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Hyland v. Kirkman

Decided: March 10, 1978.


Wood, J.s.c.


The Attorney General of New Jersey, the Department of Environmental Protection and its Commissioners have instituted this action to (as the plaintiffs put it) "rectify a massive fraud upon the courts and land recordation system of the State." Plaintiffs ask as relief the "setting aside of certain judgments, conveyances, and tax sale certificates which were integral to the fraudulent scheme." Presently before the court are motions by a number of defendants for dismissal of the complaint.

A brief statement of the facts as alleged in the complaint is necessary to an understanding of the issues.*fn1

The action arises by reason of the efforts of two groups of persons to acquire for their own purposes title to a tract of land, in area about 4800 acres, situate in the Township of Bass River, Burlington County, and forming a part of the great wilderness area known as the Pine Barrens. The first of these groups may be denominated for the purpose of this statement, the Kirkman-Burgess interest. The second may be called the Kaufman-DeMarco interest.

The Kirkman-Burgess group acquired color of title to the lands in question by deed from defendant Richard Tuthill dated October 9, 1961. Tuthill was an employee of Chelsea Title and Guaranty Co. He held no title or interest whatever in the premises. Nevertheless, being approached on behalf of Paul C. Burgess, Sr. or defendant Kirkman, he executed a deed purporting to convey the lands therein described to a corporation called Pinelands Development Company (PDC). This corporation was formed four days previous to the purported conveyance, on October 4, 1961. Its incorporators were Carol Trimble, daughter of Elwood Kirkman; Kathleen Keeney Burgess, wife of Paul C. Burgess, Jr. and daughter-in-law of Paul C. Burgess, Sr.; and one S. Bertman. The stock was issued to the incorporators but the corporation was actually controlled by Kirkman and Burgess Sr. Included in this tract is a parcel of 30.5 acres to which, prior to the purported conveyance, the State of New Jersey acquired title by deed from one E. Pharo.

On October 19, 1962 PDC conveyed 3400 acres of the tract to West New Jersey Society (WNJ). The stock of WNJ was issued to defendants Paul C. Burgess, Jr. and David R. Fitzsimons, a member of Kirkman's law firm. Kirkman and Burgess Sr. also controlled this corporation.

On October 22, 1962 WNJ instituted in the Superior Court, Chancery Division, an action to quiet title to the 3400-acre tract. The action was entitled West New Jersey Society, Trustee v. Samuel Richards et al. , Docket C-414-62. The State of New Jersey was not named a defendant despite its record title to the parcel of 30.5 acres. By means of a

fraudulent and false affidavit of inquiry, a default judgment was entered in this action February 8, 1963.

WNJ defaulted on taxes and defendant Tanners Brook Inc. purchased a tax sale certificate (TSC 275). Tanners Brook is the alter ego of WNJ. The incorporators, stockholders and directors were practically the same. Tanners Brook, on November 30, 1966, assigned TSC to Kathleen Keeney (now Kathleen Keeney Burgess).

As to the Kaufman-DeMarco interests, defendants Kaufman and Kaplan began their efforts to acquire title to the tract in 1961. The basis for their claim was certain tax sale certificates assigned to them by Bernard A. Campbell, which at that time were over 20 years old. On the strength of those tax sale certificates those defendants claimed a right to redeem eight tax sale certificates assigned to the State in 1936 by Bass River Township. Kaufman and Kaplan then instituted an action entitled Kaplan v. State of New Jersey. A stipulation of settlement was entered, under which the State of New Jersey agreed to reassign the certificates to Bass River Township for cancellation. Bass River, through its solicitor, defendant Mark DeMarco, contested Kaplan's right to cancellation of the tax sale certificates held by the State. Kaplan then instituted suit in 1964 entitled Kaplan v. Bass River Township.

While that action was pending the Kaufman interests were interpleaded in an action instituted by the Kirkman-Burgess interests, entitled WNJ v. Bass River Township. As a result a settlement was reached wherein an agreement was made between Kaufman and Kirkman the purpose of which was to conceal the fraudulent nature of defendants' claims. In furtherance of the agreement PDC conveyed 1400 acres of the tract to defendant Saratoga Land Trust, which in turn was controlled by defendant DeMarco. Saratoga was incorporated on September 21, 1965, the same day as this conveyance. Also, Tanners Brook assigned its interest in the tax sale certificate referred to as TSC 275 to Keeney. Keeney

then instituted an action entitled Keeney v. Dressel to foreclose the right of redemption in TSC 275. Final judgment was entered on April 19, 1967. On May 12, 1967 Keeney conveyed 1200 acres of the tract covered by TSC 275 to Kaufman. On November 28, 1968 defendant K&D Land Trust was established, and on that same date Saratoga conveyed its interest in the tract to K&D. The interest holders in Saratoga were DeMarco's wife, Weisbecker, Keeney and Dreschler. The interest holders in K&D are Kaufman, a New York group, DeMarco's wife, Weisbecker, Keeney and Dreschler.

Shortly after the settlement in WNJ v. Bass River Township , DeMarco, while still solicitor of Bass River, was retained by Kaufman to represent his interests in Bass River. DeMarco employed Keeney to abstract the title to Kaufman's properties. In 1966 DeMarco, on behalf of Bass River, made a motion to amend the order obtained in 1964 in Kaplan v. Bass River. The original order required the State to reassign its tax sale certificates to Bass River Township. Bass River was to allow Kaplan to redeem. The amended order required the State to reassign its liens directly to Kaplan. In 1970 DeMarco brought an action for foreclosure on four of the state tax sale certificates; judgment was granted.

In 1969 Kaufman and DeMarco represented to the heirs of Beyer and Burdette, persons in a valid chain of title to the property, that they (Kaufman and DeMarco) had acquired title through the deeds from the Kirkman-Burgess group. They then paid consideration of $5000 to the heirs for release of their interests in the property.

On August 1, 1969 Keeney conveyed 2200 acres covered by TSC 275 to defendant Society of Divine Vocation (SDV). On August 21, 1969 SDV conveyed the same property to defendant Great Notch Development Corp. Defendant Chelsea performed the title search for this transaction.

On August 9, 1973 Kaufman conveyed 100 acres of the tract to defendant J & M Land Co. This 100 acres was part of the 1200 acres conveyed by Keeney to Kaufman in furtherance

of the alleged Kirkman-Kaufman fraudulent settlement.

On March 29, 1974 Kaufman instituted a quiet title action entitled Kaufman v. Adams to quiet title to the 1400 acres conveyed by PDC to Saratoga and from Saratoga to K&D. This action is still pending.

As of the filing of the complaint the following held interests in the original 4800 acre Tuthill tract:

Kaufman 1100 acres

J & M 100 acres

Great Notch 2200 acres

K & D 1400 acres

To illustrate the chain of title and as an aid to understand the facts, see the attached chart of the chain of title.

The present motion is brought on behalf of defendants to dismiss the complaint on a number of grounds and for summary judgment. They will be dealt with in order.

I. Standing

It is first urged that plaintiffs lack standing to maintain this action. While recognizing the right of the Attorney General to protect the interest of the general public when that interest is challenged, defendants argue that there is no such challenge demonstrated in this case. They contend that if damage to any interest is shown by the complaint, it is damage to private interests only and that these are not such as may be defended by the Attorney General on his own motion. There does not appear here, they say, any question of "great public moment" which calls for or sanctions the intervention of the Attorney General. Woulfe v. Associated Realties Corp. , 130 N.J. Eq. 519, 525 (Ch. 1942); Kugler v. Romain , 58 N.J. 522 (1971). Defendants argue that if anyone was wronged by the fraudulent scheme, it was "merely" a group of private individuals rather than the "public at large." They maintain that there is no authority in the Attorney General to protect persons involved in private

real estate transactions from the fraudulent acts of other private individuals. Granting that the Attorney General has broad discretion to determine what matters involve the public interest, O'Regan v. Schermerhorn , 25 N.J. Misc. 1 (Sup. Ct. 1946), they argue that the issue which is the subject of litigation should have "an impact on the public distinct from its impact on particular citizens." This case, they say, has no such impact. Therefore they label the Attorney General's determination to institute this action an "abuse of discretion" and an unjustifiable invasion of private rights.

I am unable to accept such a narrow view of the status and authority of plaintiffs. The complaint asserts that there has been use (or abuse) of the "recordation system" of this State, and further, that fraud has been perpetrated on the courts by these defendants to the end of perpetrating fraud upon citizens of the State and of appropriation unto themselves rights in real estate previously nonexistent and, in effect, manufactured out of the whole cloth. That such activity threatens the integrity of those institutions and tends to bring them into disrepute seems obvious. It seems to me equally obvious that the integrity of these institutions is of vital public importance, and that an action to protect them is well within the discretion of the Attorney General. As Judge (later Justice) Ackerson said in O'Regan v. Schermerhorn, supra.

It is settled in our state that the Attorney General has all the power invested in his office at common law except as modified by constitutional or statutory regulation.

He is invested with a broad discretion in determining what matters may be of interest to the public generally * * * [at 8]

The court went on to point out that the statute respecting the office of the Attorney General (N.J.S.A. 52:17A-1 et seq.) "does not restrict but rather reaffirms the common law authority of ...

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