Opinion
DOCKET NO. A-1487-11T1
02-06-2013
CAPITAL ONE BANK, Plaintiff-Respondent, v. BOBAN JOVANOVIC, Defendant-Appellant.
Forman & Cardonsky, attorneys for appellant (Samuel Tsinman, of counsel and on the brief). Respondent Capital One Bank has not filed a brief.
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Graves and Espinosa.
On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Union County, Docket No. DC-013440-10.
Forman & Cardonsky, attorneys for appellant (Samuel Tsinman, of counsel and on the brief).
Respondent Capital One Bank has not filed a brief. PER CURIAM
Defendant Boban Jovanovic appeals from the denial of his motion to vacate a Special Civil Part default judgment of $5241.60 against him. We reverse and remand.
Plaintiff Capital One Bank filed a complaint against defendant on July 14, 2010. The complaint alleged that defendant owed the amount of $2747.99 plus interest of $2442.94 and attorneys' fees, and demanded judgment against defendant for $5190.93 plus interest, attorneys' fees and costs. A default judgment was entered against defendant in the amount of $5241.60.
Defendant filed a motion to vacate the default judgment and for leave to file an answer in September 2011. In support of the motion, defendant submitted a certification, which included the following assertions:
2. In 2000 through 2002 I assisted with the operation of Genesis International Holding Limited, a Delaware Corporation, owned at that time by my nephew, Sasha Jovanovic, located at 20 Commerce Drive, Cranford, NJ.
3. In December 2002 I took over control of Genesis International Holding Limited.
4. Capital One Bank issued Genesis International a credit card secured by the corporation which I used on behalf of Genesis International for corporate expenditures.
5. I was not personally accountable for the debts of Genesis International though I was a permissive user of the credit card.
6. Genesis International was not profitable and ceased its operations in the end of 2004.
7. In or about June 2004, I moved to the State of Georgia.
8. In or about October, 2004, I permanently relocated to the Republic of Serbia, my birthplace.
9. My detailed and meticulous records indicate that the final payment to Capital One Bank was made on March 3, 2004.
10. I was not served, personally or otherwise, with notice of the Complaint filed against me with regard to the above mentioned Capital One credit card.
Defendant's attorney also filed a certification, in which he stated that a certified letter was handed to defendant's father on July 21, 2010, which he refused. A copy of the letter, marked "refused after signing," was attached as an exhibit.
Plaintiff opposed the motion. Plaintiff offered no further evidence or argument regarding defendant's contention that he had not been served with the complaint. Plaintiff argued that defendant was required to show both excusable neglect and a meritorious defense to be entitled to the relief he sought. Although plaintiff conceded that defendant "may have a valid excusable neglect, if in fact he does not reside in New Jersey at the time of service," plaintiff maintained that defendant lacked a meritorious defense.
The certification submitted by plaintiff's counsel asserts that defendant applied for a Capital One Bank small business credit card in August 2003 and that, pursuant to the credit card agreement, both defendant and the corporation are liable for the outstanding usage on the credit card. The "Miles One Visa Business Platinum Card Invitation" that served as an application identifies the corporation as "Genesis International Holdings Lit." and the business signatory as Boban Jovanovic, and states that he is the President of the corporation. The copy of the Small Business Addendum provided as an exhibit states, in part:
"You", "your" and "yourself" includes the Business and the Business Signer in both your Credit Card Agreement and this Addendum.
. . . .
Your Promise to Pay. The Business and the Business Signer on the Account each promises personally, individually and jointly to pay us all authorized amounts due on your Account.
. . . .
"Business Signer" means an authorized representative of the Business who is authorized to sign documents for the Business and legally bind it.
The form addendum was marked "© 2008 Capital One." The date of the document was, therefore, several years after defendant opened the account and even after payments on the account ceased. No proof was submitted to demonstrate that the addendum or a similar document was part of the agreement entered into by defendant.
The motion judge denied the motion to vacate. In his appeal, defendant argues that the motion judge abused his discretion in denying the motion.
Rule 6:2-3(b), which governs the manner of service in the Special Civil Part, distinguishes the requirements for service "within this State" and "outside this State." Within the State, service is to be made "in accordance with R. 6:2-3(d) or as otherwise provided by court order consistent with due process of law, or in accordance with R. 4:4-5." R. 6:2-3(b). "Substituted or constructive service outside this State may be made pursuant to the applicable provisions in R. 4:4-4 or R. 4:4-5." Ibid. Thus, although mailed service is "a viable option for conferring in personam jurisdiction" when service is within the State, long-arm service pursuant to Rules 4:4-4(b) and 4:4-5 is required for service outside the State. Pressler & Verniero, Current N.J. Court Rules, comment 1 on R. 6:2-3 (2013).
Defendant's certification that he moved from New Jersey to Georgia in or about June 2004 and then to the Republic of Serbia in or about October 2004 was unrefuted. Therefore, plaintiff was required to effect service pursuant to Rules 4:4-4(b) and 4:4-5. Plaintiff does not contend that it complied with these rules to effect service.
Even if Rule 6:2-3 applied, the proofs before this court do not support a conclusion that service was effective. When the process is served by mail within this State, the process is to be mailed simultaneously by both certified and ordinary mail. Rule 6:2-3(d)(1). Such service is effective "if the certified mail is returned to the court marked 'unclaimed' or 'refused,' . . . provided that the ordinary mail has not been returned." Rule 6:2-3(d)(4) (emphasis added). The evidence here is limited to a copy of an envelope, marked certified mail, that was refused. Plaintiff has provided no certification or other proof that the ordinary mail sent to defendant at that address was not returned.
The motion to vacate the default judgment was governed by Rule 4:43-3, which states that the court may set aside an entry of default and a default judgment "for good cause shown." See R. 6:6-1. Although such good cause generally requires a showing of a meritorious defense, this requirement does not apply when there has not been effective service upon a defaulting defendant. In Peralta v. Heights Med. Ctr., Inc., 485 U.S. 80, 86-87, 108 S.Ct. 896, 900, 99 L. Ed. 2d 75, 82 (1988), the Supreme Court held that the Due Process Clause of the Fourteenth Amendment required that a default judgment be vacated when the service upon a defaulting defendant was ineffective, even if the defendant lacked a meritorious defense. The Court stated, "[w]here a person has been deprived of property in a manner contrary to the most basic tenets of due process, 'it is no answer to say that in his particular case due process of law would have led to the same result because he had no adequate defense upon the merits.'" Ibid. (quoting Coe v. Armour Fertilizer Works, 237 U.S. 413, 424, 35 S. Ct. 625, 629, 59 L.Ed. 1027, 1032 (1915)); see also Berger v. Paterson Veterans Taxi Serv., 244 N.J. Super. 200, 205 (App. Div. 1990).
In this case, the undisputed facts fail to show that plaintiff effected service upon defendant. As a result, the motion judge erred in denying defendant's motion to vacate the default and default judgment and to file an answer to the complaint.
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