Opinion
DOCKET NO. A-2413-13T4
04-27-2016
ST. CLARE'S HEALTH SYSTEM, Plaintiff-Respondent, v. ALAN ZIMMER, Defendant-Appellant.
Jeffrey M. Advokat argued the cause for appellant (Advokat & Rosenberg, attorneys; Mr. Advokat, on the briefs). Steven Stadtmauer argued the cause for respondent (Celentano, Stadtmauer & Walentowicz, L.L.P., attorneys; Megan E. Verbos, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Lihotz, Fasciale and Higbee. On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-3079-12. Jeffrey M. Advokat argued the cause for appellant (Advokat & Rosenberg, attorneys; Mr. Advokat, on the briefs). Steven Stadtmauer argued the cause for respondent (Celentano, Stadtmauer & Walentowicz, L.L.P., attorneys; Megan E. Verbos, on the brief). PER CURIAM
In this case involving collection on a book account, defendant appeals from a January 2, 2014 order denying his motion to vacate default judgment entered in plaintiff's favor. Because defendant failed to show excusable neglect or exceptional circumstances as required by Rule 4:50-1(a) and (f), we affirm.
On December 13, 2012, plaintiff filed its complaint against defendant seeking payment on two accounts for medical services rendered to defendant: $26,136.50, covering services rendered between May 5 and May 17, 2002; and $36,622.17, covering services rendered between March 1 and March 19, 2002. Defendant chose not to file an answer to the complaint. Instead, in February 2013, defendant filed a Rule 4:6-2(e) motion to dismiss plaintiff's complaint. He argued the complaint was barred by the six-year statute of limitations (SOL) contained in N.J.S.A. 2A:14-1. Plaintiff opposed the motion, contending N.J.S.A. 2A:14-24 tolled the SOL.
This statute, entitled "[a]cknowledgment or new promise," provides, in pertinent part:
[N]o acknowledgment or promise by words only shall be deemed sufficient evidence of a new or continuing contract, so as to take any case out of the operation of this chapter, or to deprive any person of the benefit thereof, unless such acknowledgment or promise shall be made or continued by or in some writing to be signed by the party chargeable thereby.
In response to the motion, plaintiff submitted a certification from its manager of patient accounts showing defendant made substantial efforts to satisfy the debt by issuing approximately 183 checks to plaintiff. Plaintiff asserted that each check contained a handwritten notation identifying the applicable account number, which plaintiff maintained clearly reflected defendant's cumulative acknowledgment that he owed the money and would fully pay off the debt. Defendant continued to pay plaintiff after plaintiff filed the complaint.
In his merits brief, defendant's counsel concedes defendant paid $13,316.17, leaving a balance of $49,442.50.
The judge properly converted the Rule 4:6-2(e) motion into a Rule 4:46 summary judgment motion because he considered papers beyond the pleadings. It was clear that resolution of the SOL argument raised genuine issues of material fact. The judge rendered a written decision, stating:
A reading of N.J.S.A. 2A:14-24 . . . makes clear that a payment on an account will toll the [SOL] if there is an acknowledgment or promise in writing that the entire debt will be paid. . . . The [d]efendant wrote the account number on each check. [However], [t]here is nothing in the record showing that the amounts owed on each account were disputed, which is an issue which must be meted out during discovery.As a result, the judge entered an order dated April 1, 2013, denying the motion.
After the court rejected his SOL argument, defendant did not file an answer and engage in discovery as to the amount of the debt, whether defendant acknowledged the debt, and whether he fully intended in writing to satisfy it. Instead, defendant filed a motion for leave to appeal from the court's interlocutory denial of his motion to dismiss. On May 21, 2013, we denied that motion without prejudice.
After we denied defendant's motion for leave to appeal, defendant did not file an answer to plaintiff's complaint. As a result, the court placed defendant in default. On September 4, 2013, plaintiff obtained default judgment in the amount of $49,442.50.
On November 27, 2013, defendant moved to vacate default judgment. As part of the moving papers, defendant's counsel acknowledged defendant failed to file an answer and plaintiff obtained default judgment. After reciting the procedural history, defendant's counsel stated "[r]ather than fully litigate the Law Division case," defendant has chosen to pursue his right to appeal from the April 1, 2013 order denying defendant's motion to dismiss on SOL grounds. As a result, defendant sought to vacate default judgment, not because there existed a basis under Rule 4:50-1, but rather, to eliminate the interlocutory nature of the order denying the motion to dismiss. The judge then denied defendant's motion to vacate default judgment.
On appeal, defendant focuses primarily on the SOL argument he raised before the court on his motion to dismiss. He repeats his argument that plaintiff's complaint should be barred by the SOL. Defendant maintains, like he did before the judge, that N.J.S.A. 2A:14-24 does not toll the SOL. Defendant acknowledges, however, the parties dispute whether he fully recognized plaintiff's "entire debt" and whether he intended in writing to satisfy the "entire debt." Defendant did not argue the judge erred by denying his motion to vacate default judgment.
Although defendant focuses on the merits of his unsuccessful motion to dismiss the complaint, we affirm because he failed to demonstrate entitlement to relief under Rule 4:50-1. A party seeking to vacate a default judgment must satisfy this rule, which provides, in pertinent part, that
[o]n 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: (a) mistake, inadvertence, surprise, or excusable neglect; . . . or (f) any other reason justifying relief from the operation of the judgment or order.
[Rule 4:50-1.]
A party seeking relief under Rule 4:50-1(a) must show both excusable neglect and a meritorious defense. Mancini v. EDS, 132 N.J. 330, 334-35 (1993) (quoting Morales v. Santiago, 217 N.J. Super. 496, 501 (App. Div. 1987)). Excusable neglect can be found if "the default was 'attributable to an honest mistake that is compatible with due diligence or reasonable prudence.'" Guillaume, supra, 209 N.J. at 468 (quoting Mancini, supra, 132 N.J. at 335).
A motion to vacate judgment under Rule 4:50-1(a) or (f) "should be granted sparingly, and is addressed to the sound discretion of the trial court." Fineberg v. Fineberg, 309 N.J. Super. 205, 215 (App. Div. 1998) (citations omitted). A trial court's determination "warrants substantial deference, and should not be reversed unless it results in a clear abuse of discretion." U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467 (2012) (citations omitted). An abuse of discretion occurs "when a decision is 'made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.'" Id. at 467-68 (quoting Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123 (2007)). We conclude the judge did not abuse his discretion.
Here, defendant has shown no excusable neglect. As a result, there is no basis under subsection (a) to vacate default judgment. Instead of initially filing an answer, engaging in discovery, and challenging the amount of the debt and whether he acknowledged the debt and intended to fully satisfy it, defendant allowed the entry of default judgment so that he could file a final appeal. That is so even though defendant admits there exists disputed issues of material facts precluding summary judgment as a matter of law.
At oral argument before us, it was obvious that the parties disputed the factual basis underlying whether N.J.S.A. 2A:14-24 was triggered to toll the SOL. Resolution of the factual issues required discovery, which was obviated by not filing an answer and by allowing the entry of default judgment. --------
Relief from the default judgment was also not warranted under Rule 4:50-1(f), as defendant's circumstance is not one of the "exceptional situations" contemplated by subsection (f). See Hous. Auth. of Morristown v. Little, 135 N.J. 274, 286 (1994) (stating that "relief under Rule 4:50-1(f) is available only when truly exceptional circumstances are present" (citation omitted)); Badalamenti v. Simpkiss, 422 N.J. Super. 86, 103 (App. Div.) (indicating that when requesting relief under Rule 4:50-1(f), the party "must show that enforcement of the judgment would be unjust, oppressive or inequitable" (citation omitted)), certif. denied, 208 N.J. 600 (2011). No such exceptional circumstances exist here.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION