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Sovereign Bank v. Yang

Superior Court of New Jersey, Appellate Division

November 6, 2013

SOVEREIGN BANK, Plaintiff-Respondent,
FENG YANG, Defendant-Appellant.


Submitted October 29, 2013

On appeal from Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-000820-06.

David J. Khawam, attorney for appellant.

Respondent has not filed a brief.

Before Judges Reisner and Carroll.


Defendant Feng Yang appeals from a September 5, 2012 Law Division order denying his motion to vacate a May 2010 default judgment or, alternatively, for a proof hearing, and an October 12, 2012 order denying reconsideration. We affirm.

On March 27, 2006, plaintiff Sovereign Bank commenced this collection action seeking to recover $24, 513.22 due from defendant on a business loan. Following service of the complaint, defendant entered into a payment arrangement with plaintiff. The suit was then administratively dismissed for lack of prosecution, in light of defendant's agreement to pay the debt.

Defendant ceased making payments in January 2010, and plaintiff moved to reinstate its complaint. The complaint was reinstated, and default judgment then entered against defendant in the sum of $12, 194.76 on May 28, 2010. On August 6, 2010, plaintiff moved to enforce litigant's rights for defendant's failure to respond to an information subpoena. In June 2012, plaintiff levied against defendant's bank account, and on July 16, 2012, the court signed a turnover order. Defendant did not oppose these applications, and did not move to vacate the default judgment until July 10, 2012, some two years after its entry. In August 2012, the judge conducted oral argument and, in a September 5, 2012 order, denied defendant's motion to vacate the default judgment, finding that it was untimely, and that defendant failed to establish excusable neglect. Also, because this was a book account action where defendant owed plaintiff a sum certain, the court found no reason to schedule a proof hearing. On October 12, 2012, the judge denied reconsideration.

On appeal, defendant argues that he never received service of the complaint because it was served on his elderly mother-in-law, who only speaks Mandarin and suffers from dementia. Defendant further contends that he has a meritorious defense in that the debt which plaintiff seeks to collect has now been fully satisfied.

We focus primarily on defendant's contention regarding his appeal from the order denying the vacation of the default judgment. Defendant moved to vacate the default judgment under Rule 4:50-1, which provides:

On motion, 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; (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 a trial court considers a timely-filed and appropriately-supported motion to vacate a default judgment, the motion must 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.), aff'd, 43 N.J. 508 (1964). However, a motion to vacate a judgment under Rule 4:50-1(a) "should be granted sparingly, and is addressed to the sound discretion of the trial court, whose determination will be left undisturbed unless it results from a clear abuse of discretion." Fineberg v. Fineberg, 309 N.J.Super. 205, 215 (App. Div. 1998) (citing Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283-84 (1994)). An abuse of discretion occurs "when a decision is made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis." Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123 (2007) (internal quotation marks and citation omitted).

When a trial court decides a motion under Rule 4:50-1, and thereby "reconcile[s] the strong interests in finality of judgments and judicial efficiency with the equitable notion that courts should have authority to avoid an unjust result in any given case, " U.S. Bank Nat. Ass'n v. Guillaume, 209 N.J. 449, 467 (2012) (internal quotation marks and citation omitted), the court's "determination . . . warrants substantial deference[.]" Ibid. We conclude that the defendant failed to demonstrate that he was entitled to relief under Rule 4:50-1. As such, the judge did not abuse his discretion.

Regarding Rule 4:50-1(a), defendant must show excusable neglect and a meritorious defense. See Guillaume, supra, 209 N.J. at 469. "Excusable neglect" may be found when the default was "'attributable to an honest mistake that is compatible with due diligence or reasonable prudence.'" Id. at 468 (quoting Mancini v. EDS, 132 N.J. 330, 335 (1993)). A motion under subsection (a) must be made within one year of the judgment. R. 4:50-2. Here, defendant filed an untimely motion to vacate the judgment, some two years after the judgment was entered, as the motion judge correctly noted.

Moreover, defendant has not shown excusable neglect. The judge found that defendant had been properly served with the complaint, was on notice of the litigation, entered into a payment arrangement with plaintiff, and that his actions were inconsistent with due diligence or reasonable excuse. We agree. Defendant provided no legally competent evidence that his mother-in-law had dementia and was not legally competent to accept service of process. Moreover, defendant's claim that he was unaware of this litigation until his bank account was levied upon in 2012 is expressly contradicted by the Stipulation of Settlement, included in his appendix, which was earlier sent to his then-attorney by plaintiff's counsel, and referenced the docket number of this action. As a result, defendant is not entitled to relief pursuant to Rule 4:50-1(a).

To the extent that defendant challenges the trial court's subsequent denial of his reconsideration motion, we similarly find such contention lacking in merit.

We review the trial court's denial of a motion for reconsideration under an abuse of discretion standard. Marinelli v. Mitts & Merrill, 303 N.J.Super. 61, 77 (App. Div. 1997). Reconsideration is "'a matter within the sound discretion of the Court, to be exercised in the interest of justice[.]'" Palombi v. Palombi, 414 N.J.Super. 274, 288 (App. Div. 2010) (quoting D'Atria v. D'Atria, 242 N.J.Super. 392, 401 (Ch. Div. 1990)). Reconsideration is appropriate if "'1) the [c]ourt has expressed its decision based upon a palpably incorrect or irrational basis, or 2) it is obvious that the [c]ourt either did not consider, or failed to appreciate the significance of probative, competent evidence.'" Cummings v. Bahr, 295 N.J.Super. 374, 384 (App. Div. 1996) (quoting D'Atria, supra, 242 N.J.Super. at 401); see also Fusco v. Bd. of Educ. of City of Newark, 349 N.J.Super. 455, 461-62 (App. Div.), certif. denied, 174 N.J. 544 (2002). Reconsideration is not appropriate as a vehicle to bring to the court's attention evidence that was not presented, but was available, in connection with initial argument. Id. at 463.

In the present case, defense counsel submitted a letter brief in support of the reconsideration motion, and attached copies of various bank statements. Having reviewed these statements, it is unclear how they relate to the satisfaction of the underlying debt, or why they could not have been supplied with defendant's initial motion. In any event, the motion judge properly ruled that since they came from counsel, unaccompanied by a certification from defendant, they did not constitute competent evidence sufficient to vacate the judgment, or warrant a proof hearing. R. 1:6-6.

Notable also in regard to the reconsideration motion, defendant's counsel in his reply brief conceded that the documentation "shows $5, 000 is owed on this matter." Defendant argues on appeal that the entire debt owed to plaintiff has now been fully satisfied. Plaintiff has not filed a responding brief, and we are unable on this record to conclude that is the case. Therefore, in affirming the trial court's orders, we do so without prejudice to defendant's right to file a further motion with the trial court for issuance of a warrant of satisfaction based upon that claim.


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