Court Opinion

ID: 9953032
Source: CourtListenerOpinion
Date Created: 2024-03-21 14:08:23.58558+00
Date Added: 2024-06-11T14:45:36.922773
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NOT FOR PUBLICATION WITHOUT THE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-2961-22

MIDLAND FUNDING LLC,

          Plaintiff-Respondent,

v.

ROSA WILLIAMS,

     Defendant-Appellant.
________________________

                   Argued February 27, 2024 – Decided March 21, 2024

                   Before Judges Gooden Brown and Natali.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Passaic County, Docket No. DC-006242-12.

                   Mark H. Jensen argued the cause for appellant (Kim
                   Law Firm LLC, attorneys; Yongmoon Kim and Mark
                   H. Jensen, on the briefs).

                   Han Sheng Beh argued the cause for respondent
                   (Hinshaw & Culbertson LLP, attorneys; Han Sheng
                   Beh, on the brief).

PER CURIAM
      This appeal involves the third litigation related to a fully satisfied

$3,174.11 credit card debt. In her current challenge, defendant Rosa Williams1

appeals from a March 3, 2023 order denying her motion to vacate a September

10, 2012 final judgment entered by default, and the attendant wage execution.

She also challenges a May 8, 2023 order denying her reconsideration

application. We are satisfied the court did not abuse its discretion in denying

defendant relief from the final judgment under Rule 4:50-1(d) or (f), and

accordingly we affirm both orders.

                                        I.

      Our opinion is best understood by reciting in greater granularity than usual

the idiosyncratic procedural history of defendant's multiple challenges to the

2012 final judgment.

      In April 2012, plaintiff Midland Funding LLC, filed a collection action

against defendant for $3,174.11, which included $365.05 in interest.          The

complaint stated plaintiff was "now the owner" of defendant's defaulted

revolving credit card account with HSBC Bank Nevada, N.A. The return of

service indicated a copy of the summons and complaint was mailed to

1
   In the record, defendant is referred to as both Rosa Williams and Rosa
Williams-Hopkins. Intending no disrespect, we use the name Rosa Williams as
that is defendant's name identified in the complaint.
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defendant's address at "417 11th Ave" in Paterson, via regular and certified mail,

with return service requested.    The regular mail was not returned and the

certified mail was returned as "unclaimed."

      Having failed to respond to the complaint, in September 2012, plaintiff

moved for, and the court entered, default judgment against defendant for the

underlying debt, interest, and costs and fees. In November 2012, a payment of

$250 was made via check from defendant's bank account. The check was

endorsed to "Pressler and Pressler LLP," the firm representing plaintiff at the

time, and the memo line included the word "Midland."

      In early 2013, the court granted plaintiff's request for a wage execution

and the conforming order noted defendant received $250 as a credit toward the

judgment amount.      In October 2014, the judgment was paid in full and

accordingly noted in the court records as satisfied.

      Nearly seven years after the 2012 entry of final judgment, in August 2019,

and nearly five years after the judgment was fully satisfied, defendant filed a

class action lawsuit against Midland in Essex County related to the 2012 final

judgment. See Williams-Hopkins v. Midland Funding LLC, A-4468-19, A-

4470-19 (App. Div. April 19, 2022). In her three-count complaint, defendant

alleged Midland "unlawfully enforced consumer debts after unlawfully taking

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assignments of them without a sales finance company or consumer lending

license" in violation of the New Jersey Consumer Finance Licensing Act

(NJCFLA), N.J.S.A. 17:11C-1 to -49, and the Consumer Fraud Act (CFA),

N.J.S.A. 56:8-1 to -210. She sought "a declaratory judgment that the credit

accounts are void and unenforceable, that the state court judgments obtained on

unlawful debts are void or otherwise cannot be enforced, and an injunction

against any further attempts to enforce the credit account or any judgment in any

manner." Defendant also sought monetary damages and disgorgement due to

Midland's unjust enrichment.

      Midland moved to dismiss the complaint under Rule 4:6-2(e), based on

the entire controversy doctrine and other grounds. Williams-Hopkins, slip op.

at 4. The court granted Midland's application and dismissed plaintiff's complaint

based on the entire controversy doctrine and explained:

            Plaintiffs could have challenged [Midland's] debt
            collection    activity,     the    validity     of    the
            assignments[,] . . . and [Midland's] rights to institute
            and prosecute collection claims in a New Jersey court
            in defense of the prior [c]ollections [l]awsuits. They
            could have raised all the legal theories asserted here as
            defenses/counterclaims in the prior [c]ollection
            [l]awsuits.

            [Id. at 5.]

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We affirmed, see id. at 7, and the Supreme Court denied certification. Williams-

Hopkins v. Midland Funding LLC, 252 N.J. 257 (2022).

      Three months after the Supreme Court denied certification, and despite

the dismissal of her Essex County complaint in which she requested, in part, to

set aside the 2012 default judgment, defendant filed a motion to vacate under

Rules 4:50-1(d) and (f), which is the subject of this appeal. In her application,

defendant submitted a certification in which she attested she was never served

with the complaint and she "had no knowledge of the proceedings initiated

against [her]." Defendant also stated, however, "[d]uring 2012, around the time

[plaintiff] sued me . . . I may have even failed one of my classes due to stress,

anxiety, and sleeplessness caused by the collection lawsuit." Defendant also

attested she "remember[s] being harassed by [plaintiff's] collection calls," but

was unaware of the NJCFLA or its licensing requirements.

      In opposition, Midland's former counsel submitted a certification stating,

"[d]efendant's spouse called [plaintiff's counsel's office] on November 6, 2012,"

provided information to verify his identity, including the P.O. Box the certified

mail was forwarded to, and "an address of 417 11th Ave., Paterson, NJ."

Plaintiff's former counsel stated to have "expressly indicated that there was a

judgment in this case," and on a subsequent phone call the same day, "the parties

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agreed to monthly payment arrangement to resolve this judgment for payment

of $250.00 per month." Plaintiff produced the only check submitted pursuant to

that payment plan, which bears defendant's name. Plaintiff's former counsel also

attested to having sent defendant a written agreement, but defendant failed to

return it.

        After considering the parties' submissions and oral arguments, the court

denied defendant's motion and entered a conforming written order on March 3,

2023.    In the court's oral decision, it rejected defendant's claim the 2012

judgment was void under Rule 4:50-1(d), based on Midland's alleged failure to

properly serve the underlying collection complaint.          Although defendant

contended she lived on the second floor of a two-unit building, and the complaint

was mailed without a specific floor identified, the court found, there was "no

indication from the evidence that service was made on the first, rather than the

second floor." The court also relied on Rule 6:2-3(d) and explained "service is

deemed effective unless the mail is returned to the [c]ourt by the postal serv ice,

with an indication that it was not served." The court specifically found the

regular mail was not returned to the court, and the certified mail was returned

"with an indication it was served, but went unclaimed."

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      The court also determined defendant had actual notice of the collection

action as evidenced by, "her spouse call[ing] plaintiff on November 6, 2012

seeking to settle the matter," and that he made an initial payment three days later

with a check in defendant's name. The court also took judicial notice of the

previously dismissed Essex County class action litigation and noted the filing of

that complaint indicated she "was aware of the proceedings against her."

Finally, the court rejected defendant's claim the 2012 judgment should be

vacated under Rule 4:50-1(f), based on Midland's purported violations of the

NJCFLA because "[d]efendant has provided no proof whatsoever that plaintiff

was not licensed in New Jersey."

      Defendant moved for reconsideration. In support, she provided the court,

for the first time, with plaintiff's license as a consumer lender and sales finance

company which indicated plaintiff was first licensed in January 2015. In her

reply to plaintiff's opposition, defendant also submitted her husband's

certification in which he attested, "to the best of [his] knowledge, [he] did not

make any payments to [plaintiff] or their attorneys on [defendant's] behalf or set

up any payment plan with [plaintiff] or their attorneys," and he "never sent

[plaintiff] or their attorneys any check or payments for [defendant]."

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Defendant's husband also stated the "only time [he] spoke with [plaintiff] or

their attorneys was to tell them to stop harassing [him and defendant]."

      The court denied defendant's motion and issued an order and

accompanying written opinion on May 8, 2023. With respect to defendant's

insufficient service of process argument, the court again explained although the

certified mail was returned "unclaimed," the regular mail was not returned. The

court also found based on the motion record evidence, defendant's spouse called

plaintiff two months after default judgment was entered, and defendant did not

seek, at that time, to vacate default judgment. Rather, as the court explained,

defendant's spouse sought to settle the matter and there was an initial payment

made in November 2012 with a check bearing defendant's name, just three days

after the phone call discussing settlement. The court also noted, "the first wage

execution was filed in this case on January 28, 2013 without any motion or

objection being filed by [d]efendant and was returned satisfied in October

2014."

      With respect to defendant's husband's reply certification, the court found,

"these are not facts that [d]efendant ever asserted either in its prior [m]otion or

in furtherance of the [m]otion for [r]econsideration," and the court "presume[d]

[d]efendant had cognizance of these facts upon filing of the prior [m]otion."

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Further, the court noted plaintiff provided a check for $250 with defendant's

name on it and defendant's counsel admitted at oral argument, "yes, defendant's

husband arranged to make a payment on the debt." As such, the court rejected

defendant's husband's "blanket denial as it has already been contradicted and

was not submitted properly" as a motion for reconsideration was "not the time

to submit [c]ertifications which could have been submitted with the original

motion."   The court also noted defendant herself submitted a certification in

which she stated, "[d]uring 2012, around the time [plaintiff] sued me . . . I may

have even failed one of my classes due to the stress, anxiety, and sleeplessness

caused by the collection lawsuit," thus further indicating her knowledge of the

collection action in 2012.

      The court also rejected defendant's reliance on Rule 4:50-1(f).           It

explained, citing Baumann v. Marinaro, 95 N.J. 380, 395 (1984), "[b]ecause of

the importance of finality of judgments, relief under Rule 4:50-1(f) is available

only when 'truly exceptional circumstances are present.'"             The court

acknowledged defendant "now provided evidence of [p]laintiff's lack of

licensure, which it did not do in its previous [m]otion," but concluded the

"allegation that [p]laintiff was unlicensed" was not "an extraordinary

circumstance necessitating the default judgment be vacated more than ten years

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after being entered and satisfied." The court also noted "[d]efendant had plenty

of opportunity to contest the default judgment by filing a motion to vacate soon

after it was entered, not arranging a payment plan with [p]laintiff, objecting to

the wage garnishment, or filing a motion any time within the ten years that have

passed." This appeal followed.

                                         II.

      Before us, defendant reprises the same arguments thoroughly considered

and rejected by the court. Specifically, she contends the court erred in failing

to vacate the 2012 judgment as it was void under Rule 4:50-1(d) because she

was not served with process and she was entitled to relief under Rule 4:50-1(f)

based on Midland's improper commencement of the collection action without

the requisite license as required under the NJCFLA. Defendant also contends

the court abused its discretion in denying her motion for reconsideration because

the court classified plaintiff's lack of licensure as an allegation rather than fact

and because such lack of licensure is an exceptional circumstance warranting

vacating the 2012 default judgment. We reject all of these arguments for the

reasons detailed in the court's thoughtful oral and written decisions. We offer

the following to amplify our decision.

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      We first address the standards of review which guide our analysis. We

review a trial judge's determination on a motion to vacate a default judgment

under Rule 4:50-1 for "a clear abuse of discretion." US Bank Nat'l Ass'n v.

Guillaume, 209 N.J. 449, 467 (2012). "The trial court's determination under the

rule warrants substantial deference, and should not be reversed unless it results

in a clear abuse of discretion." Id. at 467. To warrant reversal, the movant must

demonstrate that the motion judge's "decision [was] 'made without a rational

explanation, inexplicably departed from established policies, or rested o n an

impermissible basis.'" Id. at 467-68 (quoting Iliadis v. Wal-Mart Stores, Inc.,

191 N.J. 88, 123 (2007)); see also BV001 REO Blocker, LLC v. 53 W. Somerset

St. Props., LLC, 467 N.J. Super. 117, 124 (App. Div. 2021) (finding that "a trial

court mistakenly exercises its discretion when it 'fails to give appropriate

deference to the principles' governing the motion [or] relies 'upon a

consideration of irrelevant or inappropriate factors'") (internal citations

omitted).

      We also review a trial court's decision on a motion for reconsideration

under an abuse of discretion standard. Cummings v. Bahr, 295 N.J. Super. 374,

389 (App. Div. 1996). That said, reconsideration is granted "only under very

narrow circumstances" and is only available when "'either ([1]) the [c]ourt has

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expressed its decision based upon a palpably incorrect or irrational basis, or (2)

it is obvious that the [c]ourt either did not consider, or failed to appreciate the

significance of probative, competent evidence.'"       Fusco v. Bd. of Educ. of

Newark, 349 N.J. Super. 455, 462 (App. Div. 2002) (quoting D'Atria v. D'Atria,

242 N.J. Super. 392, 401 (Ch. Div. 1990)).

      We next discuss the relevant Rules and interpretive decisions which

support relief from final judgments. Rule 4:50-1 permits a court, "[o]n motion,

with briefs, and upon such terms as are just," to "relieve a party or the party's

legal representative from a final judgment or order" if "(d) the judgment or order

is void" or "(f) any other reason justifying relief from the operation of the

judgment or order." R. 4:50-1(d), (f). 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 County Park Comm'n, 74 N.J. 113, 120

(1977).

      A motion to vacate a judgment that "is void and, therefore, unenforceable

. . . is a particularly worthy candidate for relief (R. 4:50-1(d)) provided that the

time lapse [between the entry of the judgment and the motion to vacate the

judgment] is not unreasonable and an innocent third party's rights have not

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                                        12
intervened." Bank v. Kim, 361 N.J. Super. 331, 336 (App. Div. 2003) (citing

Berger v. Paterson Veterans Taxi Serv., 244 N.J. Super. 200, 205 (App. Div.

1990)); Coryell, L.L.C. v. Curry, 391 N.J. Super. 72, 80 (App. Div. 2006).

      Relief under subsection (f) of Rule 4:50-1 is available only when "truly

exceptional circumstances are present," because of the "importance that we

attach to the finality of judgments." Housing Auth. of Morristown v. Little, 135

N.J. 274, 286 (1994) (quoting Baumann, 95 N.J. at 395). Not only must the

movant "demonstrate the circumstances are exceptional" but also that

"enforcement of the judgment or order would be unjust, oppressive or

inequitable." Johnson v. Johnson, 320 N.J. Super. 371, 378 (App. Div. 1999).

      Rule 4:50-1(f) has been described as a catch-all provision, and in

"'exceptional cases its boundaries are as expansive as the need to achieve equity

and justice.'" DEG, LLC v. Township of Fairfield, 198 N.J. 242, 269-70 (2009)

(quoting Court Inv. Co. v. Perillo, 48 N.J. 334, 341 (1966)). As such, the

application of this subsection "must be resolved on its own particular facts,"

Baumann, 95 N.J. at 395, and "[n]o categorization can be made of the situations

which warrant redress under subsection (f)," Perillo, 48 N.J. at 341. Motions

brought under both Rule 4:50-1(d) and (f) are not subject to the one-year filing

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                                      13
requirement of subsections (a), (b), and (c), but must nonetheless be filed within

a reasonable time. See R. 4:50-2.

      Against these standards and legal principles, we discern no abuse of the

court's discretion.   As to defendant's claim the court erred in refusing to vacate

the 2012 judgment under Rule 4:50-1(d), we are satisfied the record

overwhelmingly established defendant was properly served with the summons

and complaint in the underlying collection action. Not only was the regular mail

not returned and the certified mail marked unclaimed, which constitutes

effective service for Special Civil Part proceedings, see Rule 6:2-3(d)(4) ("[I]f

the certified mail is returned to the court marked 'unclaimed' or 'refused,' service

is effective provided that the ordinary mail has not been returned."), but it cannot

be reasonably disputed defendant's husband paid a portion of the debt as

evidenced by the check for $250 bearing defendant's name.

      If that were not enough, defendant filed the Essex County class action

complaint in which she not only failed to contend service was ineffective, but in

her certification to vacate the judgment she made confirmatory statements to the

contrary such as asserting the stress from the collection litigation "may have"

caused her to fail an academic course. The court's failure to accept the self-

serving certifications of defendant and her husband on reconsideration was

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entirely proper and certainly not without a rational basis in light of the

aforementioned proofs.

      Relief was also properly denied under the catch all provision of Rule 4:50-

1(f). First, we reject defendant's argument that the court failed to consider

properly the equities based on its argument the 2012 judgment was obtained in

violation of the NJCFLA. In its reconsideration decision, the court expressly

considered and rejected this argument. As noted, it rejected defendant's claim

that Midland's alleged failure to obtain the necessary license was "an

extraordinary circumstance necessitating the default judgment be vacated more

than ten years after being entered and satisfied."      As the court correctly

observed, "[d]efendant had plenty of opportunity to contest the default judgment

by filing a motion to vacate soon after it was entered, not arranging a payment

plan with [p]laintiff, objecting to the wage garnishment, or filing a motion any

time within the ten years that have passed." Applying our deferential standard

of review, we discern no abuse of the court's discretion in reaching such a

conclusion. See Guillaume, 209 N.J. at 467-68.

      The court also correctly concluded defendant failed to timely seek relief

from the final judgment. Although the court did not deny defendant relief solely

based on noncompliance with the "reasonable" timeframe set forth in Rule 4:50-

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2, the court did consider the length of time defendant waited to seek relief in

deciding defendant's application.      Specifically, not only did defendant wait

nearly seven years after the 2012 judgment to file the Essex County complaint

and over ten years before filing the instant action, but did so after fully satisfying

that judgment. And, as noted, she elected to file the Essex County complaint

which sought affirmative relief against Midland, as well as collateral attacks

against the 2012 judgment. Only after that complaint was dismissed, and we

rejected defendant's argument on direct appeal and the Supreme Court denied

review, did defendant file the current challenge to the 2012 judgment. Under

these circumstances the court's decision that any violations of the NJCFLA

simply did not constitute extraordinary circumstances sufficient to excuse

defendant's grossly belated application was based on findings fully supported by

the record and consistent with applicable law. Simply put, to permit defendant

to collaterally attack the 2012 judgment under these circumstances would render

the principles underlying the finality of judgments and judicial efficiency

completely irrelevant.

      Contrary to defendant's argument, our decision in LVNV Funding, LLC

v. Deangelo, 464 N.J. Super. 103 (App. Div. 2020) does not compel a contrary

result.   In that case, defendant defaulted on an automobile loan and later

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breached a modification agreement. Id. at 106. LVNV, like Midland here,

purchased an underlying debt and obtained a final judgment. Ibid. Eight years

later, defendant moved to vacate, contending the underlying debt was obtained

in violation of the Fair Debt Collection Practice Act, 15 U.S.C. §§ 1692 - 1692p,

as the statute of limitations with respect to defendant's breach had lapsed prior

to the filing of the collection action pursuant to N.J.S.A. 12A:2-725(1). Id. at

105-06.

      The trial court vacated the judgment under Rule 4:50-1(f). Id. at 106. In

affirming that decision, we concluded the court did not abuse its discretion

because the court balanced LVNV's "violation of federal law by suing on a time-

barred claim" with defendant "inexcusably ignor[ing] a judgment on that time-

barred claim" along with other misconduct including lying about his identity.

Id. at 109.   As we explained:

              Despite the problematic conduct and motivation of both
              parties, the judge ultimately viewed the decision as
              turning not on which of the parties acted worse but on
              the weight of the competing public policies. On
              defendant's side was plaintiff's commencement of a
              time-barred claim in violation of federal policy, which
              strongly favors the curbing of "abusive debt collection
              practices." 15 U.S.C. § 1692(a). The countervailing
              state policy urged by plaintiff is what the Supreme
              Court referred to as "the strong interests in finality of
              judgments and judicial efficiency." Baumann, 95 N.J.
              at 392; see also [Mancini v. EDS ex rel. New Jersey

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            Auto. Full Ins. Underwriting Ass'n, 132 N.J. 330, 334,
            (1993)]. Both these policies cannot be served here; one
            must give way to the other. The judge determined that
            the interest in curbing abusive collection practices
            outweighed the interest in the finality of judgments. In
            the final analysis, we cannot conclude that the choice
            the judge made constitutes an abuse of the discretion
            provided by Rule 4:50-1(f).

            [Id. at 110.]

      It is clear that in Deangelo, the trial court made a dispositive finding

plaintiff commenced a time-barred suit in violation of federal policy and also

concluded defendant's failure to respond to the complaint was inexcusable. We

merely concluded when faced with the "problematic conduct and motivation of

both parties," the trial court did not abuse its discretion in vacating plaintiff's

improperly obtained default judgment.

      Here, the court did not dispositively address plaintiff's licensure

requirement, as defendant improperly submitted the proof relevant to that issue

for the first time on reconsideration. In denying relief, the court appeared to

have accepted defendant's contention plaintiff violated the NJCFLA,2 but clearly

concluded under the circumstances presented any such violation simply did not

2
  We note both parties' briefs cite conflicting unpublished cases in support of
their arguments with respect to plaintiff's licensure requirement under the
NJCFLA. Neither party, however, cited binding authority on the issue, and, as
noted, the trial court did not make a dispositive finding.
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warrant relief under Rule 4:50-1(f), as to do so would be contrary to the

principles underlying the finality of judgments, and Rule 4:50-2. The court's

decision was clearly not an abuse of discretion and we are also satisfied

enforcement of the order, which related to a debt defendant indisputably owed,

would not be unjust or inequitable under Johnson, 320 N.J. Super. at 378. The

fact that the Deangelo court affirmed a trial court's discretionary decision under

the facts of that case does not compel the conclusion the court abused its

discretion here.

      To the extent we have not expressly addressed any of defendant's

arguments, it is because we find they are without sufficient merit to warrant

discussion in a written opinion. R. 2:11-3(e)(1)(E).

      Affirmed.

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