June 15, 2012
VANZ, LLC - MAR. 10 SERIES 02, PLAINTIFF-RESPONDENT,
AVELINA SIMON, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. DC-016955-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 25, 2011
Before Judges Messano and Espinosa.
On June 1, 2010, plaintiff filed a complaint against defendant in which it alleged that its "predecessor in interest sold and assigned all right, title and interest in the defendant's defaulted AMERICAN EXPRESS BANK FSB . . . account to the Plaintiff[;]" that defendant was therefore indebted to plaintiff on a book account; that demand for payment had been made and the amount due and owing remained unpaid. Defendant filed both a form answer and a second answer and counterclaim, in which she alleged that plaintiff had violated the New Jersey Fair Credit Reporting Act, N.J.S.A. 56:11-28 to -52; the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692p; the Fair Credit Billing Act, 15 U.S.C. §§ 1666-1666j; and the Truth in Lending Act, 15 U.S.C. §§ 1601-1667f.
On July 14, 2010, plaintiff wrote to the court to request an adjournment of the trial date, which it identified as August 1, 2010. Plaintiff advised that it had served discovery demands upon defendant on July 13, 2010, starting a discovery period that would not expire until October 13, 2010. See R. 6:4-5. Plaintiff asked for an adjournment of the August 1 trial date "to allow for discovery to be completed."
Defendant responded, advising the court that the trial date was actually August 13, 2010. She also stated that, although she had not been served with any discovery request, she had no objection to plaintiff's adjournment request.
It is unclear from the record whether plaintiff's adjournment request was denied prior to the scheduled trial date. However, it is undisputed that defendant received no notice prior to the trial date that the request had been denied. Plaintiff appeared for the trial date. Defendant did not. It is further undisputed that no effort was made to contact defendant on the trial date to advise her that the adjournment request was denied. Default was entered against defendant.
Defendant filed a motion to vacate default and reinstate her counterclaim as well as a motion to compel discovery. The motion to vacate default was denied on September 27, 2010. However, although plaintiff opposed defendant's motion to compel discovery, the court granted that motion.
Defendant filed two motions for reconsideration of her motion to vacate default,*fn1 both of which were denied. She appeals from the second order denying her motion for reconsideration. We reverse.
"[T]he opening of default judgments should be viewed with great liberality, and every reasonable ground for indulgence is tolerated to the end that a just result is reached." Marder v. Realty Constr. Co., 84 N.J. Super. 313, 319 (App. Div.) (emphasis added), aff'd, 43 N.J. 508 (1964). Significantly, defendant here sought relief from the entry of a default rather than a default judgment. The applicable standard was, therefore, "clearly a less stringent standard than that imposed by R. 4:50-1 for setting aside a default judgment." Pressler and Verniero, Current N.J. Court Rules, comment on R. 4:43-3 (2012). A motion to set aside a default judgment will not be granted unless the movant shows the failure to appear or defend was excusable and that there is a meritorious defense. Marder, supra, 84 N.J. Super. at 318-19. However, a "mere showing of good cause is required for setting aside an entry of default. N.J. Mfrs. Ins. Co. v. Prestige Health Grp., LLC, 406 N.J. Super. 354, 360 (App. Div.), certif. denied, 199 N.J. 543 (2009); R. 4:43-3.
Here, defendant acted vigorously to defend against the complaint. She timely filed an answer and counterclaim, responded in writing to plaintiff's adjournment request and filed a motion to compel discovery. It was her understanding that adjournment requests are routinely granted without the necessity of an appearance of the adversary if the request is made within the discovery period. See R. 6:4-7(b). For these reasons, she did not appear on the scheduled trial date. And, apparently, no effort was made to contact her on the trial date to advise that the adjournment request was denied.*fn2 Under these circumstances, we are satisfied that she demonstrated good cause, warranting the vacation of the default against her.
This matter comes before us as an appeal from the denial of her second motion for reconsideration, rather than from the initial order denying her motion to vacate the default.
Reconsideration is a matter within the sound discretion of the Court, to be exercised in the interest of justice. . . . [It] should be utilized only for those cases which fall into that narrow corridor in which either 1) the Court has expressed its decision based upon a palpably incorrect or irrational basis, or 2) it is obvious that the Court either did not consider, or failed to appreciate the significance of probative, competent evidence. [D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990).]
Our scope of review is to determine whether the court acted in an arbitrary, capricious, or unreasonable manner, "the least demanding form of judicial review." Ibid.
In its reasons for denying the motion, the trial court stated that defendant had failed to show both excusable neglect and a meritorious defense, applying the standard applicable to motions to vacate default judgment. In failing to apply the "clearly . . . less stringent standard" applicable to defendant's motion to vacate default, the court expressed its decision based upon a palpably incorrect basis. Therefore, the motion for reconsideration should have been granted and the default against defendant should be vacated.