On certification to the Superior Court, Appellate Division, whose opinion is reported at 387 N.J. Super. 65 (2006).
(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).
The issue in this appeal is whether the Township can accept the dedication of a lot for use as a park after the Township sold tax sale certificates on the property and the purchaser of a certificate had successfully foreclosed on the property.
In 1929, Elmer and Nellie Alexander, owners of property adjacent to Shadow Lake in Middletown Township, presented a subdivision map to the Township, which the Township approved. The map depicted fifty-six numbered residential lots and one unnumbered lot designated "Park." Approximately one-half of the fifty-six numbered lots and the Park lot had direct access to the Lake, while the remaining lots did not. The map was recorded with the Monmouth County Clerk in 1932.
At some unknown time, the Township joined the Park lot to the adjacent lot 17. In 1988, a tax assessor became aware of this when the owner of lot 17 prepared to sell it. The Township then uncoupled the Park lot from lot 17 and gave it a separate tax designation. The owners of the Park lot were listed as unknown. In 1990, the Township sold a tax sale certificate on the lot to a Jeffrey Jerman. A second certificate was sold to Joyce Bussey in 1991, and a third to Richard Simon on June 23, 1995. Thereafter, Simon paid taxes on the Park lot.
Simon filed a tax foreclosure action seeking to obtain title to the Park lot in 2000. The owner of lot 17 was joined in the action, and he filed an answer asserting that the Township was an indispensable party because it held a continuing and irrevocable right to accept the Park lot for public use. The trial court found that the Alexanders did not intend to dedicate the Park lot to the Township, and held that the Township was not an indispensable party.
In 2003, while the foreclosure action was still pending, the Township's attorney notified Simon that the homeowners' association in Shadow Lake Park had a partial interest in the Park lot and wanted to convey it to the Township. The attorney stated that the Township wanted to avoid litigation and sought to negotiate a compromise with Simon. Simon's attorney responded by stating that Simon was not interested in selling his valid tax sale certificate and noting that the trial court had rejected a claim that the Park lot was dedicated public land. On May 28, 2003, the trial court entered a final judgment in the foreclosure action in favor of Simon.
Approximately six months later, Simon agreed to sell the Park lot to Lamberto Builders, LLC, for the construction of a house. In January 2004, prior to the scheduled closing, the Township attorney again requested Simon to consider the sale of the Park lot to the Township. Simon's attorney responded that if the pending sale did not take place, he would contact the Township.
In May 2004, the Township instituted this action against defendants Simon, Jerman and Lamberto Builders, seeking a declaration that the Park lot was a dedicated park in accordance with the approved subdivision map filed in 1932. Several homeowners in Shadow Lake Park joined in the action on behalf of the Township. In September 2004, the Township passed an ordinance accepting the dedication of the Park lot as a public park. The parties filed cross motions for summary judgment. The trial court rejected the Township's claim that the Park lot was dedicated to public use, noting its agreement with the trial court in the foreclosure action. The court granted judgment in favor of defendants dismissing the complaint. The Township appealed, and the Appellate Division reversed.
The Appellate Division initially addressed whether the Township was barred from advancing its dedication argument under the doctrine of collateral estoppel because the dedication issue had previously been decided in the foreclosure action. The panel found that Simon had not satisfied an element required for collateral estoppel because the dedication issue was not essential to the prior, foreclosure judgment. The panel explained that when a person dedicates a portion of land for public use, the municipality acquires a continuing right to accept the dedication, but holds no interest in the land. The panel clarified that the dedicating party retains legal title and continues to be liable for the payment of property taxes, although the tax assessment should reflect the dedication. It further reasoned that the purchaser of a tax sale certificate who forecloses on such dedicated property acquires title subject to the public use and the municipality's continuing right to accept the dedication. Bearing in mind those interests, the panel found that the determination whether the Alexanders dedicated the Park lot for use as a park was not essential to the judgment in the tax foreclosure action. The panel further concluded that because the Alexanders recorded the subdivision map and sold over twenty lots from 1932 to 1956 with specific reference to that map, those acts constituted an irrevocable dedication of the Park lot for public use. This Court granted defendants' petition for certification and also granted amicus curiae status to the New Jersey Land Title Association.
HELD: The Park lot was dedicated land and the sale of the tax sale certificate and the subsequent foreclosure on the lot did not prohibit the Township from accepting the dedication of the land as a park.
1. The Court is in accord with the analysis of the Appellate Division. Once an owner of land makes an offer of dedication, that offer is complete and irrevocable so far as the dedicator is concerned. It remains in place until the municipality accepts or rejects it, no matter how long delayed. These rights can only be destroyed by proper municipal action. A municipality that wishes to reject a dedication may pass an ordinance to that effect. Similar to any other taxable land, the owner of unaccepted land is responsible for the payment of property taxes on that land. Courts have long held that taxing dedicated land does not destroy the dedication or the power of acceptance. Nor does the issuance of a tax certificate on the land with an eventual foreclosure change the outcome. Although the value of dedicated land may be minimal, the owner of the land might still benefit from holding the legal title because the municipality may reject the dedication, reverting full control of the land back to the owner. (pp. 15-19)
2. Applying those legal tenets here, the Appellate Division correctly concluded that the Alexanders dedicated the Park lot for public use when they filed the 1929 map and then conveyed other lots with reference to that map. Although the sale of the tax sale certificate and the subsequent foreclosure judgment changed the party who was responsible for paying the taxes, it did not adversely affect the Township's ability to accept the dedication of the Park lot. The Appellate Division correctly rejected defendants' arguments aimed at preventing the Township from accepting the dedication of the Park lot. (pp. 19-20)
3. The Court turns now to the remedy. Defendants argue that it is unfair and harsh after more than seventy years to permit the Township to accept the offer of dedication and correspondingly allow the Township to keep the money defendants paid for the liens and subsequent taxes. Defendants request that this Court consider equitable principles in evaluating the interplay of the law of dedication and our tax sale certificate law to grant them some relief. The Court is convinced that Simon and Jerman, as well as the Township, were innocent parties and lacked the requisite knowledge that the Park lot was dedicated property at the time the Township offered and defendants purchased the tax sale certificates on the Park lot. The Township would be unjustly enriched if the Court were to recognize the dedicated status of the Park lot and nevertheless enforce the tax assessments on that lot. Certainly, the Township received tax revenues on the Park lot well in excess of the value of the lot as dedicated property. In its complaint, the Township sought to remedy that inequity by asking the Court to establish the amount it should reimburse to defendants. The Court concludes that a fair and reasonable remedy is to bind the Township to its prayer, and have the Township reimburse defendants in an amount to be determined by the trial court. (pp. 20-24)
The judgment of the Appellate division is AFFIRMED in part and REVERSED in part, and the matter is REMANDED to the trial court to fix the amount the Township should reimburse defendants.
JUSTICE RIVERA-SOTO has filed a separate opinion CONCURRING in part and DISSENTING in part, expressing the view that the Township acted in a manner sufficiently inconsistent with the character of the lot as a public park to invoke the doctrine of equitable estoppel and thus bar the Township's belated attempt to accept the dedication.
CHIEF JUSTICE RABNER and JUSTICES LONG, LaVECCHIA, ALBIN, and HOENS join in JUSTICE WALLACE's opinion. JUSTICE RIVERA-SOTO has filed a separate opinion concurring in part and dissenting in part.
The opinion of the court was delivered by: Justice Wallace, Jr.
Argued September 11, 2007
In 1929, the owners of land adjacent to Shadow Lake in Middletown Township subdivided the land into fifty-six numbered residential lots and one unnumbered lake-front lot labeled "Park." The subdivision map was presented to the Township and recorded in 1932. Many years later, the Park lot was assessed as a separate lot for tax purposes. Because the owners of the Park lot were unknown, taxes on the lot were not paid. Subsequently, the Township sold several tax sale certificates on the lot. A purchaser of a tax sale certificate successfully foreclosed on the property, obtained title to the Park lot, and contracted to sell it to a construction company for the construction of a residence.
The Township filed a complaint against two of the certificate holders and the contracted construction company, asserting that the Park lot was dedicated to the Township for public use and that conversion of the parcel to private use would violate the rights of the public in the dedicated property. Following cross motions for summary judgment, the trial court concluded that the Township did not have a dedicated interest in the property and granted judgment in favor of defendants. On appeal, the Appellate Division reversed, holding that the "recording of the subdivision map and subsequent sale of residential lots with reference to that map constituted an irrevocable dedication of the lot for public use as a park." Twp. of Middletown v. Simon, 387 N.J. Super. 65, 77 (2006).
We granted certification to determine whether the issuance of a tax sale certificate and a successful foreclosure action by the certificate holder prevent a municipality from subsequently accepting the lot as dedicated. We agree with the reasoning of the Appellate Division that the Park lot was dedicated land and that the sale of the tax sale certificate and the subsequent foreclosure on the lot did not prohibit the Township from later accepting the dedication of the land as a park. We conclude, however, that under the circumstances presented, a remand is necessary for the Court to fix an amount of reimbursement due to defendants.
Elmer and Nellie Alexander owned a parcel of land adjacent to Shadow Lake in Middletown Township. In December 1929, the Alexanders presented a subdivision map to the Township, and the Township Committee of the Township of Middletown approved the map on December 12, 1929. The map depicted fifty-six numbered residential lots and one unnumbered lot designated "Park." Approximately one-half of the fifty-six numbered residential lots and the Park lot had direct access to Shadow Lake, while the remaining lots did not. The map was recorded with the Monmouth County Clerk on April 26, 1932. The status of the 1.08-acre Park lot is the focus of this dispute.
Elmer died in January 1932. Prior to 1938, Nellie, his widow, sold two lots, one to Stanley Haviland in October 1933 and one to Charles Green in November 1936. Both transactions referenced the filed map for Shadow Lake Park. In June 1938, Nellie entered into an agreement (the 1938 Agreement) with Haviland, Green, and the bank holding a mortgage on portions of Nellie's property. The 1938 Agreement set forth certain restrictions applicable to twenty-one of the lots in the subdivision and made two references to a park. One reference specifically mentioned the lot marked "Park" on the map and read as follows:
The drive known as Alexander Drive and the place known as Sunrise Place and the road known as Orchard Road and the parcel of land marked "Park" on the said map, shall at all times hereafter, until the care and maintenance thereof shall be taken over by the municipality be cared for and maintained by [Nellie Alexander], her heirs and assigns. [(emphasis added).]
The other reference was in an introductory paragraph that limited the running of the restrictions with the land until July 1, 1962. It provided that "no street, roads, avenues, parks or any other land is intended to be dedicated to public use by reference thereto or by reference to the said map." (emphasis added).
Following the 1938 Agreement, Nellie conveyed other lots in Shadow Lake Park to various purchasers. However, the 1938 Agreement was only expressly mentioned in two of the deeds between 1938 and 1956. Still, most of the conveyances referenced the 1929 map that depicted the unnumbered Park lot, and at least one deed expressly conveyed the lot "[t]ogether with the right to use, in common with others, the park and Shadow Lake."
Neither Nellie nor her heirs ever conveyed the Park lot. At some unknown time, for tax purposes, the Township joined the Park lot to the adjacent lot 17. In 1988, a tax assessor became aware that the Park lot was improperly attached to lot 17 when the owner of that lot prepared to sell it. The Township then uncoupled the Park lot from lot 17 and gave it a separate tax designation. The owners of the Park lot were listed as unknown.
For the next two years, no taxes were paid on the Park lot. As a result, on November 28, 1990, the Township sold a tax sale certificate on the lot to Jeffrey Jerman. A second certificate was sold to Joyce Bussey on December 6, 1991, and a third to Richard Simon on June 23, 1995. Thereafter, Simon paid the taxes on the Park lot.
In July 2000, Simon filed a tax foreclosure action (the Foreclosure Action) seeking to obtain title to the Park lot. When a search of the records revealed that Clifford Raisch, the owner of lot 17, might have an interest in the Park lot, Simon joined him in the action. Raisch filed an answer asserting that the Township was an indispensable party to the Foreclosure Action because it held a continuing and irrevocable right to accept the Park lot for public use under the law of dedication. Simon moved to strike Raisch's answer. The trial court found that the original owners of the Park lot did not intend to dedicate it to the Township; therefore, the Township was not an ...