On appeal from the Superior Court of New Jersey, Chancery Division, Essex County.
Bilder and Brochin. The opinion of the court was delivered by Brochin, J.A.D.
Pursuant to R. 4:50, Chiquita Realty, Inc. moved to vacate a judgment entered in accordance with the In Rem Tax Foreclosure Act, N.J.S.A. 54:5-104.29 et seq., which foreclosed its equity of redemption in two parcels of real estate, lots 15 and 17 in Block 1854 in the City of Newark. Chiquita Realty, Inc. claimed that, in violation of its rights to due process of law guaranteed by the state and federal constitutions, it was never served with the tax foreclosure complaint and that the resulting judgment was therefore void for lack of notice. The motion was presented to Judge Murray G. Simon and decided on the basis of affidavits, without an evidentiary hearing. For purposes of his decision, the judge assumed that the complaint for foreclosure had not been served on Chiquita Realty, Inc. He denied the motion to vacate, holding that Chiquita Realty, Inc. and its sole stockholder, Mr. Robert Powlett, were estopped from successfully challenging the judgment.
Chiquita Realty, Inc. bought lots 15 and 17 in Block 1854 in the City of Newark from Luis Soto on October 9, 1984 for $20,000. Mr. Soto retained a $15,000 purchase money mortgage. Both properties were subject to unpaid real estate taxes,
but Chiquita Realty, Inc. did not make any tax payments. In December 1984, the City of Newark purchased tax sale certificates for unpaid 1983 taxes on the properties. On August 14, 1985, the City commenced a suit pursuant to the In Rem Tax Foreclosure Act, N.J.S.A. 54:5-104.29 et seq., and on October 1, 1985 a judgment was entered barring all rights to redeem the properties and adjudicating the City of Newark to be their owner free from all adverse claims. In August 1988, the City sold the properties at auction, and Mr. Roland Foglia was the successful bidder. When Chiquita Realty, Inc. filed its notice of motion, on March 13, 1989, to vacate the foreclosure judgment and to redeem the properties, the parcels were about to be conveyed to Mr. Foglia.
When Chiquita Realty, Inc. bought the properties on October 9, 1984, its president and sole stockholder, Mr. Powlett, knew that unpaid taxes were owed, but he "was not aware that the tax obligation had received a lien status." A few days later, however, his attorney gave him a list of the unpaid taxes, totalling approximately $2,400, and "suggested that I pay the 1983 taxes to avoid a tax sale." But Mr. Powlett did not pay the taxes because he did not have the money, although he "anticipated having the money by the time I received Notice of a Tax Sale from the City of Newark."
According to Mr. Powlett, he first learned that the two parcels had been sold for taxes when, in May 1986, he saw the properties listed in an invitation for bids on real estate owned by the City of Newark. He did not attempt to redeem the properties because, he says, he was unaware that he had the right to do so. Instead, in October 1986, he attended the auction at which they were offered for sale and bid for the properties. He was the successful bidder, he deposited $4200 on account of the purchase price and then forfeited his deposit because he did not have the funds necessary to close. In August 1988, when Lots 15 and 17 in Block 1854 were again offered for sale at auction, Mr. Powlett either bid or prepared to bid, but Mr. Roland Foglia was the successful bidder.
On September 29, 1988, Mr. Foglia signed a contract to purchase the properties. He already owned adjacent property which he had purchased from the City in September 1987. In an undisputed affidavit submitted in opposition to the motion of Chiquita Realty, Inc., Mr. Foglia states that he intends to use lots 15 and 17 together with the adjacent property as the site for a soft drink distribution business. He says that he has spent most of his time during the past eight or nine months preparing to commence operation of the business. He claims that in anticipation that he would be able to close his most recent purchase from the City, he bought two trucks for $15,000, contracted to buy a forklift for $5000, and spent additional money for mortgage, appraisal and advertising fees and survey costs.
As its principal argument in support of its appeal, Chiquita Realty, Inc. contends that the denial of its motion to vacate the foreclosure judgment and to redeem its properties violates the rules enunciated by the United State Supreme Court in Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 103 S. Ct. 2706, 77 L. Ed. 2d 180 (1983) and Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S. Ct. 652, 94 L. Ed. 2d 865 (1950) and by the New Jersey Supreme Court in Township of Montville v. Block 69, Lot 10, 74 N.J. 1, 376 A.2d 909 (1977). Alternatively, Chiquita Realty, Inc. argues that upholding the foreclosure judgment would be inequitable even if it were constitutionally permissible. In addition, it asserts as grounds for reversal that one of the partners in the law firm representing Mr. Foglia "very probably had represented" Chiquita Realty, Inc. "in this matter," that the trial judge was guilty of "injudicious and intemperate behavior and clear bias" against it, and that its cause suffered from "ineffective representation by counsel." We disagree with each of these arguments and therefore affirm.
Mennonite Board of Missions v. Adams, Mullane v. Central Hanover Bank & Trust Co., and Township of Montville v. Block 69, Lot 10, do not give ...