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Hyland v. Kirkman

April 4, 1985

WILLIAM F. HYLAND, ATTORNEY GENERAL OF NEW JERSEY, ET ALS., PLAINTIFFS,
v.
ELWOOD KIRKMAN, ET ALS., DEFENDANTS



Wells, J.s.c.

Wells

The general nature of this action, the allegations of the complaint, the demands for relief and disposition of certain issues are described in a published opinion of my late colleague, Judge Wood. Hyland v. Kirkman, 157 N.J. Super. 565 (Ch.Div.1978). The reader is advised to consult that opinion before launching into this one, being mindful that this court does not find as fact all of the allegations described therein.

The trial of the case proceeded before Judge Wood on 14 trial days between May 23, 1983 and June 14, 1983. On June 29, 1983, closing arguments were heard and Judge Wood took the matter under advisement. Judge Wood died in 1984 before rendering a decision.

Upon transfer of the matter to me, R. 1:12-3(a), I tentatively decided that R. 1:12-3(b) applied and a new trial would not be required. An opportunity was afforded the parties to be heard, a request for a partial recall of witnesses was received and the matter argued. I determined I was able to familiarize myself with the proceedings and all of the testimony through a complete transcript, pleadings and exhibits, R. 1:12-3(b), and have

now done so. I am able to discharge my duty to dispose of the matter fairly without the recall of any witnesses. R. 1:12-3(c).

Plaintiffs' case rests on deeds and judgments of record in the Burlington County Clerk's office. In addition, there is no dispute that three corporations, Pinelands Development Corporation (PDC), West New Jersey Society (WNJ) and Tanners Brook, Inc. (TB) were owned and controlled by defendant Elwood Kirkman and the late Paul Burgess, Sr., whose estate is a named defendant. A further chronological history of the facts between 1961 and 1970 is, however, unnecessary. Rather the court chooses to state only the facts necessary to pose and determine the issues. A description, based on the record, of the principal parties and the lands involved known as the Isaiah Adams tract is, however, necessary.

Isaiah Adams was the returnee of a large tract of land surveyed by the Proprietors of West Jersey in 1859 situate in Bass River. His return encompassed 8,525.80 acres in a 23-course description which expressly excluded 26 surveyed exceptions returned to others leaving a net acreage of 4,662.89. Through subsequent conveyances the property became titled in Henry Shaw in August 1893. Shaw conveyed the westerly 2011 acres to Albert K. McMurray in February 1895, the south 1750 acres to George E. Godward in August 1895, the north 2000 acres to William Crawford Hawk and the east 2,797.7 acres to Meyer Beyer. Shaw's conveyances ignored the 26 exceptions, and although reasonably workable protractions of the descriptions give some idea as to where the parcels are in relation to one another and to the outbound description of the return to Isaiah Adams it is impossible to locate, with any accuracy, where the tracts are on the ground or the exact extent to which each is affected by one or more of the 26 exceptions.

After the basic four-part division of the lands by Shaw, his grantees and their successors failed to pay taxes and the resultant tax sales began to create liens. Furthermore while the record title to the McMurray, Godward and Hawk parcels

remained essentially stable subject to tax liens and the exceptions, Meyer Beyer's grantees multiplied like rabbits creating a title nightmare. Nonetheless it is with McMurray, Godward, Hawk and Beyer that the trial of title to the Isaiah Adams tract ends at the end of the 19th Century. McMurray, Godward and Hawk vanished without a trace and left no successors who have emerged even after the highly publicized start of this case. Beyer does, however, have living descendants as does one of the holders of an exception and their interests are discussed and determined herein. But it is not until 1960 that interest again focused on Isaiah Adams' lands.

The central figure in the case is Paul Burgess, Sr. Burgess went to work for Chelsea Title Company in 1922 and over the next forty years became one of the most renowned "title men" in South Jersey. Even though he was not a lawyer, few lawyers could match his knowledge and experience in the title field and several consulted him from time to time on title problems. By the early sixties, when the facts of this case began to unfold, Burgess had risen to President of Chelsea Title, and Chelsea itself had become one of the largest title insurers in South Jersey.

To Burgess, however, titles were more than a career. He, apparently, had a consuming interest in local history and archeology. He was a lifetime resident of Brigantine, served as its mayor and wrote a historical pamphlet about it. He particularly loved the Pine Barrens, the vast tract of wild and uncultivated woodland that stretches across the central part of Atlantic, Burlington and Ocean Counties encompassing Bass River and the Isaiah Adams tract.

Burgess was not a surveyor but with a surveyor's wheel, a fencing foil and a jeep, often accompanied by his daughter-in-law, Kathleen Keeney Burgess, he tracked for years through the Pine Barrens on weekends taking measurements, looking for monuments or other physical indicia of where properties described in deeds might be located. He sought out old cemeteries

for names and dates, old road beds and the foundations and remains of old buildings.

He spoke to people whom he, on rare occasion, found in the Barrens questioning them as to who owned the land. He often carried "Private Property" or "No Trespassing" signs with him and posted them. Many of the signs gave his phone number and name but no one ever called. Burgess also cut wood for his fireplace and holly trees at Christmas from these tractless barrens as did other Chelsea people.

Burgess died in 1975 after plaintiffs' investigation began but before he was questioned. Among the documents in evidence, however, are letters to and from him, memoranda and notes of his which give substantial insight into his ideas for acquiring title to what he conceived to be "abandoned" land in the Pine Barrens and particularly to the Isaiah Adams tract in Bass River. A great deal of this opinion is devoted to an analysis of Burgess' conduct in the matter.

Elwood Kirkman is a prominent attorney whose principal office is in Atlantic City. He is, and was throughout the sixties and seventies, the senior partner in a law firm which represented numerous business, banking and individual clients in that city, Atlantic County and South Jersey. Kirkman's knowledge and experience in title matters is beyond question. Much of his practice was devoted to real estate and real estate financing. He owned or controlled at least a third of the stock in Chelsea Title Company, and was its president for years before assuming the chairmanship of its board of directors, a position he held during all or most of the era in which the facts herein take place.

Kirkman and Burgess were friends and, of course, associated in business. It was to Kirkman that Burgess looked as a partner in the venture to acquire the Isaiah Adams tract. Kirkman authorized and controlled the deposit and expenditure of monies in and through WNJ and TB which he and Burgess owned and controlled.

David Fitzsimmons, an attorney about five years out of law school in 1961, had been employed by Kirkman's firm ever since his admission to the bar. It was he who Kirkman assigned to work with Burgess on various real estate projects beginning in 1961 and thereafter, including the acquisition of the Adams tract. Because of his role as an implementor of Burgess' plan, Fitzsimmons is named as a defendant herein.

Robert Kaufman was an experienced real estate broker and developer primarily in New York City but with interests all over the country. In 1960, or thereabouts, Kaufman agreed to finance the attempt to acquire certain pinelands subject to seven tax sale certificates describing portions of the Isaiah Adams tract in which a Trenton attorney, Bernard Campbell, had an interest or could obtain an interest. Kaufman is not a lawyer, but was advised throughout either by Campbell, who died in 1965, or by New York counsel. In much of what he did, Kaufman proceeded in the name of an aunt of his, Judith Kaplan, as a straw-party. Kaufman knew none of the other parties prior to 1960 but eventually met all of them and, in fact, did in proceedings, not attacked herein, foreclose on a large part of the Isaiah Adams tract. His interest in other parts of the tract is, however, determined herein.

Defendant Mark DeMarco, an attorney, is named herein because of his dual role as solicitor of Bass River from 1961 through 1967 and as Kaufman's attorney from May 1966 to date. DeMarco also has an interest in a part of the Isaiah Adams tract which is affected by this decision.

Kathleen Keeney Burgess is Paul Burgess' daughter-in-law. At some point herein, Burgess interested Mrs. Burgess in searching and quickly discovered she worked with marked attention to detail. Although Burgess himself had done considerable search work in the Isaiah Adams title, he also put Mrs. Burgess to work on it and later, her experience being so great, Kaufman also engaged her for the same purpose.

Mrs. Burgess used her maiden name (Keeney) and married name interchangeably. She is the Keeney in Keeney v. Dressel, infra at 358, a key proceeding in the matter. She also, like DeMarco, ended up with an interest in the Adams tract which is affected by this decision.

INTRODUCTION

On page 585 of Judge Wood's opinion, 157 N.J. Super., is an appendix displaying two chains of title out of Tuthill for parts of the Adams tract.*fn1 One chain, for 3,400 acres, that being the combined acreage into McMurray and Godward, supra at 353, ends in Great Notch (2,200 acres) and Kaufman (1,200 acres) who has since conveyed 100 acres to J & M.*fn2 The second chain for the remaining 1,400 acres ends in K & D Land Trust. The former chain will be referred to as the "sanitized" chain since the claim of its present holders is based on two court judgments. A major point of plaintiffs' case is to establish that these court proceedings were fraudulent. Plaintiff also asserts the latter chain, "unsanitized" by any proceedings, grants no title. There is, however, a pending action before this court involving this chain, Kaufman v. Adams, which is affected by this decision.

THE UNSANITIZED CHAIN

Both chains start with a deed from Richard Tuthill to PDC. The court finds that the deed from Tuthill to PDC in October 1961 was a "wild" or "thin air" deed, both apt descriptions. As used herein, the court defines a wild deed as meaning a written instrument, in the form of a deed, acknowledged and

recorded wherein the named grantor, knowing he, she or it has absolutely no title of any kind to the premises described therein nonetheless executes the instrument. Tuthill's deed clearly fits that definition in this case. He was a searcher at Chelsea and signed the deed at the request of his boss, the president of the company, Paul Burgess. He did not have, and never had, any interest whatsoever, choate or inchoate in the lands described in his deed and knew it. Burgess, as well, knew it. Tuthill was perfectly candid about that in his trial testimony.

Four years later on September 21, 1965 by deed signed "C. Trimble, President" PDC conveyed a part of the lands described in the Tuthill deed comprising about 1,400 acres to Victoria Dreschler, Mark DeMarco's sister-in-law, as trustee of Saratoga Land Trust, an entity created to hold in the interests of Kathleen Kenney Burgess, Dorothy Weisbecher and Lucy DeMarco in the land. Lucy DeMarco is Mark DeMarco's wife and his nominee. The conveyance represented a gift to Mrs. Burgess and Weisbecker apparently in consideration of the search work they had done for Burgess and Kirkman. Since Burgess knew that more work had to be done to secure good title he asked DeMarco to represent Mrs. Burgess and Weisbecker and agreed that DeMarco have a 30% interest as a contingent fee.

DeMarco's plan was to pay taxes on the 1,400 acres for five years and then file a quiet title action under N.J.S.A. 2A:62-2. But in May 1966 Kaufman engaged DeMarco to represent him in foreclosing Kaufman's tax sale certificates. Mrs. Burgess was engaged to do the necessary searches and by 1968 DeMarco realized that Kaufman's certificates might cover some part of the lands purportedly conveyed to Saratoga.

DeMarco immediately made a clean breast of the conflict to Kaufman. The problem was resolved by giving Kaufman a 50% interest in the lands described in deed to Saratoga. K & D Land Trust was formed naming Kaufman as trustee with Mrs. Burgess, Weisbecker, Mrs. DeMarco and Dreschler suffering a loss by half of their former interest in Saratoga. On November

28, 1968, Dreschler conveyed by lot and block description the Saratoga lands to K & D.

Mrs. Burgess' searches also revealed the Meyer Beyer title mess, supra at 353. Efforts were made to locate descendants of Beyer and ultimately a grandson of his, David Holzman, was found living and working in New York. In addition, descendants of the holder of one of the several exceptions out of the Beyer tract, Alfred E. Burdette, were also discovered. Kaufman, aided by DeMarco, sought to, and finally did acquire, in 1969 and 1970 respectively, deeds from the Beyer and Burdette heirs. The process by which the same was accomplished, however, is not, in the case of the Beyer heirs, gratifying.

The record taken as a whole discloses that Holzman and his attorney Hoffman, relied on a representation by DeMarco, acting under the guise of an apparently neutral abstract company, that K & D had an insurable title. Based largely on this representation and on practical considerations including the expense in searching and surveying the property and, perhaps, defending the title in court, Holzman decided to settle.

The Beyer heirs were not told that K & D had no title whatsoever, something DeMarco knew or ought to have known since its deed sprung directly from the Tuthill bargain and sale deed, less than eight years of record, which Burgess had procured. Rather, DeMarco writes to Kaufman on abstract company letterhead (P91) designed for use in Kaufman's negotiations with Holzman: ". . . this company will provide you title insurance as to the quality of your title but not as to the quantity." That statement is pure sophistry since no title company would insure either the quality or quantity of a title based on Tuthill's rootless eight-year-old bargain and sale deed. In fact DeMarco knew that Chelsea itself, Burgess' own company, would not provide title insurance on any part of the Adams tract because of the exceptions. A letter written by DeMarco to Kaufman's attorney in New York in 1966 is evidence of such knowledge. DeMarco, of course, knew that the K & D deed

came from PDC and thus had absolutely no basis for representing that K & D's title was insurable. For that reason regardless of all the other truths the letter may recite about the overlapping and conflicting descriptions out of Meyer Beyer, its potential to mislead depends entirely on a false premise: the quality and insurability of K & D's title, and its innate superiority over the Beyer claim. The Court finds P91 is palpably deceptive, Bron v. Weintraub, 42 N.J. 87, 91 (1964), that it was relied upon and made with that intent.

DeMarco and Kaufman also secured a deed from the Burdette heirs. In two letters DeMarco describes the title situation to one of them and their attorney. While the letters are written in a manner most favorable to K & D, taken as a whole, they do not contain the same glaringly false premise that infects P91 and are not, therefore, palpably deceptive.

Armed with K & D's deed, the deeds from the Meyer Beyer and Burdette heirs*fn3 and payment of taxes since 1965, DeMarco, on behalf of Kaufman, commenced a quiet title action under N.J.S.A. 2A:62-2, Kaufman v. Adams, C-2549-73, on March 29, 1974. That action is stayed pending decision herein although the Burdette exception has been settled. Since the purpose of the action is to quiet title in K & D it is an effort to "sanitize" the 1,400-acre chain of title arising out of the Tuthill deed. The efficacy of that effort must therefore be decided since a judgment would cut off Meyer Beyer and everyone who claims under him. But before reaching that issue the court will turn to the sanitized chain wherein the cleansing process is completed.

THE SANITIZED CHAIN

Examination of Judge Wood's chart, Hyland, supra, 157 N.J. Super. at 585, reveals another chain of title beginning with

the wild Tuthill to PDC deed and describing 3,400 acres. In 1962, about a year later, PDC executed a deed to WNJ which Burgess tells Fitzsimmons to prepare but not record. That is done on October 19, 1962 and two days later WNJ filed a quiet title action, WNJ v. Richards, C-414-62 under N.J.S.A. 2A:62-1. In my opinion the deed to WNJ and the quiet title action was hurried to gain advantage over Kaufman who was then pressing Bass River to deliver certain tax sale certificates to him. The contemporaneous exchange of letters, evidence that conclusion. Burgess supplied Fitzsimmons with the names of defendants*fn4 all of whom were served by publication. The complaint alleges WNJ to be in "peaceful possession under a claim of ownership." A supporting affidavit was filed, signed by Burgess, using identical language and on February 8, 1963 a default judgment of quiet title was executed by Judge Wick sitting in a chancery vicinage which included Burlington County. Ten days later PDC's deed to WNJ was recorded.

WNJ, now as owner of record under its deed from PDC and the quiet title judgment, defaulted on its 1963 and 1964 taxes. Fitzsimmons, acting for TB attended the resultant municipal sales and purchased the tax sale certificates for approximately $6,200. TB assigned the certificates in trust to Mrs. Burgess, who through Fitzsimmons filed, on December 22, 1966, a tax sale certificate foreclosure proceeding. Keeney v. Dressel, C-1939-66. In contrast to WNJ v. Richards, this proceeding was technically thorough. It named about 300 defendants who had any color of claim to the Adams tract, including the State. But see infra at 375. Service, for the most part, was by publication and on April 19, 1967 a final judgment by default

was entered. The proceedings were entirely regular on their face.

Pursuant to a September 1966 agreement between the Burgess/Kirkman group and Kaufman wherein Kaufman agreed to relinquish his interests under two of his tax sale certificates covering the 3,400 acres in exchange for 1,200 acres of the northerly portion of it after the tax sale foreclosure, Mrs. Burgess on May 12, 1967 conveyed 1,200 acres to Kaufman. Kaufman paid, also pursuant to the agreement, about one-third of the expenses of the action. He made no search of the title nor did he obtain title insurance.

On August 1, 1969 Mrs. Burgess, two-and-one-half years after final judgment in Keeney v. Dressel, supra at 361, conveyed the remaining 2,200 acres described in that action to the Society of the Divine Vocations (SDV) for a total consideration of $307,500, of which $229,500 was secured by a mortgage which she took back and immediately assigned to Burgess and Kirkman. On August 21, 1969 SDV conveyed the property to Great Notch Development Corp. for $403,740 which assumed and agreed to pay the SDV mortgage. Great Notch did obtain a Chelsea title report, showing title in SDV "by deed from Kathleen Keeney, Trustee, dated August 1, 1969 and recorded on August 7, 1969 in Book 1707 on page 592." Great Notch also thereafter obtained Chelsea's title policy.

There was no evidence of any relation between Burgess and Kirkman or any of their corporations and SDV or Great Notch or between Great Notch and SDV. Neither SDV nor Great Notch had any actual knowledge of the wild Tuthill deed or the manner in which TB acquired the tax sale certificates. The court further finds from the expert testimony that had Great Notch hired a title company unrelated to the parties herein it would have passed title on the basis of the judgment in Keeney v. Dressel.

ANALYSIS: Wild Deeds

Plaintiff asks that the Tuthill deed be stricken of record as a "fraud" on the recordation system. Charging that it was prepared, signed and recorded for the purpose of creating a modern chain of title in order that the grantees thereof could claim "color of title" and eventually quiet title through court proceedings, plaintiff asserts that deeds, even if a nullity, should be stricken where they are used for a ...


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