On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-3779-03.
The opinion of the court was delivered by: Parker, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Wefing, Parker and C.S. Fisher.
In this condemnation action, a municipality, alleging that a parcel of private property was abandoned although the taxes were fully paid, exercised its power of eminent domain to take the private property and turn it over to a private entity to develop for profit. The private entity in this case was owned by a former city council member who allegedly sought to purchase the property for years before the condemnation.
Defendant Charles Shennett appeals from an order entered on May 31, 2005, vacating a report of commissioners dated August 27, 2004, and appointing a new panel of commissioners to reappraise defendant's property, but denying his motion to vacate a default judgment entered against him. We reverse and remand.
Defendant's family has owned the property at 254 Summer Street in Passaic since 1925, when it was purchased by defendant's aunt. In 1986, the aunt conveyed the property to defendant. Later that year, the house burned down and the lot remained vacant. Defendant continued to pay the property taxes until the end of 2004. When he did not receive a property tax bill for 2005, he made inquiries and discovered that the property had been transferred through a condemnation action to a third party, Wayne Asset Management, LLC (WAM). WAM is owned by former Passaic City Councilman, Wayne Alston (Alston).
In September 2003, the City of Passaic (City) filed a complaint for condemnation and sought an order to show cause why commissioners should not be appointed to appraise the property. The order to show cause was abandoned by the City without explanation, and on March 18, 2004 -- while defendant was still paying taxes on the property -- the City sought a second order to show cause alleging that defendant's property was abandoned. The City claimed that its attempt to serve the owner by mail was returned by the post office with no forwarding address -- notwithstanding the fact that the City consistently mailed tax bills to defendant's correct address. On May 5, 2004, an order was entered authorizing the City to acquire the property and appointing commissioners to appraise the land and fix compensation to be paid for the taking. Because defendant had no notice, he did not appear and the matter proceeded to default. On June 16, 2004, a default judgment was entered with a declaration of taking for the sum of $14,730. The City was ordered to deposit the money in court in order to take title to the property.
In an agreement originally dated June 9, 2004 -- before the default judgment was even entered -- and amended to reflect the date of December 23, 2004, the Passaic Redevelopment Agency agreed to sell the property to WAM for $60,000 - $45,000 more than the "just compensation" awarded for the condemnation. Defendant later attested that Alston had been trying to purchase the property for years but defendant told him the property "was not for sale."
On April 26, 2005, soon after defendant learned that the property had been condemned and transferred from his ownership, he moved, pursuant to R. 4:50-1, to (1) "vacate and set aside the [o]rder of May 5, 2004" authorizing the City to acquire the property and appoint commissioners to appraise it; (2) vacate the judgment entered on June 16, 2004, granting possession to the City; and (3) vacate the commissioner's report dated August 27, 2004, valuing the property at $14,730. In that motion, defendant maintained that (1) he was never personally served with process; (2) the property was not abandoned because he had continued to pay taxes on it through the end of 2004; (3) the $14,730 in "just compensation" for the taking was a misrepresentation of the value of the property that was sold to WAM for $60,000; and (4) he did not receive notice of the commissioners' hearing. The City cross-moved for counsel fees.
At oral argument on May 13, 2005, the City acknowledged that it never attempted to serve defendant personally. The City argued, however, that service had been made by mail and publication in the Herald News on April 8, 2004 -- seven months after the complaint was filed. The City further acknowledged that it had not met the requirements for service by mail or publication as set forth in Rules 4:4-3 and -4. Nevertheless, the City maintained that the default judgment could not be vacated because the property had been sold to WAM, which had already built a two-family house on it -- less than five months after the agreement of sale was executed on December 23, 2004. The City allowed, however, that a new commissioners' hearing should be scheduled to determine "just compensation" for the property. The trial judge agreed.
In an order entered on May 31, 2005, the court granted defendant's motion to vacate the earlier commissioners' report valuing the property at $14,730 and appointed new commissioners to reevaluate the property, but denied defendant's application to vacate the earlier court orders authorizing the condemnation, appointing commissioners and granting the default judgment.
On August 29, 2005, WAM filed a "Complaint In Intervention to Quiet Title," seeking to confirm that defendant "has no title to, nor interest ...