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Simon v. National Community Bank of New Jersey

July 6, 1995

BETTY SIMON, TRUSTEE, J.D.T., RICHARD SIMON, GRANTOR DATED MARCH 2, 1970, PLAINTIFF-RESPONDENT,
v.
NATIONAL COMMUNITY BANK OF NEW JERSEY, DEFENDANT/THIRD PARTY PLAINTIFF/APPELLANT/CROSS-RESPONDENT, V. TOWNSHIP OF EGG HARBOR AND JANE DOE, AN UNKNOWN AUTHORIZED AGENT OF EGG HARBOR TOWNSHIP, THIRD PARTY DEFENDANT-RESPONDENT/CROSS-APPELLANT. AND MARTLAND HOSPITAL, EUGENE DAVOLOS AND ANNE M. DAVOLOS, HIS WIFE, A PARTNERSHIP T/A ELSEA PARTNERSHIP; AT&T CREDIT CORP., GENERAL ELECTRIC CORP.; FOREST CITY RESIDENTIAL DEVELOPMENT, INC., (FORMERLY FOREST CITY DILLON, INC.), STATE OF NEW JERSEY; DANIEL S. FALASCO PLUMBING, HEATING & COOLING, INC.; BEST WESTERN INTERNATIONAL, INC., JOHN L. GROSSMAN, JOHN D. PHELPS, JR.; UNKNOWN OTHERS/UNKOWN CLAIMANTS, THEIR HEIRS, DEVISEES AND THEIR SUCCESSORS IN RIGHT, TITLE AND INTEREST, DEFENDANTS. TICOR TITLE INSURANCE COMPANY AND TITLE COMPANY OF NEW JERSEY, PLAINTIFFS-APPELLANTS/CROSS-RESPONDENTS, V. TOWNSHIP OF EGG HARBOR, JANE DOE, AND UNKNOWN AUTHORIZED AGENT OF EGG HARBOR TOWNSHIP AND BETTY SIMON, DEFENDANTS-RESPONDENTS/CROSS-APPELLANTS.



On appeal from Superior Court, Law Division, Atlantic County.

Approved for Publication July 6, 1995.

Before Judges King, D'Annunzio and Eichen. The opinion of the court was delivered by Eichen, J.s.c. (temporarily assigned). D'annunzio, J.A.D., (concurring)

The opinion of the court was delivered by: Eichen

EICHEN, J.S.C. (temporarily assigned)

These consolidated cases arose as a result of erroneous telephonic information conveyed by an unidentified clerical employee in the tax collector's office of Egg Harbor Township (Egg Harbor) concerning the tax lien status of certain commercial property. The information was given to a title company representative during a second mortgage loan closing between a bank and the owner of the commercial property.

I.

The following facts are relevant to this appeal. On February 1, 1988, National Community Bank (NCB) made a $2,500,000 second mortgage loan to G & M Land Associates (G & M) for a Sheraton Hotel property in Egg Harbor. Title Company of Jersey, an agent authorized to write title insurance policies on behalf of Ticor Title Insurance Company (collectively, the title company), through its representative, an assistant vice president, Sally Oshman (Oshman), telephoned the tax collector's office of Egg Harbor prior to the loan closing to request information concerning any delinquent taxes or additional assessments relating to the property. According to Oshman's affidavit an unidentified person at the tax collector's office mistakenly informed her that the total outstanding 1987 and 1988 taxes, including additional assessments, were in the amount of $23,753, when, in fact, additional assessments in the amount of $105,708 were still open and unpaid. It is undisputed the mistaken information was not conveyed intentionally or in bad faith. Oshman claims she issued the title policy without "tax exceptions' in reliance on the erroneous telephonic tax lien status advice. Neither the bank nor the title company ordered a formal tax lien search prior to closing the loan.

NCB and the title company sued Egg Harbor and plaintiff claiming Egg Harbor negligently disseminated tax information to them for which they are liable. The parties cross-claimed, counter-claimed and filed third party actions against each other and, after considerable procedural jousting, the Judge granted Egg Harbor's and plaintiff's motions for summary judgment.

The motion Judge found Egg Harbor was not liable to the title company or NCB because they had failed to follow the statutory scheme enacted by the Legislature in the Tax Sale Law, specifically, N.J.S.A. 54:5-11 to -18, (the Tax Sale Law), which enables interested parties to make written requests for an official search of municipal tax liens. The Judge concluded compliance with the statutory scheme is the exclusive method of acquiring protection from mistakes made by the tax collector's office.

The title company and NCB (appellants) appeal. Egg Harbor filed a cross-appeal. Appellants contend the motion Judge erred in granting summary judgment in favor of Egg Harbor and plaintiff. Appellants argue they relied to their detriment on the oral tax lien status advice; that Egg Harbor's practice was to routinely disseminate such tax information over the telephone; and that Egg Harbor should be held accountable for its negligent misrepresentation under the New Jersey Tort Claims Act, N.J.S.A. 59:1-1 to 12-3 (the Tort Claims Act). Appellants argue the Judge erred in ruling that because appellants failed to formally request an official tax search under the Tax Sale Law, Egg Harbor cannot be held liable for negligence under the Tort Claims Act for misrepresenting the tax lien status of the property over the telephone. Appellants' theory is that because Egg Harbor itself did not follow the formal procedures set forth in the Tax Sale Law, that statutory scheme is inapplicable, and Egg Harbor's actions must be viewed solely in the context of the Tort Claims Act. They maintain that, under the Tort Claims Act, Egg Harbor is liable for its clerk's negligent performance of the "ministerial" function of disseminating tax information over the telephone. Appellants contend the two statutes are in pari materia and should be read together and harmonized so that the Tort Claims Act is not canceled out by the Tax Sale Law.

Plaintiff and Egg Harbor contend the Judge correctly held that the purpose of the Tax Sale Law would be undermined if Egg Harbor were made responsible for the innocent misrepresentation of a clerical employee and that the Tax Sale Law should not be read in pari materia to hold the township liable for the alleged negligence of its employee in failing to accurately disseminate the requested tax information.

We agree the Tort Claims Act should be examined in analyzing appellants' claim against Egg Harbor, but conclude, for the reasons discussed later in this opinion, that the act specifically immunizes Egg Harbor for the innocent misrepresentation of its employee. Whether the Tax Sale Law provisions governing tax searches are considered alone or in relation to the Tort Claims Act, we are satisfied appellants may not recover from Egg Harbor for the innocent misrepresentations of a municipal employee over the telephone as to the tax and assessment lien status of the property and that the Tax Sale Law provides the exclusive remedy for recovering losses sustained due to municipal errors in reporting the tax lien status of real property.

Further, in the absence of disputed issues of material fact, the Judge properly granted summary judgment in favor of Egg Harbor and plaintiff. This is so, even accepting appellants' allegations of negligence and detrimental reliance as true and granting them all favorable inferences; they nevertheless have not made out a valid claim against Egg Harbor or plaintiff. Judson v. Peoples Bank & ...


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