July 11, 2012
JEREMY DELLO RUSSO, PLAINTIFF-RESPONDENT,
JAMIE ARVAY, DEFENDANT-APPELLANT
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-257-11.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted May 15, 2012 -
Before Judges Fisher, Baxter and Carchman.
Defendant Jamie Arvay*fn1 appeals from two orders of the trial court. The first, issued November 16, 2010, granted plaintiff Jeremy Dello Russo's request for default judgment against defendant. The order entered a judgment of divorce, denied alimony to either party, and divided the marital assets and debts. The second, issued February 4, 2011, denied defendant's request that: the default judgment and judgment of divorce be dismissed; she receive $6000 per month in alimony; the court reconsider its equitable distribution; and she be awarded attorney's fees. Defendant assigns error to all of these decisions. Defendant also argues that the trial court erred in awarding attorney's fees to plaintiff in connection with a later motion to enforce litigant's rights. We affirm the entry of the judgment of divorce, without prejudice to defendant's challenge to jurisdiction, but reverse and remand on all other issues.
Since we conclude that there are substantial issues that should be addressed at the trial of this matter, we provide an expansive review of the relevant facts.
Plaintiff and defendant were married on May 17, 2006. During their marriage, they resided in New York. The parties had no children together, although defendant has a son from a previous marriage. On July 21, 2010, plaintiff filed a complaint for divorce against defendant based on irreconcilable differences. In his complaint, plaintiff asserted that he lived in Tenafly, New Jersey, and had been living there since May 1, 2009. Plaintiff's counsel served the summons and complaint on defendant -- who continued to reside in New York --when she appeared in a family court in New Jersey on July 26, 2010, in response to a temporary restraining order (TRO) filed by plaintiff against defendant on July 16. That TRO was ultimately vacated, and plaintiff's domestic violence complaint against defendant was dismissed.
Defendant did not respond to plaintiff's summons and complaint, and on September 10, 2010, plaintiff filed a request for an entry of default. The court scheduled a proof hearing for October 27, 2010.
In early- to mid-October 2010, plaintiff filed his Notice of Proposed Final Judgment, which also contained plaintiff's Case Information Statement (CIS). At the same time, plaintiff served defendant by regular and certified mail. Although defendant complains about the timing of the service, the hearing resulting in the judgment under review was not held until well after the twenty-day period relevant to such notice. R. 5:5-10.
On October 27, 2010, both parties appeared for the proof hearing. At the hearing, defendant, appearing pro se, admitted that she had not answered plaintiff's complaint, and claimed that "I thought I just had to come in here." She noted, however, that she had received plaintiff's proposed final judgment, had "[m]ajor issues" with it, and requested an adjournment so that she could hire an attorney. The court granted defendant's request for adjournment and set the next hearing date for November 16, 2010 at 9 a.m. That same day, plaintiff's counsel sent a letter to defendant notifying her of the new hearing date and time. Plaintiff's counsel also received the notice of rescheduling on November 4, 2010, and sent a copy of it to defendant that same day. The proof hearing was held on November 16, 2010, from 9:15 a.m. to 9:31 a.m. Defendant failed to appear, and no attorney appeared on her behalf.
Plaintiff testified at the hearing in accordance with his complaint, CIS, and proposed final judgment. He confirmed that at the time of the hearing he lived in Tenafly, New Jersey, and had been living there for approximately one-and-one-half years. He indicated that defendant lived in Manhattan, in the parties' former marital residence, and that irreconcilable differences had existed between the parties for over six months.
According to plaintiff's CIS, he had an annual salary of $52,000, although at the hearing, he indicated that he was "between jobs" because he had just completed his residency at Englewood Hospital. He noted that defendant was not employed, but said she had worked in the past as a bartender. Plaintiff sought no alimony from defendant, and argued that he should not be ordered to pay any alimony to her. With regard to income taxes, plaintiff advised the court that the parties had filed separately in 2006 and 2009, and jointly in 2007 and 2008. He requested that each party be responsible for his or her own taxes for 2006 and 2009, and that he be responsible for any taxes incurred in 2007 and 2008. He claimed that he was entitled to any refunds attributable to the 2007 and 2008 returns.
As to the marital residence, which the parties rented but did not own, plaintiff proposed that he be responsible for paying an estimated $11,000 in outstanding rent incurred through August 2010, and that defendant be responsible for the rent thereafter. Plaintiff also proposed that he be responsible for debts owed to Con Edison through February 1, 2010 (approximately $1,550), and to Time Warner through August 9, 2010 (approximately $550), and that defendant be responsible for any bills or debts to those entities incurred after those dates.
Plaintiff noted that two vehicles were "registered and owned" by him -- a Honda Accord and a Mercedes-Benz. He valued the vehicles at $18,730 and $36,800, respectively, and advised that the Mercedes-Benz was encumbered with an $18,000 loan. He proposed that he retain both vehicles and be responsible for the remainder of the loan.
Regarding the contents of the marital residence, plaintiff requested that defendant return to him only two items: one Cartier Pasha watch and one Bulgari watch, both of which he claimed to have acquired before the marriage.
Plaintiff asserted that he maintained a checking account in his name, with a present balance of approximately $700, and held a one-third interest in a limited liability company, the Dello Russo Family Trust, which had been gifted to him before the marriage. He requested that he retain his interest in both of those assets. Plaintiff also noted that defendant had an unknown amount of student loans, and requested that she be responsible for those debts.
Finally, plaintiff contended that the parties were engaged in a dispute with a prior landlord over past rent owed, and that this debt could be as high as $21,000; plaintiff proposed that he be responsible for handling this dispute and paying whatever amount was ultimately owed.
At the conclusion of the hearing, the judge found that plaintiff had established grounds for divorce based on irreconcilable differences. The court awarded no alimony, finding "[t]here's no testimony to any of the factors that would apply." The court allocated assets and debts consistent with plaintiff's proposals.
Within one month, on December 14, 2010, defendant moved to vacate the default judgment and judgment of divorce. Defendant also requested spousal support, the return of certain property, and attorney's fees. Defendant submitted a certification claiming that her motion should be granted because: she had never been served notice of the November 16, 2010 hearing; the court lacked jurisdiction over the divorce because plaintiff was not a bona fide resident of New Jersey; there were no grounds for divorce because the parties had not been separated for at least eighteen months; the summons for divorce did not contain a court date; and she was unable to obtain counsel. She also claimed that she attempted to attend the November 16 hearing, but her bus arrived at 9:10 a.m., and that by the time she arrived in the courtroom, the hearing was already concluded.
Regarding the division of assets, defendant claimed that the court's order was inequitable because she "set aside [her] school and career" and incurred over $250,000 in student loan and credit card debts in order to take care of plaintiff, who had a history of drug problems and subjected her to "intolerable cruelty from physical to psychological and financial abuse." She also asserted that plaintiff "made [her] financially dependent on him when [she] sacrificed [her] training and career, [because he] promised to support the family in return for [her] time to help him finish his medical training." Defendant noted that all of the marital home furniture constituted her pre-marital assets.
Finally, defendant maintained that plaintiff misrepresented facts to the court and the police, including "listing an income significantly lower than his actual income," "fail[ing] to list all of his assets and [the parties'] marital debts," "[lying] about his employment," and "claim[ing] that there were no past legal proceedings," when in fact, there had been several past orders of protection against him, as well as a pending divorce action in New York.
In support of the motion and certification, defendant submitted evidence of the alleged drug use and domestic abuse, such as text message exchanges between herself and the plaintiff, certifications by friends and acquaintances of the parties, a certificate of treatment by a doctor noting defendant had been "treated for injuries stemming from domestic violence," and a copy of an order of protection issued in New York.
On February 4, 2011, the trial judge heard argument on defendant's motion. Defendant appeared pro se. Defendant asserted that the Mercedes-Benz was titled in her name, and presented a title for the vehicle confirming this fact. She claimed that plaintiff put the title in her name as an apology for "abandon[ing] [her] for four days [while] on a crack binge." Defendant also claimed that her parents made a "significant down payment" for the car.*fn2 With regard to her claim that plaintiff does not reside in New Jersey, defendant noted that the Tenafly address is also plaintiff's parents' address, claimed that all emails she had received from plaintiff came from either Englewood Hospital -- where he works -- or "an IP address[*fn3 ] in New York City,"*fn4 and noted that he claimed on his CIS a $209 George Washington Bridge monthly commuting fee.*fn5
The judge denied defendant's motion and ordered defendant to endorse title to the Mercedes to plaintiff. Thereafter, plaintiff moved to enforce litigants rights to secure the benefit of the judgment of divorce. This appeal followed.
Since we conclude that the default judgment as to the extant issues, with the exception of the judgment of divorce, should have been vacated, we address that issue, and leave the remaining issues to be considered in further detail upon remand.
We deem it appropriate to comment on the frustrations confronting trial judges in the Family Part when a matter is presented uncontested during a default hearing, and then the issues must be revisited when the defaulting party appears seeking relief from the judgment. That is apparent here. Defendant failed to appear at the appointed day and time, and the judge properly moved forward with the hearing and entered judgment.*fn6 When defendant appeared to vacate the default and proceed on her motion for various forms of financial relief, she appeared without documentation or other proofs necessary to establish her various claims. We recognize that this was not a trial but the return day of the motion and defendant was appearing without counsel, yet it was incumbent upon defendant to provide the requisite information necessary to assist the court in an effort to reach a just resolution.
On remand and the rescheduling of trial, the court may take appropriate notice of defendant's prior failures to provide the requisite support of her claims. While courts will indulge litigants, at some point such indulgence must yield to the rights of all litigants, including the opposing party, as well as the imposition on the court.
We now address the merits of the denial of defendant's motion to set aside the default judgment.
A trial court's decision under Rule 4:50-1 is entitled to "substantial deference, and should not be reversed unless it results in a clear abuse of discretion." US Bank N.A. v. Guillaume, 209 N.J. 449, 467 (2012).
Pursuant to Rule 4:50-1, a court may relieve a party from default judgment based on a showing of the following:
(a) mistake, inadvertence, surprise, or excusable neglect; (b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial under R. 4:49; (c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (d) the judgment or order is void; (e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or (f) any other reason justifying relief from the operation of the judgment or order.
When reviewing an application to vacate a default judgment, courts must exercise "great liberality" and "should tolerate every reasonable ground for indulgence with a view to opening default judgments in order that a just result is reached." Nowosleska v. Steele, 400 N.J. Super. 297, 303 (App. Div. 2008) (citation and internal quotation marks omitted). "Generally, a defendant seeking to reopen a default judgment because of excusable neglect must show that the failure to answer was excusable under the circumstances and that a meritorious defense is available." Hous. Auth. of Morristown v. Little, 135 N.J. 274, 284 (1994). Relief under subsection (f) is usually applied "sparingly, in exceptional situations" to prevent grave injustice, though it is applied "more liberally" when the application is to vacate a default judgment, such that "any doubt should be resolved in favor of the application to set aside the judgment to the end of securing a trial upon the merits." Nowosleska, supra, 400 N.J. Super. at 304 (citations and internal quotation marks omitted).
On appeal, defendant claims that she "supplied sufficient evidence and testimony pointing to an unjust default JOD, where major marital assets and debts were omitted." Plaintiff further maintains that her motion to vacate the JOD "revealed [plaintiff's] lies claiming that there were no hearings regarding the couple's divorce or support except the July 2010 frivolous New Jersey restraining order proceeding."
The trial judge noted that defendant provided no competent evidence of these claims. However, defendant submitted documentation indicating on the face of the submissions that the parties' relationship has been the subject of a New York divorce or support proceeding. Plaintiff certified in his complaint that "[t]here have been no previous proceedings between the plaintiff and defendant respecting the marriage or its dissolution or respecting the support or maintenance of either party in any [c]court" other than his TRO and domestic violence complaint. We recognize that the submissions were unsigned, yet they raised issues as to the nature of plaintiff's certification. Similarly, there is a substantial issue of jurisdiction that will benefit from a plenary proceeding rather than being determined on motion, as here. This is especially true given that such determination will impact on the divorce itself rather than the ancillary financial issues.
We are also especially concerned that there appear to be significant issues raised as to the nature of and title to assets that were not fully explored by either sworn testimony or accompanying documentation.
Ultimately, the appropriate course of action is that this matter proceed in the ordinary course through a plenary proceeding so that the issues can be fully aired in an appropriate manner and a just result can be achieved. See Curry v. Curry, 108 N.J. Super. 527, 530 (App. Div. 1970) (noting that "a judgment by default is not favored in divorce suits") (citation omitted). See also Morales v. Santiago, 217 N.J. Super. 496, 504 (App. Div. 1987) (concluding that "the cumulative effect of our misgivings" can support vacation of a default judgment under Rule 4:50-1(f), and that "the boundaries of that subsection of the rule are as expansive as the need to achieve equity and justice'") (citation omitted).
We reverse the judgment of divorce as to all issues except the granting of the divorce. As to that issue, we affirm the dissolution of the marriage without prejudice to defendant's right to proceed on her claim that the Superior Court had no jurisdiction over defendant to enter such an order. As to the remaining issues, we remand for a trial. We do not retain jurisdiction.