NIKOLA PICINIC v. REYCO AUTOMOTIVE

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4456-05T34456-05T3

NIKOLA PICINIC,

Plaintiff-Respondent,

v.

REYCO AUTOMOTIVE,

Defendant-Appellant.

__________________________________________________

 

Submitted January 9, 2007 - Decided

Before Judges Kestin and Weissbard.

On appeal from Superior Court of New Jersey, Law Division, Bergen County, DC-12713-05.

Nashel, Kates, Nussman, Rapone & Ellis, attorneys for appellant (Michael B. Kates, of counsel; Robert D. Pearson, on the brief).

Sekas & Associates, attorneys for respondent (Michael Pescatore and Nicholas G. Sekas, on the brief).

PER CURIAM

Defendant, Reyco Automotive, appeals from a default judgment in the amount of $9649.20 entered in favor of Nikola Picinic. We reverse and remand for further proceedings.

On a Friday in December 2004, plaintiff brought his car to defendant's business premises for repair. Because the repairs could not be completed by the end of the day on Saturday, it was necessary for the car to be left in an unfenced parking lot in front of defendant's shop until Monday morning when the business reopened. At defendant's request, plaintiff secured the vehicle with locking devices on the steering wheel, the hood and left front wheel. Notwithstanding these precautions, the vehicle was stolen. It was found a few days later in a severely damaged condition behind a building on defendant's property.

After defendant declined to involve its insurance carrier, and the matter could not be amicably resolved, plaintiff initiated suit pro se in the Special Civil Part, on July 12, 2005, seeking $7000 in damages. No response was received from defendant and a default was entered on August 25, 2005. A proof hearing was held on October 6, 2005, resulting in entry of the judgment under review. Execution was issued and on October 20, 2005, defendant paid the amount due in order to forestall levy on his business property.

On November 7, 2005, defendant moved to vacate the default judgment. In support of the application, defendant's principal submitted the following affidavit:

I, RAYED HASSAN, by way of Affidavit say:

1. I am the owner and principal of Reyco Automotive LLC ("Reyco"). I am personally familiar with the facts of the within matter.

2. I remember being served with a document from the court earlier this year with reference to the above matter. The document required me to respond to certain questions and submit same back to the Court. I did so.

3. Following submission of that document, I did not receive any other documents or notices from either the plaintiff or the Court.

4. The next time I heard about this matter was when Constable Guerra appeared at Reyco attempting to execute on the default judgment amount.

5. Had I been notified of a trial date, I would have contacted my attorney much earlier to defend this matter and would have appeared for trial.

6. I thought after submitting the document to the Court the matter was disposed of because I thought the Court may have dismissed the case after hearing my side of the story.

7. This matter stems from Mr. Picinic's car being stolen from the front parking lot of Reyco Automotive.

8. Mr. Picinic brought his car in on a Friday for repairs. The car could not be completed by Saturday because Mr. Picinic wanted high performance parts installed.

Accordingly, the next day I advised Mr. Picinic to come and lock his car because the

car would have to stay in the lot over the weekend.

9. Mr. Picinic came to the shop on Saturday and locked his car with several locking devices. He used a steering club, a "boot" on the left front wheel and two locks on the hood.

10. At the time he left the car, Mr. Picinic was aware that Reyco would not be responsible for his vehicle. He knew that because I advised him to lock his car. Moreover, there is a large sign clearly displayed in the front of my shop that says "Not responsible for theft or damage to vehicle."

11. Accordingly, Reyco is not responsible for the theft of his vehicle.

12. Furthermore, the amount of the default judgment cannot be substantiated because the market value of the car is only a tiny fraction of Mr. Picinic's claim.

13. It is respectfully submitted that for the foregoing reasons the Court vacate the default judgment, allow me to file an Answer and direct the Constable to return the $9,649.20 that he is holding back to me.

In opposition, plaintiff provided the following certification:

1. I am the Plaintiff in the above matter.

2. On December 17, 2004, I had my vehicle towed to the defendant's repair shop.

3. After the defendant advised me that the car needed extensive repairs, I left my car at the defendant's property to have the work performed.

4. Later that day, I came by and installed locking devises [sic] on my vehicle to prevent it from being stolen.

5. On December 22, 2004, the defendant called me and asked me if I had removed my vehicle from his property.

6. I responded that I did not.

7. I went to the Fairview police department to report my stolen car.

8. The next day, December 23, 2004, the defendant "found" my car completely stripped behind the work garage of the building on the defendant's property.

9. I advised the defendant to contact his insurance carrier concerning my vehicle.

10. The defendant refused and said that he did not want his premiums to go higher.

11. After it became apparent that the defendant wasn't going to contact his insurance or pay my repair costs, I filed suit pro se to obtain relief.

12. The defendant admitted receiving the summons and complaint in his own motion.

13. The defendant obviously ignored the summons and complaint and never responded, otherwise the court file would have his answer.

14. The defendant didn't show up to the proof hearing . . . on October 6, 2005.

15. I presented my proofs to the Court and the Court, based upon my proofs, entered judgment in my favor.

16. I complied with the Court's instructions and submitted the necessary paperwork to collect on the judgment.

17. The defendant only decided to deny all responsibility and respond after the Court Officer showed up to enforce the judgment.

18. On November 4, 2005, the defendant, by way of counsel, filed a motion to vacate the judgment in this case.

19. I strongly believe that because the defendant admitted receiving notice in his motion and his willing failure to respond does not meet an "excusable neglect" standard.

20. I believe that the defendant waited and ignored my filings and the service of process on him, hoping that I wouldn't be able to collect.

21. I respectfully state that it would be unfair to reopen this for the defendant, as he received the notice and rested on his rights at my expense.

22. I request that his motion be denied for the above reasons and that the money being held in escrow be released pursuant to the Court's judgment.

23. If the court determines that the defendant can answer and vacates the judgment, I request that the money remain in escrow pending resolution of this case as a condition to granting the motion.

On December 16, 2005, the court entered an order denying the motion to vacate. No findings of fact or conclusions of law were provided, as required by R. 1:7-4. Defendant then moved for reconsideration, which was heard by a different judge because the judge who had entered the initial order of denial had retired. In support of the motion for reconsideration, defendant submitted the following affidavit of its office manager:

I, KERI DIAMOND, by way of Affidavit say:

1. I am an employee and the office manager of Reyco Automotive ("Reyco"). I am personally familiar with the facts of the within matter.

2. After Reyco received the Complaint, I spoke with Rayed Hassan, the owner of the company. After our discussion, I took several steps to properly respond to the matter including calling the court on several occasions and going to the courthouse.

3. When I went to the courthouse, a clerk there gave me a packet with which Reyco was to answer the Complaint. The packet required Reyco to respond to certain questions and submit the answers back to the Court.

4. At that time, I again spoke with Mr. Hassan and we together drafted a letter dated August 15, 2005 which we believe addressed the claims against the company. A copy of the letter is annexed hereto as Exhibit "A".

5. Following submission of the letter, I did not receive any other documents or notices from either the plaintiff or the Court.

6. The next time either I or anyone at the company heard about this matter was when Constable Guerra appeared at Reyco attempting to execute on the default judgment amount.

7. Had the company received any further notification from the court or from the plaintiff, we would have taken additional action to defend the matter. Rather, we believed that the matter was settled based upon our submission to the court.

8. It is respectfully submitted that for the foregoing reasons the Court vacate the default judgment, allow Reyco Automotive to file an Answer and direct the Constable to return the $9,649.20 that he is holding back to Reyco.

Attached to the affidavit was the letter, dated August 15, 2005, referenced in paragraph four as "Exhibit A," reading as follows:

 
Superior Court of New Jersey

Special Civil Part, Finance Division

County of Bergen

 
To Whom It May Concern:

 
This letter is in response to the claim Mr. Nicolic Picnic [sic] has filed with your court. We stand firm on our answer that this claim is erroneous and unsupported. Mr. Picnic's [sic] vehicle was personally secured himself [sic] in front of our facility with special locks he had installed on his engine hood and wheels. After the incident took place, we made every effort to assist the Fairview Police Department in this matter by supplying our video surveillance tape from that day and any additional information they requested.

 
Please keep in mind this was a 1992 Honda Civic which was in serious need of repairs and the value is no where near what he is claiming. I have enclosed a copy of what work was done and what was still needed.

If there is any other information that you should need from us, please do not hesitate to contact us.

Ray Hassan

 
 
 
Reyco Automotive

The judge denied defendant's motion from the bench on March 31, 2006, finding "nothing new" from that which was before the retired judge:

I just don't see enough there to overturn [the initial judge's] decision, I just don't see it. Whatever you have now was before him then. . . . I don't see anything new here that [the judge] didn't have before him. He didn't agree with you at that time. I'm sorry. The motion is going to be denied.

On April 26, 2006, the judge placed on the record reasons amplifying his earlier ruling. In doing so, the judge briefly reviewed the facts and concluded that defendant had failed to demonstrate excusable neglect. With respect to his denial of reconsideration, he stated:

The purpose of both 4:50-1 and 4:49-2 is not to re-argue motions that have already been heard for the purpose of taking the second bite at the apple.

Now I cannot find that [the first judge], when he denied the motion to vacate in the first instance, [rendered] a palpably incorrect, or irrational [decision]. Had I decided the motion I probably, in all likelihood, would have decided it in the same way inasmuch as there was no excusable neglect here. It was just willful ignoring of the process by the defendant until such time as her property was levied on.

Now based on a comparison between the defendant's prior submissions for the December 16th motion before [the first judge], in this latest submission the defendant fails to set forth any new competent evidence that the Court failed -- that [the first judge] failed to consider or that would cause this Court to reconsider [the first judge]'s decision. It appears that this litigant is merely dissatisfied with the decision of the Court; that is, [the first judge]'s decision. And this defendant has not brought to this Court's attention any additional information which could -- which was not provided to [the first judge] when he decided his motion, the motion to vacate, back in December. At some point in time a motion practice has to come to an end.

On appeal, defendant asserts (1) that it met the requirements for vacating a default judgment, which are excusable neglect and a meritorious defense; and (2) that the initial judge erred in failing to provide findings of fact and conclusions of law. We agree, in part, with defendant's arguments and remand for further proceedings.

At the outset, defendant is clearly correct that the initial judge, who denied the motion to vacate, erred in failing to provide findings of fact and conclusions of law supporting his disposition. R. 1:6-2(f); R. 1:7-4. As a result, we have no basis upon which to evaluate that judge's order. From this it follows that the action of the second judge in denying the motion for reconsideration was in error to the extent that his disposition was based on conjecture concerning the reasons for the first judge's ruling. However, in his oral ruling of April 26, 2006, the second judge appears to have addressed defendant's contention on its merits, rather than based on the failure to meet the requirements for reconsideration. The judge briefly reviewed the chronology of events and concluded that there was no excusable neglect. While the second judge, under the circumstances of the first judge's retirement, should have dealt with the reconsideration motion at the outset as an initial motion to vacate, he eventually did so. As a result, we turn to the merits.

A motion to vacate a default judgment should not be granted unless the moving party can demonstrate that its failure to answer or otherwise appear and defend was somehow excusable, and further, that it has a meritorious defense. Marder v. Realty Constr. Co., 84 N.J. Super. 313, 318 (App. Div.), aff'd, 43 N.J. 508 (1964); see also Jameson v. Great Atl., 363 N.J. Super. 419, 430 (App. Div. 2003), certif. denied, 179 N.J. 309 (2004). "However, the opening of a default judgment should be viewed with great liberality, and every reasonable ground for indulgence is tolerated to the end that a just result is reached." Marder, supra, 84 N.J. Super. at 319.

There is no dispute that defendant was served with the complaint. Defendant claims, however, that he demonstrated excusable neglect in that he responded to the complaint by letter and, having heard nothing further from the court, concluded that the matter had been dismissed. Plaintiff argues, in response, that defendant "rested on [its] rights and failed to appropriately respond or appear."

We do not see this as a case of excusable neglect, even though both parties address it under that rubric. Defendant claims that it did answer the complaint, in the form of its letter of August 15, 2005. While that letter may not have been an answer in the form expected from an attorney, it was a sufficient pro se response to the pro se complaint to have forestalled the entry of default, assuming the letter was in fact sent. Unfortunately, it was sent to the "Finance Division" of the Special Civil Part and did not reference the case name or docket number, thus raising doubt as to whether it was received and properly filed. The record does not indicate whether the document was in the court file or whether plaintiff received a copy of it.

Nevertheless, defendant's motion for reconsideration squarely presented the question of whether it had answered the complaint or, at least, had made a good faith attempt to answer it, thus providing a basis for relief under R. 4:50-1(f). That issue must be explored and cannot be resolved on competing certifications. Accordingly, we remand for such further proceedings.

Remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.

 

It appears that the judgment was for $8695, with the additional $954.20 representing costs.

We note that defendant did present the basis for a meritorious defense on both liability, McGlynn v. Newark Parking Auth., 86 N.J. 551, 560 (1981), and damages, Marder, supra, 84 N.J. at 319.

(continued)

(continued)

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A-4456-05T3

February 20, 2007