In a case that was defended by Rick Perr and Monica Littman of Kaufman Dolowich, a New Jersey appeals court has affirmed a lower court’s ruling denying a consumer’s motion to vacate a default judgment years after it was satisfied, disagreeing with the consumer’s allegation that the debt was void because previous owners of the debt were not licensed lenders in New Jersey.
The background: The case arose after the consumer defaulted on a credit card debt, which changed hands multiple times. Two of the owners of the debt were not licensed under the New Jersey Consumer Finance Licensing Act.
- The plaintiff filed a collection lawsuit in 2018, and when the consumer failed to respond, a default judgment was entered in 2019. The judgment was satisfied in full four years later.
- In 2024, roughly six years after entry of judgment and more than a year after it was paid, the consumer moved to vacate the judgment, claiming it was void because of the unlicensed status of prior debt holders.
- The trial court rejected the motion, finding it untimely and contrary to the “strong interest of finality of judgments and judicial efficiency.” The judge also found the consumer had not demonstrated excusable neglect or any extraordinary circumstances warranting relief.
The ruling: The Appeals Court agreed, holding that the NJCFLA does not authorize private parties to bring claims based on alleged licensing violations. Enforcement authority, the court explained, lies solely with the Commissioner of the Department of Banking and Insurance. “Because the basis of defendant’s motion rested on an impermissible basis — a private cause of action under the NJCFLA — she failed to meet the criteria of either subsection (d) or (f) of the rule,” the panel wrote.
- The court contrasted the case with LVNV Funding v. DeAngelo, where a judgment was vacated due to a Fair Debt Collection Practices Act violation, noting that the FDCPA explicitly provides a private right of action while the NJCFLA does not.
- The panel further emphasized that motions to vacate must be filed within a “reasonable time,” observing that the consumer waited more than six years after the default judgment and over a year after paying it off. The delay, the court concluded, made the motion untimely.
- There was no abuse of discretion in the lower court’s conclusion and the appeals court affirmed the ruling in full.
