On appeal from the Superior Court, Appellate Division.
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
Plaintiff Anthony Malinowski purchased a tax sale certificate for property located in Raritan Borough. He filed a complaint to foreclose on the tax certificate. The last day for redemption was set for March 1, 2004. On February 24, 2004, Cherrystone Bay, LLC purchased the mortgage, allegedly for $55,900 -- the value of the mortgage. Cherrystone, now as the mortgage holder, asserted that it had the statutory right to redeem the tax certificate. Without intervening in the foreclosure action, Cherrystone made various attempts to redeem the certificate, valued at over $49,000 in the tax collector's office. On March 3, 2004, judgment was entered in favor of Malinowski, foreclosing on the tax sale certificate. The next day, unaware that judgment had been entered, Cherrystone redeemed the tax certificate. Cherrystone then filed for the first time to intervene in the foreclosure proceedings and to vacate the final judgment. The trial court denied the motion. Cherrystone appealed. While Cherrystone's appeal was pending, the Appellate Division decided Simon v. Rando.
The Appellate Division reversed in an unpublished per curiam opinion. It concluded that Simon v. Rando announced a new rule requiring that a third-party purchaser/assignee intervene in the foreclosure action prior to redeeming a tax certificate, and that Rando should have prospective application only. Judge Payne dissented, explaining that Rando merely applied existing rules to a new factual variant. Malinowski appealed to the Supreme Court.
HELD: The Court's decisions in Cronecker and Rando must be given retroactive effect.
1. The principles enunciated in the Court's decisions in Cronecker and Rando come from a straightforward reading and interpretation of the governing statutes. Because there is no new rule of law and because the parties and their lawyers are presumed to know the applicable statutes, it would be inequitable to plaintiffs to apply these decisions prospectively. (pp. 8-10)
2. In the case of Cherrystone, who acquired a property interest after the commencement of a tax sale foreclosure action, no plausible interpretation of N.J.S.A. 54:5-89.1 and 54:5-98 would lead to the belief that redemption could occur without first intervening in the action. The Court is not swayed by the argument that the statutes in question should be interpreted in line with the purported customs of some practitioners. Prospective application would allow practitioners who have chosen to ignore the clear import of the Tax Sale Law to benefit from their transgressions. (pp. 10-12)
3. In response to the argument that compliance with the statutory language may be inefficient in practice, the Court does not pass on the wisdom of statutes or substitute its preferences for the policy choices made by the Legislature. The Court's role is to give meaning to the clearly expressed words in the Tax Sale Law. (p. 12)
The judgment of the Appellate Division is REVERSED.The judgment of the trial court is REINSTATED.
JUSTICES LAVECCHIA, ZAZZALI, WALLACE and RIVERA-SOTO join in JUSTICE ALBIN's opinion. JUSTICE LONG did not participate.
The opinion of the court was delivered by: Justice Albin
In Simon v. Cronecker, ___ N.J. ___ (2007), decided today, we held that after the filing of an action to foreclose a tax certificate on property, a third-party investor purchasing that property may not redeem the certificate without first complying with N.J.S.A. 54:5-89.1 and 54:5-98, which require timely intervention in the foreclosure action and the payment of more than nominal consideration for the property. Id. at ___ (slip op. at 42-45). In the post-foreclosure complaint period, without the court's oversight and permission, the investor has no right to participate, directly or indirectly, in the redemption process. Id. at ___ (slip op. at 42-44). In Simon v. Rando, ___ N.J. ___ (2007), also decided today, we applied that same principle to a third-party investor purchasing prior tax sale certificates after the holders of subsequently issued tax certificates instituted foreclosure proceedings. Id. at ___ (slip op. at 8). In Rando, we affirmed the Appellate Division, which held that "[t]he obligation to intervene in the action is essential to judicial review of the adequacy of consideration paid for a post-complaint assignment of an interest in property subject to foreclosure." 374 N.J. Super. 147, 155 (App. Div. 2005), aff'd, ___ N.J. ___ (2007). Thus, in Rando, because the third-party investor acquired prior tax certificates in the post-foreclosure complaint stage and failed to intervene in the foreclosure proceedings commenced by the holders of the subsequently issued certificates, the investor was barred from participating in the redemption process.
In this appeal, the only issue before us is whether the rule of law announced by the appellate panel in Rando, which we essentially affirmed in both Cronecker and Rando, is to be retroactively applied to the facts of this case. That issue comes to us as of ...