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Crusader Servicing Corp. v. Humphrey

March 3, 2009


On appeal from Superior Court of New Jersey, Chancery Division, Essex County, Docket No. F-12174-06.

Per curiam.


Argued December 2, 2008

Before Judges Skillman, Graves and Grall.

Cherrystone Bay, L.L.C., appeals from a judgment of the Chancery Division entered in an action to foreclose the right of redemption under the Tax Sale Law, N.J.S.A. 54:5-1 to -137. The foreclosure action was filed by plaintiff Crusader Servicing Corporation, which by way of assignment from the Township of Irvington holds a tax sale certificate on property owned by defendant Franklin Humphrey. Cherrystone intervened in the action.

The facts are not in dispute. Crusader filed its complaint to foreclose the right of redemption on July 12, 2006. On October 11, 2006, the Chancery Division entered an order setting November 27, 2006 as the final day for redemption. On November 25, 2006, Humphrey executed a contract for sale of his property to Cherrystone for $40,000 conditioned upon the court's approval of Cherrystone's motion to intervene and redeem in accordance with N.J.S.A. 54:5-89.1 and -98. Cf. Simon v. Cronecker, 189 N.J. 304, 311, 336 (2007). On November 28, 2006, Cherrystone filed a motion to stay entry of final judgment, intervene and redeem. Final judgment of foreclosure was entered on December 4, 2006, before Cherrystone's motion to intervene was decided.

The Chancery Division treated Cherrystone's motion as one to vacate the final judgment pursuant to Rule 4:50-1(f), ordered discovery and conducted hearings. After the first hearing on the motion, Crusader offered Humphrey $80,000 for the property conditioned upon approval by the court and denial of Cherrystone's motion and, in opposing Cherrystone's motion, sought court approval of its agreement. Humphrey filed a certification in support of Crusader's position.

On May 2, 2007, the court issued an order vacating the final judgment, granting Cherrystone leave to intervene, prohibiting Cherrystone from consummating the sale and redemption pursuant to its contract with Humphrey and directing a private auction between Cherrystone and Crusader in which the opening bid is Crusader's offer of $80,000. The judgment also requires the high-bidder to redeem the certificate, authorizes Crusader to deduct the cost of redemption if it prevails at the auction, and provides for dismissal of the foreclosure action with prejudice upon sale and redemption.

Following oral argument on appeal, Cherrystone filed a motion to withdraw its appeal on the ground that it is moot. In support of that motion, Cherrystone represents that it now lacks the resources necessary to honor its agreement with Humphrey or submit a bid at "private auction." Although Crusader did not file a cross-appeal, it opposes Cherrystone's motion to withdraw on the ground that it has incurred substantial costs in defending a "novel" application of the principles established by the Supreme Court in Cronecker that presents a question of public importance.

We conclude there is no longer an actual controversy and, for that reason, exercise our discretion to grant Cherrystone's motion to dismiss. R. 2:8-2; Greenfield v. N.J. Dep't. of Corr., 382 N.J. Super. 254, 257-58 (App. Div. 2006). A decision from this court will have no practical consequence. Ibid. Under the trial court's order, Cherrystone may not exercise any contractual right it may have had to obtain Humphrey's property, and Crusader's prior bid of $80,000 is the opening bid at the "private auction" in which only Cherrystone and Crusader may participate. For that reason, Crusader's concern that Cherrystone may assign its rights under the contract to a third party is unfounded. Moreover, because Cherrystone will not submit a bid, Crusader is the prevailing party in the court-ordered auction and has obtained the relief it sought when it asked the court to approve its $80,000 contract of purchase for Humphrey's property.

Moreover, Cherrystone's appeal does not present a question that is both sufficiently "important to the public and likely to recur" to warrant a judicial decision. Clymer v. Summit Bancorp., 171 N.J. 57, 65-66 (2002); see State v. Gartland, 149 N.J. 456, 464 (1997). The case primarily involves an exercise of the trial court's discretion to grant relief from a final judgment "upon such terms as are just." R. 4:50-1. And, Cherrystone filed its eleventh-hour motion to intervene in this action before the Supreme Court's decisions in Cronecker, supra, 189 N.J. 304, and Simon v. Rando, 189 N.J. 339 (2007), clarifying the obligation to intervene when a person intends to redeem indirectly an interest in property acquired after the filing of a complaint to foreclose the owner's right to redeem.

The appeal is dismissed and remanded to the trial court for further proceedings in accordance with its order.


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