Court Opinion

ID: 9964228
Source: CourtListenerOpinion
Date Created: 2024-04-29 14:10:40.443352+00
Date Added: 2024-06-11T08:25:14.537440
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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-3849-22

CELENA LEWIS,

          Plaintiff-Respondent,

v.

KIM C. SU,

     Defendant-Appellant.
_______________________

                   Submitted April 9, 2024 – Decided April 29, 2024

                   Before Judges Gooden Brown and Bergman.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Camden County, Docket No. DC-000202-23.

                   Law Office of Michael G. David, attorneys for
                   appellant (David Justin Sideman, of counsel and on the
                   brief).

                   Respondent has not filed a brief.

PER CURIAM
                                        I.

      Defendant Kim Su appeals from an order denying her motion to vacate a

default judgment entered after a proof hearing in the Special Civil Part in favor

of plaintiff Celena Lewis in the amount of $17,189. Based on our review of the

record and the applicable legal principles, we affirm in part, reverse in part, and

remand for a trial concerning damages consistent with this opinion.

      We derive the following facts from the record. Plaintiff filed a complaint

in the Law Division, Special Civil Part, on January 6, 2023. The complaint,

sounding in negligence, alleged that defendant rear-ended plaintiff's motor

vehicle and sought to recover the damages caused by the accident. The total

demand set forth in her complaint was $15,167.96.          The alleged damages

included the amount paid out by plaintiff's insurance company for the total loss

of her vehicle, rental fees, and costs of filing the complaint. The complaint was

served via mail on defendant, who failed to file an answer and was automatically

defaulted on February 21, 2023. Plaintiff requested default judgment on April

25, 2023. The court sent a notice by regular mail to defendant setting a proof

hearing for June 6, 2023.

      Defendant failed to appear at the proof hearing.        At the hearing, in

response to questions from the trial judge, plaintiff testified that the monthly

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payments for her totaled Honda Accord were originally $435 and later were

reduced to $300-$310 after she refinanced the approximate $15,000 remaining

on her loan. Plaintiff also testified about her rental car costs, deductible, and

the amount paid on the down payment for her new replacement automobile. On

June 6, 2023, judgment was entered in favor of plaintiff and against defendant

in the amount of $17,189.     The judgment amount was based primarily on

plaintiff's testimony which multiplied her estimated monthly car payment of

$300 by forty-eight months for a total of $14,400, added the amount of $207 for

her car rental costs, added a $1,000 deductible, filing fees of $82, and a $1,500

down payment made for her replacement vehicle, which was a 2020 Jeep

Compass.

      After retaining counsel, on June 13, 2023, defendant filed her first motion

to vacate the default judgment and to permit her time to file an answer relying

upon Rule 4:50-1(a) and (f). The motion was unopposed. The motion was

denied on July 3, 2023, without oral argument.

      On July 18, 2023, defendant filed a second motion to vacate the default

judgment but with more detail. The trial judge treated this as a motion for

reconsideration. In support of the second motion, three separate certifications

were offered by defendant. The first was a certification by defendant that stated

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she was "confused" and "did not understand" she "needed to respond or send it

to [her] car insurance company." She stated she was hospitalized at the time the

proof hearing notice was delivered and continued to be hospitalized at the time

it was held.   She also stated that she did not "see [plaintiff's] rear lights

activated." The second certification was from defendant's health care assistant.

She stated defendant had received the complaint in January 2023 and she had

informed defendant she should "forward it to her car insurance company." The

third certification was from an insurance adjuster at GEICO, which insured

defendant. In pertinent part, the certification stated:

            Liberty Mutual provided proof of payment [to plaintiff]
            as follows:

                   a. To [plaintiff], $1000.00;

                   b. To American Honda Finance Corporation,
                      $14,259.46[ for the loan payoff] . . . ;

                   c. $135.00 to Cross Country Motor Club
                      presumably related to roadside assistance; and

                   d. $630.00 to Enterprise Holdings, Inc. for a
                      rental vehicle for . . . plaintiff's use.

      At oral argument, defendant's counsel reiterated the factual assertions set

forth in the three certifications in support of her motion to vacate the default

judgment. The trial judge denied the motion finding no excusable neglect or a

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meritorious defense was shown. In summary, the trial judge found defendant

was served with the complaint in January 2023, her assistant advised her to

submit it to her insurance company but she failed to do so, she neglected to take

any action or answer the complaint, she admitted she did not see the plaintiff's

rear lights, and the trial judge's calculation of damages was supported by the

evidence and was not arbitrary. This appeal followed.

                                       II.

      Defendant asserts on appeal:

            I.    THE TRIAL [JUDGE] ERRED IN DENYING
                  DEFENDANT'S SECOND MOTION TO
                  VACATE DEFAULT JUDGMENT BECAUSE
                  DEFENDANT            DEMONSTRATED
                  EXCUSABLE     NEGLECT     AND    A
                  MERITORIOUS DEFENSE TO THE CAUSE
                  OF ACTION PURSUANT TO [RULE] 4:50-
                  1(a).

            II.   THE TRIAL [JUDGE] ERRED IN DENYING
                  THE SECOND MOTION TO VACATE THE
                  DEFAULT JUDGMENT PURSUANT TO
                  [RULE] 4:50-1(f) BECAUSE [HE] AWARDED
                  DAMAGES TO WHICH PLAINTIFF WAS
                  NOT LEGALLY ENTITLED.

      At the outset, we point out defendant's notice of appeal only identified the

order denying her motion for reconsideration. If the notice of appeal "designates

only the order entered on a motion for reconsideration, it is only that proceeding

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and not the order that generated the reconsideration motion that is

reviewed.” Pressler & Verniero, Current N.J. Court Rules, cmt. 5.1 on R. 2:5-

1(f)(1) (2024). However, under the circumstances, we will address the merits

of the underlying motion. See W.H. Indus., Inc. v. Fundicao Balancins, Ltda,

397 N.J. Super. 455, 458-59 (App. Div. 2008).

      A motion to vacate a default judgment pursuant Rule 4:50-1(a) must be

brought "within a reasonable time" but not later than one year after judgment.

R. 4:50-2. Although not expressly included in the Rule, it is well-settled that a

defendant claiming excusable neglect must also demonstrate a meritorious

defense. Marder v. Realty Constr. Co., 84 N.J. Super. 313, 318 (App. Div.

1964), aff'd, 43 N.J. 508 (1964).

      The decision whether to grant a motion to vacate a default judgment is

"left to the sound discretion of the trial court and will not be disturbed absent an

abuse of discretion." Mancini v. EDS ex rel. N.J. Auto. Full Ins. Underwriting

Ass'n, 132 N.J. 330, 334 (1993). "The rule 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." Manning Eng'g, Inc. v. Hudson Cnty. Park Comm'n, 74 N.J. 113, 120

(1977).

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      "A court should view 'the opening of default judgments . . . with great

liberality,' and should tolerate 'every reasonable ground for indulgence . . . to

the end that a just result is reached.'" Mancini, 132 N.J. at 334 (omissions in

original) (quoting Marder, 84 N.J. Super. at 319). "All doubts . . . should be

resolved in favor of the parties seeking relief." Ibid. That is so because of the

importance we attach to securing a decision on the merits.                  Davis v.

DND/Fidoreo, Inc., 317 N.J. Super. 92, 100-01 (App. Div. 1998).

      Our courts have also recognized that a defendant's promptness in moving

to vacate a default judgment is a factor that supports granting the motion. Reg'l

Constr. Corp. v. Ray, 364 N.J. Super. 534, 541 (App. Div. 2003) (affirming a

finding of excusable neglect "when examined against the very short time period

between the entry of default judgment and the motion to vacate"); Jameson v.

Great Atl. & Pac. Tea Co., 363 N.J. Super. 419, 428 (App. Div. 2003) (noting

the "speed and diligence with which [the party] moved to attempt to vacate the

default judgment"). "[W]here the judgment has been in effect for only a brief

period of time before the motion to vacate is filed[,] . . . a plaintiff's expectations

regarding the legitimacy of the judgment and the court's interest in the finality

of judgments are at their nadir." Reg'l Constr. Corp., 364 N.J. Super. at 545.

      Prejudice to the plaintiff if default judgment is vacated is also a relevant

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consideration. In this regard, Rule 4:50-1 permits the court to condition an order

vacating default judgment "upon such terms as are just." Any relief granted

under this provision of the Rule must be "reasonably proportionate to the

prejudice suffered by plaintiff." Reg'l Constr. Corp., 364 N.J. Super. at 543. A

court may compel a party seeking to vacate default to reimburse the judgment

holder for the fees and costs "in the pursuit of the default judgment or in

responding to the motion to vacate." Ibid.

      In addition to a showing of excusable neglect, a sufficient and valid

defense must be stated clearly to avoid the ultimate result being inevitably the

same after setting aside a default judgment. See Schulwitz v. Shuster, 27 N.J.

Super. 554, 561 (App. Div. 1953) (requiring the showing of a meritorious

defense so "[t]he time of the courts, counsel and litigants [is] not . . . taken up

by . . . a futile proceeding."). A court is required to "examine defendant's

proposed defense to determine its merit." Bank of N.J. v. Pulini, 194 N.J. Super.

163, 166 (App. Div. 1984).

      Subsection (f) of Rule 4:50-1 is a catch-all provision that authorizes a

court to relieve a party from a judgment or order for "any other reason justifying

relief from the operation of the judgment or order."         The essence of the

subsection is to achieve equity and justice in exceptional situations that cannot

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be easily categorized. DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 269-70,

(2009) (citing Court Inv. Co. v. Perillo, 48 N.J. 334, 341 (1966)). Therefore, in

order for relief under the rule to be granted, the movant "must show that the

enforcement of the order would be unjust, oppressive or inequitable." Quagliato

v. Bodner, 115 N.J. Super. 133, 138 (App. Div. 1971). An application under

subsection (f) must be sought within a reasonable time after entry of the

judgment. See R. 4:50-2

                                      III.

      Turning to the facts of the case before us, defendant initially moved to

vacate the default judgment only four days after defendant provided the

judgment to her attorney. Defendant's second motion was filed fifteen days after

the order denying her initial motion was entered. The second motion attempted

to correct the deficiencies found in the denial of her first motion. To support

her arguments, she attached three certifications, all based on personal

knowledge and all outlining the factual circumstances entitling her to the relief

requested, as required by Rule 1:6-6. The motion was unopposed.

      Sufficient credible evidence existed in the motion record to support

defendant's argument that there was excusable neglect pursuant to Rule 4:50-

1(a) for her failure to answer the complaint.      As defendant's certification

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indicates, she experienced language barriers, a misunderstanding of the

requirement to answer the complaint, and was hospitalized when notice for the

proof hearing was delivered and remained hospitalized at the time of the proof

hearing. She was eighty-one years old and was under the care of a health aide.

She filed her first motion to vacate the judgment about one week after it was

delivered to her insurance carrier, followed shortly thereafter by her second,

more detailed motion. When viewed with liberality, as we must, the unopposed

facts supporting defendant's motion satisfy the excusable neglect standard of

Rule 4:50-1(a).

      A thorough review of the motion record shows defendant submitted

adequate proofs she had a meritorious defense related to the damages demanded

by plaintiff and the quantum of damages entered by the trial judge in his

judgment.

      In general, the typical measure of damages to personal property "is the

difference between the market value of the personal property before and the

market value after the damage occurred." Model Jury Charge (Civil), 8.44,

"Personal Property" (approved Mar. 1975); see also Hyland v. Borras, 316 N.J.

Super. 22, 24-25 (App. Div. 1998); Associated Metals & Minerals Corp. v.

Dixon Chem. & Rsch., Inc., 82 N.J. Super. 281, 314 (App. Div. 1963); accord

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Jones v. Lahn, 1 N.J. 358, 362 (1949); Douches v. Royal, 1 N.J. Super. 45, 47

(App. Div. 1948).

      However, when the personalty has been destroyed by the tortfeasor, and

no market value exists, the market value at the time of the loss is the appropriate

award. Lane v. Oil Delivery, Inc., 216 N.J. Super. 413, 419 (App. Div. 1987).

      The trial judge's damage award included a $14,400 reimbursement to

plaintiff representing the amount paid for previous car loan payments over a

period of four years. Our review of the record does not contain sufficient

evidence of an adequate nexus between the prior payments and the market value

of the vehicle before and after the accident, which we determine is the

appropriate methodology to calculate the damages in this instance.             The

undisputed facts show that plaintiff was paid monies from her insurance carrier

in the amount of $16,024.46 comprised of the payoff for the loan on her "totaled"

Honda automobile in the amount of $14,259.46, rental car costs of $630,

roadside assistance costs of $135, and a $1,000 deductible. These insurance

payments shown through the certification of defendant's auto insurance agent

reinforced defendant's position that there was a meritorious defense related to

the fair and appropriate quantum of damages, including the likelihood that

excessive damages were awarded to plaintiff.

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      Additionally, the prejudice to plaintiff at this early stage of the litigation

was minimal, if any. Furthermore, the trial judge had the option to award

adequate sanctions against defendant, including payment to plaintiff for any

reasonable costs she incurred as part of the default process rather than deny

defendant's motion.

      We find differently concerning the trial judge's liability findings. We

agree with the trial judge that the meritorious defense prong concerning liability

was not satisfied by the defendant. We conclude there was sufficient, credible

evidence in the record to support the trial judge's denial of defendant's motion

to vacate the default judgment concerning liability and affirm this portion of the

judgment.

      The trial judge's finding, rejecting defendant's allegation that plaintiff's

taillights were not working and concluding a meritorious defense was not met,

is supported by sufficient credible evidence in the record. No dispute existed in

the motion record that defendant's vehicle struck plaintiff's stopped vehicle in

the rear. These facts support the trial judge's liability finding. See Dolson v.

Anastasia, 55 N.J. 2, 11-12 (1969). As aptly pointed out by the trial judge in his

oral decision, defendant's certification stated that she did not see the plaintiff's

rear lights before striking her vehicle.        A plain reading of defendant's

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certification was itself sufficient credible evidence that the lack of a meritorious

defense existed concerning liability, supporting the judge's denial of her motion.

      Grounded on the foregoing reasons, we affirm the trial judge's liability

findings but we reverse and vacate the judgment in respect to damages and

remand to the trial court for a trial on damages. Based on this ruling and the

importance we attach to securing a decision on the merits, defendant shall be

permitted to file an answer in a reasonable period to be set by the trial judge.

The trial judge shall also have the discretion to provide for reasonable discovery

pursuant to Rule 6:4-3 which may be warranted considering our opinion

remanding the matter.

      Defendant shall be permitted to participate fully in the damages hearing,

including the ability to offer evidence and witness testimony. At the time of the

damages hearing the court shall consider but shall not be limited to the following

factors: the market value of plaintiff's 2016 Honda automobile at the time of

the accident, any reasonable automobile rental costs, roadside assistance costs,

or other related costs incurred by plaintiff due to the accident, the payoff amount

for any loans secured on the Honda as of the date of accident, any amounts paid

to her from collateral sources including those from her own insurance carrier ,

and any other factors which the court deems relevant to the calculation of

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plaintiff's reasonable damages.      The rules for measuring damages are

subordinate to the ultimate aim of making good the injury done or loss suffered.

"The answer rests in good sense rather than in a mechanical application of a

single formula." N.J. Power and Light Co. v. Mabee, 41 N.J. 439, 441 (1964).

      Having determined that defendant is entitled to vacate the default

judgment concerning damages based on Rule 4:50-1(a), we deem defendant's

arguments pursuant to Rule 4:50-1(f) moot.

      Affirmed in part, reversed in part and remanded.       We do not retain

jurisdiction.

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