RICHARD KELLY, ETC. VS. GENCO REMODELING, INC. (L-2824-08, MERCER COUNTY AND STATEWIDE)
A-5275-15T4
| N.J. Super. Ct. App. Div. | Sep 25, 2017Background
- Jacqueline E. Kelly sued Genco Remodeling, Inc. (and individual defendants including Paul Verna) under the Consumer Fraud Act for defective window work; Kelly died during litigation and her estate was substituted as plaintiff.
- A default judgment for $47,400 was entered on March 3, 2009 against the defendants, including Verna "individually, severally and in the alternative."
- Verna (Genco’s registered agent and accountant) moved to vacate the default after discovering the judgment during a title search; he testified he had limited contact with Genco (prepared tax returns, served as registered agent) and denied personal service of the complaint or visiting the Lombardis’ Sewell address.
- Sheriff’s returns and an affidavit indicated an information subpoena was served at a Sewell address associated with the Lombardis; Verna said he was served at a different office (Thorofare) and wrote a note on the subpoena describing his role with Genco.
- The trial court vacated the default under R. 4:50-1(d), concluding service of the complaint was not established, Verna acted diligently once he learned of the judgment, and he asserted a potentially meritorious defense; the estate’s later motion to reinstate was denied and this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the default judgment should have been vacated for lack of proper service | Kelly’s estate: sheriff’s returns and affidavits established service; Verna’s deposition is insufficient to rebut sworn returns and is not clear and convincing evidence | Verna: there was no personal service of the complaint; returns and sheriff records do not prove service on him at the Sewell address; he acted promptly once he learned of the judgment | Court affirmed vacatur: substantial deviation in service existed and no proper proof of complaint service; R.4:50-1(d) relief appropriate |
| Whether Verna’s testimony adequately controverted sheriff’s returns | Estate: Verna’s testimony cannot legally overcome the affidavit of service; delay and inconsistency diminish credibility | Verna: testified under oath he was not served at Sewell, had limited role, and only learned of judgment later; sheriff’s generalized procedures did not refute his testimony | Court credited the lack of proof of proper service and found the estate didn’t rebut Verna’s testimony sufficiently to bar relief |
| Whether the motion to vacate was untimely or prejudicial to the estate | Estate: delay (including Kelly’s death) and prejudice warrant denying vacatur | Verna: once he learned, he acted diligently; prior knowledge of subpoena does not substitute for proper service of complaint | Court: timeliness measured from actual notice; Verna acted diligently upon learning of judgment; delay did not produce undue prejudice because liability remained contested |
| Whether the trial court erred by deciding before receiving additional sheriff deposition and whether an evidentiary hearing was required | Estate: decision premature; full proof (sheriff’s deponent) could refute Verna and required a hearing | Verna: court had sufficient record (deposition transcript, returns, subpoenas) and discretion to rule | Court: did not abuse discretion in ruling before the additional deposition; no requirement for further hearing given the record and standards for R.4:50 relief |
Key Cases Cited
- Mancini v. EDS, 132 N.J. 330 (1993) (vacatur of defaults is discretionary; appellate review for abuse of discretion)
- U.S. Bank Nat. Ass'n v. Guillaume, 209 N.J. 449 (2012) (appellate review requires clear abuse of discretion)
- Davis v. DND/Fidoreo, Inc., 317 N.J. Super. 92 (App. Div. 1998) (doubts on service favor liberal disposition to secure trial on merits)
- Sobel v. Long Island Entm't Prods. Inc., 329 N.J. Super. 285 (App. Div. 2000) (even with some notice, defective service requires vacatur)
- Jameson v. Great Atl. & Pac. Tea Co., 363 N.J. Super. 419 (App. Div. 2003) (movant bears burden to show grounds for vacatur)
- Goldfarb v. Roeger, 54 N.J. Super. 85 (App. Div. 1959) (service doubts justify liberal disposition)
- Farrell v. TCI of Northern N.J., 378 N.J. Super. 341 (App. Div. 2005) (timeliness of R.4:50 motion measured from actual notice)
- Sean Wood v. Hegarty Grp., Inc., 422 N.J. Super. 500 (App. Div. 2011) (discusses difficulty of piercing corporate veil)