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Portfolio Recovery Associates, LLC v. Larna N. Morrisey


October 12, 2011


On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Bergen County, Docket No. DC-4402-10.

Per curiam.


Submitted September 26, 2011

Before Judges Sabatino and Ashrafi.

Pro se defendant Larna Morrisey appeals from an August 6, 2010 order of the Special Civil Part denying her motion to file an answer and counterclaim out of time. We reverse.

Plaintiff Portfolio Recovery Associates, LLC, filed a complaint on January 29, 2010, alleging it had purchased a credit card account from MBNA and that defendant Morrisey was in default on the account in the amount of $2,793.47. On February 17, 2010, the summons and complaint were served by mail upon Morrisey. See R. 6:2-3(d) (service by mail in the Special Civil Part). Sometime in late March 2010, Morrisey filed a motion to dismiss the complaint. Attached to her motion was a lengthy certification alleging a history of contacts and communications with plaintiff Portfolio and its attorneys regarding her Bank of America credit card debt and plaintiff's collection efforts. Morrisey contended the complaint should be dismissed on a variety of factual, statutory, and constitutional grounds.

By order dated April 30, 2010, the Special Civil Part denied Morrisey's motion to dismiss. The court's order stated: "Plaintiff's Complaint stands. Complaint states a cause of action recognizable at law. Case remains in default as Defendant has not filed an Answer to the Complaint."

Before that order was issued, plaintiff Portfolio requested and on April 26, 2010, the clerk of the Special Civil Part entered default judgment against Morrisey in the amount claimed in the complaint plus costs and statutory fees. See R. 6:6-3(a) (entry of default judgment by clerk for sum certain).

On May 14, 2010, Morrisey filed a motion for reconsideration of her motion to dismiss the complaint, arguing excusable inability to attend oral argument on April 30th because she had a pre-scheduled vacation and was not in the state. By order dated June 25, 2010, the court denied the motion for reconsideration.

On July 6, 2010, promptly after receiving the court's order, Morrisey filed another motion, this time for leave to file a responsive pleading out of time. She attached to her new motion a proposed answer and counterclaim, which included a demand for a jury trial. The court denied that motion on August 6, 2010, stating in its order: "Plaintiff has offered sufficient proof establishing that Defendant is legally responsible for the debt incurred." Later, on September 30, 2010, an order for wage execution was entered against Morrisey to collect on the default judgment, for a total amount of $3,222.42 with addition of fees and costs. Morrisey then filed this appeal.

Before us, Morrisey argues she had entered into an agreement with Bank of America and paid off by installment payments over several years the approximate $7,000 original debt. She contends she was deprived of the right to defend the claim filed by plaintiff and that she has valid defenses and counterclaims. Plaintiff Portfolio responds that Morrisey has not presented evidence of a settlement agreement with Bank of America, and that she has no meritorious defense to its claim.

Under Rules 4:6-1 and -2(e), made applicable to the Special Civil Part by Rule 6:3-1, a defendant may file a motion to dismiss a complaint for failure to state a claim upon which relief can be granted in lieu of filing a timely answer to the summons and complaint. When such a motion is filed, the time for filing an answer is tolled until the motion is decided. Upon receiving notice that the motion to dismiss has been denied, the defendant automatically has ten days to file an answer unless the court fixes a different deadline. R. 4:6-1(b). Courts often set a time for filing an answer in the same order by which they deny the defendant's motion to dismiss the complaint.

Here, the Special Civil Part did not set a time for Morrisey to file an answer after it denied her motion to dismiss on April 30, 2010. Nevertheless, the rule provided an additional ten days for filing an answer. Consequently, Morrisey was not in default at the time that a default judgment was entered against her on April 26, 2010, even before her motion to dismiss had been decided.

Additionally, in the Special Civil Part, an appearance by a pro se defendant is considered an acceptable substitute for a formal answer to the complaint. See R. 6:3-1(5). An appearance should prevent the entry of default or default judgment. Here, Morrisey filed her pro se motion to dismiss the complaint in late March 2010, apparently within the time for filing of an answer.*fn1 Her motion should have been considered an appearance that precluded entry of default.

The clerk of the court erred as a matter of law in entering judgment against Morrisey on April 26, 2010, while her motion was pending and she was actively pursuing defenses against plaintiff's claim. No judgment should have been entered without further order of the court.

Subsequently, the court erred when it stated in its August 6, 2010 order that plaintiff Portfolio had presented sufficient proof of the debt. At that time, Morrisey had not been granted her right to plead and defend the case. She had no opportunity to seek discovery and to present evidence to a factfinder, which would be a jury for genuinely disputed issues. Even if the evidence of the debt was irrefutable, Morrisey had potential counterclaims and offsets that might have affected plaintiff's right to judgment or the amount of the judgment.

Because of the erroneous procedural rulings, we reverse and remand to the Special Civil Part to permit Morrisey to file an answer and counterclaim, with payment of appropriate fees if not already paid. See R. 6:1-1(c); R. 6:5-3(a). The court's order for wage execution shall be vacated. Upon application of either party, the court shall make a determination as to whether amounts collected through wage execution shall be reimbursed to Morrisey or otherwise preserved pending final resolution of the case.

In reaching our decision, we have made no findings and we do not comment about the merits of either party's pleadings or evidence. Our conclusions are based on procedural errors.

Reversed and remanded. We do not retain jurisdiction.

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