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United Savings & Loan Association of Trenton v. Scruggs

Decided: October 7, 1981.

THE UNITED SAVINGS & LOAN ASSOCIATION OF TRENTON, N.J., A CORP. OF THE STATE OF N.J., PLAINTIFF,
v.
ANNETTE SCRUGGS, SINGLE, ET AL., DEFENDANTS



Dreier, J.s.c.

Dreier

[181 NJSuper Page 53] On July 28, 1978 defendant Annette Scruggs executed a bond and a mortgage in favor of plaintiff United States Savings and Loan Association to secure a debt of approximately $14,000. The mortgage was duly recorded on the same day. Alleging that Miss Scruggs had defaulted on payments due on the obligation,

plaintiff recently brought this action to foreclose the mortgage. Immediately subsequent to filing its complaint, and in accordance with customary practice, plaintiff filed a notice of lis pendens pursuant to N.J.S.A. 2A:15-9.

Plaintiff is now before the court on motion for an order permitting the filing of a nonstatutory notice of lis pendens as a result of a decision of the United States District Court holding the procedures set out in the New Jersey lis pendens statute, N.J.S.A. 2A:15-6 et seq. , to be unconstitutional under the Due Process clause of the United States Constitution. Chrysler Corp. v. Fedders Corp. , 519 F. Supp. 1252, 1264 (D.N.J.1981).*fn1 In the alternative, plaintiff seeks a declaration that its original notice of lis pendens was and is effective. The circumstances of the within action, however, are distinguishable from those of Chrysler and do not give rise to the same due process concerns; thus, the statutory notice of lis pendens already filed by plaintiff is here held to be valid.

As Judge Ackerman noted in Chrysler , the doctrine of lis pendens prevents a party to litigation from conveying the property in dispute in derogation of the potential rights of his opponent in the land and in obstruction of the administration of justice. 519 F. Supp. at 1260. Filing a notice of lis pendens serves as constructive notice to the world that an action involving real property is pending, so that any subsequent purchaser or lienor of that property will take subject to the outcome of the litigation. N.J.S.A. 2A:15-7; Wendy's of So. Jersey, Inc. v. Blanchard Management Corp. , 170 N.J. Super. 491, 496 (Ch.Div.1979).

The New Jersey statute permits a notice of lis pendens to be filed on the basis of plaintiff's unverified complaint, nor need the notice itself be in affidavit form. N.J.S.A. 2A:15-6. Once filed, the notice of lis pendens may not be discharged under the statute except by: (1) plaintiff's failure to prosecute the action

diligently, N.J.S.A. 2A:15-10; (2) the passage of three years from the date of filing, N.J.S.A. 2A:15-11; (3) final judgment in favor of defendant, N.J.S.A. 2A:15-14; (4) defendant's posting a bond sufficient to secure plaintiff's claim, N.J.S.A. 2A:15-15; or (5) complete and final satisfaction of the claim against defendant, or by settlement or abandonment of the action. N.J.S.A. 2A:15-17.

The fixed and persistent nature of the notice has been underscored by two recent cases: Polk v. Schwartz , 166 N.J. Super. 292 (App.Div.1979), and O'Boyle v. Fairway Prod., Inc. , 169 N.J. Super. 165 (App.Div.1979). As noted in Polk , unless the complaint clearly recites a cause of action which, under the statute, does not permit the filing of a notice of lis pendens (e.g. , an action to recover judgment for money or damages only, N.J.S.A. 2A:15-6), it is not appropriate for a defendant to move directly to discharge the notice. 166 N.J. Super. at 299. Rather, defendant should move "either to dismiss the complaint or pertinent counts thereof for failure to state a claim upon which relief can be granted or for summary judgment, which motion would [include] a request to discharge the notice of lis pendens." Id. at 299-300.

O'Boyle added this footnote to Polk:

The adversely affected party would be entitled to have the notice of lis pendens discharged if on motion he could demonstrate and obtain a determination by partial summary judgment to the effect that plaintiff in fact and in law had no right to a lien or to a claim affecting the title to the realty in question but only, if at all, some different claim or right against the defendant as for damages. [169 N.J. Super. at 167].

N.J.S.A. 2A:15-6 provides that a notice of lis pendens may be filed where the object of the action is "to enforce a lien . . . upon real estate or to affect the title to real estate or a lien or encumbrance thereon. . . ." In General Electric Credit Corp. v. Winnebago of N.J. , 149 N.J. Super. 81 (App.Div.1977), this language was construed to permit filing a notice of lis pendens not ...


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