FRANZBLAU DRATCH, PC v. BRIAN MARTIN

NOT FOR PUBLICATION WITHOUT THE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-1017-16T4

FRANZBLAU DRATCH, PC,

        Plaintiff-Respondent,

v.

BRIAN MARTIN,

     Defendant-Appellant.
_________________________________

              Submitted November 15, 2017 – Decided December 12, 2017

              Before Judges Nugent and Geiger.

              On appeal from Superior Court of New Jersey,
              Law Division, Essex County, Docket No. L-3435-
              13.

              Peter A. Ouda, attorney for appellant.

              Franzblau Dratch, PC, respondent                pro   se
              (Stephen N. Dratch, on the brief).

PER CURIAM

        Defendant Brian Martin appeals a September 23, 2016 order

granting      reconsideration       and   reinstating     a   default    judgment

entered against him.         We reverse.
      We glean the following facts from the record.                         This is a

collection     action     brought       by   plaintiff       Franzblau    Dratch,     PC,

against defendant, its former divorce client, for unpaid legal

fees totaling $17,839.49.           Plaintiff's initial attempts to serve

defendant with process were unsuccessful.                      After unsuccessfully

moving   for    leave     to    serve    defendant      by    substituted    service,

plaintiff engaged a private process server who served the summons

and   complaint     on    an    individual       at   defendant's      residence      who

identified      herself    as     Cassandra       Martin.        Plaintiff       alleges

Cassandra Martin identified herself to the process server as

defendant's relative and roommate.                    On April 2, 2014, default

judgment was entered against defendant.

      Plaintiff claims it mailed a copy of the default judgment to

defendant      on   May   12,    2014.       Approximately       two     weeks    later,

plaintiff served defendant with a post-judgment discovery demand

to which defendant responded by email.                   Thereafter, defendant's

attorney wrote to plaintiff regarding the post-judgment discovery

demand. Subsequently, on June 9, 2014, plaintiff asked defendant's

attorney for copies of defendant's tax returns.                        Plaintiff also

propounded a May 18, 2015 notice of post-judgment deposition.

      Settlement discussions ensued with the parties agreeing to

settle the matter for a $3500 lump sum payment, but defendant

never paid the settlement amount.                     Instead, in February 2016,

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defendant retained counsel and moved to vacate the default judgment

and for leave to file a counterclaim.               Defendant denied plaintiff

properly served him, claiming that Cassandra Martin was not his

relative, not a member of his household, and was unknown to him.

He also contended he has meritorious defenses to the collection

action, including breach of contract, unreasonable and unnecessary

legal fees, and legal malpractice.               Plaintiff opposed the motion.

     On March 4, 2016, the trial court granted defendant's motion.

In addition to erroneously indicating the motion was unopposed,

the judge added handwritten comments on the order indicating

defendant      had   demonstrated         both    excusable      neglect    and     a

meritorious defense required under Rule 4:50-1.                The order vacated

the default judgment and granted defendant leave to file an answer

and counterclaim within thirty days.

     Defendant       then    filed   an    answer     and   counterclaim,     which

asserted multiple affirmative defenses, including failure to state

a cause of action and lack of jurisdiction over the defendant

because of improper service.              The answer also asserted that the

legal   fees    sought      by   plaintiff    "were    neither    reasonable      nor

necessary."      The counterclaim alleged plaintiff committed legal

malpractice by failing to oppose the default motion filed by

defendant's wife in the divorce action.



                                          3                                 A-1017-16T4
      Plaintiff then moved for reconsideration, which was opposed

by defendant and denied by the trial court on April 29, 2016.1                        In

handwritten comments on the order, the judge stated:                      "Defendant

has demonstrated (1) excusable neglect – in not receiving service

–   and   (2)    a    meritorious     defense      –   a   counterclaim   for    legal

malpractice[.]         R. 4:50-1."

      Plaintiff moved a second time for reconsideration.                   Defendant

opposed the motion.           On September 23, 2016, the judge granted the

motion.     In rendering her decision, the judge did not address

defendant's arguments on the merits.                   Rather, she simply stated

it had recently come to her attention that the order vacating the

default    and       the   first     order       denying    reconsideration      "were

impermissibly          stamped      with   [her]       signature     without     [her]

authorization."         The judge further indicated that after reviewing

all the papers submitted in opposition to defendant's motion to

vacate the default, she found "that defendant should not have been

granted    the       relief   he    requested."        Accordingly,    she     granted

plaintiff's second motion for reconsideration, reinstated the

default     judgment,         and     dismissed        defendant's     answer       and

counterclaim.         This appeal followed.


1
  Although the wording of the order does not state the motion for
reconsideration is denied, the parties consider the order to have
denied plaintiff's motion to rescind the March 4, 2016 order and
reinstate the default judgment.

                                             4                                 A-1017-16T4
     Plaintiff   represented    defendant   in   a   contested      divorce

action.   During the discovery phase of the case, plaintiff moved

to withdraw as defendant's counsel claiming defendant had failed

to pay outstanding legal fees. Plaintiff further claimed defendant

engaged in conduct that resulted in plaintiff making incomplete

representations to the divorce court.         At the same time that

plaintiff's motion to be relieved was pending, defendant's wife

moved to enter default against him in the divorce case, claiming

defendant had failed to provide court-ordered discovery.

     Plaintiff's motion to be relieved as counsel and defendant's

wife's motion for discovery sanctions had the same return date.

Defendant contends he provided the court-ordered discovery to his

wife.     Defendant   thought   plaintiff   would    oppose   his    wife's

discovery motion on that basis, but plaintiff did not submit any

opposing papers to the divorce court.       As a result, the divorce

court granted his wife's unopposed motion and entered a default

against defendant for failure to provide discovery.           The divorce

court then concluded the divorce action by conducting a proof

hearing rather than a trial.       The divorce court did not permit

defendant to present any affirmative evidence on the issues of

alimony and child support during the proof hearing.              Defendant

contends this restriction resulted in the divorce court imposing

unreasonably high alimony and child support obligations.

                                   5                                A-1017-16T4
     On   appeal,    defendant   argues    the   trial   court   abused   its

discretion by ultimately denying his motion to vacate the default

judgment entered against him without making any findings or stating

its analysis.

     Motions to reopen or set aside a judgment are governed by

Rule 4:50-1.        Defendant sought to reopen the judgment under

subsections (d) and (f) of the rule, which provide that the court

may relieve a party from a final judgment if "the judgment or

order is void," R. 4:50-1(d); or "any other reason justifying

relief from the operation of the judgment or order," R. 4:50-1(f).

Motions brought under subsections (d) and (f) "shall be made within

a reasonable time . . . after the judgment, order or proceeding

was entered or taken."      R. 4:50-2.

     An application to vacate a default judgment is "viewed with

great liberality, and every reasonable ground for indulgence is

tolerated to the end that a just result is reached."              Marder v.

Realty Const. Co., 
84 N.J. Super. 313, 319 (App. Div.), aff'd, 
43 N.J. 508 (1964).       Ordinarily, "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, if liability is not disputed, to the quantum of damages



                                      6                              A-1017-16T4
assessed."   Pressler & Verniero, Current N.J. Court Rules, comment

4.1 on R. 4:50-1 (2018).

     On two occasions, the trial court found that defendant had

demonstrated excusable neglect and a meritorious defense.       Yet,

when deciding plaintiff's second motion for reconsideration, the

trial court came to a different conclusion without making any new

findings or providing any analysis, in clear violation of Rule

1:7-4(a), which requires the court to "find the facts and state

its conclusions of law thereon."     See Bennett v. Lugo, 
368 N.J.

Super. 466 (App. Div.) (holding that unsupported findings made

after "reviewing the moving papers" are "wholly inadequate"),

certif. denied, 
180 N.J. 457 (2004); Morales v. Santiago, 
217 N.J.

Super. 496 (App. Div. 1987) (concluding the trial court failed to

abide by Rule 1:7-4 when it denied defendant's motion to vacate

default judgment without finding sellers were served with process

and without ordering a plenary hearing to resolve the issue).

     Defendant argues his right to due process was violated.

Fundamental to due process is providing a defendant with notice

of a lawsuit and an opportunity to be heard.    "An elementary and

fundamental requirement of due process in any proceeding which is

to be accorded finality is notice reasonably calculated, under all

the circumstances, to apprise interested parties of the pendency

of the action and afford them an opportunity to present their

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objections."   O'Connor v. Abraham Altus, 
67 N.J. 106, 126 (1975)

(quoting Mullane v. Cent. Hanover Bank & Tr. Co., 
339 U.S. 306,

314, 
70 S. Ct. 652, 657, 
94 L. Ed. 2d 865, 873 (1950)).           "Failure

to give notice violates 'the most rudimentary demands of due

process of law.'"   Peralta v. Heights Med. Ctr., Inc., 
485 U.S. 80, 84, 
108 S. Ct. 896, 899, 
99 L. Ed. 2d 75, 81 (1988) (quoting

Armstrong v. Manzo, 
380 U.S. 545, 550, 
85 S. Ct. 1187, 1190, 
14 L. Ed. 2d 62, 65 (1965)).

     A party satisfies the notice requirement if they properly

serve the defendant with a summons and complaint.            A party may

obtain in personam jurisdiction over a defendant "by leaving a

copy thereof at the individual's dwelling place or usual place of

abode with a competent member of the household of the age of 14

or over then residing therein."         R. 4:4-4(a)(1).

     Here,   defendant   contends   the     court   lacked   in   personam

jurisdiction because plaintiff did not serve him with the summons

and complaint in accordance with Rule 4:4-4(a)(1).            He alleges

that Cassandra Martin was not a member of his household because

she did not live in his residence.        Plaintiff contends it properly

served defendant with process because Cassandra Martin was a member

of defendant's household.     The trial court did not conduct a

hearing to determine whether Cassandra Martin was a member of

defendant's household.    The court should not have determined that

                                    8                              A-1017-16T4
disputed factual issue on conflicting certifications.            See Eaton

v. Grau, 
368 N.J. Super. 215, 222 (App. Div. 2004).

     If   Cassandra   Martin   was    not   a   resident   of   defendant's

household, service was improper, defendant's right to due process

was violated, the court lacked in personam jurisdiction over the

defendant, and the judgment is void.

     "It is clear that a court cannot exercise its power to the

detriment of a litigant when in personam jurisdiction has not been

established, and that such action would violate the Due Process

Clause." Berger v. Paterson Veterans Taxi Serv., 
244 N.J. Super.
 200, 205 (App. Div. 1990) (citing Peralta, supra, 
485 U.S. 80, 
108 S. Ct. 896, 
99 L. Ed. 2d 75).        Where the service of process is so

defective that the default judgment is void, due process requires

the court grant a motion to set aside a judgment even if it was

not made in a timely fashion.    Id. at 204-06.       In addition, if the

court lacks in personam jurisdiction, the defendant is not required

to demonstrate a meritorious defense.           Peralta, supra, 
485 U.S. 
at 86-87, 
108 S. Ct.  at 900, 
99 L. Ed. 2d    at 82.

     We hold the trial court erred by denying defendant's motion

to reopen the default judgment without conducting a hearing to

resolve the disputed issue of whether plaintiff properly served

defendant.   We reverse the September 23, 2016 order and remand for

further proceedings consistent with this opinion.          In light of our

                                      9                             A-1017-16T4
ruling, we need not reach the issue of whether the court should

have granted defendant's motion under Rule 4:50-1(f).

    Reversed and remanded.   We do not retain jurisdiction.




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