SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO . A

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- 18T2 BASCOM CORPORATION, Plai ntiff

- Respondent,

v. FLYING COLORS, LLC, Defendant

- Appellant, and
SUN NATIONAL BANK , and STATE OF NEW JERSEY, Defendant s .

___________ __ ________________

Argued telephonically July 2 8 , 2020

– Decided August 6, 20 20 Before Judges Sumners and Mayer. On appeal from the Superior Court of New Jersey, Chancery Division, Passaic County, Docket No. F

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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court

. " A lthough 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

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- 18T2 Peter R. Bray argued the cause for appellant s ( Bray & Bray , LLC , attorneys; Geoffrey T odd Bray , on the brief s ). Michael G. Pell e grino argued the cause for respondent ( Pellegrino & Feldst e in, LLC , attorneys; Michael G. Pellegrino , on the brief).
PER CURIAM Defendant Flying Colors, LLC appeals from an August 12, 2019 order denying its motion to vacate default judgment. We affirm.
In 2 008, d efendant acquired property in Paterson for $1,600,000.
D efendant's general partner , Andrey Tovstashy , executed t he contract to purchase the property. Defendant's other general partner, Michael Stengart, executed a personal guaranty to finance the property's purchase. Stengart used the property to operate a childcare facility. In 2016, defendant failed to pay property taxes and the municipality issued a tax sale certificat e . Plaintiff Bascom Corporation purchased th at certificate in March 2017. In December 2017, plaintiff file d a tax sale certificate foreclosure complaint (complaint). On February 3, 2018, according to the filed affidavit of service, Tovstashy, as defendant's partner , was personally served with the complaint at his residence. Defendant does not dispute service of the complaint on3 A

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Tovstashy. According to Stengart, Tovstashy never told him about service of plaintiff's complaint.
A corporate search revealed Stengart as defendant's other general partner and liste d a residential address in Woodcliff Lake. Efforts to personally serve Stengart were unsuccessfu l

. No other individuals were identified in plaintiff's corporate search of person s authorized to accept service of process on behalf of defendant. A May 30, 2018 order set the time, place, and amount for defendant's redemption of the tax lien. The redemption notice was sent to Tovstashy's residence as well as by regular and certified mail to the property address where Stengart operated his business

. Because defendant failed to answer the complaint, on September 24, 2018, default judgment was entered

. Due to personal and financial difficulties, on an unknown date, T ovstash y transferred his interest in the property to Stengart

. 1 Stengart experienced his own financial difficulties and decided to sell the property in 2018

. B ecause he

1 On July 1, 2018, nearly f ive months after the complaint was served, Tovstashy signed a document stating he relinquished any interest in defendant "several years" earlier. However, Tovstashy never submitted a certification attesting to his resignation as defendant's general partner or person authorized to accept service of process on behalf of defendant as of the date the complaint was served.4 A

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wanted to avoid filing for personal bankruptcy, Stengart sought to cancel the personal guaranty securing defendant's purchase of the property

. Stengart claim ed he was unaware of plaintiff's lawsuit, defendant's de f ault , and subsequent entry of default judgment when he sought to sell the property. In October 2018, Stengart attempted to negotiate a pay

- off of the lien amount but plaintiff declined to negotiate. Defendant then moved to vacate default judgment in February 2019. On August 12, 2019, the motion judge denied defendant's motion to vacate default judgment

. He explained the return of service of process confirmed Tovstashy was personally served with th e complaint as defendant's general partner and St engart's lack of knowledge regarding the complaint was therefore legally irrelevant. T he judge also noted all documents preceding the entry of the judgment were sent by regular and certified mail to the property where Stengart operated a day care facility as well as Tovstashy's residence

. After finding service of process on defendant was valid, the judge held defendant failed to demonstrate excusable neglect and a mer itorious defense in support of vacating the judgment. In addition, t he judge explained forfeiture of the property was a consequence of plaintiff's tax sale certificate foreclosure and the re was5 A

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insufficient equity in the property to enable defendant to repay the lien and other carrying expenses incurred by plaintiff. The judge rejected defendant's
unsubstantiated argument that it would be inequitable to allow the judgment because Stengart arranged for the short sale of the property, the sale remained vi able, the lien amount would be paid from the sale, and the sale would avoid Stengart's filing for personal bankruptcy.
O n appeal, defendant raises the same arguments presented to the motion judge. Defendant argues plaintiff will be unjustly enriched i n acquiring property worth $1 ,0 00,000 as a result of the tax sale certificate foreclosure judgment. It also c ontends default judgment should have been vacated pursuant to Rule 4:50

- 1(d) because service "was not affected upon Flying Colors

. " D efendant fur ther
asserts a b alancing of the equities justified vacating the judgment to allow the sale of the property and redemption of the tax sale certificate. We disagree

. When a trial court considers a 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." Mancini v.
EDS , 132 N.J. 330, 334 (1993) (quoting Marder v. Realty Constr. Co. , 84 N.J. Super. 313, 319 (App. Div. 1964)). A trial court's decision under Rule 4:50

- 1 is entitled to "substantial deference, and should not be reversed unless it results6 A

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in a clear abuse of discretion." U.S. Bank Nat'l Ass'n v. Curcio , 444 N.J. Super. 94, 105 (App. Div. 2016) (quoting U.S. Bank Nat'l Ass'n v. Guillaume , 209 N.J. 449, 467 (2012)). Rule 4:50

- 1 is "designed to reconcile the strong interests in finality of judgments and judicial efficiency with t he equitable notion that courts should have authority to avoid an unjust result in any given case." Guillaume , 209 N.J. at 467 (quoting Mancini , 132 N.J. at 334). "In the tax sale certificate foreclosure context considerations of public policy and equity are also taken into
account." M&D Assocs. v. Mandara , 366 N.J. Super. 341, 350 (App. Div. 2004). The statement in d efendant's certification in support of the motion to vacate the final judgment, contending it was not given notice of the foreclosure
proc eeding and the right to redeem the tax sale certificat e , is not supported by the record. Notably absent from t he record is any admissible evidence disputing personal service of the complaint upon defendant's general partner , Tovstashy , and mail service of other pleadings on Tovstashy and the ongoing business located a t the property address where Stengart was operating a childcare facility

. Nor is there any certification from Tovstashy admitting a failure to notify Stengart about plaintiff's lawsuit . Simi larly, there is no evidence that defendant revised its company filing information to reflect Tovstashy's withdrawal as a partner prior to service of the complaint.7 A

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Here, o ne of defendant's two general partners was personally served with the complaint on February 3, 2018. The re is no competent evidence in the record
that T ovstashy had withdrawn from the co mpany as of the date the complaint

was personally served

. Based on t he evidence in the record, t he judge found there was effective personal service of the complaint on Tovstashy as
defendant's listed partner in accordance with Rule 4:4

- 4(a)(5). Because service of the complaint was proper , the default judgment was not voi d . As a result, defendant was required to demonstrate excusable neglect and a meritorious defense to vacate the default judgment and failed to do so

. See R. 4:50

- 1(a). Under these circumstances, we discern no abuse of discretion in the motion judge's d enial of defendant's motion to vacate the final judgment. Affirmed.