DENNIS PRESSEY v. NORTH STAR PROPERTY GROUP

NOT FOR PUBLICATION WITHOUT THE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-0

DENNIS PRESSEY and CENTER POINT

CONTRACTING, LLC,1

Plaintiffs-Respondents,

v.

NORTH STAR PROPERTY GROUP and

JIM DIAMOND,

Defendants-Appellants.

__________________________________

NORTH STAR PROPERTY GROUP, INC.,

Plaintiff-Appellant,

v.

DENNIS PRESSEY,

Defendant-Respondent.

_________________________________________

December 29, 2016

Submitted December 12, 2016 Decided

Before Judges Sabatino and Nugent.

On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Burlington County, Docket Nos. DC-6732-14 and DC-6836-14.

Law Offices of Mark J. Molz, attorneys for appellants (Mark J. Molz, on the briefs).

Dennis Pressey, respondent pro se.

PER CURIAM

This appeal arises out of disputes between a commercial landlord and tenant that resulted in several cases in the Special Civil Part. Although the procedural history is somewhat complicated and the underlying facts are not detailed in depth in the sparse record supplied to us, we discern the following relevant background.

2

Eventually disputes arose between the parties, with North Star contending that its tenant failed to pay rent due and had damaged the premises. North Star consequently brought a summary dispossession action in the Special Civil Part against Pressey, and obtained a judgment for possession.3

After the eviction case ended, Pressey and Centerpoint, as co-plaintiffs, filed a complaint against "James Diamond/Northstar Property Group" in the Special Civil Part seeking the return of the security deposit, demanding $3,600 in damages, plus costs. Diamond is a vice president of North Star. The action was docketed in the Special Civil Part under No. DC-6732-14. The summons and complaint were mailed to North Star and Diamond, and Diamond acknowledged service of the certified mail enclosing those documents on September 6, 2014. Both defendants in that case filed an answer.

Meanwhile, North Star filed a separate action (Docket No. DC-6836-14) in the Special Civil Part on September 9, 2014. That complaint sought recovery for back rent and alleged damages to the premises.

After being served, Pressey and Centerpoint moved through their counsel in lieu of an answer to dismiss the complaint. The dismissal motion was based on an assertion that North Star's corporate status in New Jersey had been suspended for failure to file annual reports with the Secretary of State in compliance with N.J.S.A.15A:4-5(a) and (b). North Star failed to respond to the motion, and the Special Civil Part consequently granted the unopposed motion and dismissed North Star's complaint on November 14, 2014.

3 On December 8, 2014, North Star and Diamond failed to appear for trial in the tenant's action, and default was accordingly entered. About a month later on January 6, 2015, default judgment was entered in DC-6732-14 against North Star and Diamond in the sum of $3,666.

After a writ of execution on the tenant's judgment was issued, North Star and Diamond moved on May 1, 2015 to vacate that default judgement and simultaneously moved to reinstate North Star's complaint in DC-6836-14. In the supporting papers, North Star alleged that it had a meritorious defense to the tenant's action, alleging that Pressey had physically altered the premises without a contract or written estimate to authorize him making such improvements. Additionally, North Star asserted, in a certification by Diamond, that it had provided the Secretary of State with the delinquent annual reports and thus had been reinstated to a corporation in good standing. SeeN.J.S.A. 15A:4-5(c) (allowing for such a cure upon the payment to the State of "the fee then payable upon the filing of the certificate of incorporation", along with the filing of a current annual report and a reinstatement filing assignment outlined in N.J.S.A.15A:15-1(g)).

Pressey and Centerpoint opposed the landlord's post-disposition motions. They argued that North Star and Diamond had not shown excusable neglect in failing to respond to the tenant's lawsuit and not appearing for trial. They further asserted that North Star and Diamond had not shown sufficient justification to restore its own complaint.

After considering the parties' positions, Judge Janet Z. Smith denied both of the landlord's motions, detailing her reasons in a consolidated written opinion dated June 12, 2015. With respect to the default judgment entered in the tenant's action in DC-6732-14, the court determined that the landlord had failed to demonstrate excusable neglect for failing to appear at trial. Nor had the landlord presented a meritorious defense to that action. SeeR. 4:50-1; Mancini v. EDS, 132 N.J.330, 334 (1993). In particular, the judge rejected Diamond's assertion in his supporting certification that he had not personally appeared for trial because he had "thought the entire case was dismissed." With respect to the landlord's dismissed complaint in DC-6836-14, the judge was not satisfied that its corporate status in this State had actually been restored.

The landlord now appeals the consolidated order. It argues that the trial court erred in denying it relief to reopen both cases. Specifically, it asserts that its affirmative complaint against the tenant should have been dismissed without prejudice instead of with prejudice because of the temporary revocation of its corporate status; that the court lacked the authority to enter the default judgment because the tenant allegedly named the wrong parties in the lawsuit; that the court should have reinstated the landlord's complaint once it was provided with documentation showing that its corporate status was restored; and that Diamond can have no personal liability to the tenant because he does not own the subject realty and is not individually responsible for the LLC's debts.

Our scope of review of these matters is limited. In general, the disposition of a motion under Rule4:50-1 to vacate a judgment is generally entrusted to the discretion of the trial court. Hodgson v. Applegate, 31 N.J. 29, 37 (1959). The trial court's decision to grant or deny such a motion should not be disturbed on appeal unless it represents a "clear abuse of discretion." Hous. Auth. of Morristown v. Little, 135 N.J.274, 283-84 (1994); Orner v. Liu, 419 N.J. Super. 431, 435 (App. Div.), certif. denied, 208 N.J. 369 (2011). Such an abuse of discretion exists when the trial court's decision is "made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis." Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002); see also US Bank Nat'l. Ass'n. v. Guillaume, 209 N.J.449, 467-68 (2012) (reiterating the Flagglanguage).

Applying this deferential standard of review, we discern no abuse of discretion in the trial court's denial of the landlord's application to set aside the tenant's default judgment. The judge reasonably found unpersuasive Diamond's explanation that he had not appeared for that hearing because he allegedly believed the "entire case" was dismissed. As the judge rightly pointed out, the only matter that the court had dismissed was the lawsuit in which North Star, not Diamond, was the plaintiff, whereas the only matter in which Diamond was named individually was the tenant's action to recover its security deposit. The revoked status of North Star's corporate charter in this State had no bearing on Diamond's own potential liability. Moreover, as the judge also noted, Diamond and his company were represented by counsel.

The trial court did not abuse its discretion in finding that the landlord had not shown excusable neglect. Having sustained that finding, we need not reach whether the landlord had presented grounds for a meritorious defense, including the claim that Pressey's Special Civil Part complaint was defective because it admitted the suffix "Inc." in naming North Star, and allegations that the tenant had damaged the premises and thereby was not entitled to have its security deposit refunded. In the absence of proving excusable neglect for ignoring a summons and complaint, the presence of a meritorious defense is inconsequential under Rule4:50-1. Guillaume, supra, 209 N.J.at 468; Marder v. Realty Constr. Co., 84 N.J. Super. 318, 318 (App. Div.), aff'd43 N.J. 508 (1964).

The trial court's dismissal of North Star's affirmative complaint in DC-6836-14 was also appropriate because of the corporation's failure to file timely annual reports with the Secretary of State as required and N.J.S.A. 15A:4-5. The documents provided by North Star to the motion judge did not show that it had cured its deficiency as of the time its lawsuit was dismissed on November 14, 2014, or even by June 12, 2015 when Judge Smith issued her decision rejecting the landlord's motions for relief.

The landlord has included in its appendix and appeal a copy of a Certificate of Reinstatement issued by the Acting State Treasurer on July 15, 2015, a month after the trial court ruled. Because that document was not provided to the trial court, it is not properly part of the appellate record for our review, and we must disregard it. See R.2:5-4(a) (confining the record on appeal to "papers on file in the court or courts or agencies below"); Townsend v. Pierre, 221 N.J.36, 45 n.2 (2015). However, the landlord is not precluded from moving for relief on this basis in the trial court, subject to whatever legal or equitable defenses the tenant may interpose, pursuant to Rule4:50-1(f). We provide no advisory opinion as to whether or not such a future motion for reinstatement should be granted.

The remaining arguments raised in the landlord's brief and reply brief lack sufficient merit to warrant discussion. R.2:11-3(e)(1)(E).

Affirmed.

1 Pressey, who is apparently a principal of the LLC, filed a substitution of attorney with this court on September 29, 2015.

2 The landlord argues in its main brief on appeal that the lease called for no security deposit. However, the lease's Table of Contents contains a heading indicating that paragraph 7 of the lease, entitled "Security Deposit", appears on page 4 of the lease. Pages 3 through 6 of the lease are omitted from the landlord's appendix. Given that omission, we do not accept the landlord's unsubstantiated assertion that no security deposit was required for this lease.

3 Pressey did not appeal this judgment evicting him and his company from the premises.