LVNV FUNDING, LLC VS. OLGA VALDES (DC-000905-04, BERGEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-3577-19

LVNV FUNDING, LLC,

Plaintiff-Respondent,

v.

OLGA VALDES,

Defendant-Appellant.
________________________

Submitted May 12, 2021 – Decided June 9, 2021

Before Judges Rose and Firko.

On appeal from the Superior Court of New Jersey, Law
Division, Bergen County, Docket No. DC-000905-04.

Olga Valdes, appellant pro se.

Respondent has not filed a brief.

PER CURIAM

Defendant Olga Valdes appeals from a March 27, 2020, Law Division

order entered by the Supervising Judge of the Special Civil Part denying what

the judge construed as defendant's motion to vacate default judgment under Rule
4:50-1(f) following a settlement and a May 20, 2020, order denying

reconsideration. We affirm.

I.

We derive the following facts from the record provided. On December 3,

2003, plaintiff's predecessor in interest sold and assigned defendant's Sears

account to Sherman Acquisition, L.P., the filing plaintiff. Defendant owed the

sum of $4,617.85, inclusive of interest, service charges, costs, and attorney's

fees, in accordance with her Sears agreement.

According to defendant, Sherman Acquisition, L.P., ceased doing

business in this State on January 30, 2009, as evidenced by its Certificate of

Cancellation of Authority – Foreign Limited Partnership filed with the New

Jersey Division of Revenue. On June 7, 2010, an order was entered by a prior

judge amending the caption of the case to read, "LVNV Funding LLC A/P/O

Citibank," (LVNV) as superseding plaintiff. The record shows that LVNV

submitted a Public Records Filing for New Business Entity on July 14, 2016,

with the State of New Jersey Division of Revenue. Defendant did not oppose

plaintiff's motion to amend the caption.

On May 15, 2019, David J. Levine, Esq., of the law firm of Fein, Such,

Kahn & Shepard, P.C., sent defendant a letter advising her the firm was retained

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to represent LVNV to collect the judgment amount of $4,875.22. 1 The letter

provided that post-judgment interest through May 15, 2019, was $1,057.82, and

credits were applied in the amount of $1,469.04, leaving a current balance due

of $4,464. The account belonging to defendant was identified by: defendant's

name; the current owner of the debt—LVNV; the original creditor, Sears

National Bank; the original account number; and the docket number assigned to

the case.

On that same date, Philip A. Kahn, Esq., an attorney employed by Fein,

Such, Kahn & Shepard, P.C., filed a notice of appearance in lieu of a substitution

of attorney with the clerk of the Special Civil Part because prior counsel did not

return a signed substitution of attorney "despite multiple requests."

On October 29, 2019, counsel for plaintiff applied for a notice of

application for wage execution on defendant's employer. The notice included a

certification of service indicating the application for wage execution was served

upon defendant by first class mail and certified mail, return receipt requested , at

1
The order and execution against earnings indicate that judgment was entered
by the court on December 8, 2004. The $4,875.22 judgment amount was
comprised of the judgment award of $4,711.98, plus court costs and statutory
attorney's fees of $163.24. The total due as stated in the order was $4,817.81,
which included interest from prior writs ($804.64), costs from prior writs
($26.98), new interest on this writ ($103.03), new credits on this writ ($60),
execution fees and mileage ($39), and court officer fee ($437.98).
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her last known address. On November 19, 2019, the Supervising Judge granted

the application for wage execution and entered an order for execution against

earnings pursuant to 15 U.S.C. § 1673 and N.J.S.A. 2A:17-56. Defendant's

employer was ordered to make appropriate deductions from her salary.

After the issuance of the writ of execution, defendant offered to settle the

debt. The parties reached an agreement providing that, "[d]efendant agrees to

pay [p]laintiff the sum of . . . [$1500] on or before December 24, 2019." A post-

judgment settlement agreement and release agreement (the agreement) was

prepared by counsel for plaintiff and filed with the court. Plaintiff is identified

as Sherman Acquisition L.P. on the agreement. Counsel for plaintiff and

defendant signed the agreement.

Subsequent to executing the agreement, defendant received a legal notice

by mail from the LVNV Funding settlement administrator advising her about a

class action settlement involving LVNV. The notice stated: "You are entitled to

receive a settlement credit or payment in connection with a class action

settlement." Defendant reneged on the terms of the agreement and did not pay

the $1500 settlement amount. Instead, on February 13, 2020, defendant wrote a

letter to plaintiff's then counsel, Brian P.S. McCabe, Esq., requesting proof that

LVNV "was not in violation of the New Jersey Consumer Financing Licensing

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Act (NJCFLA)" 2 and a copy of "[LVNV's] professional license which allows

Fein, Such, Kahn & Shepard, P.C. . . . to collect the pertinent debt." Defendant

claimed in her letter that LVNV "was in violation of section e (10) of the Federal

Fair Debt Collections Practice Act" (FDCPA)3 and that "[her] purpose is not to

thwart [the] agreement."

Defendant claimed that LVNV's license was not provided to her.

Therefore, on February 24, 2020, defendant filed a notice of motion seeking

relief from judgment under Rule 4:50(f). In her certification in support of the

motion, defendant stated, "[o]n [December 18, 2020], I entered into an

[a]greement to settle the pertinent debt. However, shortly thereafter, I received

a notice of a class action in the United States District Court where I'm a party."

Defendant represented in her certification that LVNV violated the FDCPA by

not obtaining a license under the NJCFLA. She also stated that on February 6,

2020, plaintiff's counsel represented his client "has been in compliance with the

law since the time of inception." Defendant sought relief from the judgment

based on her theory that plaintiff and its counsel violated the FDCPA and

NJCFLA.

2
N.J.S.A. 17:11C-1 to -49.
3
15 U.S.C. § 1692 (a) to (p).
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 Counsel for plaintiff filed a certification in opposition to defendant's

motion to vacate the judgment. In her certification, counsel stated, "[p]laintiff's

predecessor in interest sold and assigned all right, title and interest in the

[d]efendant's Sears account to the [p]laintiff." The account "is associated with

[d]efendant's social security number . . . ." Counsel also averred that defendant

"decided to ignore the matter until she became aware of the financial

consequences against her."

Attached to counsel's certification as "Exhibit E" 4 was the "State of New

Jersey's certification that [p]laintiff is licensed as a [c]onsumer [l]ender." Citing

Marder v. Realty Constr. Co., 84 N.J. Super. 313, 318 (App. Div. 1964),

plaintiff's counsel asserted that defendant's motion to vacate should be denied

because defendant failed to show "excusable neglect" and did not set forth any

factual basis to "conclude a 'meritorious defense' exists in this matter." Having

failed to meet her burden, counsel for plaintiff contended that defendant's

motion to vacate should be denied as "untimely," and due to the "sixteen years"

that have passed since the entry of judgment, granting the motion "would greatly

prejudice" plaintiff.

4
Defendant did not include Exhibit E in her appendix.
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 In plaintiff's opposition to defendant's reply, 5 counsel pointed out

defendant "has not denied that the debt belongs to her and has not questioned

the outstanding amount." Consequently, counsel maintained the FDCPA was

inapplicable because there was no violation, and the allegation was untimely

because § 1692 k(d) "clearly states that an FDCPA action 'may be brought . . .

within one year from the date on which the violation occurs.'" According to

plaintiff's counsel, defendant had until "December 8, 2005 to bring such a

claim."

On March 27, 2020, the Supervising Judge denied defendant's motion for

relief from judgment. In his decision, the judge determined:

This [m]otion shall be treated as a [m]otion to
[v]acate [d]efault [j]udgment under R[ule] 4:50-1(f).
Motion to [v]acate [d]efault [j]udgment is [denied].
Defendant avers she previously agreed to settle the debt
however she now raises new issues. A [s]ettlement
[a]greement was signed and is enforceable as written.

A memorializing order was entered that day. This appeal followed.

On appeal, defendant presents one issue in her "opening statement" for

our consideration on appeal: whether Khan committed a fraud upon the Superior

5
Defendant's reply was not included in her appendix.
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Court of New Jersey, Law Division, Bergen County, Special Civil Part. 6 We are

not persuaded by defendant's argument.

II.

Rule 4:50-1 which is incorporated into the Special Civil Part by Rule 6:6-

1, provides:

the court may relieve a party . . . from a final judgment
or order for the following reasons: (a) mistake,
inadvertence, surprise, or excusable neglect; (b) newly
discovered evidence which would probably alter the
judgment or order and which by due diligence could not
have been discovered in time to move for a new trial
under [Rule] 4:49; (c) fraud . . . , misrepresentation, or
other misconduct of an adverse party; (d) the judgment
or order is void; (3) the judgment or order has been
satisfied, released or discharged, or a prior judgment or
order upon which it is based has been reversed or
otherwise vacated, or it is no longer equitable that the
judgment or order should have prospective application;
or (f) any other reason justifying relief from the
operation of the judgment of order.

Rule 4:50-1 applies to final orders and judgments and "does not

distinguish between consent judgments and those issued after trial. So long as

the judgment is final, the rule is applicable." DEG, LLC v. Twp. of Fairfield,

198 N.J. 242, 251 (2009). "[A]n order is considered final if it disposes of all

6
Defendant's brief did not contain point headings. See R. 2:6-2(b) (requiring a
table of contents, including point headings). We have also not considered any
information defendant supplied in her brief that is not part of the record.
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issues as to all parties." Silviera-Francisco v. Bd. of Educ. of City of Elizabeth,

224 N.J. 126, 136 (2016). "Significantly, Rule 4:50-1 is not an opportunity for

parties to a consent judgment to change their minds; nor it is a pathway to reopen

litigation because a party either views his [or her] settlement as less

advantageous than it had previously appeared, or rethinks the effectives of his

[or her] original legal strategy." DEG, 198 N.J. at 261. "Rather, the rule is a

carefully crafted vehicle intended to underscore the need for repose while

achieving a just result." Ibid. Thus, the rule "denominates with specificity the

narrow band of triggering events that will warrant relief from judgment if justice

is to be served," and "[o]nly the existence of one of those triggers will allow a

party to challenge the substance of the judgment." Id. at 261-62.

Although courts are empowered under Rule 4:50-1 "to confer absolution"

from judgments and orders, Id. at 261, relief "is granted sparingly." F.B. v.

A.L.G., 176 N.J. 201, 207 (2003) (citation omitted); see also Pressler &

Verniero, Current N.J. Court Rules, cmt. 1.1 on R. 4:50-1 (2021). "On appellate

review, the trial judge's determination 'will be left undisturbed unless it

represents a clear abuse of discretion.'" DEG, 198 N.J. at 261 (quoting Hous.

Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994)). "'[A]buse of

discretion' . . . arises when a decision is 'made without a rational explanation,

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inexplicably departed from established policies, or rested on an impermissibl e

basis.'" Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002) (quoting

Achacoso-Sanchez v. Immigr. and Naturalization Serv., 779 F.2d 1260 (7th Cir.

1985)). "The discretion afforded to a trial court under the Rule also includes the

duty to consider evidence in the record that militates against the grant of relief."

Little, 135 N.J. at 290. See also, Carrington Mortg. Servs., LLC v. Moore, 464

N.J. Super. 59, 67 (App. Div. 2020).

In denying defendant relief under Rule 4:50-1(f), the judge emphasized

that defendant "agreed to settle the debt" and now "raises new issues." He also

noted the "settlement agreement was signed and is enforceable as written."

Having carefully reviewed the record, we affirm primarily for the reaso ns

expressed by the Supervising Judge, which are well supported by the evidence

and legal precedent. We add the following brief remarks.

An agreement to settle a lawsuit is a contract which, like all contracts,

may be freely entered into and which a court, absent a demonstration of "fraud

or other compelling circumstances," should honor and enforce as it does other

contracts. Indeed, "settlement of litigation ranks high in our public policy."

Moreover, courts will not ordinarily inquire into the adequacy or inadequacy of

the consideration underlying a compromise settlement fairly and deliberately

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made. . . . [W]here there is no showing of "artifice or deception, lack of

independent advice, abuse of confidential relation, or similar indicia generally

found in the reported instances where equity has declined to enforce, as unfair

or unconscionable, an agreement voluntarily executed by the parties," the

agreement should be enforced. Pascarella v. Bruck, 190 N.J. Super. 118, 124-

25 (App. Div. 1983) (citations omitted). Here, defendant essentially urges us to

vacate the settlement agreement as unenforceable because LVNV is the current

owner of the debt, not Sherman Acquisition L.P., who was a signatory to the

agreement, and LVNV did not oppose her motion to vacate judgment.

A plaintiff suing on an assigned, charged-off credit card debt must prove

both ownership of the defendant's debt and the amount due to the card issuer

when it closed defendant's account. Thus, plaintiff must prove it owned

defendant's credit card debt, whether one characterizes this as standing to sue or

an essential element of proof on an assigned claim. See Wells Fargo Bank, N.A.

v. Ford, 418 N.J. Super. 592, 599-600 (App. Div. 2011); Triffin v. Somerset

Valley Bank, 343 N.J. Super. 73, 79-82 (App. Div. 2001).

"[A]ny beneficial contract may be assigned, and courts of law will protect

the rights of the assignee suing in the name of the assignee." Somerset

Orthopedic Assocs. v. Horizon Blue Cross & Blue Shield of N.J., 345 N.J.

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Super. 410, 415 (App. Div. 2001). Indeed, the assigned credit card debt on

which plaintiff sued constitutes a chose in action arising on a contract, which is

specifically assignable pursuant to N.J.S.A. 2A:25-1. In order for such

assignment to be valid, it "must contain clear evidence of the intent to transfer

the person's rights and 'the subject matter of the assignment must be described

sufficiently to make it capable of being readily identified.'" Berkowitz v.

Haigood, 256 N.J. Super. 342, 346 (Law Div. 1992) (citations omitted).

Moreover, "[o]nce properly notified of the assignment, the obligor is charged

with the duty to pay the assignee and not the assignor." Ibid.

We are satisfied that the documents show that LVNV has a valid

assignment of debt from Sherman Acquisition L.P., which sold and assigned "all

right, title and interest" in defendant's Sears account to LVNV. Moreover, the

account is identified with defendant's social security number. And, LVNV

provided the State of New Jersey's certification that LVNV is licensed as a

consumer lender. Defendant failed to come forward with any evidence disputing

either the assignment or the authenticity of the State's certification attesting to

the validity of LVNV's license as a consumer lender. Specifically, defendant

does not deny owing the debt. Moreover, the class action litigation has no

bearing on the matter under review. Accordingly, we affirm the judge's denial

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of defendant's motion to vacate judgment under Rule 4:50-1(f) and denial of her

motion for reconsideration.

The record lacks any evidence, other than defendant's claim the settlement

agreement was fraudulently procured, which we have rejected, to support her

argument on the grounds of fraud or exceptional circumstances. Becaus e the

order enforcing the settlement agreement was not an abuse of discretion, there

are no exceptional circumstances warranting relief under Rule 4:50-1(f).

Defendant's remaining arguments are without sufficient merit to warrant

discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.

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