Opinion
DOCKET NO. A-4159-13T4
05-22-2015
MIDLAND FUNDING, LLC, Plaintiff-Respondent, v. MAUREEN BERRIOS, Defendant-Appellant.
David Wisniewski argued the cause for appellant. Lawrence J. McDermott, Jr. argued the cause for respondent (Pressler and Pressler, L.L.P., attorneys; Mr. McDermott, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Fisher and Manahan. On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. DC-4141-13. David Wisniewski argued the cause for appellant. Lawrence J. McDermott, Jr. argued the cause for respondent (Pressler and Pressler, L.L.P., attorneys; Mr. McDermott, on the brief). PER CURIAM
Defendant Maureen Berrios appeals the denial of her motion to vacate a default judgment entered in this collection action. Because such a motion must be liberally indulged, we conclude the judge erred in disregarding defendant's sworn statements in favor of his interpretation - favorable to plaintiff - of a telephone conversation between plaintiff's counsel's office and the unrepresented defendant.
The complaint in this action was filed in the Special Civil Part by plaintiff Midland Funding, LLC, on March 27, 2013. According to the clerk's records, the complaint was served on June 21, 2013. When defendant failed to file a timely responsive pleading, the clerk entered a $9,649.26 default judgment in favor of plaintiff on October 4, 2013. In February 2014, defendant moved for relief from the judgment, asserting in an affidavit that she did not know "who or what" Midland Funding is, that she never "transacted any business" with plaintiff, and that she does "not owe them any money." With regard to her failure to respond to the complaint, defendant asserted in her affidavit that
From June 2013 through the present, I have been hospitalized numerous times for a variety of medical conditions, including for cancer in June 2013 and meniscus therapy and surgery. Even if I was served with the complaint, I was not able to deal with it, due to my numerous medical issues.In response, plaintiff relied in part on a transcript of a telephone conversation (hereafter "the transcript") between a paralegal employed by plaintiff's counsel and the then-unrepresented defendant; during the conversation — which was apparently prompted by a letter sent by plaintiff's counsel — defendant appears to acknowledge her awareness of the suit and the alleged debt. In light of the transcript, the motion judge concluded he was "convinced" defendant "knows this account," that she had "done business with this company before," and that "she'd like to work something out." For those reasons, he denied the motion to vacate.
Defendant appeals, arguing: the judge did not utilize the correct standard; the clerk lacked the authority to enter default judgment; there exists "ample evidence" plaintiff's certifications regarding the assignment of the claim "are false"; defendant demonstrated excusable neglect because "she was not served with the complaint"; defendant has meritorious defenses to the complaint; and plaintiff failed to adhere to the "Consumer Bill of Rights." Because we agree the judge did not "liberally indulge" defendant's moving papers and, instead, gave too much credence to the transcript, we reverse.
At the outset of the transcript there is a reference to a letter sent to defendant; of interest is the fact that the letter appears not to have been produced in the trial court and is not contained in the record on appeal. Its absence deprived the motion judge of the ability to draw other inferences about defendant's alleged statements during the telephone conversation than those suggested by plaintiff. For example, the letter may have been captioned with the docket number; consequently, defendant's recitation of the docket number — which plaintiff views as conclusive on the question of service of process — might not have been viewed as so damaging to defendant's sworn assertions. In addition, the letter may have invited settlement discussions; if so, plaintiff's offering of the alleged content of the discussion as defendant's admission of the elements of plaintiff's cause of action is dubious at best, N.J.R.E. 408, particularly when the discussion clearly occurred when defendant was unrepresented.
We assume for present purposes only that the transcript is accurate and was properly authenticated.
The transcript starts with the following exchange:
JF: Pressler and Pressler, you are speaking with Joe.We find it additionally curious that defendant asked whether she had to give the docket number "again," suggesting the likelihood of an earlier telephone call or an earlier discussion not contained in the transcript.
[Defendant]: Hi Joe. How are you today?
JF: Can't complain. How are you?
[Defendant]: Good. Um, Joe, I received a letter from you guys and I guess, do I have to give you the docket number again?
JF: Please.
[Defendant]: It is DC-004141-13.
We think this highly likely since the individual speaking for plaintiff during the transcribed conversation mentioned "we just sent you out a settlement letter on Thursday"; indeed, plaintiff's spokesperson went on in the transcript to describe the details of the offer conveyed by the letter.
N.J.R.E. 408 states in part that "[w]hen a claim is disputed as to validity or amount, evidence of settlements or conduct by parties or their attorneys in settlement negotiations . . ., including offers of compromise or any payment in settlement of a related claim, shall not be admissible to provide liability for, or invalidity of, the amount of the disputed claim."
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Our courts have long held that a party seeking to vacate a default judgment is entitled to have the application "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); see also Morristown Hous. Auth. v. Little, 135 N.J. 274, 283-84 (1994); Mancini v. EDS, 132 N.J. 330, 334 (1993). This approach was not taken here. Even if the record permitted a determination that defendant was properly served with the summons and complaint, her sworn assertion that medical problems distracted her from properly responding to the complaint was a ground upon which relief should have been granted. See Bergen-Eastern Corp. v. Koss, 178 N.J. Super. 42, 45-46 (App. Div.) (affirming vacation of a default judgment when it was shown the seventy-four-year-old defendant with "a history of continuing, serious psychiatric problems . . . did not understand [the complaint's] import"), appeal dismissed, 88 N.J. 499 (1981); see also Regional Constr. Corp. v. Ray, 364 N.J. Super. 534, 541 (App. Div. 2003) (excusing defendant's confusion based on the import of numerous suits and a belief that counsel would protect his interests). As to the presence of a meritorious defense, we do not understand defendant's comments in the transcript — assuming they are admissible — as either conceding plaintiff's standing to sue on this account or the amount owed.
The motion judge should have liberally indulged defendant's sworn statements and should not have decided the motion through an interpretation favorable to her adversary of her unsworn comments in the transcript, particularly where the circumstances strongly suggested those unsworn statements are likely inadmissible, N.J.R.E. 408. Consequently, we reverse the order under review, vacate the default judgment, and remand for entry of an order permitting defendant a reasonable time to file a responsive pleading. For these reasons, we need not reach the other issues presented by defendant in this appeal.
Reversed and remanded. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION