). Nevertheless, we elect to briefly consider the arguments.

Reconsideration is a matter generally left to the discretion of a trial court. Capital Fin. Co. of Delaware Valley, Inc., supra, 398 N.J. Super. at 310 (citing Johnson v. Cyklop Strapping Corp., 220 N.J. Super. 250, 264 (App. Div. 1987), certif. denied, 110 N.J. 196 (1988)). As such, appellate review of a denial from a motion for reconsideration is governed by an abuse of discretion standard. Davis v. Devereux Foundation, 414 N.J. Super. 1, 17 (App. Div. 2010) (citing Marinelli v. Mitts & Merrill, 303 N.J. Super. 61, 77 (App. Div. 1997)). "'Reconsideration should be utilized only for those cases . . . that fall within that narrow corridor in which either 1) the [c]court has expressed its decision based upon a palpably incorrect or irrational basis, or 2) it is obvious that the [c]court either did not consider, or failed to appreciate the significance of probative, competent evidence.'" Capital Fin. Co. of Del. Valley, Inc., supra, 398 N.J. Super. at 310 (quoting D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)). Under this standard, only actions that are "arbitrary, capricious, or unreasonable" will be available for reconsideration. D'Atria, supra, 242 N.J. Super. at 401. We find that the Law Division neither abused its discretion in denying reconsideration nor acted arbitrarily, capriciously, or unreasonably.

Rule 4:50-1 governs relief from final judgments and orders:

On motion, with briefs, and upon such terms as are just, the court may relieve a party or the party's legal representative from a final judgment or order for the following reasons: (a) mistake, inadvertence, surprise, or excusable neglect; (b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial under R. 4:49; (c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (d) the judgment or order is void; (e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or (f) any other reason justifying relief from the operation of the judgment or order.

Applications to vacate default judgments are liberally construed so that cases may be decided on the merits. Pressler & Verniero, Current N.J. Court Rules, comment 4.1 on R. 4:50-1 (2012); Prof'l Stone, Stucco & Siding Applicators, Inc. v. Carter, 409 N.J. Super. 64, 68 (App. Div. 2009); Nowosleska v. Steele, 400 N.J. Super. 297, 303 (App. Div. 2008). However, a default judgment will not be disturbed unless defendant can "establish that his failure to answer was due to excusable neglect and that he has a meritorious defense." Goldhaber v. Kohlenberg, 395 N.J. Super. 380, 391 (App. Div. 2007). The meritorious defense requirement will only be waived where the default was obtained through defective service of process. Rogan Equities, Inc. v. Santini, 289 N.J. Super. 95, 113-114 (App. Div.), certif. denied, 145 N.J. 375 (1996).

In defendant's first and third points he argues, for the first time on appeal, that under 15 U.S.C.A. § 1692i, "a debt collector only has standing against a consumer who has actually signed the contract," and as such, the judgment should be vacated for lack of standing. We disagree.

The venue section of the Federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.A. § 1692i, provides that with the exception of actions involving real property, a debt collector must bring an action "in the judicial district or similar legal entity . . . (A) in which such consumer signed the contract sued upon; or (B) in which such consumer resides at the commencement of the action." This section pertains to venue, not standing, as suggested by defendant. In any event, plaintiff complied with the venue section by bringing the action in Union County, the county where defendant resides.

Defendant next contends in points two and seven, again for the first time on appeal, that applicable provisions of the Uniform Commercial Code, N.J.S.A. 12A:1-101 to 12A:10-106 (the UCC) precludes enforcement of the debt. We disagree because the arrangement between the parties was not governed by the UCC. N.J.S.A. 12A:2-201 states: a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought. [(Emphasis added).]

The UCC only applies to contracts for the sale of goods, not to service contracts. Quality Guaranteed Roofing, Inc. v. Hoffmann-La Roche, Inc., 302 N.J. Super. 163, 165 (App. Div. 1997). Here, the arrangement between Dr. DeMaio and defendant was for the performance of medical services, not for the sale of goods. See id. at 165-66. Even if the arrangement were a "mixed contract," that is, one for goods and services, the services in this case no doubt predominated, as there is no evidence of any purchases associated with defendant's treatment. See, e.g., id. at 167 (finding "that the purchase of the roofing material was merely incidental to the dominant purpose of the contract: the installation of the roof"). Therefore, the UCC does not bar plaintiff's claim for payment.

Defendant further argues that plaintiff's attorney violated Rule 11 of the Federal Rules of Civil Procedure (FRCP) and Rule 3.1 of the Rules of Professional Conduct (RPC) by failing to make a "reasonable inquiry" of plaintiff's allegations before filing a complaint. Specifically, defendant urges that since plaintiff's attorney admitted that defendant's father was a responsible party, "[p]laintiff's attorney ha[d] knowledge that wrongful prosecution was [being] committed" against him. We find these arguments untenable.

The federal rules are inapplicable to the case at bar since the action is lodged in state court, which is governed by state procedural rules. Nonetheless, we will consider defendant's argument since FRCP 11 is analogous to New Jersey's Rule 1:4-8.

Rule 1:4-8 and RPC 3.1 deal with frivolous pleadings. Rule 1:4-8 provides for remedies, including the imposition of sanctions against attorneys who violate its terms. However, remedies are limited to those who timely invoke either Rule 1:4-8(a) or seek sanctions under Rule 1:4-8(b), which was never done in this case.

RPC 3.1 "prohibit[s] an attorney from bringing or defending a proceeding 'unless the lawyer knows or reasonably believes that there is a basis in law and fact for doing so that is not frivolous[.]'" Salzano v. N. Jersey Media Group Inc., 201 N.J. 500, 521 (2010), cert. denied, __ U.S. __, 131 S. Ct. 1045, 178 L. Ed. 2d 864 (2011).

In this case, plaintiff's cause of action was not frivolous, but rather had a firm basis in law and established fact. See id. at 521. The writing between plaintiff and defendant's father, even though it has not been presented to us, did not release defendant from liability. Moreover, defendant cites no authority for the proposition that it served as a release or waiver of liability to the one who actually received the dental services. Relying on Trocki Plastic Surgery Center v. Bartkowski, 344 N.J. Super. 399 (App. Div. 2001), cert. denied, 171 N.J. 338 (2002), however, defendant argues that his father is solely obligated on the debt by virtue of the writing that he signed on the day of the emergency procedure.

In Trocki, defendants' minor child underwent emergency surgery for a lacerated wrist, for which defendants were billed approximately $1900. Id. at 401. When defendants failed to pay, despite having been substantially reimbursed by the husband's health insurance carrier, plaintiff sued defendants and obtained a judgment against them for the cost of the procedure, plus interest, attorneys fees, and costs. Ibid. We affirmed the judgment, holding that "[d]efendants were legally responsible as parents of the minor for payment of this bill." Id. at 403. We further held that the child's parents were "contractually obligated by virtue of the 'Authorization/Responsibility Agreement' executed by the wife." Ibid.

It is axiomatic that parents have a legal duty to support their minor children. Grotsky v. Grotsky, 58 N.J. 354, 356 (1971); Trocki Plastic Surgery Ctr., supra, 344 N.J. Super. at 403. By definition, a minor is a person under eighteen years of age. N.J.S.A. 9:17B-3. In this case, at nineteen years of age, defendant was not a minor when the dental work was performed. Having reached majority and accepted the necessary emergency services from plaintiff, defendant was still obligated on the debt and his father had no legal duty to support him. See Grotsky, supra, 58 N.J. at 356.

We have considered the remainder of defendant's arguments and find that they lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.


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