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David Rothenberg and Sarah Rothenberg, Rabbi Grainon Lazewnick, Yaakov v. Joseph Grunfeld and Majestic Company

October 27, 2011


On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-2486-08.

Per curiam.


Submitted September 26, 2011 -

Before Judges Parrillo and Grall.

Defendants Joseph Grunfeld and his wholly-owned business Majestic Company appeal from the July 23, 2010 order of the Law Division denying their motion for relief from a July 19, 2009 summary judgment entered against them. Plaintiffs David and Sarah Rothenberg, Yaakov and Avroham Lazewnick and Rabbi Grainon Lazewnick (collectively plaintiffs), cross-appeal from a provision of the July 23, 2010 order allowing Richard Seltzer, Esquire, defendants' former attorney, to prosecute the post-judgment motion on behalf of defendants. We affirm.

Briefly stated, the underlying matter is an action to collect unpaid principal totaling $710,000 and interest accumulated over eighteen-and-one-half years on notes signed by Grunfeld in favor of the five individual plaintiffs between 1990 and 1992 with yearly rates between fourteen and seventeen percent. Plaintiffs' complaint alleging defendants' default on these loans was filed July 17, 2008. Defendants answered with general denials. Following discovery, plaintiffs moved for summary judgment on June 15, 2009. Accompanying their motions were copies of the notes and certifications attesting to an aggregate outstanding debt, including principal and interest, of $2,446,464 owed by defendants to plaintiffs.

The summary judgment motion was unopposed. It is disputed whether defendants received proper notice of the filing. Seltzer, defendants' attorney, claimed he never received notice of the original motion, which listed his address as that of the Ocean County Courthouse. On the other hand, the certification of service on the notice of motion indicated that a copy had been mailed to Seltzer and no package had been returned by the postal service undeliverable or incorrectly addressed.

In any event, summary judgment in the amount of $2,446,464*fn1 was entered on July 17, 2009 and subsequently docketed.*fn2

Defendants, through attorney Seltzer, received the order at the end of July 2009 at the latest; however, they did not move to vacate the judgment at that time. Instead, defendants chose to engage in settlement negotiations with plaintiffs, which ultimately proved unsuccessful. In fact, it was only after having failed to respond to plaintiffs' information subpoena received on September 14, 2009, and having been served with plaintiffs' motion to enforce litigant's rights and for discovery filed on September 30, 2009, that defendants on October 6, 2009, moved for relief from the summary judgment under Rule 4:50-1, or, in the alternative, for reconsideration under Rule 1:7-4.

The basis for defendants' motion was twofold: lack of process concerning the original summary judgment motion and the inaccuracy of the amount of the judgment awarded. As to the former, defendants offered no explanation or excuse for the sixty-seven day delay after being served with the order entering judgment. As to the latter, defendant simply appended to their motion copies of three checks totaling $548,779.89, all dated 2008, none signed by Grunfeld, and unsupported by any proof they were in payment of the notes in question. Following argument, the Law Division, assuming without deciding that defendants did not receive the notice of motion, denied defendants' motion and granted plaintiffs' motion to enforce litigant's rights by order of October 23, 2009. As to the former, the court reasoned that considered as either a motion to amend judgment, Rule 4:49-2, or a motion for reconsideration, Rule 1:7-4, defendants' filing was late as well beyond the twenty-day time bar common to both rules. Moreover, if considered a motion for relief from judgment, defendants met none of the requirements under Rule 4:50-1, had not filed within a reasonable time under Rule 4:50-2, and offered no competent proof that the amount of the judgment was incorrect.

Significantly, defendants never moved for reconsideration of the October 23, 2009 denial under Rule 1:7-4(b), or to alter or amend that order under Rule 4:49-2. Nor did defendants ever file an appeal therefrom under Rule 2:4-1(a). On the contrary, defendants took no action until seven months later when attorney Seltzer, against whom defendants had brought a legal malpractice action on June 7, 2010 arising from his handling of the underlying debt collection matter, filed, apparently with defendant's acquiescence, a motion to intervene and to vacate under Rule 4:50-1 the July 19, 2009 judgment entered against his clients, and for a proof hearing pursuant to Rule 4:43-2(b).

This newly-filed motion, practically identical to defendants' October 2009 application, presents no additional information beyond that provided in the previous filing, as there had been no interim developments since the October 23, 2009 order, other than, of course, the institution of defendants' professional negligence action against Seltzer. Finding that Seltzer had defendants' permission to continue the representation of their interests in this matter, the court, over the objection of plaintiffs who argued Seltzer lacked standing, entertained argument on the motion styled "relief from judgment." Following argument, the court denied the application by order of July 23, 2010, reasoning:

If [Grunfeld] indeed felt he was aggrieved or had a basis for relief from this Court's determinations made in July and more importantly in October, [sic] 2009, and Mr. Grunfeld chose not to file an appeal, the within application is even further time barred for the reasons referenced in the paper filed by counsel for the plaintiff ...

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