Velocity Investments LLC Assignee of Webbank v. Mordechai Gross ( 2024 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3561-22
VELOCITY INVESTMENTS LLC
ASSIGNEE OF WEBBANK,
Plaintiff-Respondent,
v.
MORDECHAI GROSS,
Defendant-Appellant.
Submitted May 29, 2024 – Decided July 19, 2024
Before Judges Sumners and Rose.
On appeal from the Superior Court of New Jersey, Law
Division, Ocean County, Docket No. L-2591-22.
Michael M. Steinmetz, attorney for appellant.
Ragan & Ragan, PC, attorneys for respondent (Walter
Peter Ragan, Jr., on the brief).
PER CURIAM
In this debt collection case, defendant Mordechai Gross appeals from a
June 9, 2023 Law Division order denying his motion to vacate a May 13, 2023
final judgment entered in favor of plaintiff Velocity Investments LLC Assignee
of Webbank. Because defendant defaulted on the underlying loan within the
meaning of the parties' stipulation of settlement, we affirm.
The facts and procedural history are not complicated. In May 2018,
defendant obtained a $50,000 loan from Cross River Bank, which later conveyed
the loan to Upstart Network, Inc. After making ten payments, in April 2019,
defendant defaulted on the loan. Upstart Network then charged off the loan and
sold the outstanding $49,597.36 debt obligation to plaintiff.
In its ensuing complaint, plaintiff demanded judgment in full and costs of
suit. After defendant failed to answer the complaint, the court entered default.
See R. 4:43-1. Defendant – a self-represented attorney – then contacted
plaintiff's counsel and negotiated a $20,000 settlement, payable over five $2,500
installments by certain dates between April 30 and June 30, 2023, and a final
$7,500 payment by July 15, 2023.
Pertinent to this appeal, the March 13, 2023 stipulation of settlement
provided, in relevant part:
4. The time of payment is the date of receipt
thereof by . . . [p]laintiff's counsel, not the date of
mailing and/or transmittal by . . . [d]efendant. The
burden of proof of such timely payment and receipt
thereof by [p]laintiff's counsel shall rest upon . . .
[d]efendant. . . .
A-3561-22
2
5. In the event that any of . . . [d]efendant['s]
checks are returned by the bank[,] . . . [d]efendant shall
be considered to be in default. Should . . . [d]efendant
default in tendering any one payment, for a period of 5
days, judgment will be entered in favor of . . . [p]laintiff
and against . . . [d]efendant upon [c]ertification of
[c]ounsel, without motion or notification to . . .
[d]efendant for the full amount sought in the
[c]omplaint, (which may be more than the settled
amount) plus interest and costs of suit, less any
payments made to the date of default.
6. . . . Defendant hereby acknowledges that there
is no grace period other than what is set forth above in
paragraph five and if payment is not timely received or
if payment is returned for insufficient funds . . .
[p]laintiff will proceed with the entry of judgment
without further notice and any payments received after
the payment date said payment will be applied to the
full balance due. . . . Defendant further acknowledges
and understands that he has had the opportunity to
review this [s]tipulation with an attorney of his
choosing and that this is a binding agreement and that
there will be no exceptions or extensions and time is of
the essence. . . .
[(Emphasis added).]
Defendant failed to make the first payment. Consistent with paragraph
five of the agreement, plaintiff moved ex parte for entry of judgment. On May
13, 2023, the court issued judgment for plaintiff in the amount of $49,597.36,
plus costs.
A-3561-22
3
The following month, the court denied defendant's motion to vacate the
judgment. In a terse statement of reasons annexed to the June 9, 2023 order, the
court summarily concluded: "Good cause for the relief requested not
established. The [s]tipulation of [s]ettlement sign [sic] by the moving party and
filed with the [c]ourt on March 13, 2023 is clear and unambitious [sic]." This
appeal followed.
"The decision granting or denying an application to open a judgment will
be left undisturbed unless it represents a clear abuse of discretion." Hous. Auth.
of Morristown v. Little, 135 N.J. 274, 283 (1994); see also U.S. Bank Nat'l Ass'n
v. Guillaume, 209 N.J. 449, 467 (2012) (stating a trial court's determination
under Rule 4:50-1 "warrants substantial deference and should not be reversed
unless it results in a clear abuse of discretion"). An abuse of discretion "arises
when a decision is 'made without a rational explanation, inexplicably departed
from established policies, or rested on an impermissible basis.'" Flagg v. Essex
Cnty. Prosecutor, 171 N.J. 561, 571 (2002) (quoting Achacoso-Sanchez v. INS.,
779 F.2d 1260, 1265 (7th Cir. 1985)).
Rule 4:50-1 is "designed to reconcile 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." Mancini v. EDS,
A-3561-22
4
132 N.J. 330, 334 (1993). The rule establishes six alternative grounds for relief
from a final judgment, whether obtained by default or after trial.1 Although
courts generally "use Rule 4:50-1 sparingly, in exceptional situations," Hous.
Auth. of Morristown, 235 N.J. at 289, "motions for relief from default judgments
. . . are liberally viewed," Pressler & Verniero, Current N.J. Court Rules, cmt. 1
on R. 4:50-1 (2024). Equitable principles should guide the court's analysis
1
Rule 4:50-1 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[ule] 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.
A-3561-22
5
regardless of the subsection. MTAG v. Tao Invs., LLC, 476 N.J uper. 324, 333
(App. Div. 2023) (quoting F.B. v. A.L.G., 176 N.J. 201, 207 (2003)).
Defendant argues the court abused its discretion by failing to vacate the
"default judgment" under Rule 4:50-1. In particular, he claims plaintiff's failure
to notice him of its post-settlement motion to obtain judgment constituted
excusable neglect under subsection (a), and the equities merit relief under
subsection (f). Alternatively, defendant asserts the lack of notice was "an
exceptional circumstance that mitigate[d] in favor of vacating the default
judgment."
As a threshold matter, the May 13, 2023 judgment was not a "default
judgment" within the meaning of Rule 4:43-2 (providing final judgment by
default for failure to answer a complaint under Rule 4:43-1). Instead, judgment
was entered pursuant to the terms of the parties' stipulation of settlement which,
under paragraphs five and six, expressly permitted the entry of judgment for
untimely payments, without notice to defendant. See, e.g., Nolan v. Lee Ho,
120 N.J. 465, 472 (1990) (recognizing a settlement agreement is a contract); see
also Pacifico v. Pacifico, 190 N.J. 258, 266 (2007) (holding "[a]s a general rule,
courts should enforce contracts as the parties intended").
A-3561-22
6
In any event, under subsection (a) of Rule 4:50-1, our Supreme Court has
underscored, "[i]t would create a rather anomalous situation if a judgment were
to be vacated on the ground of mistake, accident, surprise or excusable neglect,
only to discover later that the defendant had no meritorious defense ." That is
because "[t]he time of the courts, counsel and litigants should not be taken up
by such a futile proceeding." U.S. Bank Nat'l Ass'n, 209 N.J. at 469 (quoting
Schulwitz v. Shuster, 27 N.J. Super. 554, 561 (App. Div. 1953)). In the present
matter, defendant has not proffered any grounds supporting a meritorious
defense under subsection (a). Nor has defendant demonstrated the equities favor
vacating the judgment under subsection (f).
In reply to plaintiff's argument that the stipulation of settlement is clear
and unambiguous, defendant argues a closer inspection of the agreement reveals
it is limited and unclear, "as it does not outright state that other forms of delayed
payment, separate from banking issues, would lead to default." Defendant
contends had the parties intended to establish an absolute default provision, it
would have been explicitly stated in the agreement. Defendant strains to create
an ambiguity where none exists.
A court's task is not to "torture the language of [a contract] to create
ambiguity." Schor v. FMS Fin. Corp., 357 N.J. Super. 185, 191 (App. Div.
A-3561-22
7
2002) (quoting Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div.
1997)). Rather, courts look to the plain terms of the contract and declare the
meaning of what is already written, not what, in hindsight, may have been
written. See Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001) (explaining
a court's task is not to rewrite a contract for the parties better than or different
from the one they wrote for themselves).
Here, the language of the agreement is clear, permitting plaintiff to obtain
"the entry of judgment without further notice" for either of two reasons: "if
payment is not timely received or if payment is returned for insufficient funds."
See Hardy ex rel. Dowdell v. Abdul-Matin, 198 N.J. 95, 103 (2009) (recognizing
"a basic principle of contract interpretation is to read the document as a whole
in a fair and common sense manner"). Common sense dictates that the
stipulation of settlement's plain language left no room for confusion as it clearly
specified the due dates for each payment and the consequences of default.
Moreover, although defendant was self-represented, he was a licensed attorney
who initiated negotiations with plaintiff's counsel and, as stated in the
agreement, was provided an opportunity to consult with counsel before assenting
to its terms.
A-3561-22
8
Nor are we persuaded by defendant's belated argument that the
agreement's grace period evinced the parties' "mutual understanding of [its]
flexible payment terms." Referencing plaintiff's "consistent acceptance of late
payments without objection," defendant claims plaintiff waived "strict
adherence [of] the original payment schedule." Defendant's argument is belied
by the terms of the agreement, which expressly stated the consequences of
untimely payment. We therefore discern no reason to disturb the June 9, 2023
order.
We would be remiss, however, if we overlooked the court's failure to
comply with Rule 1:7-4(a). Although the issue was not raised by the parties, the
court's two-sentence decision falls short of the requirements set forth in the rule.
Rule 1:7-4(a) requires "the court . . . find the facts and state its conclusions of
law . . . on every motion decided by a written order that is appealable as of
right." See Curtis v. Finneran, 83 N.J. 563, 570 (1980) (recognizing "the trial
court must state clearly its factual findings and correlate them with the relevant
legal conclusions" as required by Rule 1:7-4).
Although we do not endorse the court's failure to fully comply with Rule
1:7-4 in this case, its terse findings have not impeded our review. Moreover, we
are mindful a remand for the court to comply with the rule would cause further
A-3561-22
9
delay in concluding the matter and cost the parties additional counsel fees. We
nonetheless take this opportunity to remind trial courts of their obligation under
the rule.
Affirmed.
A-3561-22
10