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New Century Financial Services, Inc v. Ronald J. Davis


July 20, 2012


On appeal from Superior Court of New Jersey, Special Civil Part, Sussex County, Docket No. DC-002989-00.

Per curiam.


Argued March 13, 2012

Before Judges Payne and Simonelli.

Defendant, Ronald J. Davis, Jr., appeals from an order of March 11, 2011, denying his second motion to vacate a default judgment entered against him in the amount of $9,961.06 plus costs and attorney's fees of $263.23 on February 7, 2001 in the Special Civil Part. On appeal, defendant argues that the default judgment should be vacated pursuant to Rule 4:50-1(f) because plaintiff, New Century Financial Services, Inc. (New Century) failed to comply with the requirements of Rule 6:6-3(a) in obtaining its default judgment. We affirm.


The procedural history of this matter is lengthy. On December 16, 2000, plaintiff filed suit in the Special Civil Part against defendant, seeking recovery of unpaid charges and fees allegedly incurred by defendant on a Citibank MasterCard account that had been assigned to it. An envelope containing the complaint, bearing a post mark of December 21, 2000, was sent to defendant's residence address by certified and regular mail. The certified mail envelope bore the zip code 00784, which was incorrect. Nonetheless, the envelope bears markings that indicate that it was received in the correct post office and dates that suggest that notices of the certified mail were provided to defendant on three occasions - on December 22, 2000 and on January 11 and 15, 2001. The certified mail was returned to the Special Civil Part as unclaimed. However, the regular mail was not returned, raising a presumption of proper service.

R. 6:2-3(d)(1) and (4). Evidence has established that defendant has lived at the address utilized by plaintiff since 1991.

Default was automatically entered when defendant failed to file an answer and, on September 7, 2001, a default judgment was entered pursuant to Rule 6:6-3(a) by the clerk. Because the judgment was sought within six months of service of the complaint, no prior notice was provided to defendant. See R. 6:6-3(d). However, thereafter, defendant was served with an information subpoena on September 24, 2001, and on October 11, 2001, defendant was served with a motion to enforce litigant's rights. On November 15, 2001, an order to enforce litigant's rights was entered that was served on defendant on November 23, 2001. A further order to enforce litigant's rights was executed on March 1, 2002. Additionally, on August 5, 2003, a letter was sent to defendant reminding him of the judgment.

A further motion to enforce litigant's rights was served on June 11, 2004, resulting in an additional order dated July 16, 2004. Yet another motion was filed on May 29, 2007, which was granted either on June 15, 2007 or September 25, 2007. The court's records demonstrate that, in that connection, in 2007 a court officer contacted defendant and obtained responses from him to plaintiff's information subpoena, including defendant's social security number. In addition, a number of warrants for defendant's arrest were issued, but they do not appear to have been executed.

In November 2009, plaintiff levied on defendant's bank account with Wachovia Bank, and on November 21, 2009, defendant was notified that the levy had taken place. On January 20, 2010, a motion for turn-over of funds in the amount of $206.71 was granted as unopposed.

However, on January 18, 2010, two days before the turn-over order was entered, defendant moved, through counsel with whom he had frequent contact as an insurance company investigator, to vacate the default judgment entered against him nine years earlier, arguing that there was no proof that New Century was a proper plaintiff; he was never served with plaintiff's complaint; he was not the proper defendant; and, despite responding to a 2007 information subpoena, he did not have any notice of plaintiff's suit until November 16, 2009 when he received notice of the bank levy from Wachovia.

The motion was argued on February 11, 2010. After reciting evidence of notice to defendant contained in the court file as set forth previously, the motion judge stated that he found that it was "difficult for this court to believe, or conclude, or accept a proposition that Mr. Davis was without notice until recent date." Additionally, the judge found regularly mailed service to have been properly effected; that New Century was the proper plaintiff; and, by comparison of defendant's social security number with one furnished by defendant in 2007, that suit was properly filed against defendant, Ronald Davis, Jr., not his father, Ronald Davis, Sr. However, responding to defendant's argument that the account was not his, in an order issued on the day of the hearing, the judge ordered plaintiff to provide "all available account information" within its possession within ten days. Additionally, he ordered plaintiff's counsel to "diligently attempt" to locate and provide account information from Citibank within sixty days.

In accordance with court order, on February 19, 2010, plaintiff's counsel provided information "that the account at issue was a Citibank MasterCard account which was opened on May 1, 1989 and charged off on November 10, 1997. The last payment on this account was made on January 20, 1998 in the amount of $150.00." Thereafter, counsel informed defendant that actual proofs had been destroyed by Citibank. Defendant did not appeal from the court's order.

On July 1, 2010, plaintiff served a new information subpoena on defendant, with no response. As a result, on August 17, 2010, plaintiff filed an additional motion in aid of litigant's rights, returnable on October 7, 2010, but later withdrew the motion upon receipt of defendant's responses to the subpoena.

Plaintiff then sought and was granted a wage execution order. That prompted a further motion to set aside the wage garnishment for alleged lack of notice and to vacate the prior default judgment for failure to comply with the judge's order of February 11, 2010. The motion was heard by the same motion judge on March 11, 2011. At the hearing, defense counsel argued that the wage garnishment had been improperly obtained ex parte, and he argued at greater length that proof of the underlying debt had not been produced. When plaintiff was unable to immediately demonstrate proof of notice to defendant of the wage garnishment application, the judge vacated the order permitting garnishment to occur, without prejudice to a renewal of the application upon proper notice.*fn2 Addressing the proofs underlying plaintiff's complaint, the judge again recited the procedural history of the case, and then stated:

So the problem here as I see [it] is that there were numerous communications spanning from 2001 through 2009 until [defense counsel] got involved in early 2010 on behalf of Mr. Davis where Mr. Davis according to the notices that are contained in the court file, using a reasonable person standard, a reasonable person would know or should have known that this action was pending, and should have taken arguably action earlier than February of 2010 or now to make an application to vacate the default and default judgment and to file an answer.

As a result of the passage of time this lawsuit was originally filed in, I believe, I indicated it was filed in December of 2000. That is over ten years ago. It is not unusual for a plaintiff, even a creditor, to dispose of information, electronically stored or otherwise.

The judge then recognized the practice by credit card issuing companies of closing out delinquent accounts, writing off uncollectible debts, and selling the accounts, in bulk, to entities such as New Century, which in turn use legal process in an effort to collect the debt. The judge stated:

I understand [counsel] on behalf of Mr. Davis is indicating that A) his client doesn't know who New Century Financial Services is. There is no proof that New Century Financial Services purchased or owns this account, and other arguments of that type.

Those are arguments that I think would have perhaps had merit to some degree if an answer had been filed on a timely basis. Once the case goes into default and then, subsequently, into default judgment status, . . . these issues are viewed . . . through a different set of procedural glasses.

After again alluding to the procedural history of the case, the judge stated:

So it's hard for me to conclude that Mr. Davis has been diligent in protecting or seeking to protect or advance his rights or interest in the matter until some time in early 2010, and only after there was a bank levy order that was entered.

Following further argument, the judge observed that plaintiff's proofs, although "thin," were arguably sufficient to support the judgment. Although defendant would have been entitled to more evidence regarding the account and the assignment in discovery, if he had filed a timely answer, he did not. The judge concluded: "There is no rule that says that a plaintiff or creditor even a plaintiff or creditor that one might not like has to keep or retain these records for ten years. So I think the problem here is that this is too late in the ball game." The judge thus declined to vacate the default judgment against defendant. An order, dated March 11, 2011, embodied the judge's rulings. This appeal from the March 11 order followed.


On appeal, defendant again challenges the proof presented by New Century in support of its default judgment as inadequate, arguing that the certification submitted in support of the entry of judgment was not based upon personal knowledge, by the New Century employee signing the certification, of the books and records of Citibank, and that true and accurate copies of Citibank's account records were not affixed to the certification. Acknowledging that he cannot demonstrate excusable neglect justifying entry of an order vacating the default judgment pursuant to Rule 4:50-1(a), defendant seeks relief pursuant to the catch-all provision of Rule 4:50-1(f), arguing that the judge abused his discretion in declining to vacate the default judgment.

We reject defendant's arguments and affirm, substantially on the basis of the opinion of the motion judge. We add only the following. Rule 6:6-3(a) sets forth the proofs that are necessary to support a default judgment. Notably, the Rule does not require that an assignee produce proof of the assignment. However, it is required to offer an affidavit setting forth "a particular statement of the items of the claim, the amounts and dates, the calculated amount of interest, the payments or credits, if any, the net amount due, and the name of the original creditor if the claim was acquired by assignment[.]" The rule further states in relevant part:

If plaintiff's records are maintained electronically and the claim is founded on an open-end credit plan, as defined in 15 U.S.C. §1602(i) and 12 C.F.R. §226.2(a)(20), a copy of the periodic statement for the last billing cycle, as prescribed by 15 U.S.C. §1637(b) and 12 C.F.R. §226.7, or a computer-generated report setting forth the previous balance, identification of the transactions and credits, if any, periodic rates, balance on which the finance charge is computed, the amount of the finance charge, the annual percentage rate, other charges, if any, the closing date of the billing cycle, and the new balance, if attached to the affidavit, shall be sufficient to support the entry of judgment.

See also LVNV Funding, L.L.C. v. Colvell, 421 N.J. Super. 1, 6-7 (App. Div. 2011) (applying these requirements in the context of summary judgment).

If defendant had timely contested plaintiff's claim, he would have been entitled to these proofs. However, we agree with the motion judge that, as the result of defendant's failure to act for a period of ten years, after service was properly effected and during which time notice to defendant of plaintiff's judgment clearly existed, the relief otherwise available to him is now barred. We know of no precedent that would suggest a duty on the part of either plaintiff or Citibank to retain records in support of an existing judgment for such a lengthy period of time. Further, in light of the record in this matter, we do not regard as credible defendant's position that the debt is not his.


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