WILLIAM J. GOGLIA v. ANTHONY DESA

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

WILLIAM J. GOGLIA AND

TERESA HOBLICK a/k/a

TERESA GOGLIA,

Plaintiffs-Respondent,

v.

ANTHONY DESA,

Defendant-Appellant.

___________________________________

July 1, 2015

Argued February 10, 2015 Decided

Before Judges Hayden and Sumners.

On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-1845-90.

Glenn R. Reiser argued the cause for appellant (LoFaro & Reiser, attorneys; Mr. Reiser, on the brief).

Keith E. Paterson argued the cause for respondent Teresa Hoblick.

Respondent William J. Goglia has not filed a brief.

PER CURIAM

Defendant Anthony Desa appeals from the Law Division's January 31, 2014 order denying his motion to discharge a default judgment and the March 28, 2014 order denying his motion for reconsideration. We reverse and remand.

We discern the following pertinent facts and procedural history from the record. On October 4, 1990, plaintiffs William and Theresa Goglia, husband and wife, obtained a default judgment against Desa in the amount of $154,057, arising from an investment scheme. After the Goglias divorced, William assigned his share of the judgment to Theresa, who changed her last name to Hoblick, and recorded the assignment on February 15, 2007, with the Morris County Superior Court. Hoblick subsequently assigned the judgment to Prime Judicial Systems, Inc. and recorded it with the same court on May 4, 2007.

Almost six years later Hoblick filed a motion seeking: to vacate the assignment of the judgment to Prime Judicial, revive the judgment for an additional twenty years pursuant to N.J.S.A. 2A:14-22, and amend the caption to reflect her surname change. On August 9, 2013, the court denied the motion because Hoblick lacked standing due to her assignment to Prime Judicial. In response, on October 8, 2013, Hoblick filed a separate complaint against Prime Judicial and its President Gary K. McBride seeking to revoke her assignment of the judgment.

Meanwhile on November 12, 2013, Desa filed a motion to discharge the judgment citing expiration of: the twenty-year period to execute on the judgment, N.J.S.A. 2A:14-5, and the time to revive the judgment within twenty years of its entry, N.J.S.A. 2A:17-3. Desa also contended that Hoblick's motion to vacate the assignment was the first time he was made aware of the judgment against him, and that Hoblick failed to explain what efforts were made to enforce the judgment. Desa served his motion by regular and certified mail on Hoblick, Prime Judicial, and the registered agent of Kennedy Lopez Jefferson & Cohn, a company that Desa claimed was related to Prime Judicial and purportedly controlled by McBride.

In turn, Hoblick filed a cross-motion to consolidate Desa's action with her complaint against Prime Judicial and McBride. Her cross-motion was denied on December 24, 2013. Thereafter, on January 9, 2014, McBride filed a motion to dismiss Hoblick's complaint, which was denied on January 31, 2014.

That same day, the trial court also denied Desa's motion to discharge the default judgment without prejudice on procedural grounds, finding that Desa could not seek the relief he requested as the entity that owns the judgment, Prime Judicial, was not made a party to the case. The court reasoned that Desa should have pled Prime Judicial as a party in this matter because Prime Judicial had an interest and property rights in the judgment through the assignment from Hoblick. The court ruled that Desa offered no case law to support his contention that service of the motion on Prime Judicial satisfied due process. The court also rejected Desa's argument that the judgment should be discharged pursuant to Rule 4:50-1 because he had not made the application within a reasonable time as required under Rule 4:50-2. The trial court reasoned that Rule 4:50-1 was not the appropriate means to discharge a judgment that was correctly entered as the rule governs vacating a judgment where "the underlying judgment is, or was void at the time it was entered, or that there was any problem with the judgment that was entered at that time."

Although the trial court did not rule on the merits of the judgment discharge, it suggested that the judgment may not have been stale and unenforceable under N.J.S.A. 2A:14-22(a), which sets forth criteria for tolling the statute of limitations for enforcement of a judgment. In particular, the court noted that in Hoblick's application seeking to revive the judgment, she argued that the statute of limitations should be tolled based on her unsuccessful efforts to locate Desa after he moved out of state.

Desa subsequently filed a motion for reconsideration, which was denied on March 28, 2014, for the same reasons as the initial motion. This appeal followed. Within weeks of the filing of this appeal, Hoblick's complaint against Prime Judicial and McBride was administratively dismissed on April 25, 2014 for lack of prosecution.

On January 23, 2015, Hoblick filed a motion to supplement the record to reflect that Prime Judicial assigned the judgment back to Hoblick. Three days later, Desa filed a cross-motion, with Hoblick's approval, requesting that we assume original jurisdiction pursuant to Rule 2:10-5 and decide all issues that the trial court did not reach. We granted the motion to supplement the record, but denied the cross-motion without prejudice to allow the parties to address the issues at oral argument for the appeal before us.

In light of the fact that the default judgment against Desa has been re-assigned to Hoblick, the trial court's determination dismissing Desa's motion to discharge the default judgment without prejudice because Prime Judicial was not a party to the action is moot.1 "An issue is 'moot' when the decision sought in a matter, when rendered, can have no practical effect on the existing controversy." Greenfield v. N.J. Dep't of Corrs., 382 N.J. Super. 254, 257-58 (App. Div. 2006) (internal quotation marks and citation omitted). With Hoblick again the judgment holder, the matter is now ripe for resolution on its merits.

There is no dispute that the twenty-year statute of limitations period for Hoblick's 1990 default judgment against Desa expired pursuant to N.J.S.A. 2A:14-5 and N.J.S.A. 2A:17-3 prior to Hoblick's motion in 2013. However, N.J.S.A. 2A:14-22 (a) affords an exception to the twenty-year rule and permits the statute of limitations to be tolled provided that (1) the person against whom there is a judgment "removes from this State after the accrual [of the judgment] and before the expiration of the [statute of limitations]" and (2) the judgment holder files an affidavit certifying that "after diligent inquiry and effort, long-arm service cannot be effectuated . . . ." If both of these elements are met, "the time or times during which such person . . . is not residing within this State . . . shall not be computed as part of the" statute of limitations period. N.J.S.A. 2A:14-22 (a).

To satisfy N.J.S.A. 2A:14-22(a), Hoblick submitted an affidavit to the trial court detailing Desa's movement out of state since she obtained the judgment. To dispute those contentions, Desa provided a certification addressing his whereabouts since the date of the judgment and alleging Hoblick's lack of collection efforts. However, the trial court did not address these conflicting submissions as the court made its disposition strictly on a procedural ground.

Thus, the question is whether we should exercise original jurisdiction as requested by the parties. We decline to do so as the record is simply inadequate. See Price v. Himeji, LLC, 214 N.J. 263, 294-95 (2013) (exercise of original jurisdiction is discouraged when the record is inadequate to permit appellate review). In the absence of findings or conclusions, we are "unable to perform [our] appellate review function." T.M. v. J.C., 348 N.J. Super. 101, 106-07 (App. Div.), certif. denied, 175 N.J. 78 (2002); see also Twp. of Reading v. Solberg Aviation Co., 409 N.J. Super. 282, 303 (App. Div. 2009) (describing how a lack of findings not only hampers the resolution of the case, but also affects the appellate courts' ability to properly review the trial court decision), certif. denied, 201 N.J. 154 (2010). Thus, a remand is necessary for the trial court to make findings and conclusions as to whether the statute of limitations should be tolled. Price, supra, 214 N.J. at 294-95.

Given our remand, we must also address the trial court's rejection of Desa's argument that the judgment should be discharged pursuant to Rule 4:50-1(d), (e), or (f). The rule, in pertinent part, provides that a court can grant relief from a final judgment

On motion, with briefs, and upon such terms as are just, the court may relieve a party or the party's legal representative from a final judgment or order for the following reasons: . . . (d) the judgment or order is void; (e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or (f) any other reason justifying relief from the operation of the judgment or order.

[R. 4:50-1.]

Motions pursuant to subsections (d), (e) or (f) must be made within a reasonable time. R. 4:50-2. Whether a motion has been made within a "reasonable time" is "dependent on the totality of the circumstances." Pressler & Verniero, Current N.J. Court Rules, comment 3 on R. 4:50-2 (2015). A motion to vacate "a default judgment will not be disturbed unless the failure to answer or otherwise appear and defend was excusable under the circumstances and unless the defendant has a meritorious defense; either to the cause of action itself, or . . . to the quantum of damages assessed." Pressler & Verniero, Current N.J. Court Rules, comment 4.1 on R. 4:50-1 (2015) (citing U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467 (2012)).

Courts will "indulgently" review Rule 4:50-1 motions arising from a default judgment, however, the party seeking such relief must still establish that exceptional circumstances exist. Nowosleskav. Steele, 400 N.J. Super. 291, 304 (App. Div. 2008). We review a court's determination of a Rule 4:50-1 motion under an abuse of discretion standard. U.S. Bank, supra, 209 N.J. at 468-69. There is "an abuse of discretion when a decision is made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis." Id. at 467-68 (internal quotation marks and citation omitted).

Here, Desa argues that he should be relieved of the judgment because it is inequitable for the judgment to remain considering the fact that it was unenforceable as the statute of limitations had expired. As noted, the court did not address the merits of the statute of limitations argument because it denied in its decision to deny Desa's motion to discharge on the procedural ground that Prime Judicial was not a party to the action. Thus, we are unable to determine whether there was an abuse of discretion. Consequently, a remand is appropriate for a determination of whether Desa is entitled to relief under Rule 4:50-1 against Hoblick, a party to the action and the current judgment holder.

Lastly, although we need not address the point to reach our decision, we note that Desa assertsthat the trial court failed to acknowledge and reasonably exercise its equitable powers in denying his requested relief. We agree with Desa that the trial court misunderstood its powers.

In determining Desa's motion, the trial court stated "this is not a court of equity. This is a court of law." To the contrary, where "there are any ancillary issues in equity, the Law Division judge has the authority to exercise jurisdiction over those matters." Ward v. Merrimack Mut. Fire Ins. Co., 312 N.J. Super. 162, 169 (App. Div. 1998); see also N.J. Const. art. VI, 3, 4. Courts of equity are empowered to devise and shape remedies that are flexible and adaptable "to fit the changing circumstances of every case and the complex relations of all the parties." Ibid. (internal quotations and citations omitted). In recognition of the discretion given to courts of equity, an appellate court will not intervene absent a clear showing that the trial court has abused that discretion. See Feigenbaum v. Guaracini, 402 N.J. Super. 7, 17 (App. Div. 2008).

While the trial court underestimated its powers, there is no demonstration that the court abused its discretion. The court decided to dismiss defendant's motion without prejudice on procedural grounds, rather than using its equitable powers to grant defendant the relief sought. As noted, the court fully explained its decision and the reasoning therein.

The matter is remanded to the trial court for further proceedings consistent with this decision. Jurisdiction is not retained.

1 Consequently, there is no need to address Desa's contention that the trial court misinterpreted and misapplied the case law, in its initial decision and reconsideration motion, in finding that Desa either had to file a new suit against Prime Judicial or join in Hoblick's separate action in order to discharge the judgment. We also need not decide whether Desa could raise defenses under N.J.S.A. 2A:25-1 which addresses the assignment of claims. Similarly, there is no need to address Hoblick's argument that the assignment of the default judgment should have been revoked based on the false misrepresentations made by Prime Judicial being a licensed Nevada collection agency and that it would collect on the judgment.