Midland Funding, LLC v. Albern, 433 N.J. Super. 494 (App. Div. 2013). “[I]s a defendant, who, in responding to a complaint, moved for dismissal but did not file an answer after the motion was denied, entitled to notice of a plaintiff’s request for default?” That is how Judge Fisher posed the question at issue in today’s case. His answer: the defendant was entitled to notice.
Plaintiff sued defendant on an allegedly outstanding credit card account. Responding pro se, defendant moved to dismiss the complaint. That motion was denied. Under Rule 4:6-1(b), defendant then had ten days to answer the complaint. But defendant did not file an answer. Plaintiff then applied ex parte for the entry of default, claiming that “no defendant named herein has answered or otherwise moved.” That claim was not accurate, since defendant had moved to dismiss, albeit unsuccessfully. Regardless, the clerk entered default.
Apparently, when plaintiff moved for a default judgment, notice was given to defendant. Defendant opposed the entry of default judgment, asserting that he had not been served with an application to enter default, that defendant had moved to dismiss, and that plaintiff lacked standing to sue. Despite that, default judgment was entered. Plaintiff sought discovery of defendant’s assets, and defendant responded with a motion for relief from judgment under Rule 4:50-1. The Law Division denied that motion, concluding that defendant’s failure to file an answer was not excusable and that defendant had not presented a meritorious defense. Still acting pro se, defendant appealed, and the Appellate Division reversed.
Though the Law Division had viewed defendant’s motion as arising under Rule 4:50-1(a) (excusable neglect), Judge Fisher found that the motion was more properly treated under Rule 4:50-1(d) (void judgment), since defendant contended that plaintiff had “proceeded improperly in seeking default.” Under Rule 4:50-1(d), unlike Rule 4:50-1(a), defendant was not required to offer a meritorious defense. But Judge Fisher concluded that defendant’s assertion of lack of standing was a meritorious defense, if one had been required. And, since defendant was pro se, and given the particular language of the Law Division’s order denying his motion to dismiss, it was excusable for defendant to have though that discovery would begin without the need for him to do anything more once his motion to dismiss had been denied.
More fundamentally, however, Judge Fisher held that defendant was entitled to notice of plaintiff’s request for the entry of default. Rule 4:43-1 allows ex parte applications for default only if the defendant “has failed to plead or otherwise defend as provided by these rules or court order, or if the answer has been stricken with prejudice.” Defendant had not “failed to plead or otherwise defend” since he had moved to dismiss. And, because he had not filed an answer, no answer had been “stricken with prejudice.” Accordingly, this “absence of express authority in Rule 4:43-1, in light of the ‘strong preference for adjudication on the merits rather than final disposition for procedural reasons,’ Galik v. Clara Maass Med. Ctr., 167 N.J. 341, 356 (2001) (quoting Mayfield v. Cmty. Med. Assocs., P.A., 335 N.J. Super. 198, 207 (App. Div. 2000)), demands that the unauthorized ex parte default– and the subsequent judgment based on that default– be vacated and that defendant be given an opportunity to file an answer and defend against plaintiff’s claim.”
