Before Judges Keefe, A.A. Rodr¡guez and Collester.
The opinion of the court was delivered by: Keefe, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: February 14, 2000
On appeal from Superior Court of New Jersey, Law Division, Camden County.
This is a legal malpractice case in which plaintiff Joan M. Gibau appeals from the entry of summary judgment in favor of defendants Eleanor H. Klein, Esquire and Klein and Smoger, P.C. (collectively referred to as Klein). *fn1 The appeal requires that we determine whether the trial judge correctly held that Klein was not liable as a matter of law for failing to record the final judgment of divorce. In essence, the trial court found that post-divorce judgments against plaintiff's former husband, defendant Frank Gibau (Frank), did not become liens against the marital home that passed to plaintiff by reason of the final divorce judgment. Thus, plaintiff was not harmed by Klein's failure to record the judgment. We affirm the judgment under review, but for reasons other than those stated by the trial judge.
The relevant facts are undisputed. Klein represented plaintiff in divorce proceedings against Frank culminating in a judgment of divorce filed with the Clerk of the Superior Court on January 6, 1978. The judgment provided, among other things, that Frank "shall forthwith transfer and convey to plaintiff all of his right, title and interest in and to the former marital residence, located at 106 Devon Road, Cinnaminson, New Jersey." It is undisputed that Frank did not comply with the order and that Klein did not record the final judgment in the book of deeds in Burlington County, where the property was located.
In 1995, plaintiff entered into a contract to sell the former marital home to a third party. A judgment search revealed that money judgments were taken against Frank after the entry of the final judgment of divorce. The title company engaged by the purchaser of plaintiff's property took the position that the judgments against Frank were liens on the property and refused to insure the title unless they were satisfied. *fn2 In light of that development, plaintiff authorized her attorney to compromise the judgments. The attorney was successful in reducing the amount owed on the judgments, but plaintiff was required to pay $22,500 out of the proceeds of the sale to satisfy the balance of the judgments against Frank.
Plaintiff then instituted this suit against Klein and Frank. The essence of plaintiff's complaint against Klein was that Klein negligently failed to record the judgment of divorce in the Burlington County book of deeds. On the day trial was scheduled to commence, Klein raised the issue now under review. Klein claimed that recording the divorce judgment was unnecessary because the transfer of title to plaintiff occurred automatically by operation of law, and the docketing of the judgment was notice to the world. The trial judge adjourned the trial and ordered the parties to file briefs. After considering the parties' briefs and entertaining oral argument, the judge dismissed the case finding, essentially, that the judgments taken against Frank were not liens against the property that plaintiff was required to pay. Accordingly, nothing Klein did or failed to do caused damage to plaintiff. This appeal followed.
At common law, money judgments did not constitute liens against real property. Judgment liens are creatures of statute. Joseph Harris & Sons, Inc. v. Van Loan, 23 N.J. 466, 470 (1957). It is by virtue of statute that money judgments become liens on real estate "from the time of the actual entry of such judgment on the minutes or records of the court." N.J.S.A. 2A:16-1. In order to become a lien, however, the real property must be "held by the judgment debtor[.]" New Brunswick Sav. Bank v. Markouski, 123 N.J. 402, 412 (1991)(emphasis added). It is axiomatic that if the Cinnaminson property was not "held" by Frank at the time the judgments against him were taken, they were not liens on plaintiff's property. The question, therefore, is whether Frank still held an interest in the property when the judgments were taken against him.
As noted earlier, Frank failed to comply with the final judgment of divorce and "forthwith transfer and convey" his interest in the Cinniminson property to plaintiff. N.J.S.A. 2A:16-7 provides that:
When a judgment of the superior court shall be entered for a conveyance, release or acquittance of real estate or an interest therein, and the party against whom the judgment shall be entered shall not comply therewith by the time appointed, or within 15 days after entry of the judgment if no time be appointed therein, the judgment shall be considered and taken, in all courts of the state to have the same operation and effect, and be available as if the conveyance, release or acquittance had been executed conformably to the judgment.
When a judgment triggering this statute is docketed, it becomes self- operative without the need for further action. See King v. Greene, 30 N.J. 395, 398 (1959)(holding that where the court ordered the wife to execute a deed to herself and her husband as tenants by the entirety, and she failed to do so, the decree was "self-operative" and had the effect of making the husband a tenant by the entirety).
The final judgment of divorce in this case was docketed with the Clerk of the Superior Court as authorized by law. N.J.S.A. 2A:16-12. Thus, it is clear that, as between plaintiff and Frank, plaintiff was the sole owner of the property from the fifteenth day after the judgment was entered. But that does not necessarily decide the question of whether plaintiff's claim is superior as to third parties, such as judgment creditors. Unlike various provisions of the Recording Act, see, e.g., N.J.S.A. 46:16-1.1 and N.J.S.A. 46:21-1, the Legislature did not create a priority in favor of litigants who benefitted from a judgment encompassed by N.J.S.A. 2A:16-7. Nor did King, supra, address the question of whether the docketing of the decree, standing alone, places the beneficiary of the statute in a superior position to creditors who thereafter obtain judgments against the losing party to the litigation.
Klein argues that docketing the judgment resulting from proceedings to which N.J.S.A. 2A:16-7 applies is sufficient notice to subsequent judgment creditors and purchasers for value without notice. Klein relies upon New Brunswick Sav. Bank, supra, to argue that the recording of the judgment functions as notice to the world. Indeed, in that case, the Court said that "[t]he judgment is a binding judicial determination of the rights and duties of the parties to the action and, when recorded on the docket of the Clerk of the Superior Court, functions as notice of the debtor-creditor relationship." New Brunswick Sav. Bank, supra, 123 N.J. at 411 (citation ...