Toorak Capital Partners LLC v. Hanoch Dov Feldman

• Court: New Jersey Superior Court Appellate Division
• Decided: March 10, 2026
• Docket: A-3402-23
• Status: Unpublished

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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-3402-23

TOORAK CAPITAL PARTNERS LLC,

Plaintiff-Respondent,

v.

HANOCH DOV FELDMAN, NJ 297 RESIDENCE LLC, NJ PROPERTIES 180 USA LLC, NJ PROPERTIES 117 USA LLC, 345 PALISADE N G LLC, and ELEUTHER FELDMAN,

Defendants-Appellants. ____________________________

Submitted November 18, 2025 – Decided March 10, 2026

Before Judges Chase and Augostini.

On appeal from the Superior Court of New Jersey, Chancery Division, Hudson County, Docket No. C-000113-23.

Lipsky Portales, PA, attorneys for appellants (Sean M. Lipsky and Elena Portales, of counsel and on the briefs). Offit Kurman, PA, attorneys for respondent (Thomas W. Halm, Jr., of counsel and on the brief).

PER CURIAM

Individual defendants Hanoch Dov Feldman, Eleuther Feldman,1 and

corporate defendants NJ 297 Residence LLC, NJ Properties 180 USA LLC, NJ

Properties 117 USA LLC, and 345 Palisade N G LLC appeal from three orders:

two orders entered on March 28, 2024, denying defendants' motion to vacate

default and entering default judgment in favor of plaintiff, Toorak Capital

Partners LLC, thereby voiding various property transfers; and the May 24, 2024

order, denying reconsideration of the March 28, 2024 orders. Based upon a

review of the motion record and applicable law, we reverse and remand for

further proceedings because the trial court improperly entered default judgment.

I.

Eleuther owned several New Jersey limited liability companies that each

owned real estate. In 2017, Eleuther transferred title to these properties to his

son Hanoch, claiming the transfer occurred so that Hanoch could improve and

manage the properties. In 2022, "after refinancing, renovating, and improving

the [p]roperties," Hanoch transferred them back to Eleuther for nominal

1 Because individual defendants share a surname, we refer to them by their first names to avoid confusion. We intend no disrespect by doing so. A-3402-23 2 consideration. Plaintiff made the loans to Hanoch before the properties were

transferred back to Eleuther.

On August 10, 2023, plaintiff filed a complaint alleging that Hanoch

transferred four New Jersey properties to four companies owned by his father,

Eleuther, in violation of New Jersey's Uniform Voidable Transactions Act

(UVTA),2 N.J.S.A. 25:2-20 to -36. The complaint referenced two separate

lawsuits filed by plaintiff in New York, claiming Hanoch breached the terms of

loans secured by mortgages on the New York properties. It further detailed that

these loans were now in default and the subject of the foreclosure and deficiency

actions pending in New York.

On October 20, 2023, the court issued a dismissal notice to plaintiff,

advising that the complaint would be dismissed without prejudice on November

19, 2023, thirty days from the date of the notice, for lack of prosecution under

Rule 1:13-7 or Rule 4:43-2 unless the required action was taken. On November

24, 2023, the case was dismissed because plaintiff did not submit proof of

service within four months of the filing of the complaint.

2 Effective August 10, 2021, the Uniform Fraudulent Transfer Act became known as the UVTA. The UVTA applies to all transactions occurring after the effective date. A-3402-23 3 On December 29, 2023, plaintiff filed a motion seeking to reinstate the

case and to validate the prior substituted service of process on all defendants

nunc pro tunc.3 On January 19, 2024, the unopposed motion was granted, the

case was reinstated and substituted service was permitted and deemed

effectuated as of the date the summons and complaint were mailed to defendants.

The order included two statements regarding default: (1) "[p]laintiff shall be

entitled to move to enter default upon expiration of the appropriate time period

unless otherwise extended[,]" and (2) "[p]laintiff shall request entry of default

if no responsive pleading is filed within [thirty-five] days of the date of service

and fully comply with [Rule] 4:43-1."

The order was to be served upon the parties via "first class mail." On

January 22, 2024, the reinstatement order was uploaded into the electronic court

file jacket (eCourts).

On January 23, 2024, plaintiff's counsel certified that the order was sent

by regular mail to defendants. That same day, plaintiff filed a request to enter

default against all defendants under Rule 4:43-1. With this request, plaintiff's

counsel certified that the request to enter default and supporting documentation

3 Nunc pro tunc means to have "retroactive legal effect through a court's inherent power." Black's Law Dictionary 1283 (12th ed. 2024).

A-3402-23 4 was mailed to defendants via regular mail. The clerk entered default against all

defendants that day.

On February 20, 2024, defendants, now represented by counsel, filed a

motion to vacate default and permit the filing of an answer. Defendants included

with the motion a proposed contesting answer and counterclaim as required by

Rule 4:43-3. On February 21, 2024, plaintiff filed a separate motion seeking to

enter default judgment against all defendants. Plaintiff's counsel certified that

this motion was served on defendants' counsel via "electronic mail, certified

mail, return receipt requested, and regular mail."

On March 28, 2024, the trial court heard oral argument on the parties'

respective default motions, denying defendants' motion to vacate default and

granting plaintiff's motion to enter default judgment pursuant to Rule 4:43-2(b).

In denying the motion to vacate default, the court did not find "excusable

neglect," and noted that "there isn't even a suggestion" that the parties met the

good cause standard. For completeness' sake, the court also rejected defendants'

meritorious defense arguments. As for defendants' motion to vacate default, the

court found:

So I think it is clear to the [c]ourt and I am convinced that these parties tried to evade service of the . . . original summons and complaint. And when valid addresses were obtained, they ignored the service of the

A-3402-23 5 motion to restore the case. And then tried to avoid or evade the jurisdiction of New York in the foreclosure action with these fraudulent transfers.

So I am granting the motion for default judgment.

Pursuant to the UVTA, the court voided and set aside various transfers of

property, and enjoined defendants from encumbering or disposing of the

properties.

On April 17, 2024, defendants filed for reconsideration, which the court

denied on May 24, 2024. The court found no basis to reconsider its March 28,

2024 orders, explaining:

. . . I just do not find any palpably incorrect decision by me based on the facts as they were presented, or any valid basis to support the defense argument that the judgment was void.

I added the language about the effective service of process nunc pro tunc because I was mindful of the fact that there was service as far back as October on one of [] defendants. And but for the passage of time that resulted in the dismissal, [plaintiff's counsel] or someone from his firm would have filed their affidavit of due diligence and the case would have proceeded anyway. So he didn't ask for that, I added it. And that's the reason I added it.

Most notably, also, when the motion to restore was filed, it's unquestioned and admitted that [] defendants had notice of it and they chose not to oppose it. That would have been the time to say, hey, wait a minute, this isn't fair; even if I attempted to file my

A-3402-23 6 answer during the dismissal period, it might have been rejected. And that's really all that would have happened.

We don't need a retroactive reinstatement, but I did want to make sure it was understood that I found the service to be effective despite what I thought at the time were efforts by [] defendants to evade service.

....

So I think, respectfully, it's disingenuous to say that they were deprived of any due process because there was only five days here or four days there between reinstatement and entry of default.

This appeal followed.

Defendants raise several points for our consideration, primarily

challenging the trial court's entry of default judgment. They contend that the

trial court erred because: (1) defendants' time to answer had not yet expired; (2)

defendants filed a timely answer; (3) the motion to vacate default was

improperly denied because defendants did not willfully default; (4) the trial

court erroneously applied the excusable neglect standard; (5) plaintiff suffered

no prejudice had default been vacated; and (6) defendants provided evidence of

a meritorious defense. Defendant also asserts that the trial court's decision to

enter final judgment voiding the alleged fraudulent transfers is contrary to

binding appellate precedent.

A-3402-23 7 II.

"Generally, a decision to vacate a default judgment lies within the sound

discretion of the trial court, guided by principles of equity." Romero v. Gold

Star Distribution, LLC, 468 N.J. Super. 274, 293 (App. Div. 2021) (quoting

Coryell, L.L.C. v. Curry, 391 N.J. Super. 72, 79 (App. Div. 2006)) (remaining

citations omitted). We will not disturb that decision "unless it represents clear

abuse of discretion." Ibid. (quoting Hous. Auth. of Morristown v. Little, 135

N.J. 274, 283 (1994)). "A court abuses its discretion when its decision is made

without a rational explanation, inexplicably departed from established policies,

or rested on an impermissible basis." State v. Chavies, 247 N.J. 245, 257 (2021)

(quoting State v. R.Y., 242 N.J. 48, 65 (2020)) (internal quotation marks

omitted).

We owe no deference to a trial court's legal determinations, reviewing de

novo whether the proper legal standard was applied. See Manalapan Realty,

L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

A.

We begin by addressing defendants' contentions regarding whether the

trial court erred in entering default judgment. Defendants assert that default was

improperly entered before their time to answer had lapsed. Rule 4:6-1 provides

A-3402-23 8 defendants thirty-five days from the date of service to answer a complaint.

Service effectuated by certified mail is deemed complete upon the date of

acceptance of the certified mailing. R. 1:5-4(b). Rule 1:3-3 extends the time to

respond to a complaint by five days when service is effectuated by regular mail.

Service effectuated by both certified and regular mail is complete upon mailing

of the ordinary mail. R. 1:5-4(a) and (b).

If a defendant fails to answer the complaint or the answer is stricken with

prejudice, Rule 4:43-1 provides that "the clerk shall enter a default on the docket

as to such party." "Our Rules prescribe a two-step default process, and there is

a significant difference between the burdens imposed at each stage. When

nothing more than an entry of default pursuant to Rule 4:43-1 has occurred,

relief from that default may be granted on a showing of good cause." US Bank

Nat'l. Ass'n v. Guillaume, 209 N.J. 449, 466-67 (2012) (citation omitted); see R.

4:43-3.

Before the complaint was dismissed for lack of prosecution pursuant to

Rule 1:13-7, Hanoch acknowledged service of the complaint on November 2,

2023 and Eleuthera was served on November 16, 2023, before the complaint

was dismissed. Both defendants were entitled to forty days to file an answer

before default was entered. In the January 19, 2024 order reinstating the case,

A-3402-23 9 the trial court deemed service on defendants sufficient as of the date of the

mailing nunc pro tunc consistent with the court rules.

Because the matter was administratively dismissed on November 24,

2023, and reinstated on January 19, 2024, we next consider whether the time

defendants had to serve an answer tolled during the administrative dismissal

period. In support of their position that the time defendants had to respond to

the complaint was tolled until the complaint was reinstated, they rely on our

decision in Weber v. Mayan Palace Hotel & Resorts, 397 N.J. Super. 257, 264-

65 (App. Div. 2007). In Weber, we held that a complaint may be served after a

case is administratively dismissed but before it is reinstated. 397 N.J. Super. at

264. Moreover, we held that "[t]he defendant's time to answer will not begin to

run until the complaint has been reinstated." Ibid. (citation omitted). Plaintiff

contends that Weber is "not on point" because the factual scenario was

distinguishable. We are not persuaded.

In both Weber and the present case, the matters were administratively

dismissed for lack of prosecution under Rule 1:13-7. In the present case,

plaintiff effectuated substituted service by regular and certified mail shortly

before the case was administratively dismissed; whereas in Weber, service was

effectuated during the time the matter was dismissed. Notwithstanding these

A-3402-23 10 procedural differences, our holding that defendants' time to answer is tolled and

does not begin to run until reinstatement applies under both factual scenarios.

To short circuit the time in which a defendant is provided by court rule to file

an answer offends due process. See Doe v. Poritz, 142 N.J. 1, 106 (1995)

("Fundamentally, due process requires an opportunity to be heard at a

meaningful time and in a meaningful manner.")

Thus, Hanoch had until February 4, 2024, to file an answer, and Eleuther

had until February 20, 2024. After reinstating the case on January 19, 2024,

default was entered on January 23, 2024—well before defendants' deadline to

file an answer. Because defendants had additional time in which to file an

answer to the complaint, the clerk's entry of default was erroneous. Cf. Midland

Funding LLC v. Albern, 433 N.J. Super. 494, 499 (App. Div. 2013).

B.

We turn next to defendants' contentions that the trial court erred by not

vacating default because they had filed a timely answer and because the court

erroneously applied the incorrect legal standard to defendants' motion to vacate

default. Based on our review of the record and the governing legal standards,

A-3402-23 11 we are satisfied the trial court erred in not granting defendants' motion to vacate

default.

A motion to vacate default need not meet "the more stringent requirements

of [Rule] 4:50-1 for setting aside a default judgment." O'Connor v. Altus, 67

N.J. 106, 129 (1975) (citations omitted). "[O]nly a 'mere showing of good cause

is required for setting aside an entry of default.'" N.J. Div. of Youth & Family

Servs. v. M.G., 427 N.J. Super. 154, 171 (App. Div. 2012) (quoting N.J. Mfrs.

Ins. Co. v. Prestige Health Grp., LLC, 406 N.J. Super. 354, 360 (App. Div.

2009)). By contrast, "[a] motion to set aside a default judgment will not be

granted unless the movant shows . . . that there is a meritorious defense." Ibid.

(citing Marder v. Realty Const. Co., 84 N.J. Super. 313 (App. Div. 1964); R.

4:50-1).

The "good cause" standard "requires the exercise of sound discretion in

light of the facts and circumstances of the particular case considered in the

context of the purposes of the [c]ourt [r]ule being applied." Del. Valley

Wholesale Florist, Inc. v. Addalia, 349 N.J. Super. 228, 232 (App. Div. 2002).

Moreover, courts must be mindful of the "strong preference for adjudication on

the merits rather than final disposition for procedural reasons." Midland

Funding, 433 N.J. Super. at 499 (quoting Galik v. Clara Maass Med. Ctr., 167

A-3402-23 12 N.J. 341, 356 (2001)). Therefore, "an application to vacate default 'should be

viewed with great liberality and every reasonable ground for indulgence is

tolerated to the end that a just result is reached.'" N.J. Div. of Youth & Family

Servs. v. P.W.R., 410 N.J. Super. 501, 508 (App. Div. 2009) (quoting Marder,

84 N.J. Super. at 319).

Defendants complied with Rule 4:43-3 by attaching a contesting answer

and counterclaims to their motion to set aside default which they filed on

February 20, 2024. The trial court offered reasons for denying the motion to

vacate default, finding no excusable neglect or meritorious defense. Although

noting the lower good cause standard of Rule 4:43-3, the court stated, "there

isn't even a suggestion that . . . these parties met that standard." This conclusion

is based on the more stringent standard; and therefore, misstates the applicable

law under these circumstances.

C.

Defendants initially argue that the trial court erred in entering final

judgment against them and voiding and setting aside the transfers of the New

Jersey properties because the law prohibits the issuance of a final judgment until

a creditor's monetary claim has been reduced to judgment. Deerhurst Estates v.

Meadow, 70 N.J. Super. 404, 409 (App. Div. 1961). We decline to address this

A-3402-23 13 contention for two reasons. First, arguments not raised before the trial court will

generally not be considered on appeal. See Selective Ins. Co. of Am. v.

Rothman, 208 N.J. 580, 586 (2012). We "decline to consider questions or issues

not properly presented to the trial court when an opportunity for such a

presentation is available 'unless the questions [] raised on appeal go to the

jurisdiction of the trial court or concern matters of great public interest .'" Nieder

v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) (quoting Reynolds Offset Co.,

Inc. v. Summer, 58 N.J. Super. 542, 548 (App. Div. 1959)).

Defendants acknowledge that this argument is being raised for the first

time on appeal although they contend it involves a matter of great public

importance. We are not persuaded that the matter is of such great public interest

that we should consider it. However, because we conclude that the trial court

improperly entered default judgment and the matter is being remanded for

further proceedings, we need not reach the merits of this belated contention.

In sum, default judgment must be predicated on the valid entry of default

which did not occur in this case. See Clark v. Pomponio, 397 N.J. Super. 630,

641-42 (App. Div. 2008). Further, the court incorrectly applied the more

stringent legal standard of Rule 4:50-1(a) to the facts of this case instead of the

less stringent requirement of good cause. Therefore, we hold that the court

A-3402-23 14 mistakenly exercised its discretion by denying defendants' motion to vacate the

entry of default.

As a result, we need not address the trial court's denial of the motion to

reconsider that ruling. Accordingly, we reverse the trial court's denial of the

motion to vacate entry of default and vacate both the entry of default and the

judgment of default. R. 4:43-2. We remand for the prompt filing of defendants'

responsive pleading and further proceedings. See O'Connor, 67 N.J. at 129;

Midland, 433 N.J. Super. at 499.

Reversed and remanded. We do not retain jurisdiction.

A-3402-23 15