CARMEN A. BURGOS v. INTERNATIONAL VACATION CLUB LTD

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4651-10T2

CARMEN A. BURGOS and

CARLOS R. BURGOS, w/h,

Plaintiffs-Respondents,

v.

INTERNATIONAL VACATION CLUB,

LTD.,

Defendant-Appellant.

____________________________

March 13, 2012

Submitted February 28, 2012 - Decided

Before Judges Simonelli and Accurso.

On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-1712-09.

Gordon & Rees, LLP, attorneys for appellant (Ronald A. Giller and Elior D. Shiloh, of counsel and on the briefs; Jane Adele Regina, on the briefs).

Thomas A. Lynam (Villari, Lentz & Lynam, LLC), attorney for respondent.

PER CURIAM

Defendant International Vacation Club, Ltd. (IVC) appeals from the May 13, 2011 Law Division order, which denied its motion to vacate a default judgment entered on October 26, 2009. We reverse.

IVC is a company organized under the laws of the British Virgin Islands, with its principal place of business located in Naco, Dominican Republic. IVC manages the sale of timeshare units located at the Hamaca Beach Resort in the Dominican Republic. It conducts no business and has no office, registered agent or employees in the United States. It's main business address is Lope de Vega Avenue #19, Pisa Building, 2nd Floor, Naco, Dominican Republic. It maintains a Post Office box in Miami, Florida (the P.O. Box) as a mailing address, where customers send their payments and any contractual complaints. Mail received at the P.O. Box is forwarded to a P.O. Box in the Dominican Republic, where an IVC employee collects it for distribution.

On May 3, 2007, plaintiffs, who are Cherry Hill residents, executed a contract with IVC to purchase a timeshare. Plaintiffs allege that while at their timeshare on May 20, 2008, plaintiff Carmen Burgos sustained injuries when she slipped and fell on a slippery/wet substance that had accumulated in the hallway leading to plaintiffs' timeshare.

On April 2, 2009, plaintiffs filed a complaint against IVC in the Superior Court of New Jersey, Camden County. Without first filing an affidavit of diligent inquiry, plaintiffs attempted to serve the summons and complaint on IVC by certified mail addressed to the P.O. Box. Plaintiffs obtained a signed certified mail return receipt. On April 21, 2009, plaintiffs filed a proof of service; however, they did not file an affidavit. IVC did not answer or otherwise respond to the complaint.

On June 17, 2009, plaintiffs' counsel mailed a letter and request to enter default to IVC at the P.O. Box, and advised IVC that if it failed to respond within ten days, a judgment may be entered against it without a hearing. On June 30, 2009, plaintiffs' attorney mailed copies of a letter to the court and a request to enter default to IVC at the P.O. Box. On July 1, 2009, the court entered the order of default. The record does not indicate that plaintiffs' attorney served IVC with the filed order of default, as required by Rule 4:43-1.1

On July 22, 2009, plaintiffs filed a motion for an assessment of damages hearing, and mailed it to the P.O. Box. By order dated August 14, 2009, the court scheduled a proof hearing. Plaintiffs' attorney mailed the order to the P.O. Box. On October 26, 2009, the court entered judgment against IVC for a total of $39,010.2

On October 5, 2010, plaintiffs domesticated the judgment in Florida by filing a certified copy and an affidavit of foreign judgment, which they did not serve on IVC. They obtained a Florida writ of garnishment on December 10, 2010. Thereafter, approximately $78,000 of IVC's funds were levied. On January 9, 2011, IVC filed a motion in Florida to dissolve the writ based on lack of service and defective service of process. The Florida court entered an order on January 26, 2011, abating the writ for ninety days and allowing IVC to challenge the judgment in New Jersey.

IVC filed a motion in New Jersey pursuant to Rule 4:50-1(d) to vacate the default judgment based on lack of or defective service of process. The trial judge denied the motion, concluding that IVC did not show excusable neglect, IVC had received the summons and complaint, there was a technical violation of the service of process rules "[b]ut it in no way went to the essential due process requirement that the defendant get notice of the summons and complaint," and defendant "made a tactical decision to not file an answer." This appeal followed.

On appeal, IVC contends that the judgment is void and must be vacated because the court lacked in personam jurisdiction. We agree.

We will not disturb a trial court's decision on a motion to vacate a default absent an abuse of discretion. Marder v. Realty Constr. Co., 84 N.J. Super. 313, 318 (App. Div.), aff'd 43 N.J. 508 (1964). We conclude that there was a mistaken exercise of discretion here.

"'The requirements of the rules with respect to service of process go to the jurisdiction of the court and must be strictly complied with. Any defects . . . are fatal and leave the court without jurisdiction and its judgment void.'" Berger v. Paterson Veterans Taxi Serv., 244 N.J. Super. 200, 204 (App. Div. 1990) (quoting Driscoll v. Burlington-Bristol Bridge Co., 8 N.J. 433, 493, cert. denied, 344 U.S. 838, 73 S. Ct. 25, 97 L. Ed. 652 (1952)). There are several fatal defects in service of process in this case that render the default judgment void and unenforceable.

The court lacks jurisdiction over a defendant and the authority to enter judgment if the defendant was not properly served with process. City of Passaic v. Shennet, 390 N.J. Super. 475, 483 (App. Div. 2007). "Personal service is a prerequisite to achieving in personam jurisdiction[.]" Berger, supra, 244 N.J. Super. at 204-05; R. 4:4-4(a). "The primary method of obtaining in personam jurisdiction over a defendant in this State is by causing the summons and complaint to be personally served[.]" R. 4:4-4(a). If a defendant cannot be personally served within the State, in personam jurisdiction can only be obtained by mail or personal service outside the State "[i]f it appears by affidavit satisfying the requirements of R. 4:4-5(b) that despite diligent effort and inquiry personal service cannot be made in accordance with [Rule 4:4-4(a)]." R. 4:4-4(b)(1). The filing of an affidavit of inquiry is not a mere technicality -- it is a mandatory jurisdictional requirement. R. 4:4-5(b); Pressler & Verniero, supra, comment to R. 4:4-5. Plaintiffs did not file an affidavit of inquiry.

In addition, mail service on a corporation, partnership or unincorporated association must be "addressed to a registered agent for service, or to its principal place of business, or to its registered office. Mail may be addressed to a post office box in lieu of a street address only as provided by R. 1:5-2." R. 4:4-4(b)(1)(C). Rule 1:5-2 provides that mail may be addressed to a post office box in lieu of a street address "only if the sender cannot by diligent effort determine the addressee's street address or if the post office does not make street-address delivery to the addressee. The specific facts underlying the diligent effort required by this rule shall be recited in the proof of service required by R. 1:5-3." (emphasis added). Plaintiffs made no diligent effort to determine IVC's street address as required by Rule 1:5-2, let alone recite that effort in their proof of service. They also failed to file an affidavit along with their proof of service, as required by Rule 1:5-3.

More importantly, even if IVC had actual notice of the summons and complaint, it had no obligation to file an answer or otherwise respond to the complaint because service was improper and defective. Wohlegmuth v. 560 Ocean Club, 302 N.J. Super. 306, 311 (App. Div. 1997).

Plaintiffs' violations of the Rules regarding service of process were not mere technical defects. The improper and defective service of process in this case deprived the court of in personam jurisdiction. Because the court never obtained in personam jurisdiction over IVC, "the judgment is absolutely void and of no legal effect for any purpose[.]" Garza v. Paone, 44 N.J. Super. 553, 557 (App. Div. 1957); see also Berger, 244 N.J. Super. at 204. The judgment is, thus, vacated. R. 4:50-1(d).

1 Rule 4:43-1 provides that "[i]f defendant was originally served with process . . . by certified or ordinary mail, the attorney obtaining the entry of default shall send a copy thereof to the defaulting defendant by ordinary mail addressed to the same address at which defendant was served with process." Service of the order of default must be made "promptly upon entry." Pressler & Verniero, Current N.J. Court Rules, comment 1 on R. 4:43-1 (2012).

2 The judgment consists of the following: $30,000 for compensatory damages, $7,500 for plaintiff Carlos Burgos's per quod claim, and $1,510 for medical bills.