April 10, 2012
T & M ASSOCIATES, PLAINTIFF-RESPONDENT,
JOANNE FABER, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. DC-11368-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 6, 2011
Before Judges Alvarez and Nugent.
Defendant Joanne Faber appeals from two May 18, 2010 orders: one that denied her motion to vacate a default judgment, and one that granted plaintiff T & M Associates' motion to enforce litigant's rights by requiring defendant to complete an information subpoena. We affirm.
The motion record establishes the following factual and procedural history. In March 2007, while embroiled in a boundary dispute with a neighbor, defendant sought professional assistance from plaintiff, a business that provided engineering and consulting services. Plaintiff provided defendant with an initial written proposal and during the ensuing eighteen months, as defendant requested additional services, plaintiff submitted two additional proposals.
Although plaintiff provided services to defendant and billed her for the work, defendant refused to pay plaintiff after a dispute developed between the parties, defendant claiming that plaintiff had failed to provide some of the services it had contracted to perform, and had inadequately performed services it did provide. In June 2009 plaintiff commenced a breach-of-contract action against defendant in an attempt to collect its money.
According to the Special Civil Part records, the plaintiff's complaint was mailed to defendant on June 22, 2009. Because defendant did not timely file an answer, a default was entered on July 30, 2009. On December 10, 2009, the court entered a final judgment by default in the amount of $11,979.88, which plaintiff served on defendant eight days later, on December 18, 2009, along with an information subpoena. Five days later, on December 23, 2009, the Special Civil Part clerk received from defendant a November 30, 2009 "letter [in] Lieu of a Formal Answer." The clerk returned the letter because "[t]he party was placed in default on 7-30-09." Defendant filed nothing further with the court until plaintiff served her with a motion to enforce litigant's rights, seeking to compel her to answer the information subpoena.
On March 30, 2010, the return date of plaintiff's motion to enforce litigant's rights, defendant appeared, requested oral argument, attempted to have the court mark some papers as exhibits, and informed the court that she had filed a separate motion to vacate the default judgment. The court adjourned plaintiff's enforcement motion pending disposition of defendant's motion to vacate the default judgment.
Defendant based her motion to vacate the default judgment "on Rule 4.2, Rule 5.2.3 and Rule 6.7.2."*fn1 She explained in a certification that "[t]his case[, plaintiff's breach-of-contract action, DC-11368-09,] is related to C237-06," a reference to the Chancery Division action concerning the boundary dispute. She also explained:
I received a copy of the filed Complaint in June 2009, by the plaintiff and immediately advised them by telephone voicemail that due to the current pending litigation the engineering information was considered privileged, as I was advised by counsel, this is pursuant to Rule 5.2.3, and I could not discuss the matter.
Defendant averred that she had hired plaintiff "to perform a survey for a boundary line dispute litigation case and [she] was led to believe by [plaintiff] that they provided [her] with a survey until professionals reviewed the document and informed [her] that the document is not a survey pursuant to engineering guidelines." Finally, defendant asserted that she "advised [plaintiff's counsel] that a survey was never completed on [her] property, according to [her] professionals, and that pursuit of a collection is frivolous and that [plaintiff's counsel] is acting as a debt collector and therefore is responsible as a party to the action."
Defendant included with her motion a March 29, 2010 letter from a professional engineer and licensed surveyor, which provided in part:
Per your request I have carefully reviewed the documents provided me by you for both lots 16 & 16.01 and lots 4 & 4.01 in the Township of Toms River (formerly Dover Township). Some of the former documents were prepared by Morgan Engineering LLC dated 2/15/02 and some of the later documents were prepared by George W. Henn, Inc. dated 12/09/05.
I have also read the plans provide [sic] me by you from [plaintiff]. There are 2 Plans, the first is dated June 18, 2007 and is entitled "Boundary Survey" and the second is dated June 20, 2007 and is also entitled "Boundary Survey[."] Both of these plans are unsigned, and without seal, the second is rendered in colors to identify supposed differences between the Henn and Morgan plans.
I wish to state that the plans provided to you from [plaintiff] entitled "Boundary Survey" are in fact not surveys, but a compilation of information gleaned from other documents some of which were surveys.
In at least one location the information plotted does not accurately represent the empirical data from which it was taken, and is off by over 10 feet. Therefore by definition these plans do not adhere to Land Surveying standards and guidelines, and also they are not accurate within themselves.
On May 18, 2010, the court denied defendant's motion to vacate the default judgment and granted plaintiff's motion to enforce litigant's rights. Although plaintiff's attorney appeared for argument on the motion, defendant did not. The court waited until 11:10 a.m. before hearing argument. The court explained that the motion had been rescheduled from May 4, 2010 at defendant's request; the court had mailed her a letter confirming the postponement; and the court's secretary had "[left] her a telephone message saying it's adjourned to May 18th per her request that this be adjourned from May 4th." In addition to the letter and phone message, the court had mailed two notice postcards with the May 18 date, one card for each motion.*fn2
In its oral opinion, the court explained that defendant was required to establish excusable neglect and a meritorious defense in order to vacate the default judgment. The court determined that defendant's expert's report established a meritorious defense, but rejected defendant's assertion that an alleged privilege prevented her from filing an answer.*fn3 The court denied defendant's motion because she had not demonstrated excusable neglect.
Defendant contends in this appeal that the trial court erred by not vacating the default judgment. Acknowledging that she was required to demonstrate excusable neglect and a meritorious defense to obtain relief from the judgment, she argues that her letters to plaintiff's counsel informing him that her communications with his client were privileged and her "letter answer" to the court established excusable neglect. She also maintains that plaintiff fraudulently procured its judgment, that the court abused its discretion by entering judgment on a monetary amount unsupported by competent evidence, and that she is entitled to relief under each provision of Rule 4:50-1.
We review the trial court's decision denying defendant's motion under an abuse-of-discretion standard. "Generally, a decision to vacate a default judgment lies within the sound discretion of the trial court, guided by principles of equity." Coryell, L.L.C. v. Curry, 391 N.J. Super. 72, 79 (App. Div. 2006) (citing Hous. Auth. of Town of Morristown v. Little, 135 N.J. 274, 283 (1994)). "The decision to grant or deny a motion to vacate the entry of judgment 'will be left undisturbed unless it represents a clear abuse of discretion.'" Ibid. (quoting Little, supra, 135 N.J. at 283).
A party may seek relief from a default judgment under Rule 4:43-3, which authorizes the court to set aside a default judgment in accordance with Rule 4:50. Rule 4:50-1 provides in relevant part:
On motions, 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; . . . (c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; . . . or (f) any other reason justifying relief from the operation of the judgment or order.
Defendant first claims that the trial court abused its discretion by not granting her relief from the default judgment under subsection (a) of Rule 4:50-1. To obtain relief from a judgment under that subsection of the rule, a party "must be prepared to 'show that [her] neglect to answer was excusable under the circumstances and that [she] has a meritorious defense.'" Dynasty Bldg. Corp. v. Ackerman, 376 N.J. Super. 280, 285 (App. Div. 2005) (quoting Marder v. Realty Const. Co., 84 N.J. Super. 313, 318 (App. Div.), aff'd, 43 N.J. 508 (1964)). As the Supreme Court explained in Mancini v. EDS, 132 N.J. 330, 335 (1993), "[c]arelessness may be excusable when attributable to an honest mistake that is compatible with due diligence or reasonable prudence."
In the case before us, defendant was served with the complaint in June 2009. Her "letter [in] Lieu of a Formal Answer," dated November 30, 2009, was not received by the court until December 23, 2009, nearly two weeks after the December 10, 2009 default judgment had been entered against her. Although she stated in her letter in lieu of answer that a formal answer would be filed by counsel "shortly," no answer was forthcoming. Instead, defendant waited until March 30 of the following year, the return date of plaintiff's motion to enforce litigant's rights, before filing her motion to vacate the default judgment.
Defendant's motion to vacate the default judgment was postponed at least one time. Commendably, the court wrote to defendant and also had court staff leave a message on her answering machine reminding her of the return date of the motion. Defendant did not notify the court before March 30 that she would not appear, and made no attempt to contact the court on the return date of her motion to explain that she could not appear. After waiting more than two hours, the court decided both defendant's motion to vacate the default judgment and plaintiff's motion to enforce litigant's rights.
In rendering its decision, the trial court considered not only defendant's delay, but also her proposed answer. The proposed answer contradicted her claim of excusable neglect, that is, that answering the complaint would require her to disclose privileged communications between her and plaintiff's engineers, communications that might prejudice her in her boundary dispute litigation. In her proposed answer, defendant responded to each affirmative allegation in the complaint by stating, "Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations and leaves Counterclaims to their proofs [sic]." In addition to those responses, defendant pleaded in conclusory terms eight affirmative defenses. As the trial court noted, defendant's boilerplate responses and defenses did not implicate any privileged communications.
We recognize that motions to vacate default judgments are to be viewed with great liberality. Marder, supra, 84 N.J. Super. at 319. We also recognize that the trial court could have exercised its discretion by granting defendant's motion and imposing sanctions to compensate plaintiff for the unnecessary expense it incurred by engaging in the motion practice necessitated by defendant's delays. Our function, however, is not to second-guess the trial court, but instead to determine whether the court abused its discretion. Having considered the record presented to us and the applicable law, we find no such abuse of discretion.
Defendant also argues that she was entitled to relief under Rule 4:50-1(c), because plaintiff fraudulently obtained the judgment. She contends that the court required no substantiating evidence before entering the judgment, and that plaintiff did not render the services upon which the judgment was based, as evidenced by her expert's report. We reject this argument.
Defendant has not provided a copy of the motion in which plaintiff sought the default judgment. Without a copy of that motion, we cannot determine whether the judgment was entered on competent or incompetent proofs. See Soc'y Hill Condo. Ass'n, Inc. v. Soc'y Hill Assocs., 347 N.J. Super. 163, 177-78 (App. Div. 2002) (noting that appellant's failure to provide the appellate court with the parts of the record essential to a proper consideration of the issues made appellate review impossible).
More significantly, it does not appear from the record that defendant raised the issue of fraud before the trial court. She did not cite Rule 4:50-1(c) in her notice of motion as a ground for relief and she did not refer to "fraud" in the certification she submitted in support of her motion. Her expert's report does not refer to fraud, nor could the expert express such an opinion in the report, because he neither reviewed nor discussed the scope of the work plaintiff agreed to do as per its written proposals. Without having reviewed plaintiff's proposals, the expert could not competently opine that plaintiff billed defendant for services that it included in the proposals but did not perform. We will not consider on appeal issues that were not properly presented to the trial court. Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973).
Finally, defendant argues that the trial court abused its discretion by not vacating the judgment under Rule 4:50-1(f). That subsection authorizes a court to vacate a judgment for "any other reason justifying relief from the operation of the judgment or order." For this subsection, the policy favoring the finality of judgments is an important factor so that relief is available only when "truly exceptional circumstances are present." Little, supra, 135 N.J. at 286 (internal quotation marks and citation omitted). Subsection (f) should be used "'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.) (quoting Little, supra, 135 N.J. at 289), certif. denied, 176 N.J. 429 (2003).
Defendant did not raise this subsection before the trial court and did not present to the trial court truly exceptional circumstances that would warrant relief. Accordingly, we reject her argument that she should be afforded relief under Rule 4:50-1(f).