HOUSING AUTHORITY OF THE CITY OF SALEM v. ALBERT FIELDS JR (2013)

Defendant Albert Fields, Jr. rented an apartment in a public housing facility operated by plaintiff Housing Authority of the City of Salem (Authority).   The Authority filed a complaint for a judgment of possession, which was granted when defendant failed to appear in court.   Because defendant was incarcerated, and not properly served with the complaint, we vacate the default judgment and remand for further proceedings regarding the complaint.

On May 15, 2012, defendant met with an Authority representative and agreed that he had a $158 credit which would be applied to his June rent of $206.   On May 16, however, defendant was incarcerated and lost his job.   On July 20, defendant sent a letter requesting a financial hardship exemption based on his loss of employment, and stating that his bank would pay the rent.   See 24 C.F.R. § 5.630(b).  The Authority granted the hardship exemption and reduced his rent to $50 per month effective July 1.

On August 17, in response to defendant's July 20 letter, the executive director of the Authority sent a letter addressed to defendant at the Salem County Correctional Facility (SCCF).  The executive director reported that the bank was unable to pay the rent, and warned that the Authority would proceed with an eviction action.   Defendant received that letter at the SCCF, and wrote back on August 20 asserting that his request for a hardship exemption precluded eviction.   On August 23, the executive director responded by a letter addressed to defendant both at the SCCF and the apartment.   The executive director repeated that the Authority was moving forward with its eviction procedure, and stated that “this letter is my last written correspondence to you concerning this issue.”   During the rest of August, defendant sent several letters to the Authority stating that he did not know when he was getting out of the SCCF.

On August 31, the Authority filed a landlord-tenant complaint in the Special Civil Part, alleging non-payment of rent and demanding possession.   The Authority served the summons and complaint by asking the clerk of the court to send them regular and certified mail to the apartment.   On September 21, defendant failed to appear in court, and the judge entered a judgment of possession by default.   A warrant for removal was posted on the apartment door, and defendant was locked out of the apartment.

After his release, defendant filed an order to show cause, seeking emergent relief.   The Special Civil Part judge set an October 19 return date.   Defendant appeared and argued that he had not received notice.   The Authority argued that it was not required to send notices to the jail, and that everything was properly sent to the apartment.

The judge ruled that service of the summons and complaint was proper because it was sent to the apartment by regular and certified mail, return receipt requested, and the regular mail was not returned.   The judge also ruled that it was proper to post the warrant of execution on the apartment door, even if defendant did not receive it.   The judge declined to vacate the judgment under Rule 4:50–1, reasoning:

There's got to be excusable neglect and a meritorious defense in order for me to vacate the judgment․  I find that there was excusable neglect because he was incarcerated.   He couldn't show up in court, couldn't defend himself.   And that's certainly excusable neglect.   But he's got to reach the level of a meritorious defense.

The judge found no meritorious defense because defendant owed $198 rent, and the hardship exemption did not stay eviction.

I.

Defendant appealed the October 19, 2012 order.   He filed motions to stay that were denied by the judge and this court.   Because the Authority failed to file a timely answering brief, this appeal has been considered on defendant's brief only.

Pursuant to Rule 6:6–1, a motion to vacate a judgment of possession may be brought under Rule 4:50–1.  “A motion under Rule 4:50–1 is addressed to the sound discretion of the trial court,” and its ruling “will be left undisturbed unless it represents a clear abuse of discretion.”  Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994).   A court commits “an abuse of 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) (citations and quotation marks omitted).  “A court should view ‘the opening of default judgments ․ with great liberality.’ ”  Mancini v. EDS ex rel. N.J. Auto. Full Ins. Underwriting Ass'n, 132 N.J. 330, 334 (1993) (quoting Marder v. Realty Constr.   Co., 84 N.J.Super. 313, 319 (App.Div.), aff'd, 43 N.J. 508 (1964)).

II.

Service in Special Civil Part actions is governed by Rule 6:2–3.   The rule provides several methods of service, including the “Service By Mail Program” used here.   R. 6:2–3(b), (d).  Under that program, the clerk of the court serves process simultaneously by certified and ordinary mail to a mailing address provided by the plaintiff's attorney.   R. 6:2–3(d)(1).

Here, service was impeded because of the Authority's failure to tell the clerk about defendant's incarceration.   The Authority knew that defendant was in the SCCF, had corresponded with him at his SCCF address, and had been told that he did not know when he would be released from the SCCF. Yet, when the Authority filed its complaint only a few days later, it did not provide the clerk with defendant's SCCF address.

Rule 6:2–3(b) provides:

When the plaintiff-landlord has reason to believe that service may not be made at the subject premises, the landlord shall also request service at an address, by certified and regular mail addressed to the tenant, where the landlord believes that service will be effectuated.   The landlord shall furnish to the clerk two additional copies of the summons and complaint for each defendant for this purpose.

Although this language appears in a paragraph addressing other methods of service, it states a common-sense procedure that a landlord should follow in giving the clerk a defendant's address for service by mail, given how “service of process relies so heavily on the accuracy of that address.”   See First Resolution Inv. Corp. v. Seker, 171 N.J. 502, 517 (2002).

We have stated that “[c]reditor's counsel has an ethical obligation under R.P.C. 3.3(a)(5) to promptly inform the court if the ordinary or certified mail is returned with a notation such as ‘moved, unable to forward’ or ‘addressee not known,’ or if counsel for the creditor has ‘other reason to believe that service was not effected.’ ”  Morristown Mem'l Hosp. v. Caldwell, 340 N.J.Super. 562, 564 (App.Div.2001) (quoting R. 6:2–3(d)(4)).   A landlord's counsel has a similar obligation to inform the clerk if there is reason to believe that service may not be effected at the premises but may be effected at another address, here the jail, so the clerk can serve both addresses.   See Fid. & Deposit Co. v. Abagnale, 97 N.J.Super. 132, 146 (Law Div.1967) (“The expectation that a defendant will normally receive notice of process served through a competent member of his household” does not prevail where the defendant “is committed to prison.”).

The Authority did not inform the clerk of defendant's incarceration at the SCCF, so service was sent only to the apartment.   This was not effective service.   Rule 6:2–3(d)(4) provides in pertinent part:

(4) Effective Service.   Consistent with due process of law, service by mail pursuant to this rule shall have the same effect as personal service, and the simultaneous mailing shall constitute effective service unless the mail is returned to the court by the postal service with a marking indicating it has not been delivered, such as “Moved, Left No Address,” “Attempted—Addressee Not Known,” “No Such Number/Street,” “Insufficient Address,” “Not Deliverable as Addressed—Unable to Forward,” or the court has other reason to believe that service was not effected.   However, if the certified mail is returned to the court marked “unclaimed” or “refused,” service is effective provided that the ordinary mail has not been returned.

Here, the mail was not returned as undeliverable.   However, “the court ha[d] other reason to believe that service was not effected.”  Ibid. By the October 19 hearing, the judge knew defendant had been in jail at the time the complaint was mailed to the apartment.   Indeed, the judge found that “there was excusable neglect because he was incarcerated,” and that he “couldn't show up in court [and] couldn't defend himself.”   The judge's finding impugned not only the validity of service but also the validity of the default and default judgment based on defendant's non-appearance.   See R. 6:6–2, –3.

Rule 6:2–3(d)(5) provides that if a “reason exists to believe that service was not effected, the clerk shall vacate the default or default judgment.”   Here, once the judge determined that defendant did not receive service because he was in jail, the judge should have granted the motion to vacate the default judgment.

Despite finding excusable neglect, the judge declined to vacate the default judgment because defendant had not shown a meritorious defense.  “Generally, a defendant seeking to reopen a default judgment because of excusable neglect [under Rule 4:50–1(a) ] must show that the failure to answer was excusable under the circumstances and that a meritorious defense is available.”   Little, supra, 135 N.J. at 284.   However, a meritorious defense “may not, as a matter of due process, be required if the default was procured on the basis of defective service of process.”   Pressler & Verniero, Current N.J. Court Rules, comment 4.1 on R. 4:50–1 (2014) (citing Peralta v. Heights Med. Ctr., Inc., 485 U.S. 80, 108 S.Ct. 896, 99 L. Ed.2d 75 (1988)).  “If defective service renders the judgment void, a meritorious defense is not required to vacate the judgment under R. 4:50–1(d).”  Jameson v. Great Atl. & Pac. Tea Co., 363 N.J.Super. 419, 425 (App.Div.2003), certif. denied, 179 N.J. 309 (2004).

When the judge declined to vacate the judgment based on the absence of a meritorious defense, he rested his decision on an impermissible basis and thus abused his discretion.   See Guillaume, supra, 209 N.J. at 467.   The default judgment was entered against defendant, and he lost his apartment, without notice of the pending court action and an opportunity to be heard.   Cf. Intek Auto Leasing, Inc. v. Zetes Microtech Corp., 268 N.J.Super. 426, 431 (App.Div.1993).   Therefore, we must vacate the default judgment under Peralta:

Where 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.”  ․ [O]nly “wiping the slate clean ․ would have restored the petitioner to the position he would have occupied had due process of law been accorded to him in the first place.”   The Due Process Clause demands no less in this case.

[Peralta, supra, 485 U.S. at 86–87, 108 S.Ct. at 900, 99 L. Ed.2d at 81 (citations omitted).]

Accordingly, we vacate the default judgment and remand this case for further proceedings regarding the complaint in accordance with this opinion.   We make no comment upon what an appropriate remedy might be, with the passage of time, should the Authority not be entitled to a judgment of possession.   We do not retain jurisdiction.

Vacated and remanded.

PER CURIAM