Bascom Corp. v. Flying Colors, LLC, 080620 NJSUP, A-5626-18T2

Docket Nº:A-5626-18T2
Opinion Judge:PER CURIAM
Party Name:BASCOM CORPORATION, Plaintiff-Respondent, v. FLYING COLORS, LLC, Defendant-Appellant, and SUN NATIONAL BANK, and STATE OF NEW JERSEY, Defendants.
Attorney:Peter R. Bray argued the cause for appellants (Bray & Bray, LLC, attorneys; Geoffrey Todd Bray, on the briefs). Michael G. Pellegrino argued the cause for respondent (Pellegrino & Feldstein, LLC, attorneys; Michael G. Pellegrino, on the brief).
Judge Panel:Before Judges Sumners and Mayer.
Case Date:August 06, 2020
Court:Superior Court of New Jersey
 
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BASCOM CORPORATION, Plaintiff-Respondent,

v.

FLYING COLORS, LLC, Defendant-Appellant,

and

SUN NATIONAL BANK, and STATE OF NEW JERSEY, Defendants.

No. A-5626-18T2

Superior Court of New Jersey, Appellate Division

August 6, 2020

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued telephonically July 28, 2020

On appeal from the Superior Court of New Jersey, Chancery Division, Passaic County, Docket No. F-027095-17.

Peter R. Bray argued the cause for appellants (Bray & Bray, LLC, attorneys; Geoffrey Todd Bray, on the briefs).

Michael G. Pellegrino argued the cause for respondent (Pellegrino & Feldstein, LLC, attorneys; Michael G. Pellegrino, on the brief).

Before Judges Sumners and Mayer.

PER CURIAM

Defendant Flying Colors, LLC appeals from an August 12, 2019 order denying its motion to vacate default judgment. We affirm.

In 2008, defendant acquired property in Paterson for $1, 600, 000. Defendant's general partner, Andrey Tovstashy, executed the contract to purchase the property. Defendant's other general partner, Michael Stengart, executed a personal guaranty to finance the property's purchase. Stengart used the property to operate a childcare facility.

In 2016, defendant failed to pay property taxes and the municipality issued a tax sale certificate. Plaintiff Bascom Corporation purchased that certificate in March 2017. In December 2017, plaintiff filed a tax sale certificate foreclosure complaint (complaint).

On February 3, 2018, according to the filed affidavit of service, Tovstashy, as defendant's partner, was personally served with the complaint at his residence. Defendant does not dispute service of the complaint on Tovstashy. According to Stengart, Tovstashy never told him about service of plaintiff's complaint.

A corporate search revealed Stengart as defendant's other general partner and listed a residential address in Woodcliff Lake. Efforts to personally serve Stengart were unsuccessful. No other individuals were identified in plaintiff's corporate search of persons authorized to accept service of process on behalf of defendant.

A May 30, 2018 order set the time, place, and amount for defendant's redemption of the tax lien. The redemption notice was sent to Tovstashy's residence as well as by regular and certified mail to the property address where Stengart operated his business. Because defendant failed to answer the complaint, on September 24, 2018, default judgment was entered.

Due to personal and financial difficulties, on an unknown date, Tovstashy transferred his interest in the property to Stengart.1 Stengart experienced his own financial difficulties and decided to sell the property in 2018. Because he wanted to avoid filing for personal bankruptcy, Stengart sought to cancel the personal guaranty securing defendant's purchase of the property. Stengart claimed he was unaware of plaintiff's lawsuit, defendant's default, and subsequent entry of default judgment when he sought to sell the property.

In October 2018, Stengart attempted to negotiate a pay-off of the lien amount but plaintiff declined to negotiate. Defendant then moved to vacate default judgment in February 2019.

On August 12, 2019, the motion judge denied defendant's motion to vacate default judgment. He explained the return of service of process confirmed Tovstashy was personally served with the...

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