Melissa Jamieson v. Devin W. Reilly
CourtNew Jersey Superior Court Appellate Division
Date FiledOctober 29, 2026
DocketA-0304-25
StatusUnpublished
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Full Opinion
NOT FOR PUBLICATION WITHOUT THE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-0304-25
MELISSA JAMIESON and
MELJAMS PROPERTIES, LLC,
Plaintiffs-Respondents,
v.
DEVIN W. REILLY, FLIPPING
KEYS, LLC, DWR ENTERPRISES,
LLC, DWR PROPERTIES, LLC and
CHAAD INVESTMENTS, LLC,
Defendants-Appellants,
and
GANGSTER GORILLA, LLC,
DEVIN REILLY, BRIAN
MUHLBAIER, ESQUIRE and
LAW OFFICE OF BRIAN J.
MUHLBAIER,
Defendants.
_______________________________
Submitted September 29, 2026 – Decided October 29, 2026
Before Judges Gilson and Gummer.
On appeal from the Superior Court of New Jersey,
Chancery Division, Cumberland County, Docket No.
C-000022-24.
Keller, Lisgar & Williams, LLP, attorneys for
appellants (Valerie K. Williams, on the briefs).
Dashlaw LLP, attorneys for respondents (Mary
Williamson Chatten, on the brief).
PER CURIAM
In this real-estate dispute, defendants, Devin W. Reilly and several
companies of which Reilly had been a member, appeal an order denying their
motion to vacate a prior order entering final judgment by default against them
and awarding plaintiffs Melissa Jamieson and MelJams Properties, LLC
(MelJams) monetary damages and counsel fees. Defendants also appeal a
subsequent "charging order."
We affirm in part, reverse in part, and vacate in part. We perceive no
abuse of discretion as to the trial court's determination not to vacate final
judgment as to liability and affirm that aspect of the order. The final judgment,
however, included a damage award that was entered without a proof hearing
conducted pursuant to Rule 4:43-2(b) and a counsel-fee award that was not
supported by specific findings. We conclude the court misapplied its discretion
in not vacating the damage and counsel-fee awards and reverse that aspect of
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the vacation-motion order. We also vacate the charging order because it was
based on the damage and counsel-fee awards. We remand for proceedings
consistent with this opinion.
I.
Plaintiffs initiated this lawsuit when they filed a complaint in Cumberland
County on July 24, 2024. Earlier that year, they voluntarily dismissed without
prejudice complaints they had filed in Salem County and in Cumberland County.
In this case, they named as defendants Reilly, DWR Properties, LLC (DWR
Properties), DWR Enterprises, LLC (DWR Enterprises), Flipping Keys, LLC
(Flipping Keys), and CHAAD Investments, LLC (CHAAD) (collectively,
defendants). Reilly was a member of each of those entities. Plaintiffs also
named as defendants other individuals and entities, none of whom are
participating in this appeal: Devin Reilly, who is Reilly's son; Gangster Gorilla,
LLC; Brian Muhlbaier, Esq.; and the Law Office of Brian J. Muhlbaier.
Plaintiffs alleged Reilly had induced Jamieson to enter into a joint business
venture involving several real-estate investment properties. The focus of this
lawsuit was a 2022 real-estate transaction in which MelJams, of which Jamieson
was the sole member, allegedly purchased property located at 1111 South 2nd
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Street in Millville (the Property), which was owned by DWR Properties and used
by defendants for their construction business, DWR Enterprises .
According to plaintiffs, defendants told Jamieson the sale price for the
Property would be $275,000 and Reilly "would apply $100,000 of his own
money toward the purchase of th[e P]roperty," leaving Jamieson to provide the
remaining balance. Plaintiffs asserted Jamieson had obtained those funds
through a loan from a friend, who wired $175,000 to Muhlbaier, defendants'
counsel, on or about May 26, 2022. According to plaintiffs, defendants assured
Jamieson "she would be getting real estate property with built in equity of at
least $75,000" and Reilly "assured [Jamieson] that he would repay the $175,000
loan . . . with rental payments within a year of closing, as his companies would
continue to run [their] operations out of this [P]roperty." Plaintiffs also alleged
defendants had "led [Jamieson] to believe that all conveyance documents,
including the [d]eed and [m]ortgage, were properly filed and recorded as she
was the owner of record of [the Property]." According to plaintiffs, Jamieson
learned in August 2023 from a title report that the property "was still in the name
of DWR Properties" and that liens and judgments had been entered against the
Property, including a March 25, 2022 $230,753.10 judgment in a lawsuit
brought against DWR Properties by 1st Colonial Community Bank.
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Plaintiffs asserted causes of action for quiet title, quia timet, and
declaratory judgment, seeking, among other things, a declaration that MelJams
owned the Property. They also asserted causes of action for breach of contract,
breach of implied-in-fact contract, breach of the implied covenant of good faith
and fair dealing, breach of implied-in-law contract, fraud and misrepresentation,
detrimental reliance and promissory estoppel, and loan estoppel, seeking
"[s]pecific [p]erformance to convey title to [the P]roperty" and compensatory,
treble, and punitive damages, as well as counsel fees and interest.
On December 23, 2024, plaintiffs moved for substituted service pursuant
to Rule 4:4-4. Plaintiffs sought permission to serve all defendants by posting
the summons and complaint "on the front door[s] of [d]efendants' business
address, 1111 S[outh] 2nd Street," which was the Property's address, and
"[d]efendants' residential address 5 Oriole Lane," and by mailing copies to both
addresses by regular and certified mail.
In support of the motion, plaintiffs' counsel certified to the investigative
and in-person service efforts plaintiffs had made concerning each defendant and
identified the Property's address at 1111 South 2nd Street and defendants'
residential address at 5 Oriole Lane as addresses sufficient to provide all
defendants with notice of the action. Counsel represented that "the [P]roperty
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was occupied by a barbershop" but still contained DWR Enterprises signage.
Counsel also certified that "[p]ublic records confirm[ed]" DWR Properties was
the owner of the Property and that, in April 2024, the United States Postal
Service had reported no change-of-address. As for DWR Enterprises, counsel
relied on a Dunn and Bradstreet contact directory and a March 12, 2024 business
report listing the Property's address as DWR Enterprises's address and
identifying Reilly as the owner of DWR Enterprises. Concerning Flipping Keys,
counsel noted that a 2018 deed transferring the Property to DWR Properties
included a return address for Flipping Keys at the Property. Regarding CHADD,
counsel relied on a March 7, 2024 recorded deed identifying the Property's
address as CHAAD's business address and listing Reilly as CHAAD's managing
member.
Counsel certified Reilly had previously owned the property located at 5
Oriole Lane and had lived there with his girlfriend before transferring title of
that property to the girlfriend in December 2019. Counsel also certified
Jamieson, based on her "past working relationship" with Reilly, believed 5
Oriole Lane to be Reilly's residential address. Counsel further cited to a report
listing Reilly's and CHAAD's addresses as 5 Oriole Lane and a process server's
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September 14, 2024 observations that occupants of 5 Oriole Lane had refused to
answer the door and appeared to be "evading service."
A legal assistant certified that on December 24, 2024, she had
electronically filed the motion and served copies of it on defendants at 5 Oriole
Lane by first-class mail and by email, using an email affiliated with Reilly.
Reilly's purported girlfriend sent a December 30, 2024 letter to plaintiffs'
counsel asserting Reilly did not reside at 5 Oriole Lane and "ha[d] no association
with [it]."
In a January 17, 2025 order, the court granted the unopposed substituted-
service motion, permitting plaintiffs to effectuate service of process on
defendants by certified and regular mail sent to 5 Oriole Lane and the Property's
address and "by posting the Summons and Complaint on the front door[s]" of
"[d]efendants' last known residential address of 5 Oriole Lane . . . and
defendants' last known business address of 1111 S[outh] 2nd Street." Plaintiffs
subsequently filed affidavits of service stating the process server had served
defendants on January 27, 2025, by "post[ing] to [the] front door[s]" of 1111
2nd Street and 5 Oriole Lane copies of the complaint, summons, and other
documents.
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On March 5, 2025, plaintiffs requested entry of default against defendants.
On April 22, 2025, plaintiffs moved for entry of final judgment against
defendants. The parties did not include a copy of that motion in the appellate
record. In a May 9, 2025 order, the court granted the unopposed motion, entered
an order granting final judgment against defendants and in favor of plaintiffs,
and awarded plaintiffs a total of $296,233.55, which consisted of $277,938.71
in damages and $18,294.84 in counsel fees and costs. In the order, which was
based on a form submitted by plaintiffs, the court did not provide an explanation
for the damage or counsel-fee awards.
Plaintiffs filed a writ of execution on June 4, 2025, and moved about a
week later for a "[c]harging [o]rder." The parties did not include a copy of that
motion in the appellate record. In a July 18, 2025 order, the court granted the
motion, charging "100%" of Reilly's membership interests in CHAAD, Flipping
Keys, DWR Enterprises, and DWR Properties "with the payment of the
judgment with interest" pursuant to N.J.S.A. 42:2C-43. The court also enjoined
Reilly from transferring or encumbering his membership interests in the entities
pursuant to N.J.S.A. 2A:17-65 and directed the entities to pay plaintiffs any
distributions attributable to Reilly's membership interests.
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On July 24, 2025, defendants moved to vacate the May 9, 2025 order
granting final judgment and for leave to file an answer. Without citing to any
specific subpart of Rule 4:50-1, defendants urged the court to use its discretion
to set aside the judgment. Defendants claimed the judgment should be set aside
for lack of notice and service in violation of their due-process rights. Defendants
argued substitute service under Rule 4:4-4(b)(3) was improper due to plaintiffs'
failure to make a "diligent inquiry . . . to locate and/or serve [Reilly] . . . at his
last known address of 2601 E. Main Street." Defendants also claimed they had
"a meritorious defense" to the complaint, specifically that Jamieson, on behalf
of MelJams, had failed to record the deed to the Property despite having received
"the original Deed, Mortgage and Note at the time of closing with verbal
instructions to record it."
In support of the motion, defendants submitted Reilly's certification, in
which he acknowledged DWR Properties had sold the Property to MelJams "[o]n
or about July 18, 2022." He claimed Jamieson had been provided with the
"original [d]eed, [m]ortgage and [n]ote at the time of closing with verbal
instructions to record it" but failed to do so. According to Reilly, DWR
Properties had paid approximately $100,000 to satisfy a loan against the
Property and MelJams was supposed to reimburse DWR Properties when the
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Property was sold. Reilly certified DWR Enterprises had ceased operations at
the end of 2021 and filed a certificate of dissolution on or about August 17,
2022, and that Flipping Keys, DWR Enterprises, and DWR Properties had not
occupied or conducted business out of the Property since the July 18, 2022 sale.
According to Reilly, CHAAD's registered address was 2601 East Main Street
and the deed listing CHAAD's address as 1111 South 2nd Street "was a clerical
error and [wa]s incorrect." Reilly further certified he had not lived at 5 Oriole
Lane since he sold it to his purported girlfriend in December 2019 and identified
his primary residence as 2601 East Main Street, which Jamieson had rented in
April 2021 after her house caught fire. According to Reilly, he "was never
served a copy of the [c]omplaint in this matter."
In opposition to the motion, plaintiffs' counsel submitted a certification in
which she detailed her efforts to investigate defendants' potential service
addresses. She attached exhibits to her certification, including a June 12, 2025
business-entity report for DWR Properties identifying Reilly as its agent for
service and listing 1111 South 2nd Street as its service and main business
addresses. The report also identified Reilly's address as 5 Oriole Lane. Counsel
submitted additional records identifying 5 Oriole Lane as Reilly's address,
including: a driver's license issued in November 2021 and set to expire in 2026;
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Flipping Keys's operating agreement listing Reilly's address as 5 Oriole Lane;
and documents concerning a new company Reilly had formed in March 2025,
which was registered at 5 Oriole Lane. Counsel certified that plaintiff had not
made service attempts at 2601 East Main Street, which plaintiffs had identified
as Reilly's address in their complaint, because "in March 2024, [a] neighbor . . .
confirmed that . . . Reilly did not reside [at that address] and that a 'black lady
[was] living there right now.'"
At oral argument, defense counsel acknowledged "Reilly['s] . . .
companies were still utilizing [1111 South 2nd Street] on their paperwork" but
asserted the businesses had not occupied or operated out of the Property since
MelJams bought the Property. Defense counsel denied defendants had engaged
in any wrongdoing and contended they simply had been "very sloppy" in their
paperwork. Defense counsel further argued plaintiffs had erred in attempting
service at 5 Oriole Lane rather than 2601 East Main Street, citing a May 15,
2023 email, which plaintiffs had attached to the complaint and in which Reilly
had advised Jamieson he planned to move into the property at 2601 East Main
Street as soon as she moved out of it. In response, plaintiffs' counsel explained
plaintiffs had not attempted service at 2601 East Main Street because
"[Jamieson] had text communications with an adjacent neighbor . . . who
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confirmed in text, no, [Reilly] doesn't live here anymore. It's a . . . 'black lady.'"
She contended evidence revealed "[twenty-one] or maybe [twenty-two] separate
and distinct written documents that Mr. Reilly identified, 1111 South 2nd Street
. . . as the address" and "[sixteen] separate and distinct pieces of evidence"
identifying 5 Oriole Lane.
On August 15, 2025, the court entered an order denying defendants'
motion to vacate. In its accompanying decision, the court detailed the evidence
demonstrating defendants were using the Property's address and 5 Oriole Lane
as their addresses. The court determined only subsections (a) and (f) of Rule
4:50-1 were potentially applicable in this case. The court found defendants had
not established excusable neglect or mistake under subsection (a) because the
"sheer number of documents, deeds, and contracts listing Reilly's or his business'
addresses at either 1111 [South 2nd Street] or 5 Oriole Lane," including
"addresses provided in legal documents to which the defendant was a signatory,"
and Reilly being "a sophisticated businessman" led to the "inescapable
conclusion that Reilly was evading service." With respect to the assertion Reilly
did not live at the Oriole Lane address, the court found "ample evidence
demonstrate[d] otherwise," including the process server's observations and
contracts and a certificate of formation identifying 5 Oriole Lane as Flipping
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Keys's address after the girlfriend had represented Reilly no longer lived there.
The court likewise found no grounds for relief under subsection (f), reasoning
defendants could not "purposefully evade service for months" and then "request
they be allowed to participate in their defense after a default is already
answered."
In their notice of appeal and amended notice of appeal, defendants stated
they were appealing the August 15, 2025 order. In their merits brief, defendants
contend the court abused its discretion in denying their motion to vacate final
judgment under subsection (a) of Rule 4:50-1 and in failing to consider
subsections (c) and (d) of the rule. Defendants did not address the court's
determination under subsection (f) of the rule. Accordingly, we deem that issue
waived. See Morris v. T.D. Bank, 454 N.J. Super. 203, 206 n.2 (App. Div. 2018)
(finding "[a]n issue not briefed is deemed waived on appeal"). Defendants also
contend the July 18, 2015 charging order is void.
II.
"We review a court's determination under Rule 4:50-1 for abuse of
discretion." Satz v. Starr, 482 N.J. Super. 55, 61 (App. Div. 2025). "[A]
decision to vacate a default judgment lies with the sound discretion of the trial
court, guided by principles of equity." Romero v. Gold Star Distrib., LLC, 468
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N.J. Super. 274, 293 (App. Div. 2021) (quoting Coryell, L.L.C. v. Curry, 291
N.J. Super. 72, 79 (App. Div. 2006)). "The trial court's decision to grant or deny
such a motion should not be disturbed on appeal unless it represents a 'clear
abuse of discretion.'" Carrington Mortg. Servs., LLC v. Moore, 464 N.J. Super.
59, 67 (App. Div. 2020) (quoting Hous. Auth. of Morristown v. Little, 135 N.J.
274, 283-84 (1994)). An abuse of discretion "occurs when 'a decision is made
without a rational explanation, inexplicably departed from established policies,
or rested on an impermissible basis.'" Doglio v. Boasso Am. Corp., 484 N.J.
Super. 534, 541 (App. Div. 2026) (quoting U.S. Bank Nat'l Ass'n v. Guillaume,
209 N.J. 449, 467-68 (2012)) (internal quotation marks omitted).
"Rule 4:50-1 governs relief from final judgment and orders," including
motions to vacate a final judgment. Romero, 468 N.J. Super. at 294. "Rule
4:50-1 provides for relief from a judgment in six enumerated circumstances,"
D.M.C. v. K.H.G., 471 N.J. Super. 10, 26 (App. Div. 2022), including:
(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 R. 4:49; (c) fraud (whether
heretofore denominated intrinsic or extrinsic),
misrepresentation, or other misconduct of an adverse
party; (d) the judgment or order is void; (e) the
judgment or order has been satisfied, released or
discharged, or a prior judgment or order upon which it
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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 or
order.
[R. 4:50-1.]
"Relief under Rule 4:50-1, except for relief from default judgments, is
'granted sparingly,' and in exceptional circumstances." MTAG v. Tao Invs.,
LLC, 476 N.J. Super. 324, 333 (App. Div. 2023) (quoting F.B. v. A.L.G., 176
N.J. 201, 207 (2003)); see also 257-261 20th Ave. Realty, LLC v. Roberto, 259
N.J. 417, 436 (2025) (same). "[A] court should view the setting aside of a
default judgment under . . . [Rule 4:50-1] and Rule 4:43-3, 'with great liberality,'
and should tolerate 'every reasonable ground for indulgence . . . to the end that
a just result is reached.'" MTAG, 476 N.J. Super. at 333 (second omission in
original) (quoting Mancini v. EDS ex rel. N.J. Auto. Full Ins. Underwriting
Ass'n, 132 N.J. 330, 334 (1993)) (internal quotation marks omitted). A court
shall balance "[t]he strong interests in finality of judgments and judicial
efficiency . . . against the need to achieve equity and justice." Roberto, 259 N.J.
at 436. Nevertheless, "all 'doubts should be resolved in favor of the parties
seeking relief.'" Ibid. (quoting Mancini, 132 N.J. at 334).
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Defendants argue the court erred in declining to apply Rule 4:50-1(a) to
vacate the judgment. Under Rule 4:50-1(a), "the court may relieve a party or
the party's legal representative from a final judgment or order for . . . mistake,
inadvertence, surprise, or excusable neglect." "The party seeking to vacate a
default judgment has the 'overall burden of demonstrating that its failure to
answer or otherwise appear and defend should be excused.'" Romero, 468 N.J.
Super. at 294-95 (quoting Jameson v. Great Atl. & Pac. Tea Co., 363 N.J. Super.
419, 26 (App. Div. 2003)). Corporations "are held to a higher standard because
'being entities that should expect to be sued from time to time, [they] have an
obligation to institute procedures within their organization for receiving and
responding to lawsuits.'" Id. at 298 (quoting Davis v. DND/Fidoreo, Inc., 317
N.J. Super. 92, 98 (App. Div. 1998)).
For relief under Rule 4:50-1(a), a party must demonstrate "excusable
negligence and a meritorious defense." Guillaume, 209 N.J. at 468. A mistake
or "[e]xcusable neglect has been defined as a situation where the default was
'attributable to an honest mistake that is compatible with due diligence or
reasonable prudence.'" Romero, 468 N.J. Super. at 298 (quoting Guillaume, 209
N.J. at 468). In other words, "excusable neglect [i]s something the parties could
not have protected themselves from during the litigation." Ibid. (emphasis in
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original). The second requirement, or "the meritorious defense requirement[,]
is only waived upon proof that the default was obtained through a defective
service of process." Id. at 295.
Defendants contend that having learned plaintiffs had dismissed their
Salem County and prior Cumberland County complaints, "it was reasonable for
[them] to mistakenly believe that any complaint that had been filed against them
by [plaintiffs] had been dismissed." Their assertion, however, that they believed
plaintiffs had dismissed the complaint in this case because plaintiffs had
dismissed other complaints is not supported in the record. Reilly made no
reference to that purported belief or to the prior complaints in the certification
he submitted in support of defendants' motion to vacate. But even if he had,
defendants' failure to act based on an assumption plaintiffs had dismissed this
case because they had dismissed prior complaints does not demonstrate "due
diligence or reasonable prudence" and does not constitute excusable neglect.
Guillaume, 209 N.J. at 468.
Defendants argue they were entitled to relief under Rule 4:50-1(c),
asserting plaintiffs "misrepresented material facts regarding service." A Rule
4:50-1(c) motion must be "filed within a year after entry of the judgment." R.
4:50-2. Defendants' subsection (c) argument, which they make for the first time
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on appeal, is untimely. See Deutsche Bank Nat'l Tr. Co. v. Russo, 429 N.J.
Super. 91, 96 n.3 (App. Div. 2012) (finding a Rule 4:50-1(c) motion untimely
when defendants "claim[ed] for the first time [on appeal] that the judgment was
obtained by fraud").
Moreover, their argument is without substantive merit. Rule 4:50-1(c)
"requires the moving party to establish fraud, misrepresentation, or misconduct
of an adverse party." Pine St. Mgmt. Corp. v. East Orange City, 15 N.J. Tax
681, 686 (Tax 1995). To establish entitlement to relief under Rule 4:50-1(c), a
moving party must demonstrate by clear and convincing evidence that the other
party gave "[p]erjured testimony that . . . [was] not false merely, but . . . [was]
willfully and purposely falsely given, and . . . [was] material to the issue tried
and . . . probably . . . controlled the result." Gilgallon v. Bond, 279 N.J. Super.
265, 267 (App. Div. 1995) (quoting Shammas v. Shammas, 9 N.J. 321, 330
(1952)). In addition, the moving party "must show that the fact of the falsity of
the testimony could not have been discovered by reasonable diligence in time to
offset it at the trial or that for other good reason the failure to use diligence is in
all the circumstances not a bar to relief." Ibid. (quoting Shammas, 9 N.J. at
330). Defendants did not meet that standard given the numerous business
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records, corporate documents, and other information plaintiffs had obtained
regarding defendants' possible addresses.
Defendants also rely on subsection (d) of the rule. "Rule 4:50-1(d)
provides for relief where 'the judgment or order is void.'" Romero, 468 N.J.
Super. at 299 (quoting R. 4:50-1(d)). "A default judgment will be considered
void when a substantial deviation from service of process rules has occurred,
casting reasonable doubt on proper notice." Jameson, 363 N.J. Super. at 425;
see also Berger v. Paterson Veterans Taxi Serv., 244 N.J. Super. 200, 205 (App.
Div. 1990) (omission in original) ("[W]hen a court is satisfied on a R[ule] 4:50-
1(d) application that initial service of process was so defective that the judgment
is void for want of in personam jurisdiction . . . the resulting void default
judgment must ordinarily be set aside."). "[N]ot every defect in the manner in
which process is served renders the judgment upon which the action is brought
void and unenforceable." Romero, 468 N.J. Super. at 301 (quoting Rosa v.
Araujo, 260 N.J. Super. 458, 462 (App. Div. 1992)).
Personal service of a summons and complaint is "[t]he primary method of
obtaining [personal] jurisdiction over a defendant in this State pursuant to Rule
4:4-3." U.S. Bank Nat'l Ass'n v. Curcio, 444 N.J. Super. 94, 105 (App. Div.
2016) (third alteration in original) (quoting R. 4:4-4(a)). The Rules of Court,
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however, provide for alternative methods of service "[i]f personal service cannot
be effected after a reasonable and good faith attempt." Id. at 106 (quoting R.
4:4-3(a)). Pursuant to Rule 4:4-4(b)(3), the court authorized plaintiffs to use an
alternative method of service when it granted plaintiffs' motion for substituted
service in the January 17, 2025 order.
In their notices of appeal and case information statements, defendants do
not identify the January 17, 2025 order as an order they are appealing. See R.
2:5-1(f)(2)(ii) ("In civil actions the notice of appeal . . . shall . . . designate the
judgment . . . appealed from."); see also Fusco v. Bd. of Educ. of City of Newark,
349 N.J. Super. 455, 461-62 (App. Div. 2002) (declining to review an order not
designated in appellant's notice of appeal or case information statement).
Nevertheless, we see no basis to reject the court's decision to authorize an
alternative method of service. Plaintiffs' "reasonable and good faith attempt[s]"
to effectuate service and to diligently investigate and identify defendants'
possible addresses were well documented in the record. R. 4:4-3(a).
Unconvinced by defendants' arguments based on subsections (a), (c), and
(d) of Rule 4:50-1, we perceive no abuse of discretion regarding the court's
denial of the motion to vacate as to the entry of default judgment on liability.
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The record, however, is devoid of any support for the court's award of damages
and counsel fees.
In the complaint, plaintiffs sought "[s]pecific [p]erformance to convey
title to [the P]roperty" and compensatory, treble, and punitive damages, as well
as counsel fees and interest. In the May 9, 2025 order, the court did not order
"[s]pecific [p]erformance to convey title to [the P]roperty." Instead, it awarded
$277,938.71 in damages and $18,294.84 in counsel fees and costs
"Generally, after a default, a plaintiff is entitled to 'all of the damages' that
can be 'prove[d] by competent, relevant evidence.'" Romero, 468 N.J. Super. at
302 (alteration in original) (quoting Heimbach v. Mueller, 229 N.J. Super. 17,
28 (App. Div. 1988)). Thus, "[i]t is axiomatic that where, following the entry
of a default, a plaintiff seeks unliquidated damages, judgment should not
ordinarily be entered without a proof hearing." Chakravarti v. Pegasus
Consulting Grp., Inc., 393 N.J. Super. 203, 210 (App. Div. 2007); see also
Romero, 468 N.J. Super. at 302 (explaining that "[f]ollowing entry of default, a
plaintiff seeking unliquidated damages ordinarily is required to establish those
damages at a proof hearing." (citing R. 4:43-2(b))). "Even though a defendant
who has defaulted has relinquished the right to present affirmative proofs in the
matter, the right to challenge a plaintiff's showings in a proof hearing by way of
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cross-examination and argument should not ordinarily be precluded."
Chakravarti, 393 N.J. Super. at 210-11.
Nothing in the record indicates the court conducted a proof hearing or
otherwise gave defendants an opportunity to exercise their right to challenge
plaintiffs' claims for damages. The record is equally devoid of any support for
the counsel-fee award. See R. 4:42-9 (listing circumstances under which a court
may award counsel fees); City of Englewood v. Exxon Mobile Corp., 406 N.J.
Super. 110, 126 (App. Div. 2009) (in the absence of "specific findings"
supporting a counsel-fee award, court "remand[ed] the matter of counsel fees
for reconsideration and a supporting statement of reasons").
On this record, we conclude the court misapplied its discretion in not
vacating the final judgment's damage and counsel-fee awards, and we reverse
that aspect of the May 9, 2025 order. We remand with instructions the court:
conduct a proof hearing, giving defendants an opportunity to challenge
plaintiffs' proof of damages "by way of cross-examination and argument";
reconsider plaintiffs' counsel-fee application; and enter an order with a
statement of reasons explaining the court's decision regarding any award of
damages or counsel fees. Chakravarti, 393 N.J. Super. at 210-11. We take no
position on the ultimate outcome.
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Because we reverse that aspect of the May 9, 2025 order, we vacate the
July 18, 2025 order, which was based on the final judgment's damage and
counsel-fee awards.
Affirmed in part; reversed in part; vacated in part; and remanded for
proceedings consistent with this opinion. We do not retain jurisdiction.
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