NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R.1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2947-15T3
DEUTSCHE BANK NATIONAL
TRUST COMPANY, AS TRUSTEE
OF THE INDYMAC INDX MORTGAGE
TRUST 2007-AR5, MORTGAGE
PASS-THROUGH CERTIFICATES,
SERIES 2007-AR5 UNDER THE POOLING
AND SERVICING AGREEMENT DATED
MARCH 1, 2007,
Plaintiff-Respondent,
v.
JIN S. CHOI, HIS/HER HEIRS,
DEVISEES, AND PERSONAL
REPRESENTATIVES AND
HIS/HER/THEIR OR ANY OF
THEIR SUCCESSORS IN RIGHT,
TITLE AND INTEREST, and IL Y.
YOON, HIS/HER HEIRS, DEVISEES,
AND PERSONAL REPRESENTATIVES
AND HIS/HER/THEIR OR ANY OF
THEIR SUCCESSORS IN RIGHT,
TITLE AND INTEREST, and MRS.
JIN CHOI, WIFE OF JIN CHOI, and
MR. YOON, HUSBAND OF IL Y.
YOON, and MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC., AS
NOMINEE FOR FIRST AMERICAN
REALTY CAPITAL CORP.,
Defendants-Appellants.
____________________________
Submitted August 15, 2017 – Decided August 25, 2017
Before Judges Manahan and Gilson.
On appeal from Superior Court of New Jersey,
Chancery Division, Bergen County, Docket No.
F-6432-13.
Joseph A. Chang & Associates, LLC, attorneys
for appellants (Joseph A. Chang, of counsel;
Mr. Chang and Jeffrey Zajac, on the brief)
Greenberg Traurig, LLP, attorneys for
respondent (Lori G. Singer, of counsel; Jason
H. Kislin, on the brief).
PER CURIAM
In this mortgage foreclosure action, defendants Jin S. Choi
and Il Y. Yoon appeal from a January 11, 2016 order denying
defendant Choi's motion to vacate default and a February 3, 2016
final judgment entered against both defendants. Defendants'
principal argument is that plaintiff failed to properly serve them
with the summons and complaint and, thus, the default should have
been vacated and the final judgment should not have been entered.
The Chancery Court found that plaintiff had attempted to personally
serve defendants and, after diligent inquiry, served defendants
by publication as allowed under Rule 4:4-5(a)(3). Accordingly,
the Chancery Court denied defendant's motion to vacate the default
and entered a final judgment. We discern no abuse of discretion
by the Chancery Court and affirm.
2 A-2947-15T3
I.
In January 2007, defendant Choi borrowed $750,000 and
executed a promissory note. That loan was secured by a mortgage
given by defendants Choi and Yoon on property located at 213 11th
Street, Palisades Park, New Jersey (the Property). The mortgage
was initially given to Mortgage Electronic Registration Systems,
Inc. (MERS), acting on behalf of First American Realty Capital
Corporation.
In 2008, defendants failed to make payments under the loan
and mortgage. In October 2012, the mortgage was assigned to
plaintiff Deutsche Bank National Trust Company, as trustee of the
IndyMac INDX Mortgage Trust 2007-AR5, Mortgage Pass-Through
Certificates, Series 2007-AR5 under the Pooling and Servicing
Agreement dated March 1, 2007 (plaintiff or Deutsche Bank).
On February 27, 2013, Deutsche Bank filed a foreclosure
complaint against defendants. Thereafter, in March 2013, Deutsche
Bank attempted to personally serve defendant Choi with the
complaint. The process server, hired by Deutsche Bank, made
attempts to serve defendant at the Property on several different
occasions. The process server also attempted to personally serve
Choi at 406 Crocus Hill, Norwood, New Jersey, which, as it turns
out, was defendant Choi's residence. The process server, however,
was not successful in personally serving defendant.
3 A-2947-15T3
Deutsche Bank then made various searches to identify
defendant's address. Those searches included postal inquiries,
internet searches, skip trace searches, searches of tax records,
and searches of records maintained by the Motor Vehicle Commission
(MVC). Those searches identified an address for defendant Choi
at 406 Crocus Hill, Norwood, New Jersey. Those inquiries also
revealed a mailing address for defendant Choi at P.O. Box 237,
Leonia, New Jersey. Deutsche Bank caused the complaint to be sent
to both the Norwood and Leonia addresses by certified mail, but
those mailings were returned unclaimed.
On October 1, 2013, Deutsche Bank caused a notice of the
complaint to be published in the Record newspaper, a newspaper of
general circulation in Bergen County, "the county in which the
venue is laid." R. 4:4-5(a)(3). Copies of that publication were
also sent to defendants at the Property, as well as the Norwood
and Leonia addresses.
On March 25, 2014, Deutsche Bank filed a request for entry
of default. In support of that application, Deutsche Bank also
filed a "CERTIFICATION OF INQUIRY AND MAILING NOTICE AND COMPLAINT
TO ABSENT DEFENDANTS AND PUBLICATION," dated March 20, 2014. On
April 25, 2014, a default was entered against defendants.
In August 2015, Deutsche Bank filed a motion for final
judgment. Deutsche Bank mailed a copy of that motion to defendant
4 A-2947-15T3
Choi. Defendant Choi acknowledged receiving a copy of the motion
for final judgment and represented that such notice was the first
notice he had of the foreclosure action.
The following month, in September 2015, prior to the entry
of final judgment, defendant Choi moved to vacate the default.
Defendant contended that the attempts to personally serve him were
insufficient and that the service by publication was defective.
After hearing oral argument on January 8, 2016, the Chancery Court
denied defendant's motion to vacate the default in an order issued
on January 11, 2016. The court also issued a written statement
of reasons explaining its ruling.
The Chancery Court found that Deutsche Bank had provided
adequate proof of its diligent efforts to locate and personally
serve defendant. The court also found that the service by
publication was proper under Rule 4:4-5(a)(3). The court went on
to reason that Deutsche Bank had complied with the requirements
of due process. Finally, the court reasoned that defendant had
offered no meritorious defense to the foreclosure action.
The final judgment in favor of Deutsche Bank was entered on
February 3, 2016. The judgment entitles Deutsche Bank to receive
$1,119,823.41, together with interest, costs of suit, and counsel
fees of $7500.
5 A-2947-15T3
II.
Defendants now appeal the denial of the motion to vacate the
default and the entry of the final judgment. Defendants argue
that plaintiff failed to properly serve the summons and complaint
and, thus, the Chancery Court was without jurisdiction and it
erred in not vacating the default and entering final judgment. In
making that argument, defendants contend that the affidavit of
diligent inquiry "lacked reliability" and was filed out of time
because it was filed six months after the publication of service.
Defendants also argue that the Chancery Court erred in not
conducting a plenary hearing on allegedly disputed issues
concerning whether defendant was properly served with the summons
and complaint. Having considered these arguments in light of the
record, we reject them and affirm.
We review a motion to vacate default for abuse of discretion.
See Bernhardt v. Alden Café, 374 N.J. Super. 271, 282 (App. Div.
2005) (reversing on the ground that "failure to vacate default was
an improper exercise of discretion"). A court abuses its
discretion "when a decision is 'made without a rational
explanation, inexplicably departed from established policies, or
rested on an impermissible basis.'" U.S. Bank Nat. Ass'n v.
Guillaume, 209 N.J. 449, 467 (2012) (quoting Iliadis v. Wal-Mart
Stores, Inc., 191 N.J. 88, 123 (2007)).
6 A-2947-15T3
Here, the Chancery Court denied defendant's motion to vacate
default finding that defendant was properly served by publication
following a diligent inquiry that failed to lead to personal
service, and, having been properly served, defendant failed to
present a meritorious defense.
In Modan v. Modan, we surveyed other appellate courts across
the country to determine what constitutes a diligent inquiry such
that service by publication becomes appropriate. 327 N.J. Super.
44, 48-49 (App. Div. 2000). We found that "a plaintiff need not
exhaust all conceivable means of personal service before service
by publication is authorized. A plaintiff need only follow up on
that information possessed by plaintiff which might reasonably
assist in determining defendant's whereabouts." Id. at 48 (quoting
Carson v. Northstar Dev. Co., 62 Wn. App. 310, 316 (1991)).
Plaintiff's affidavit of diligent inquiry establishes that
plaintiff made substantial efforts to locate defendant and effect
personal service. A search of MVC records yielded an address of
20 10th Street, Palisades Park, New Jersey, an address that pre-
dated the mortgage. A tax search listed the mortgaged premises
as the address of record. An internet search yielded the same
result. A skip trace provided an address for Choi at 406 Crocus
Hill, Norwood, New Jersey. The Postmaster for Norwood confirmed
that mail was delivered to this address.
7 A-2947-15T3
A second skip trace provided an address for Choi at P.O. Box
237, Leonia, New Jersey. The Postmaster affirmed this was a valid
address for Choi, but could provide no other address where personal
service might be effected. Searches performed with the Social
Security Death Index, the County Voter Registration Office, and
the Surrogate's Office, yielded no results. The Office of Vital
Statistics was unable to provide any information.
A private process server was hired to attempt personal
service. Six attempts were made. The first at the mortgaged
premises, in which at least one tenant was residing. This tenant
did not provide any information about an address where Choi might
be located. Personal service was attempted five times at 406
Crocus Hill, Norwood, New Jersey, over a two-week period, at
varying times of day. Plaintiff then attempted to serve Choi by
regular and certified mail at all known addresses, but the
certified mails were returned unclaimed. Thus, we agree with the
Chancery Court that plaintiff's thorough search to locate
defendant and its multiple attempts at personal service constitute
a diligent inquiry as required by Rule 4:4-5.
After such diligent inquiry was conducted and plaintiff was
unable to effectuate service, defendant was properly served by
"publication of a notice to absent defendants once in a newspaper
8 A-2947-15T3
published or of general circulation in the county in which the
venue is laid[.]" R. 4:4-5(a)(3).
Nothing in the language of Rule 4:4-5 requires that an
affidavit of diligent inquiry be filed with the court prior to
service by publication. See, e.g. M & D Associates v. Mandara,
336 N.J. Super. 341, 347 (App. Div.), certif. denied, 180 N.J. 151
(2004) (where service by publication was made nearly four months
before the affidavit of diligent inquiry was filed). It requires
only that a diligent inquiry be made prior to such service. If a
defendant fails to respond or appear, plaintiff must file an
affidavit of diligent inquiry before default can be entered if
such inquiry was required to properly effectuate service. See R.
4:43-1 (stating that a request for entry of default must be
supported by an affidavit that "shall recite the service of the
process").
Plaintiff filed its request for entry of default, along with
its affidavit of diligent inquiry, on March 25, 2014, less than
six months after the publication of service on October 1, 2013.
It follows that plaintiff requested default "within [six] months
of the actual default," as required by R. 4:43-1. Since there is
nothing in the Rules that requires filing the affidavit of diligent
inquiry prior to requesting entry of default, plaintiff's
affidavit of diligent inquiry was not untimely. Even if more than
9 A-2947-15T3
six months had passed, plaintiff simply would have been required
to seek default by notice of motion, instead of having default
entered by the clerk.
A motion to set aside default is "viewed with great
liberality, and every reasonable ground for indulgence is
tolerated to the end that a just result is reached." Trs. of
Local 478 Trucking and Allied Indus. Pension Fund v. Baron Holding
Corp., 224 N.J. Super. 485, 489 (App. Div. 1988) (quoting Marder
v. Realty Constr. Co., 84 N.J. Super. 313, 319 (App. Div.), aff'd,
43 N.J. 508 (1964)). "Nevertheless, before a default is set aside,
defendant must at the very least show the presence of a meritorious
defense worthy of a judicial determination." Ibid. Particularly
in a foreclosure matter, "[i]f there is no bona fide contest, a
secured creditor should have prompt recourse to its collateral."
Ibid. If the defendant was not properly served, however, the
showing of a meritorious defense "cannot be required as a matter
of due process." Pressler & Verniero, Current N.J. Court Rules,
comment on R. 4:43-3 (2017) (citing Peralta v. Heights Med. Ctr.,
Inc., 485 U.S. 80, 86-87, 108 S. Ct. 896, 900, 99 L. Ed. 2d 75,
82 (1988); Midland Funding, LLC v. Albern, 433 N.J. Super. 494,
501 (App. Div. 2013)).
Here we agree with the Chancery Court that defendant was
properly served by publication, thus the Chancery Court
10 A-2947-15T3
appropriately considered defendant's failure to assert a
meritorious defense as part of defendant's motion to vacate
default. Since service of process was properly effectuated, the
Chancery Court properly denied defendant's motion to vacate
default based on the lack of a meritorious defense.
Defendant Choi's September 29, 2015 motion to vacate default
also requested "a [p]lenary [h]earing relative to the service of
the [s]ummons and [c]omplaint against [d]efendant." When there
is a genuine dispute of material fact, and evidence beyond the
motion papers is necessary for a resolution, the Chancery Court
cannot resolve the issue without a plenary hearing. See K.A.F.
v. D.L.M., 437 N.J. Super. 123, 137-38 (App. Div. 2014). "[A]
court may not make credibility determinations or resolve genuine
factual issues based on conflicting affidavits." Ibid. (citing
Conforti v. Guliadis, 245 N.J. Super. 561, 565-66 (App. Div. 1991),
aff'd in part and modified in part on other grounds, 128 N.J. 318
(1992)).
Here, defendant requested a plenary hearing only with regard
to the issue of service of the summons and complaint. There is
no genuine dispute of material fact regarding that issue. It is
indisputable that plaintiff conducted an inquiry to locate
defendant for personal service. Plaintiff, as part of its request
for entry of default against defendant, filed an affidavit of
11 A-2947-15T3
diligent inquiry with the court as proof that defendant had been
properly served by publication. Although defendant challenged
whether plaintiff's efforts constituted a sufficient affidavit of
diligent inquiry under Rule 4:4-5(b), defendant did not argue that
any specific part of the affidavit were untrue.
The assertion that the affidavit and circumstances of service
lacked reliability is not, by itself, sufficient to warrant a
plenary hearing. Furthermore, defendants have not pointed to any
information in plaintiff's possession that would have "reasonably
assist[ed] in determining defendant's whereabouts." Modan, supra,
327 N.J. Super. at 48 (quoting Carson v. Northstar Dev. Co., 62
Wn. App. 310, 316 (1991)). In Modan plaintiff failed to disclose
that he was in possession of defendant's e-mail address,
information that may have helped effect actual notice. Id. at 49.
Here, defendants make no comparable assertion about information
in plaintiff's possession. Therefore, the determination of
whether defendant was properly served did not involve a genuine
dispute of material fact. Thus, no plenary hearing was necessary.
Affirmed.
12 A-2947-15T3