On appeal from Superior Court of New Jersey, Chancery Division, Atlantic County, F-1390-03 (A-0262-03T5), Union County, F-2829-03 (A-2660-03TF).
Before Judges Skillman, Parrillo and Grall.
The opinion of the court was delivered by: Grall, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 21, 2004
In considering the conduct of"intermeddlers" in actions to foreclose tax sale certificates, the Supreme Court has twice"condemned the business of'heir hunting' as having'no social value'" and"hinder[ing] tax sales." See Wattles v. Plotts, 120 N.J. 444, 445, 452 (1990); Bron v. Weintraub, 42 N.J. 87, 95 (1964). These appeals require us to consider a new variant of intermeddling and the provisions of the Tax Sale Law, N.J.S.A. 54:5-1 to -137, that prohibit such conduct. Wattles, supra, 120 N.J. at 445, 450-52; Savage v. Weissman, 355 N.J. Super. 429 (App. Div. 2002).
Richard Simon and TriState Investments are the plaintiffs in separate actions to foreclose municipal tax sale certificates. In both cases, the plaintiff's foreclosure action was dismissed after Cherrystone Bay, L.L.C. acquired and then redeemed an interest held by a named defendant. Simon and TriState appeal, and we consolidate the appeals. Because Cherrystone did not follow the statutory procedures, we reverse and remand.*fn1 N.J.S.A. 54:5-89.1; N.J.S.A. 54:5-98.
Richard Simon acquired a tax sale certificate on property located in the City of Ventnor at a public tax sale on November 17, 2000. After expiration of the requisite two-year waiting period, N.J.S.A. 54:5-86, he filed a complaint to foreclose the right to redeem. Default was entered against the named defendants, and on May 16, 2003, the court issued an order setting the amount required to redeem, $17,446.92 plus $938.40 taxed costs, and establishing July 7, 2003 as the final date for a named defendant to redeem with the tax collector. R. 4:64- 1(d).
Less than one week before the final date for redemption, Cherrystone intruded on the scene. It purchased a 1994 tax sale certificate for the same property from a named defendant. Cherrystone claims to have paid $45,260.59 as consideration for the assignment, but the assignment reflects consideration of $1.00. Simon disputes both the amount paid for and the date of that assignment.
On July 3, 2003 Cherrystone contacted Simon and offered to purchase his tax sale certificate for $2,500. Simon's appraisal put the value of the Ventnor property between $225,000 and $245,000, and he declined Cherrystone's offer. On July 8, 2003, without having appeared in the foreclosure action, Cherrystone tendered the funds required for redemption to the tax collector. On the same day, the court entered final judgment in favor of Simon.
On July 31, 2003, Cherrystone moved to intervene in the foreclosure action and to vacate Simon's final judgment. On August 21, 2003, the trial judge granted the motion and entered an order directing the tax collector to process Cherrystone's redemption. Cherrystone must file a second foreclosure action in order to obtain marketable title.
TriState's foreclosure action took a similar circuitous and unproductive path. On November 12, 2002, TriState purchased, by assignment, a 1997 tax sale certificate on property in the City of Elizabeth. Because TriState purchased the certificate more than two years after the 1997 tax sale, it was able to file its foreclosure complaint without delay, N.J.S.A. 54:5-86, which it did on February 10, 2003. Default was entered against the named defendants, and on June 11, 2003, the court issued an order setting the amount required to redeem, $7,213.42 plus $376.50 in taxed costs, and establishing July 25, 2003 as the final date for a named defendant to redeem through the tax collector.
Eight days before the final date for redemption, Cherrystone paid $740 to a named defendant as consideration for assignment of a 1996 tax sale certificate for the same property. On July 22, 2003, Cherrystone contacted TriState and offered to purchase its tax sale certificate for $2,500 plus the amount required for redemption. TriState's appraisal indicated that the property is worth approximately $150,000, and TriState declined Cherrystone's offer. Cherrystone, again without having intervened in the action, paid the amount required for redemption to the tax collector. The tax collector accepted the redemption.
In order to pursue its right to foreclose, TriState was required to continue the litigation. On October 27, 2003 TriState moved to bar Cherrystone's redemption. In December 2003 the judge entered an order allowing Cherrystone's redemption and dismissing TriState's foreclosure action. Cherrystone must file a second foreclosure action in order to obtain marketable title.
The purpose of the Tax Sale Law is to enhance the collection of taxes, Savage, supra, 355 N.J. Super. at 435-36, and that purpose is furthered by supporting tax titles, Bron, supra, 42 N.J. at 89. For that reason, the Legislature has directed courts to construe the provisions of the law governing suits to foreclose the equity of redemption"liberally... to encourage the barring of the right of redemption by ...