NETLINQ DESIGN, INC. v. FUSION MAGAZINE, LLC

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4104-05T54104-05T5

NETLINQ DESIGN, INC.,

Plaintiff,

v.

FUSION MAGAZINE, LLC,

Defendant/Third-Party Plaintiff-

Respondent,

v.

ONSITE COMPUTER SYSTEMS,

INC. and TOM FUREY,

Third-Party Defendants-Appellants,

and

JEFF BENSON,

Third-Party Defendant.

_______________________________

 

Argued March 26, 2007 - Decided April 26, 2007

Before Judges Lintner and Seltzer.

On appeal from the Superior Court of New

Jersey, Law Division, Burlington County,

L-920-04.

James H. Waller argued the cause for appellants.

Francesco P. L. Suglia argued the cause for respondent (Wolf, Block, Schorr & Solis-Cohen, LLP, attorneys; Mr. Suglia, James Greenberg, and Hunter S. Kintzing, on the

brief).

PER CURIAM

Third-party defendants, Onsite Computer Systems, Inc. and its principal, Tom Furey (collectively "Furey"), appeal from a February 17, 2006, order that granted a motion for reconsideration filed by third-party plaintiff Fusion Magazine, LLC (Fusion). The order reinstated a default judgment in favor of Fusion and against Furey. Because we find the record presents a factual issue respecting the adequacy of service upon Furey and requires further exploration of the reasonableness of Furey's efforts to vacate the default judgment, we reverse and remand.

This litigation began with a complaint, not included in the record, filed in the Special Civil Part by Netlinq Design, Inc. (Netlinq) against Fusion. A hearing on the merits of that complaint was scheduled for March 30, 2004. When the parties appeared, Fusion's attorney announced that four days previously, on March 26, 2004, Fusion had filed an answer, counterclaim, and a third-party complaint against Furey, Netlinq and Netlinq's principal, Jeff Benson. On the hearing date, Fusion also filed a motion to transfer the litigation to the Law Division because its counterclaim exceeded the jurisdictional limit of the Special Civil Part. See R. 6:4-1(c).

When Furey failed to answer the third-party complaint, Fusion obtained the entry of default on a certification alleging service of the third-party complaint and summons personally upon Furey at the March 30, 2004, hearing. The certification also alleged that a process server personally delivered the summons and third-party complaint on April 15, 2004, to Benson who represented that he was authorized to accept service on behalf of Furey. Default judgment was entered on July 9, 2004, in the amount of $33,646.02. Fusion's counsel ultimately certified that on July 19, 2004, he mailed, in separate envelopes, a letter addressed jointly to Benson and Furey enclosing a copy of the final judgment by default.

On October 24, 2005, Fusion's attorney "contacted Furey to attempt to resolve the matter." Promptly thereafter, on November 8, 2005, Furey moved to vacate the default. In support of the application, Furey certified that Benson was never authorized to accept service for him. The certification did not deal specifically with the claim that Furey had been personally served at the March 30, 2004, hearing but did assert that "I have never been properly served." The motion judge found no evidence in the transcript of the March 30 hearing that service had been made and vacated the default judgment by order dated January 6, 2006. On Fusion's application for reconsideration, however, the judge accepted the representation of Fusion's attorney that service had been made, if not on the record on March 30, 2004, then shortly before or after the hearing. The judge noted that there was no specific denial of that claim although it appears that at the argument on the motion to vacate, there was reference to a reply certification from Furey, not contained in this record, in which Furey asserted "that he has no recollection of being served with those papers at the hearing." Accordingly, on February 17, 2006, the motion for reconsideration was granted and the judgment reinstated.

We note that the threshold question is whether Furey was properly served so as to trigger an obligation to file an answer. The papers before the moving judge demonstrated a factual dispute as to Benson's authority to accept service on Furey. Indeed, the only evidence before the judge was that Benson represented he had such authority, a fact which Furey denied.

Similarly, we conclude that a factual dispute existed with respect to whether Furey received personal service of the third-party complaint on March 30, 2004. The fact that Furey did not specifically deny receipt of the summons and third-party complaint on March 30 is not dispositive.

A case may present credibility issues requiring resolution by a trier of fact even though a party's allegations are uncontradicted. As Chief Justice Vanderbilt observed in Ferdinand v. Agricultural Ins. Co. of Watertown, N.Y., 22 N.J. 482, 494 (1956), "[w]here men of reason and fairness may entertain differing views as to the truth of testimony, whether it be uncontradicted, uncontroverted or even undisputed, evidence of such a character is for the jury." Accord Sons of Thunder, Inc. v. Borden, Inc., 148 N.J. 396, 415 (1997). Thus, a trier of fact "is free to weigh the evidence and to reject the testimony of a witness, even though not directly contradicted, when it ... contains inherent improbabilities or contradictions which alone or in connection with other circumstances in evidence excite suspicion as to its truth." In re Perrone's Estate, 5 N.J. 514, 521-22 (1950).
 
[D'Amato by McPherson v. D'Amato, 305 N.J. Super. 109, 115 (App. Div. 1997).]

Sufficient circumstances existed here to require an evidentiary evaluation of the representation of service on March 30, 2004. On that date, while Fusion's counsel specifically represented to the judge that he had copies of the motion to transfer and accompanying certifications "for each of the plaintiffs here," he made no reference to the counterclaim. Under these circumstances, Furey's certification that he was not properly served and his later certification that he had no recollection of service (something that would presumably be of some importance and, hence, likely to be recalled) creates a factual dispute requiring a hearing. See Dewey v. R.J. Reynolds Tobacco Co., 109 N.J. 201, 222 (1988); Lopez v. Swyer, 62 N.J. 267, 275 (1973); Lyon v. Glaser, 60 N.J. 259, 276 (1972). Accordingly, the matter must be remanded for a factual hearing to determine if Furey was served either at the March 30, 2004, hearing or on April 15, 2004, by service on Benson.

Because the question of service is, as we have noted, a threshold question, we add these comments. If the judge determines on remand that Furey was properly served, the judge must, nevertheless, determine whether the default judgment should be vacated. Applications to vacate default judgments are "viewed with great liberality, and every reasonable ground for indulgence is tolerated to the end that a just result is reached." Marder v. Realty Constr. Co., 84 N.J. Super. 313, 319 (App. Div.), aff'd 43 N.J. 508 (1964). The judge should consider the circumstances surrounding the inaction of Furey, especially in light of the assertion made in the papers on appeal (although unsupported by this record) that Furey was relying on Benson to resolve the issues.

Similarly, if the judge determines that Furey had not been served, and the resulting judgment was therefore void, consideration must, nevertheless, be given to the responsibility of Furey to move within a reasonable period of time to vacate the void judgment. See Garza v. Paone, 44 N.J. Super. 553, 557 (App. Div. 1957) (noting that "the mere fact that the judgment may be regarded as void for lack of personal jurisdiction will not automatically authorize a court to relieve a party from its operation on motion. He must make his motion within a reasonable time.").

This will require a determination of when Furey received notice of the entry of judgment. Since we know of no authority requiring action based only on knowledge of a pending complaint without accompanying knowledge of either service of process or the entry of a judgment, Furey's knowledge of the suit alone would not add to the analysis. Even if Furey received notice of the judgment by way of the July 19, 2004, letter, the judge would need to evaluate the reasons for the delay in seeking to vacate that judgment.

In this connection, we note that the time frame involved here of some seventeen months is substantially less than that involved in other reported cases dealing with attempts to vacate void judgments. See Citibank, N.A. v. Russo, 334 N.J. Super. 346, 349-50 (App. Div. 2000) (eight years between judgment and motion to vacate); Last v. Audubon Park Assocs., 227 N.J. Super. 602, 604-05 (App. Div. 1988) (six-year lapse), certif. denied, 114 N.J. 491 (1989); Garza, supra, 44 N.J. Super. at 557 (four- year lapse).

Reversed and remanded for proceedings consistent with this opinion.

 

The record does not reveal whether that complaint has been resolved. If it has not, this appeal is interlocutory. Nevertheless, given the length of time elapsed since the entry of the judgment involved here, to the extent necessary we grant leave to appeal as within time. See R. 2:4-4(b)(2).

The letter itself is dated June 16, 2004, and is addressed to the Benson and Furey at "113 S. White Hoarse Road, Suite 4, Voorhees, New Jersey 08043." A later certification from Fusion's counsel indicates that the correct address is 113 S. Whitehorse Road. Apparently, Benson shared space with Furey at that address and it is not clear if Furey actually received the letter.

(continued)

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A-4104-05T5

April 26, 2007