Court Opinion

ID: 4653629
Source: CourtListenerOpinion
Date Created: 2021-01-22 15:10:39.368511+00
Date Added: 2024-06-11T07:53:07.910366
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NOT FOR PUBLICATION WITHOUT THE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-1929-19T3

BMO HARRIS BANK, N.A.,

          Plaintiff-Respondent,

v.

RWB TRUCKING, INC.,

          Defendant,

and

BLAKE ELFAND,

     Defendant-Appellant.
_________________________

                   Submitted December 14, 2020 – Decided January 22, 2021

                   Before Judges Hoffman and Suter.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Ocean County, Docket No. L-2786-16.

                   Hegge & Confusione, LLC, attorneys for appellant
                   (Michael Confusione, of counsel and on the briefs).

                   Wong Fleming PC, attorneys for respondent (James K.
                   Haney, on the brief).
PER CURIAM

      In January 2017, a default judgment for $166,061.14 was entered in favor

of BMO Harris Bank, N.A. (BMO), against defendants RWB Trucking, Inc.

(RWB Trucking) and Blake Elfand (defendant), giving possession of certain

equipment to BMO. The court ordered the sale of defendant's real estate in July

2019 to pay the judgment. Defendant's motion to vacate the default judgment

and the order to sell real estate was denied on September 19, 2019. Defendant

appeals that order and the December 6, 2019 order denying his motion for

reconsideration. We affirm both orders.

                                        I.

      Defendant was the president of RWB Trucking in 2014 when it executed

two loan and security agreements for the purchase of three trucks: a 2015 Great

Dane refrigerated van and a 2013 Thermo King for $72,889.80, and a 2015

Freightliner truck for $178,871.76. Defendant executed a separate "continuing

guaranty" for each of the agreements, committing to promptly pay all "liabilities,

obligations and indebtedness" of RWB Trucking. RWB Trucking defaulted on

the loans in April and May 2016.

      On October 14, 2016, BMO filed a complaint against defendants, seeking

a judgment and possession of the equipment. BMO sued RWB Trucking for

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breach of contract and defendant for breach of the continuing guaranty. BMO

sued both defendants for replevin of the equipment.

      Defendants did not answer the complaint. On January 23, 2017, BMO

obtained a final judgment by default against defendants for $166,061.14 and for

possession of the equipment.

      BMO served an information subpoena on defendants in early February

2017, but they did respond.      The court granted BMO's motion to enforce

litigant's rights, requiring defendants to answer the information subpoena by

early April 2017, but defendants did not respond.

      BMO assigned the judgment to Guaranty Solutions Recovery Fund 1, LLC

(plaintiff) in September 2018.       Plaintiff served defendants with another

information subpoena in April 2019, but defendants did not respond. The court

granted plaintiff's motion to enforce litigant's rights on June 7, 2019, requiring

defendants to respond to an information subpoena in ten days, but defendants

did not respond.

      On July 9, 2019, plaintiff filed a motion to permit the sale of defendant's

real property because its efforts to locate personal property were unsuccessful.

The motion was unopposed. On July 26, 2019, the trial court ordered that

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plaintiff could execute on defendant's real property located in Jackson

Township, Ocean County, to satisfy the January 2017 final judgment.

      Defendant responded on August 21, 2019, by filing a motion to vacate

both the default judgment and the order permitting sale of real property. In his

supporting certification, defendant acknowledged he personally guaranteed the

loan and security agreements, and that both were in default for non-payment.

Defendant did not deny plaintiff was entitled to damages for breach of contract,

but argued the judgment was too large because of plaintiff's failure to mitigate

its damages.

      Based on "information and belief," defendant understood that collateral

insurance covered the loan and security agreements, and both would be made

whole in the event of a default. He claimed he made "numerous requests" for

plaintiff to repossess the collateral, but it was stolen from storage in Florida in

December 2016. Defendant argued — based on paragraph three of plaintiff's

complaint — that if the collateral were liquidated, plaintiff's damages would be

$67,171 rather than $166,061.14.

      Defendant acknowledged being served with the complaint "on or about

November 1, 2016," but he could not afford counsel and did not file an answer.

He also contemplated filing a motion to extend time to answer. Defendant said

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his "financial problems and mental disarray" were further frustrated by a fire

that destroyed his California home in 2017. Defendant argued it was unfair to

require the sale of his home in New Jersey when plaintiff did not mitigate its

damages and because the default judgment was entered without a proof hearing

on damages.

      The trial court denied defendant's motion on September 19, 2019. In its

written opinion, the trial court found defendant failed to show excusable neglect

for not answering the complaint. Defendant could have represented himself and

filed an answer even if he did not have the financial resources to retain counsel.

The court found defendant did not assert a meritorious defense. Defendant "was

presumably in possession and had care custody and control of the collateral at

the time it was allegedly stolen." His certification, based on "information and

belief," that he thought there was collateral insurance was "without merit"

because the loan agreements specified defendant was to maintain this insurance.

      Defendant requested reconsideration, arguing in his pro se submission that

his counsel misunderstood the issues and had not responded properly.            He

claimed "when BMO . . . terminated the loan by acceleration or setting it for

repossession[,] they terminated the entire loan agreement, thus making the

insuring of the equipment their responsibility." Defendant explained he did not

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simply "forget about [the complaint] and do nothing." He moved to California

to run his business with the expectation of making a profit, but in October 2017,

his farm and home in California were destroyed by a fire.                All the

correspondence his wife mailed him was destroyed in the fire before he had a

chance to read it. He was not aware of further litigation until moving back to

New Jersey and receiving the notice in 2019 about selling his New Jersey real

estate. He argued the failure of his trucking company in New Jersey and his

investment in California, the destruction of his home in California and all of the

correspondences, destroyed his "financial means," constituting excusable

neglect and exceptional circumstances for not answering the complaint.

      The trial court denied defendant's motion for reconsideration on

December 6, 2019. It explained the motion failed to meet the standards for

reconsideration.

      On appeal, defendant argues the trial court erred by denying his motion to

vacate the default judgment and to sell real-estate, and again by denying his

motion for reconsideration.

                                       II.

      "The 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

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discretion." U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467 (2012). 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 Ctny. Prosecutor, 171 N.J. 561, 571

(2002) (quoting Achacoso-Sanchez v. INS., 779 F.2d 1260, 1265 (7th Cir.

1985)).

      The trial court did not abuse its discretion by denying defendant's motions.

Under Rule 4:50-1, a final judgment may be vacated for reasons including "(a)

mistake, inadvertence, surprise, or excusable neglect . . . or (f) any other reason

justifying relief from the operation of the judgment or order." A motion to

vacate a default judgment brought under Rule 4:50-1(a) for excusable neglect

must be made within one year after the judgment is entered. R. 4:50-2. This

"one-year period represents only the outermost time limit for the filing of a

motion based on [excusable neglect]. All Rule 4:50 motions must be filed within

a reasonable time, which, in some circumstances, may be less than one year from

entry of the order in question." Orner v. Liu, 419 N.J. Super. 431, 437 (App.

Div. 2011).

      Defendant's motion to vacate the default judgment was filed well beyond

the one-year limit. The judgment was entered on January 23, 2017. Defendant's

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motion to vacate was filed August 21, 2019. This did not satisfy the Rule for

excusable neglect.

      Defendant's pro se submission to the trial court referenced Rule 4:50-1(f).

That Rule allows a judgment to be vacated for "any other reason[s] justifying

relief from the operation of the judgment or order." R. 4:50-1(f). "Because of

the importance that we attach to the finality of judgments, relief under Rule

4:50-1(f) is available only when 'truly exceptional circumstances are present.'"

Hous. Auth. of Morristown v. Little, 135 N.J. 274, 286 (1994) (quoting

Baumann v. Marinaro, 95 N.J. 380, 395 (1984)). "However, '[b]ecause [Rule]

4:50-1(f) deals with exceptional circumstances, each case must be resolved on

its own particular facts.'" Ibid. The Court noted "[c]ourts should use Rule 4:50-

1, sparingly [and only] in exceptional situations . . . in which, were it not applied,

a grave injustice would occur." Id. at 289. Relief under this Rule must be

requested "within a reasonable time." R. 4:50-2.

      We agree with the trial court that defendant did not satisfy Rule 4:50-1(f).

A default was entered on December 8, 2016, when the complaint was not

answered. If defendant could not afford an attorney, he could have represented

himself and filed an answer. The default judgment was entered on January 23,

2017. Defendant consulted with an attorney on February 21, 2017. Although

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he claims he did not know about the entry of the judgment at that time, there

was nothing preventing him from obtaining this information.            The fire in

California occurred in October 2017. This was well after entry of the default

and default judgment. Therefore, neither the fire nor the lack of ability to pay

for an attorney constituted exceptional circumstances for having not responded

to this litigation.

       The trial court did not abuse its discretion in concluding there was not a

meritorious defense to the judgment. Defendant argues plaintiff did not mitigate

damages because it failed to carry collateral insurance on the vehicles and did

not move quicky to repossess them. He acknowledges these arguments are not

a defense to the underlying judgment but are aimed at reducing the amount of

the judgment.         However, plaintiff was not required to provide collateral

insurance for the vehicles. The contract provides "[d]ebtor agrees to maintain

insurance on the [e]quipment for the actual cash value thereof and for the life of

this Agreement . . . ." Under the contract, it was the debtor who "shall at all

times bear all risk of loss . . . ." There was nothing in the guaranty that provided

for termination of the insurance requirement when plaintiff accelerated the

loans. The guaranty that defendant signed was a "continuing" guaranty. It

continued by its own terms. It was "an absolute and unconditional guarantee of

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payment" and applied to "present and future liabilities, obligations and

indebtedness . . . whether . . . matured or un-matured."

      Defendant argues that plaintiff was not timely in seeking repossession of

the vehicles. He acknowledges receiving notice about repossession only to learn

the equipment was stolen about a month later.              Defendant could have

safeguarded the vehicle against theft to mitigate his own damages.

      Defendant also appeals the order denying his motion for reconsideration.

We review a motion for reconsideration for abuse of discretion. "[A] trial court's

reconsideration decision will be left undisturbed unless it represents a clear

abuse of discretion." Pitney Bowes Bank, Inc. v. ABC Caging Fulfillment, 440

N.J. Super. 378, 382 (App. Div. 2015). "Reconsideration is a matter within the

sound discretion of the Court, to be exercised in the interest of justice." D'Atria

v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990). Reconsideration should

only be granted where "1) the Court has expressed its decision based upon a

palpably incorrect or irrational basis, or 2) it is obvious that the Court either did

not consider, or failed to appreciate the significance of probative, competent

evidence." Ibid.

      We agree with the trial court that defendant did not satisfy the standard

for reconsideration. He did not provide new evidence that was not considered

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or show that the trial court's decision was palpably incorrect, or that it failed to

consider relevant evidence.

      Affirmed.

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