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August 26, 1998


The opinion of the court was delivered by: SIMANDLE

SIMANDLE, District Judge:

 Plaintiff, Roberta Weissman, brings this tenant ejectment action against defendant United States Postal Service ("USPS") in which she alleges that defendant failed to pay rent pursuant to a written lease agreement between the parties. Presently before the court are the parties' cross-motions for summary judgment. *fn1" Defendant argues that under 26 U.S.C. § 6332(e) it is immune from suit due to its good faith surrender of rental payments to the Internal Revenue Service ("IRS"). Plaintiff counters that defendant's failure to pay rent was a breach of the lease agreement.

 This court has subject matter jurisdiction pursuant to 39 U.S.C. §§ 401(1) & 409(a).

 I. Background

 A. Factual History

 Defendant USPS is currently in exclusive occupation and possession of a building and grounds located at 171 Broad Street, in the Borough of Red Bank, Monmouth County, New Jersey ("Premises"). Defendant occupies the premises pursuant to a written lease agreement. (R. Weissman Aff., Ex. A.) *fn2" The lease is for a term of twenty years, beginning August 1, 1965, and ending July 31, 1985, with six renewal terms of five years, exercisable at the option of defendant, and rent payable at the end of each month. (R. Weissman Aff., Ex. A.) Defendant has exercised its option to renew the lease for the term beginning August 1, 1995, and ending July 31, 2000. (R. Weissman Aff. P 2.) The annual rent due for the term beginning August 1, 1996, and ending July 30, 1997, was $ 37,450.00. (R. Weissman Aff., Ex. A.)

 Defendant originally entered into the lease agreement with Bernard Weissman and his wife, plaintiff Roberta Weissman, and Charles and Pauline Weissman, Bernard's parents, trading as Frelin Company. Id. Since then, ownership interests in the property have changed several times. By deed recorded December 29, 1976, Frelin Company conveyed ownership to Bernard Weissman. *fn3" (R. Weissman Aff., Ex. B.) Bernard Weissman then conveyed his interest to himself and plaintiff Roberta Weissman in October 1980. (R. Weissman Aff., Ex. B.) In August 1991, Tobar Construction Co., Inc., recovered a judgment jointly and severally against two real estate partnerships jointly and Bernard Weissman individually. (R. Weissman Aff., Ex. C.) The Tobar judgment was assigned to Donald Zucker, who has sworn he paid $ 200,000 for the judgment of approximately $ 308,000 plus post-judgment interest. Id. Zucker executed the judgment on Bernard Weissman's property and in doing so caused the Sheriff of Monmouth County to conduct a public execution sale of Bernard Weissman's interest in the premises. Id. Zucker himself successfully bid for Bernard Weissman's interest and was conveyed it by deed in June-July 1995. Id. On July 1, 1995, Zucker recorded that deed, the Writ of Execution, and the details of the public sale and advertisement of it. Id.

 Zucker transferred his interest in the premises back to Bernard Weissman in a deed dated May 2, 1996. (Donnelly Dec., filed August 3, 1998, Ex. 4.) Zucker signed the deed before a notary public and acknowledged under oath that he "signed, sealed and delivered this Deed as his act and deed." (Id.) On that date, he also signed an affidavit in which he acknowledged the reconveyance. (Id., Ex. 5.) The deed was apparently never physically delivered to Mr. Weissman, but was held in escrow by counsel and returned to Zucker. (B. Weissman Cert., P 17.) Zucker then conveyed this same interest to plaintiff by deed dated August 21, 1996. (R. Weissman Aff., Ex. E.) This deed specifically refers to the prior 1995 deed and indicates that it conveyed what was formerly Bernard Weissman's interest in the premises. Id. There is no evidence that either the Zucker-Bernard Weissman deed or the Zucker-Roberta Weissman deed was ever recorded. (See Donnelly Letter, received August 11, 1998.)

 The names of the lessors on the defendant's lease of the premises have never been changed. (See R. Weissman Aff., Ex. A.) Prior to this dispute, however, defendant did change payees for the rental payments. The parties agree that, after years of sending monthly rental payments to Bernard Weissman, in 1994 defendant forwarded payments to a receivership on behalf of Bernard Weissman. (R. Weissman Aff., Ex. I; Def. Mem. at 2.)

 In a letter dated July 29, 1996, Robert Rochford, counsel for plaintiff, informed Jim Howlin, Postmaster of the Red Bank Post Office, that the rent receivership had been terminated and requested that all future rent payments be sent to plaintiff, care of her attorneys. (R. Weissman Aff., Ex. D.) Defendant did not comply with this request. (R. Weissman Aff. P 4.) Instead, defendant sought additional information and documentation from the attorney for the lessor, whom defendant still believed was Bernard Weissman, on September 13, 1996, as shown by contemporaneous file notes of the Facilities Contract Specialist, Frances El-Shabat. (See Memo from Curts to El-Shabat, dated Sept. 12, 1996, and notes thereon, dated Sept. 13, 1996, attached to Certification of Robert E. Rochford, dated August 24, 1998, at Ex. B.) The Contract Specialist correctly noted that the "file indicates Mr. Weissman" as owner, and that she would need "documentation . . . as to proper ownership." Id. (emphasis in original). Also, she noted that nothing had been received from Mr. Weissman indicating that Rochford had power of attorney to receive defendant's rental payments. (Id.) These efforts by defendant to receive actual documents evidencing transfer of the premises' title continued, as shown by Contract Specialist El- Shabat's notes of October 30, 1996. (see Memo from Curts to El- Shabat, dated Oct. 29, 1996, and notes thereon, dated Oct. 30, 1996, attached to Rochford Cert., dated Aug. 24, 1998, at Ex. F.) The Zucker to Roberta Weissman deed was of no use, since Zucker too was unknown to USPS. (Id.)

 Meanwhile, defendant received a notice of levy from the IRS dated September 13, 1996, stating that $ 136,410.26 was owed to the government and naming Bernard Weissman as the taxpayer. (R. Weissman Aff., Ex. F.) The levy required that defendant turn over to the IRS the delinquent taxpayer's property and rights to property that defendant was obligated to pay. Id. The notice requested that defendant make a reasonable effort to identify all property and rights to property belonging to the delinquent taxpayer and, at a minimum, to search its records. Id. The notice provided a reply form to be returned if defendant found that it did not owe any money to the taxpayer. Id. Upon receipt of the notice, and believing Bernard Weissman to have an interest in the premises or rents, defendant began to make rental payments to the IRS. (Donnelly Dec., filed February 2, 1998, Ex. A.)

 Attorney Rochford wrote another letter to defendant dated October 9, 1996, advising it that plaintiff was the owner of the premises. (R. Weissman Aff., Ex. G.) Attached were copies of the deed from Zucker to plaintiff and a mortgage dated September 30, 1996, between S.B. Konner as mortgagee and plaintiff as mortgagor that secured a $ 165,000 promissory note "from the mortgagor and Bernard Weissman." (R. Weissman Aff., Ex. H; R. Weissman Cert., Ex. A.) The defendant's Facilities Contract Specialist promptly examined the Zucker deed and reasonably found it was insufficient to cure the confusion about ownership, as noted above.

 Dan Curts, Senior Attorney for the USPS, replied in a letter dated November 1, 1996, asking for an explanation of Zucker's role in the matter. (R. Weissman Aff., Ex. H.) Attorney Curts stated that Rochford's July 29, 1996, letter was the first indication, albeit unconfirmed, that Roberta Weissman was the sole owner of the premises rather than a joint owner with her husband Bernard. Id.

 Four more months passed until attorney Rochford responded in a letter dated March 7, 1997, providing documentation allegedly confirming that Roberta Weissman was the sole owner of the premises. (R. Weissman Aff., Ex. I.) Attached were a copy of the October 1980 deed and a copy of the July 1995 deed, Writ of Execution, and details of the public sale. Id. Attorney Rochford informed defendant that because defendant had withheld all rent from plaintiff in spite of its recognition that she was at least a joint owner, plaintiff declared the lease terminated and demanded immediate possession of the premises. Id.

 Plaintiff filed the present lawsuit, seeking payment of rent due, termination of the lease, and ejectment from the property. In the meantime, the IRS has returned all levy proceeds without prejudice to future action (Donnelly Dec., filed February 2, 1998, P 3), and all proceeds from rental payments were deposited with the Clerk of the Court pursuant to an order by Chief Judge Anne E. Thompson. Defendant has also paid water rent to prevent a sale of the property. (Id. P 5.) On July 8, 1998, Chief Judge Thompson's order was dissolved with the consent of the parties, and all funds deposited with the court have been paid to plaintiff. There is no dispute that rent payments are now current, and future payments will be made directly to plaintiff. (See Donnelly Letter of July 13, 1998.)

 B. Procedural History

 Plaintiff filed this action on March 14, 1997, and the case was assigned to United State District Judge Clarkson S. Fisher on March 17, 1997. Plaintiff filed a motion for summary judgment on June 27, 1997, and the case was re-assigned to Chief Judge Thompson on August 8, 1997.

 On September 4, 1997, Chief Judge Thompson denied plaintiff's motion for summary judgment. Defendant had opposed the motion on the grounds that discovery was necessary (1) to clarify whether the IRS lien pertained only to Bernard Weissman, and (2) to investigate the mortgage dated September 30, 1996, between plaintiff and S.B. Konner. Slip Op. at 5. Defendant had indicated that further discovery might reveal that the property was gifted back by plaintiff or that its use to secure a debt of Bernard Weissman was inconsistent with the claim that he ...

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