By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Appellate Law Attorney

In a recent case, our firm was retained by a Canadian citizen and businessman to oppose a Plaintiffs’ application to the trial court for entry of final judgment by default. We in turn filed a cross-motion to vacate the default previously entered by the trial court. Apparently, our client failed to defend himself in New Jersey in a timely manner, thus the trial court entered the default.

Our position is straightforward. The Courts in NJ have the power to vacate a default judgment under R. 4:50-1(a), which provides that relief from a final judgment may be ordered by the trial judge upon a showing of “(a) mistake, inadvertence, surprise, or excusable neglect.” The longstanding interpretation of this Rule is set out in an Appellate decision case cited as Nowosleska v. Steele. The Court said:

[W]hen exercising that discretion on an application to vacate a default judgment, courts must exercise “great liberality” and “should tolerate ‘every reasonable ground for indulgence’ “with a view to opening default judgments in order “that a just result is reached.” Indeed, New Jersey courts have always had the inherent equitable power to vacate judgments and, with respect to default judgments, have exercised great liberality in doing so in order that cases may be decided on the merits.  A court’s liberality in vacating default judgments is justified, since a default judgment is based on only one side’s presentation of the evidence without due consideration to any countervailing evidence or point of view, and, thus, may not be a fair resolution of the dispute. As a result, on a motion to vacate a default judgment, “[a]ll doubts … should be resolved in favor of the parties seeking relief.”

Here, our client seeks only his day in court. The trial court’s power to vacate the default entered is well-supported under the case law when taking into account the de minimis timing error of his prior counsel combined with the defenses raised by him as to the amounts claimed due by Plaintiffs, as set forth in the supporting Certification of Counsel. The Rule recognizes New Jersey’s balance between the finality of judgments and society’s need for the Courts to decide each case fairly.

When a judgment is entered by default, a trial court is required to exercise its discretion “with great liberality, and every reasonable ground for indulgence is to be extended to the end that a just result is reached.” Additionally, in the specific context of relief from a default judgment, “all doubts … should be resolved in favor of the party seeking relief.”

The meritorious defense(s) advanced by the trial attorney at Hanlon Niemann & Wright included (1) lack of notice of portion of the alleged debt(s) and (2) a dispute as to the reasonableness of the charges by the Plaintiff.

In this case, the negligence claimed attributable to our client was his failure to timely file his Answer to Plaintiff’s collection complaint in excess of $200,000. He was served in Canada, whereupon his Canadian counsel had to locate and retain local counsel. The extension granted by Plaintiffs was only 20 days, not the customary 30 days – in which case, the Answer would have been filed timely – and counsel disputed whether the extension agreed to was calendar days or business days. In the end, the client’s second lawyer, hired by his first lawyer, was retained without sufficient time to Answer. This appeal is not analogous to another case where a defendant purposely caused the delays to obscure justice. This case involved a litigant being punished for a de minimis error of his counsel. It will be interesting to see how this appeal is treated by the Appellate Courts. I’m optimistic of a successful outcome.

To discuss your NJ Appellate Law matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing consultations if you are unable to come to our office.