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Assem A. Abulkhair v. New Jersey Property-Liability Insurance Guaranty Association

December 15, 2011


On appeal from the Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-134-10.

Per curiam.


Argued November 9, 2011

Before Judges Fisher and Nugent.

Plaintiff Assem A. Abulkhair appeals from the October 1, 2010 Law Division orders that granted defendant New Jersey Property-Liability Insurance Guaranty Association's (PLIGA) motion, vacated the default entered against it, and denied plaintiff's cross-motion for entry of default judgment. We find no abuse of discretion on the part of the trial judge. Accordingly, we affirm.

When plaintiff was injured in an automobile accident in October 1988, he was insured under a policy issued on behalf of the New Jersey Automobile Full Insurance Underwriting Association (NJAFIUA), which provided for unlimited medical expense benefits. PLIGA has since become the administrator for claims that arose under such NJAFIUA policies. See N.J.S.A. 17:30A-2.1. On January 15, 2010, plaintiff filed a complaint asserting that PLIGA "suddenly refused to pay for the benefits with no legitimate reason." Specifically, plaintiff alleged PLIGA refused to pay $11,167.20 for mileage reimbursement plus $1,390 for gym membership dues from December 2008 through November 2010. Plaintiff alleged theories of liability which included breach of contract, bad faith, and consumer fraud.

Plaintiff served PLIGA with a copy of the complaint on February 24, 2010. Because PLIGA did not timely file an answer, plaintiff requested a default, which was entered against PLIGA on April 19, 2010.*fn1 Between June 2009 and January 2010, plaintiff negotiated with a claims examiner from PLIGA in an effort to settle the outstanding bills. On August 20, 2010, the court sent plaintiff a notice that his complaint would be dismissed in sixty days for lack of prosecution. On September 2, 2010, PLIGA filed a motion to vacate the default. On September 23, 2010, plaintiff filed a cross-motion to enter a default judgment against PLIGA. As previously indicated, on October 1, 2010, the court granted PLIGA's motion and denied plaintiff's cross-motion. Plaintiff appealed.

The New Jersey Court Rules authorize a party to file a motion to set aside a default; specifically Rule 4:43-3 provides that "[f]or good cause shown, the court may set aside an entry of default . . . ." The motion must include "an answer to the complaint and Case Information Statement . . . and . . . the filing fee for an answer . . . ." A motion to vacate a default must be viewed with liberality. Pressler & Verniero, Current N.J. Court Rules, comment on R. 4:43-3 (2012). The "good cause" standard under Rule 4:43-3 is a less stringent standard than that governing the vacation of a default judgment. Bernhardt v. Alden Cafe, 374 N.J. Super. 271, 277 (App. Div. 2005). Courts have "broad discretion" to vacate defaults under Rule 4:43-3. Eileen T. Quigley, Inc. v. Miller Family Farms, Inc., 266 N.J. Super. 283, 293 (App. Div. 1993).

In support of its motion to vacate the default, PLIGA relied on a certification that the PLIGA examiner who had initially handled the file had been out on disability for a considerable time during the spring of 2010, which may have contributed to the delay in answering defendant's complaint. Additionally, the parties had engaged in negotiations but disputed whether plaintiff was entitled to transportation reimbursement and the proper rate for such reimbursement. Finally, PLIGA asserted that there was a legitimate dispute as to the amount of money to which plaintiff was entitled.

Although plaintiff argues that defendant's motion was not factually based, and did not demonstrate excusable neglect or a meritorious defense, the trial judge reached a contrary conclusion. While defendant's meritorious defense is perhaps tenuous, the challenge to whether plaintiff is entitled to a mileage reimbursement, and the amount of that reimbursement, is at least arguable. Cf. O'Connor v. Altus, 67 N.J. 106, 129 (1975). Moreover, there is a preference that "defendant's representative should participate in any proceeding that may result in an award against the [NJAFIUA]." Mancini v. EDS, 132 N.J. 330, 338 (1993). Considering those circumstances, we find no abuse of discretion by the trial court.*fn2


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