Midland Funding LLC v. Carl Albern, Jr. , 433 N.J. Super. 494 ( 2013 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0562-12T4
MIDLAND FUNDING LLC,
APPROVED FOR PUBLICATION
Plaintiff-Respondent,
December 23, 2013
v.
APPELLATE DIVISION
CARL ALBERN, JR.,
Defendant-Appellant.
_________________________________________________________
Submitted December 3, 2013 – Decided December 23, 2013
Before Judges Fisher, Espinosa and Koblitz.
On appeal from the Superior Court of New
Jersey, Law Division, Monmouth County,
Docket No. L-2833-11.
Carl Albern Jr., appellant pro se.
Pressler and Pressler, L.L.P., attorneys for
respondent (Lawrence J. McDermott, Jr., on
the brief).
The opinion of the court was delivered by
FISHER, P.J.A.D.
This appeal presents a procedural question: is a
defendant, who, in responding to a complaint, moved for
dismissal but did not file an answer after the motion was
denied, entitled to notice of a plaintiff's request for default?
Because the applicable rules of procedure do not expressly
authorize an ex parte request for default in this unusual
circumstance, and because the rules are based on a policy
favoring the disposition of cases on their merits, we reverse
the denial of defendant's Rule 4:50 motion to vacate both the
default and the default judgment later entered.
I
On June 15, 2011, plaintiff Midland Funding LLC commenced
this action against defendant Carl Albern, Jr., on an alleged
outstanding credit card account. The summons contained the
customary admonition that defendant was required to answer or
otherwise move within the time allotted or default would be
entered against him. Defendant timely responded by filing a pro
se motion to dismiss, which was denied on October 6, 2011. The
judge's order did not specify a time within which defendant was
required to file an answer nor did it refer to defendant's need
to file an answer. Rule 4:6-1(b) allots ten days to file an
answer after denial of a motion to dismiss. Defendant did not
file an answer within that time period.
On December 1, 2011, plaintiff submitted to the Clerk an ex
parte application for entry of default, claiming "no defendant
named herein has answered or otherwise moved." This
representation was incorrect because, as mentioned, defendant
had "otherwise moved," albeit unsuccessfully. Plaintiff did
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correctly assert that defendant had not filed an answer and the
time to do so had expired. Default was entered against
defendant in early December 2011.1
Although not included in either party's appendix, we are
told plaintiff applied for the Clerk's entry of default judgment
on March 15, 2012. Whatever plaintiff submitted at the time was
apparently also served on defendant, who quickly submitted
written opposition to the Clerk on March 19, 2012, claiming: he
had not been served with an application to enter default; he had
"filed an answer in the form of a motion to dismiss"; and
plaintiff did not have standing to sue. The Clerk entered
default judgment against defendant in the amount of $19,366.77,
with costs taxed in the amount of $269.12, on March 21, 2012.
We assume the Clerk did not consider – perhaps she did not
receive – defendant's written response because defendant's
opposition was not mentioned in the judgment and because the
normal course, upon receipt of opposition, would have required
the Clerk to refer the matter to the court for disposition.
On May 14, 2012, shortly after plaintiff sought discovery
of defendant's assets, defendant moved for relief pursuant to
1
The copy of the pleading contained in the appendix is only
partially legible and does not reveal the date default was
entered. The judge's August 6, 2012 written opinion notes that
default was entered on December 6, 2011.
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Rule 4:50-1. The trial judge denied this motion for reasons set
forth in a written opinion, concluding that defendant had not
shown his failure to file an answer was excusable because he
should have understood his earlier unsuccessful motion would not
be viewed as an answer. The judge also determined that
defendant failed to present a meritorious defense, finding the
allegation of plaintiff's lack of standing insufficient in this
regard.2
II
In this pro se appeal, defendant argues: (1) an ex parte
application for entry of default in these circumstances was not
permitted; (2) he was wrongfully denied oral argument on the
return date of his Rule 4:50-1 motion; (3) the trial judge held
him "to a more stringent standard" than plaintiff; and (4)
plaintiff "has provided no credible evidence that [it] ha[d]
standing to file this action." Because we agree plaintiff was
not entitled to apply for default without notifying defendant
and because defendant presented a meritorious defense – even
though he was not obligated to do so under these circumstances –
2
That is, we discern from the record that the judge did not
reject the standing argument on its merits, but only held that
it did not constitute an adequate defense to plaintiff's claim.
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we reverse without considering defendant's second and third
points.
A
Although the trial judge couched defendant's motion as
resting on the excusable-neglect provision in Rule 4:50-1(a),
the essence of the motion was that plaintiff had proceeded
improperly in seeking default. Accordingly, the motion more
logically rested on the void-judgment provision in Rule 4:50-
1(d).3 We thus look to the procedure adopted by plaintiff in
seeking defendant's default.
Default was sought on the basis of Rule 4:43-1, which
allows a plaintiff to make an ex parte request of the Clerk for
default if the defendant "has failed to plead or otherwise
defend as provided by these rules or court order, or if the
answer has been stricken with prejudice." Defendant fit neither
of these two descriptions. He had "otherwise defend[ed]"
because he had moved for dismissal, and he was not "a party . .
. [whose] answer ha[d] been stricken with prejudice" because he
had not filed an answer. Defendant's peculiar status as a party
who had once defended but did not answer is not expressly
3
Regardless of those provisions upon which defendant expressly
based his motion, the court was required to apply those that
were actually implicated by the motion. Baumann v. Marinaro, 95
N.J. 380, 390 (1984).
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encompassed by Rule 4:43-1.4 Because that rule delineates all
the circumstances upon which an ex parte default may be
requested, it stands to reason that plaintiff was required to
request default by motion on notice to defendant.
Our procedural rules were designed to be "a means to the
end of obtaining just and expeditious determinations between the
parties on the ultimate merits," Ragusa v. Lau, 119 N.J. 276,
284 (1990) (quoting Tumarkin v. Friedman, 17 N.J. Super. 20, 27
(App. Div. 1951), certif. denied, 9 N.J. 287 (1952)), a policy
that requires rejection of plaintiff's invitation to interpret
Rule 4:43-1 broadly. The absence of express authority in Rule
4:43-1, in light of the "strong preference for adjudication on
the merits rather than final disposition for procedural
reasons," Galik v. Clara Maass Med. Ctr., 167 N.J. 341, 356
(2001) (quoting Mayfield v. Cmty. Med. Assocs., P.A., 335 N.J.
Super. 198, 207 (App. Div. 2000)), demands that the unauthorized
ex parte default – and the subsequent judgment based on that
default – be vacated and that defendant be given an opportunity
to file an answer and defend against plaintiff's claim.
4
Whether we have properly interpreted the breadth of Rule 4:43-1
is a matter which the Supreme Court's Civil Practice Committee
may wish to consider.
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B
We further observe that defendant took the position his
motion constituted an answer to the complaint. The trial judge
held that defendant's assumption was not reasonable or
excusable; defendant could not, in the judge's view, reasonably
believe his motion constituted an answer mainly because the
motion was denied. We conclude that the judge too strictly
interpreted defendant's actions and his reasonable expectations
in the aftermath of the denial of the motion to dismiss.
The motion to dismiss asserted plaintiff lacked standing to
sue, and the judge – in denying that motion – certainly never
ruled on the merits of the standing question. Instead, the
judge first wrote in the margin of the order that "the complaint
on its face sets forth a cause of action and [d]efendant's
motion must thus be denied." The second and last sentence of
this handwritten decision requires closer analysis. That
sentence referred to the rejected text of defendant's proposed
order, which sought from plaintiff, among other things, "the
actual contract of assignment," the contract upon which the
claim was based, and "the original creditor[']s last billing
statement." In the second and last sentence of the judge's
written disposition of the motion to dismiss, she concluded:
"Defendant may receive the documents upon which [p]laintiff
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relies in this matter in discovery, upon request by
[d]efendant."
Although an attorney would understand, upon denial of the
dismissal motion, that defendant was still required to file an
answer and any affirmative defenses, it was not unreasonable for
this pro se defendant to assume nothing further was required of
him in light of the judge's ruling on standing, and it was not
unreasonable for defendant to assume from the order that the
parties would thereafter engage in discovery.5 See Rubin v.
Rubin, 188 N.J. Super. 155, 159 (App. Div. 1982) (recognizing
that, although pro se litigants are not entitled to greater
rights than represented litigants, due process principles permit
the imposition of a procedural bar only after consideration of
the pro se litigant's "reasonabl[e] expect[ations]" about what
had occurred). This circumstance formed a sound basis for
relief pursuant to the excusable-neglect provision in Rule 4:50-
1(a). In short, the judge was required but failed to liberally
indulge defendant's assertions "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); see also Mancini v. EDS
5
The order denying the motion to dismiss neither directed the
filing of an answer nor set forth a deadline for that filing.
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ex rel. N.J. Auto. Full Ins. Underwriting Ass'n, 132 N.J. 330,
334 (1993).
C
The trial judge also denied defendant's Rule 4:50-1 motion
because she determined defendant had not presented a meritorious
defense. In seeking relief from a void judgment, however, a
movant is not required to demonstrate a meritorious defense.
See Peralta v. Heights Med. Ctr., Inc., 485 U.S. 80, 86, 108 S.
Ct. 896, 899-900, 99 L. Ed. 2d 75, 81-82 (1988); City of Passaic
v. Shennett, 390 N.J. Super. 475, 486 (App. Div. 2007). But,
even if we were to conclude otherwise, defendant's claim of
plaintiff's lack of standing constituted a legitimate defense to
the claim asserted in plaintiff's complaint.
III
For these reasons, we reverse the order denying defendant's
motion to vacate the default and the default judgment, and we
remand for entry of an order providing defendant with a fair and
adequate time to file an answer to the complaint.
Reversed and remanded. We do not retain jurisdiction.
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