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LEASE ACCEPTANCE CORPORATION v. LKL GROCERY, INC., A-4269-14T4. (2016)

Court: Superior Court of New Jersey Number: innjco20160608273 Visitors: 9
Filed: Jun. 08, 2016
Latest Update: Jun. 08, 2016
Summary: NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION PER CURIM . Defendant Leslie Lorenzana appeals the denial of her motion to vacate a default judgment. Because we find factual questions surrounding both the proper identity of the signer of the Lease and the propriety of the entry of the judgment, we reverse. In 1999, defendant LKL Grocery Inc. d/b/a Chelsea Pizza Caf entered into a lease for equipment with plaintiff Lease Acceptance Corporation. The lease was signed by Les
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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Defendant Leslie Lorenzana appeals the denial of her motion to vacate a default judgment. Because we find factual questions surrounding both the proper identity of the signer of the Lease and the propriety of the entry of the judgment, we reverse.

In 1999, defendant LKL Grocery Inc. d/b/a Chelsea Pizza Café entered into a lease for equipment with plaintiff Lease Acceptance Corporation. The lease was signed by Leslie Lorenzana both on behalf of LKL and as a personal guarantor. LKL's address was listed as Tenth Avenue in New York, New York. When payments due under the lease were not made, plaintiff filed suit in Michigan for the amount due plus interest, costs and attorney's fees.1 In order to serve process on defendants, plaintiff requested a credit check on Leslie Lorenzana that yielded addresses in Elmhurst, New York, New York City, and Wayne, New Jersey.

Following a process server's four unsuccessful attempts at service at the Wayne address, plaintiff moved for alternate service.2 The motion was granted by the Michigan court, allowing plaintiff to serve defendant3 by first class mail or by tacking the documents to the door of the Wayne address. Plaintiff thereafter complied with both court-approved methods of service.

When defendants did not appear or answer the complaint, the Michigan court clerk entered a default judgment on September 18, 2000 in favor of plaintiff for $12,311.31. On July 24, 2001, plaintiff docketed the judgment with the clerk of the Superior Court of New Jersey. No further action was taken by plaintiff for the next nine years.

In August 2010, as the judgment was due to expire, plaintiff moved for and received an order renewing the judgment for an additional ten years.

In January 2015, plaintiff served a writ of execution on a TD Bank branch in New Jersey to levy on a bank account owned by Lorenzana. As a consequence, Lorenzana moved to vacate the judgment and writ of execution. She argued that she was a New York resident both at the time of the execution of the lease and when plaintiff began suit in Michigan. Although the lease listed a New York address, defendant contended there was no effort made by plaintiff to serve her there. She contested the assertion of personal jurisdiction over her in Michigan and raised due process defenses that she did not have notice of the suit and therefore was denied the opportunity to be heard.

The motion was denied with the judge issuing a statement of reasons on April 10, 2015. He found the signatures on the lease application, lease agreement and LKL check written in 1999 matched the signature on Lorenzana's certification supporting the motion to vacate the judgment. The motion judge concluded that he was "clearly satisfied that the Defendant Lorenzana is the person responsible for the debt." Finally, he stated that even if the motion had merit, defendant's application to vacate the judgment should have been presented in Michigan.

On appeal, Lorenzana argues there was no personal jurisdiction in Michigan and she was denied due process as she was not properly served and given the opportunity to be heard.

The motion judge did not address the issue of jurisdiction in his decision as he determined Michigan was the proper venue for defendant's motion.4 We disagree with his conclusion. See Tara Enters., Inc. v. Daribar Mgmt. Corp., 369 N.J.Super. 45, 56 (App. Div. 2004) (holding a foreign judgment is not entitled to full faith and credit in New Jersey if a defendant was denied adequate notice and a reasonable opportunity to be heard). Moreover, the judge made findings as to his own comparison of Lorenzana's signature on several documents attached as exhibits to the motion papers and concluded without oral argument or an evidentiary hearing that they were similar and she owed the debt.

In our de novo review of the judge's decision, we find error in his failure to not permit Lorenzana the opportunity to present testimony and evidence in support of her assertions that she was not the individual who signed the lease. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.").

It flows from our decision that defendant should also have the opportunity at a limited plenary hearing to present evidence on her due process issues. "The fundamental requisite of due process of law is the opportunity to be heard." Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L. Ed. 865, 873 (quoting Grannis v. Ordean, 234 U.S. 385, 394, 34 S.Ct. 779, 783, 58 L. Ed. 1363, 1369 (1914)). Therefore "[a]n elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Ibid. (citations omitted).

Lorenzana denies having received notice of this suit. She claims to have been a New York resident at all pertinent times and, despite having knowledge of several New York addresses, plaintiff made no attempt to serve her there. On remand, defendant should be permitted to present evidence on issues of due process so that the trial judge may make the appropriate findings of fact. Similar to New Jersey, the alternative service employed by plaintiff has limited application under Michigan court rules. See Clarke v. Richco Constr., Inc., 489 Mich. 265, 278 (Mich. 2011) ("A truly diligent search for an absentee defendant is absolutely necessary to supply a fair foundation for and legitimacy to the ordering of substituted service and substituted service is not an automatic right"); see MCR 2.105(I)(1); see also Jameson v. Great Atlantic and Pacific Tea Co., 363 N.J.Super. 419, 425 (App. Div. 2003) (citation omitted) ("It is elementary that service must be accomplished in accordance with the pertinent rules in such a way as to afford `notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections'"); R. 4:4-4(b)(1).

We find it reasonable after fifteen years of inaction by plaintiff, and in light of the assertions made by defendant, that she be accorded an evidentiary hearing and the opportunity to present evidence as to whether she was the signer of the lease and if so, whether she was accorded her due process rights of notice and opportunity to be heard.

Reversed and remanded for proceedings in accordance with this decision. We do not retain jurisdiction.

FootNotes


1. Plaintiff was located in Michigan. The lease terms required the document to be governed and construed by the laws of the State of Michigan.
2. The record before us does not reflect that plaintiff ever attempted service at either of the New York addresses.
3. Leslie Lorenzana is the only defendant in this appeal.
4. We presume, without deciding, that the forum selection clause in the lease would be sufficient to accord long-arm jurisdiction in Michigan. And we note defendant only argues that she was not accorded her due process rights in making her jurisdictional argument.
Source:  Leagle

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