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Laridian Consulting, Inc., As Assignee of Nations Bank v. Pedro G. Bolanos

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


November 7, 2011

LARIDIAN CONSULTING, INC., AS ASSIGNEE OF NATIONS BANK, PLAINTIFF-RESPONDENT,
v.
PEDRO G. BOLANOS, DEFENDANT-APPELLANT.

On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. DC-8110-03.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 17, 2011

Before Judges Parrillo and Skillman.

Defendant appeals from an order entered on October 29, 2010, which denied his motion to vacate a default judgment entered against him on June 3, 2004, and an October 15, 2010 order, which required the Bank of America to turnover $20,043.10 held by defendant in a joint bank account with his wife to satisfy that judgment.

Plaintiff is the assignee of defendant's unpaid credit card debt. In April 2003, plaintiff filed this action in the Special Civil Part for the recovery of $15,000 due on defendant's account. That same month, service was made upon him by mail at his home address.

On May 14, 2004, following expiration of six months without defendant filing an answer, plaintiff filed a motion for entry of a default judgment, and on June 3, 2004, the trial court entered a default judgment against defendant in the amount of $15,369.

Before the trial court, defendant denied receipt of service of the complaint and relied upon the alleged failure of service of process as the basis for vacating the default judgment. However, defendant admittedly became aware of the action and the default judgment in the summer of 2004, and on appeal, he has abandoned his argument that the alleged failure of service of process in 2003 could provide a basis for vacating the default judgment in 2010. See Rogin Equities, Inc. v. Santuri, 289 N.J. Super. 95, 113-15 (App. Div. 1996); Rosa v. Araujo, 260 N.J. Super. 458, 463 (App. Div. 1992), certif. denied, 133 N.J. 434 (1993).

In an effort to execute upon the default judgment, plaintiff sent defendant an information subpoena. Defendant signed the subpoena on September 17, 2004, and sent it to plaintiff's counsel and the trial court together with a transmittal letter, which indicated that he had moved to the Bronx and was seeking legal counsel to represent him. Defendant's letter also sought documentation concerning the basis for the default judgment.

Insofar as the record before us indicates, plaintiff did not undertake any additional efforts to execute upon the default judgment over the next six years, and defendant admittedly did not move to vacate.

On August 18, 2010, plaintiff filed a motion for a turnover of funds in a joint savings account defendant holds with his wife in order to satisfy the judgment. On September 28, 2010, defendant responded by filing a motion to vacate the default judgment. Defendant's primary argument in support of his motion was that he had not been served with process in 2003. As previously noted, defendant has now abandoned that argument. Defendant also argued that plaintiff had failed to submit sufficient documentation to the trial court to support entry of the default judgment.

The trial court denied defendant's motion to vacate the default judgment and granted plaintiff's motion for a turnover order by oral opinions issued on October 15 and 29, 2010. On December 23, 2010, after this appeal was filed, the court issued a supplemental oral opinion expanding upon the reasons for its decision.

I.

Defendant's motion to vacate the default judgment was based on Rule 4:50-1(f), which provides that a party may be relieved from a judgment for "any other reason," (in addition to the specific reasons set forth in Rule 4:50-1(a) through (e)), "justifying relief from the operation of the judgment[.]" Relief under the subsection, sometimes referred to as the "catch-all" provision, DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 269 (2009), "is available only when 'truly exceptional circumstances are present.'" Hous. Auth. of Morristown v. Little, 135 N.J. 274, 286 (1994) (quoting Baumann v. Marinaro, 95 N.J. 380, 395 (1984)). Rule 4:50-1(f) should be invoked "'sparingly' and only 'in situations in which, were it not applied, a grave injustice would occur[.]'" First Morris Bank & Trust v. Roland Offset Serv., Inc., 357 N.J. Super. 68, 71 (App. Div. 2003) (quoting Little, supra, 135 N.J. at 289)). An appellate court may not disturb a trial court's denial of relief under Rule 4:50-1(f) unless there is a showing of an abuse of discretion. Id. at 72.

Defendant argues that the default judgment against him must be vacated because it was entered without plaintiff presenting even prima facie proof that he was liable for the alleged unpaid credit card debt. Whatever merit this argument may have had if presented on a direct appeal from the default judgment, it does not involve the kind of "truly exceptional circumstances" required to grant relief from a default judgment six years after its entry. Defendant was admittedly aware of that judgment in 2004. Consequently, he could have appealed from the judgment at that time or moved for relief under Rule 4:50-1(a) based on "excusable neglect" or under Rule 4:50-1(d) based on the alleged deficiency in the service of process. However, he did nothing until plaintiff moved for a turnover order to execute upon his bank account six years later. Compare Morales v. Santiago, 217 N.J. Super. 496, 505 (App. Div. 1987).

Moreover, assuming defendant was correct in his argument that plaintiff's submission to the trial court in support of the default judgment was inadequate, plaintiff was prejudiced by defendant's delay in moving to vacate the default judgment on that basis. Plaintiff's president, Thomas Mesce, submitted a certification in opposition to defendant's motion, which states that its assignor, Nations Bank, only retains documentation relating to a credit card account for eighteen months after assignment and that Nations Bank "either closed or merged with another bank" after the assignment of plaintiff's account. Thus, the additional documentation defendant argues plaintiff should have presented to the trial court in support of its motion for entry of a default judgment may have been available in 2004 but is no longer available due to defendant's delay in challenging the default judgment.

Therefore, the trial court did not abuse its discretion in denying defendant's motion under Rule 4:50-1(f) for relief from the judgment.

II.

Plaintiff's motion for a turnover of $20,043.10 from defendant's joint bank account with his wife was governed by N.J.S.A. 17:16I-4, which provides in pertinent part:

Unless a contrary intent is manifested by the terms of the contract, or the deposit agreement, or there is other clear and convincing evidence of a different intent at the time the account is created:

(a) A joint account belongs, during the lifetime of all parties, to the parties in proportion to the net contributions by each to the sums on deposit. In the absence of proof of net contributions, the account belongs in equal shares to all parties having present right of withdrawal.

In opposing plaintiff's motion for a turnover of $20,043.10 from defendant's joint bank account with his wife, defendant submitted a certification which stated in part:

The bank account that was levied upon by Officer Gerald Ramoth is a joint account in the name of my wife Maria Bolanos and myself. It is an account in which we made deposits to pay for the forthcoming marriage of my daughter Vanessa who is getting married in January, 2011. Attached hereto as Exhibit "C" is a spread sheet showing the balances in the account from January through September 9, 2010. The principal deposit was made in June, 2010. It was for $35,000 consisting of $10,000 contributed by myself, $15,000 by my wife Maria and $10,000 by my daughter Vanessa.

In rejecting defendant's argument that plaintiff was not entitled to a turnover order for the amount in the joint account allegedly contributed by defendant's wife, the trial court stated: "There's no competent evidence here that says this money is not his."

We disagree with this conclusion. Defendant's certification and the supporting exhibits constituted competent evidence that $15,000 of the money in the joint bank account was contributed by his wife. Therefore, defendant was entitled to an evidentiary hearing regarding this partial defense to the plaintiff's motion for a turnover order.

Although we agree with plaintiff's argument that the alleged contributions by defendant's daughter to the joint account would have no effect upon the availability of the funds to satisfy plaintiff's judgment because defendant's daughter had no interest in the account, defendant's wife is a joint owner of the account. Therefore, if defendant can show that his wife deposited $15,000 or some lesser amount into the account, this would trigger the operation of the part of N.J.S.A. 17:16I-4(a), which states that "[a] joint account belongs, during the lifetime of all parties, to the parties in proportion to the net contributions by each to the sums on deposit." Moreover, if defendant is unable to provide satisfactory proof of the origins of the money in the joint account, the amount plaintiff is entitled to recover out of the account would be governed by the part of N.J.S.A. 17:16I-4(a) which provides that "[i]n the absence of proof of net contributions, the account belongs in equal shares to all parties having present right of withdrawal." In either event, the part of the joint account to which plaintiff is entitled would appear to be less than the $20,043.10 provided in the turnover order. Therefore, this part of the case must be remanded to the trial court.

Accordingly, the October 29, 2010 order denying defendant's motion to vacate the default judgment is affirmed. The October 15, 2010 turnover order is reversed and this part of the case is remanded to the trial court for further proceedings in conformity with this opinion.

20111107

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