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New Jersey Land Title Association v. State Records Committee

August 25, 1998


Before Judges Skillman, Eichen and Steinberg.

The opinion of the court was delivered by: Eichen, J.A.D.

[9]    Argued February 23, 1998

On appeal from a final decision of the State Records Committee.

No other parties participated in this appeal.

This appeal arises from a dispute between plaintiff New Jersey Land Title Association (NJLTA), an organization of title insurance companies, and defendants, the Clerks of Union and Hunterdon County (the Clerks), the Division of Archives and Records Management *fn1 (DARM) and the State Records Committee. *fn2 DARM is in the Department of State and serves as staff to the State Records Committee, an administrative agency created by the Legislature under the Destruction of Public Records Law (1953) (the Destruction of Public Records Law), N.J.S.A. 47:3-15 to -32.

The dispute concerns the request by the Clerks to destroy a series of public records consisting of notices of settlement, lis pendens and federal tax liens whose statutory effective dates have expired (the records series). *fn3 On September 19, 1996, the State Records Committee issued a final decision approving the Clerks' request to destroy these records. NJLTA objected, claiming that the Clerks are statutorily required to permanently retain the records series, and filed an appeal from the decision. On November 1, 1996, we granted a stay of the decision pending the appeal. We now reverse. Although we conclude that the State Records Committee has the authority to promulgate retention schedules and approve the destruction of the records series without express statutory authorization, we are nonetheless convinced that the Committee's decision to authorize destruction of these records was arbitrary and unreasonable in the circumstances presented.

These are the pertinent factual circumstances surrounding the dispute. In September 1994, NJLTA filed an action against the State's county clerks, registers of deeds and mortgages, and DARM, charging them with "inconsistencies, irregularities and unreasonable delays in filing, indexing and providing public access to certain series of land records." Sometime thereafter, NJLTA voluntarily dismissed its action because DARM agreed to "consider an amendment to its retention and Disposition schedule and regulations to provide a permanent record of [notices of settlement, lis pendens and federal tax liens] before the actual filings are destroyed." *fn4

On June 20, 1995, DARM submitted a report to the State Records Committee recommending that the Committee lengthen the retention period for this category of records beyond the periods set forth in its general Records Retention Schedule. *fn5 DARM specifically recommended that the retention period for notices of settlement be extended from six years after their expiration date to twenty years from the date of filing or "renewal" of judgment; that the retention period for notices of lis pendens be extended from three years from the date of filing to sixty years; and that the retention period for notices of federal tax liens be extended from ten years after expiration to sixty years.

On the same date, the State Records Committee "voted to endorse DARM's report and recommendations for extending the retention periods of the three record[s] series and [to] call upon the Legislature to amend the statutes governing their retention accordingly." It also voted to instruct DARM "to withhold approval of any request for the destruction of the three records series until June 30, 1996, unless the records have been microfilmed in accordance with State standards."

The minutes of the June 20, 1995 meeting of the State Records Committee reveal the results of a survey conducted of the retention practices for these types of records by the twenty-one county clerks and registers of deeds and mortgages. The survey discloses that a majority of the counties "microfilm most or all [notices of settlement, lis pendens and federal tax liens] and retain them far longer than the State's schedule now requires." At the same time, the survey apparently revealed "a notable lack of uniformity among the counties regarding microfilming of the records: some doing all three series, others just two, and still others only one." The minutes also disclose that several members of the Committee expressed concern about the "possible costs that lengthened retention might impose," remarking that "the adoption of a longer retention period for the records could be construed as a State mandate for which counties might demand State funding to implement."

On June 24, 1996, the State Records Committee changed its position and adopted a resolution which stated in relevant part:

The State Records Committee ... finds that longer retention of these records may be in the public interest. The Committee, however, recognizes that retention schedules for all public records must be consistent with existing laws of New Jersey and the United States. Moreover, the Committee is mindful that increasing the retention requirements for records maintained by County and local governments of New Jersey may invoke the State constitutional provision regarding unfunded mandates. For these reasons the State Records Committee resolves to alert the State Legislature that lengthened retention of these records series may be in the public interest, and defers amending the County Clerk's retention schedule until such time as the State Legislature takes action regarding the statutory retention of the records. (emphasis added)

Four days later, on June 28, 1996, the Clerks sought approval to destroy the records which was granted by the Committee on September 19, 1996. *fn6 This appeal followed.

On appeal, NJLTA argues that "the administrative rule permitting the destruction of records affecting title to real estate is void because there is no specific [statutory] authorization for such destruction." NJLTA maintains that N.J.S.A. 47:3-9 provides the only specific authority for the destruction of public records filed or recorded with the office of the county clerk or register of deeds and mortgages. *fn7 NJLTA asserts that because the records series are not specifically authorized by N.J.S.A. 47:3-9 as the type of records which may be destroyed, and further because subsection (dd) of the statute expressly excludes notices "involving title to real ... property" from the category of notices that the clerks or registers may destroy, their inclusion on the Records Retention Schedule is ultra vires. NJLTA supports its position by relying on N.J.S.A. 47:1-14 which contains a general prohibition against the destruction of public records "except as specifically permitted by law"; it argues that because there is no "law" that "specifically permit[s]" the destruction of the types of records represented by ...

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