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Vega v. Market Trucking Corp.


September 18, 2007


On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Passaic County, Docket No. F-15147-05.

Per curiam.


Telephonically Argued August 30, 2007

Before Judges Payne and Messano.

Defendant Market Trucking Corp. appeals from an October 10, 2006, final judgment of foreclosure in favor of plaintiff Raul Vega. Defendant contends that the motion judge abused her discretion by 1) refusing to vacate or modify an earlier interlocutory order setting the amount, time, and place of redemption for the tax sales certificates owned by plaintiff, and 2) entering final judgment in favor of plaintiff. Plaintiff counters by arguing that the judge appropriately exercised her discretion in a manner that reflected the relative equities of the situation. We have considered these contentions in light of the record and applicable legal standards. We conclude the motion judge did not abuse her discretion and we therefore affirm the orders under review.

Defendant was the owner of 328-330 Market Street in Paterson. In 1994 and 1995, Wachovia Bank, N.A., purchased two municipal tax sales certificates issued on the property for $5,142.58 and $5,476.52 respectively. In 2005, the certificates were assigned to plaintiff for the sum of $43,891.71. On September 22, 2005, plaintiff initiated his foreclosure action in the Chancery Division, and after securing consent from plaintiff to an extension of time to respond, defendant filed its answer on November 23, 2005.

On April 4, 2006, at a case management conference, the litigation was settled with plaintiff's counsel placing the terms of the settlement on the record. Essentially, the parties agreed to execute a consent order setting July 15, 2006, at two p.m., at plaintiff's counsel's office, as the date, time and place for redemption. Plaintiff's counsel agreed to calculate the exact redemption amount and place that in the order. In the event defendant failed to make payment in accordance with the consent order, final judgment would enter on July 17, 2006, and "[n]o application [would] be entertained to reopen the judgment."

Defense counsel acknowledged these were the terms of the agreement and defendant's principal, Alberto Albornoz, was questioned under oath. He indicated his complete understanding of the settlement and his consent to its terms.

By mutual agreement, the parties further extended the date for redemption and forwarded the proposed order to the judge who, on July 12, 2006, entered the order now setting August 2, 2006 as the date for redemption. The order provided that if defendant failed to remit the redemption amount by that date, it was "absolutely debarred and foreclosed of and from all right and equity of redemption," final judgment would enter, and "defendant [would] not have the right to vacate [the final judgment]." The order further provided that in the event of defendant's default, the final judgment of foreclosure would issue "on Aug[.] 3, 2006 or at the Court's earliest convenience."

Defendant failed to appear or pay the amount due on August 2, 2006. The next day, defense counsel forwarded a letter to the judge acknowledging her client's failure to pay in accordance with the settlement. However, she enclosed a copy of a loan commitment to her client and requested "the Court grant [defendant] an additional [ten] days to forward the above mentioned sum to the plaintiff."

Plaintiff's counsel objected to the request, noting several irregularities and conditions in the loan commitment and characterizing the effort as a "stall tactic." She also filed a motion to enter judgment in accordance with the judge's prior July 12, 2006, order. Defendant did not file any formal opposition.

On September 1, 2006, however, defense counsel wrote to the judge indicating that defendant had closed on his mortgage loan and counsel was now in possession of sufficient monies to redeem the certificates. Defense counsel requested that plaintiff's motion be denied.

On September 6, 2006, one day before the then-scheduled return date of plaintiff's motion, defendant filed a motion for relief from the July 12, 2006, order essentially arguing that since it now possessed sufficient monies to redeem, it would be inequitable to enter the foreclosure judgment. Defendant sought an order modifying and extending the redemption date. Plaintiff filed a cross-motion to enforce the terms of the settlement, and, on September 22, 2006, the judge heard oral argument on the applications.

In her written decision issued October 3, 2006, the judge noted that despite being advised that it "needed to make an application to obtain relief from [the July 12, 2006] [o]rder," defendant failed to make the "application until September 5, 2006." She further found that the "tax sales certificates are over ten years old," and "defendant[] has done nothing to rectify the problems," concluding defendant's failure to appear on August 2, 2006, was "[c]onsistent with years of prior behavior." She noted there was no application to extend the time for redemption, "no affidavits of good cause or exceptional circumstances," nothing "given to this Court to preserve the defendant's interest in this property."

While recognizing that "[e]quity abhors foreclosure," the judge nevertheless observed that the court and "the plaintiff have provided th[is] defendant[] with opportunities to redeem [its] property." The judge then summarized her conclusions as follows:

Try as it may the Court can find no factual reason or case law to deny the plaintiff[] the benefit of [his] financial investment and [his] own risk taking in this case.

These are two commercial entities. This is not a tenant with small children who found themselves in a financial mess. There are no equities that weigh in the defendant's favor at this point in time and so this Court will enter Final Judgment in plaintiff's name.

On October 6, 2006, the judge entered an order denying defendant's motion and granting plaintiff final judgment. On October 10, 2006, the judge entered a subsequent order of final judgment in favor of plaintiff. This appeal ensued.*fn1

We begin our review by noting that the motion judge was required to first resolve defendant's application -- which sought relief from the July 12, 2006, order by extending the time to redeem -- even though it had been filed subsequent to plaintiff's motion for judgment. This may seem obvious, but, in light of the parties' invocation of R. 4:50-1, before the motion judge and before us, we believe the point needs to be emphasized. R. 4:50-1 "applies only to final orders and judgments," and not interlocutory orders that "are reviewable at any time in the interest of justice and in the court's discretion." Pressler, Current N.J. Court Rules, comment 2 on R. 4:50-1 (2007). The July 12, 2006, order was an interlocutory order reflecting the terms of the settlement that the parties reached in April. It was not a final order reviewable under R. 4:50-1.

As an interlocutory order, the motion judge, in her sound discretion, had "the inherent power . . . to review, revise, reconsider and modify" it terms. Johnson v. Cyklop Strapping Corp., 220 N.J. Super. 250, 257 (App. Div. 1987), certif. denied, 110 N.J. 196 (1988). The exercise of the judge's discretion, however, was "not subject to wanton invocation or unfettered judicial response." Id. at 263. Rather, It is only for good cause shown and in the service of the ultimate goal of substantial justice that the court's discretion should be exercised. Although this standard is necessarily expressed in general terms, it nevertheless is, in our view, endowed with an unmistakable substantive content by the common understanding which underlies our jurisprudence of what is fair, right and just in the circumstances. [Id. at 263-64.]

Our review, therefore, is limited to deciding whether the motion judge's denial of defendant's motion was a mistaken exercise of judicial discretion "clearly capable of producing an unjust result." R. 2:10-2; Casino Reinvestment Dev. Auth. v. Teller, 384 N.J. Super. 408, 413 (App. Div. 2006). We conclude it was not.

The July 12, 2006, order was the result of a knowing and voluntary settlement reached by the parties in April after months of litigation. Defendant had nearly four additional months after settling the suit to secure the necessary funds and redeem the tax sales certificates which were more than a decade old. Defendant, however, did not obtain financing until the end of August. The reasons for this delay were never adequately explained before the motion judge or before us. Plaintiff, on the other hand, not only complied with the settlement agreement, but also, as the motion judge found, extended defendant ample opportunities to redeem its interest.

The motion judge's balancing of the respective equities of the circumstances gave implicit recognition to two important public policies. By denying defendant's cross-motion and granting plaintiff's motion to enforce the terms of the July 12, 2006, order, the judge furthered the strong public policy that favors the settlement of litigation. Nolan v. Lee Ho, 120 N.J. 465, 472 (1990). By granting plaintiff final judgment of foreclosure, the judge furthered the recognized statutory, public policy that bars the redemption of tax sales certificates at the appropriate time, which, in turn, fosters marketable title to the premises. See Town of Phillipsburg v. Block 1508, Lot 12, 380 N.J. Super. 159, 175 (App. Div. 2005)(discussing public policy supporting marketable tax titles and the equitable considerations that apply to certificate owners).

We cannot conclude, therefore, that the judge mistakenly exercised her discretion resulting in an injustice to defendant.


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