August 6, 2009
HUDSON CITY SAVINGS BANK, A FEDERALLY CHARTERED SAVINGS BANK ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, PLAINTIFF,
RYONG HI YI, A/K/A RYON HI YI, UNMARRIED, EMPIRE STATE CAPITAL CORP., JAE LEE AND JENNIFER LEE, HIS WIFE, DEFENDANTS, AND UNITED STATES OF AMERICA, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. F-11647-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted June 30, 2009
Before Judges Stern and Parker.
Jung Ok Kim appeals from an order entered on August 15, 2008 denying her application to restore the action to the active calendar and her request for a hearing to establish her claim of right for her share of the surplus funds from foreclosure on property owned by her husband, defendant Ryong Hi Yi. The property was subject to a tax lien by the United States of America and the surplus funds were awarded to it.*fn1
The facts relevant to this appeal are as follows. Kim and Yi were married on October 30, 1975 in Korea. In January 1993, Yi purchased a two-family house in the Borough of Palisades Park, New Jersey, with a purchase money mortgage from plaintiff Hudson City Savings Bank. The deed and the mortgage listed Yi as unmarried. Yi's affidavit of title to the bank also stated that he was not married.
In 2005, Yi defaulted on the mortgage and the bank instituted a foreclosure action. The United States joined in the foreclosure action because it had a lien on the property as a result of Yi owing approximately $15 million in taxes.
When the bank instituted the foreclosure action, it inspected the premises in September and December 2005. The inspector learned that the two-family home was occupied by Yi, who lived alone in one apartment, and his son, daughter-in-law and their young child, who lived in the other. A final judgment of foreclosure was entered on June 6, 2006 and a writ of execution was issued by the Bergen County Sheriff for sale of the property on August 4, 2006. The sale resulted in proceeds of $742,000. After the mortgage lien was paid, there was a surplus of $593,014.69, which was deposited with the Clerk of the Superior Court.
The government's lien attached to the surplus and it filed a motion for payment of the funds. On November 17, 2006, the Chancery Division granted the government's unopposed motion for payment of the surplus monies.
Kim then moved for payment of a share of the surplus monies to her on the ground that she was Yi's wife, the tax liability was his alone, and she was, therefore, entitled to $311,643.79.*fn2
Kim's motion was argued on February 2, 2007. After hearing the arguments, the trial court found that Yi had purchased the property in 1993 with the deed and mortgage reflecting that he was unmarried. Nevertheless, the court accepted Kim's representation and proofs that she was married to Yi prior to the time the house was purchased and mortgaged. The court noted that "the wife was not on the mortgage, the wife was not on the note. The wife has no judgment which grants her an equitable or percentage share in the house or the property."
The court concluded that there was "simply no basis... in law or in equity to supersede or invalidate the award of the surplus funds that was previously entered in this matter nor to award any money whatsoever to the wife and, of course, to the husband." Accordingly, Kim's motion was denied. Kim appealed and argues that under N.J.S.A. 3B:28-3*fn3 she is entitled to one-half the surplus proceeds. In an opinion dated November 28, 2007, we noted that Kim had not raised the statute before the trial court. We found nothing in the record demonstrating that the foreclosed home was the principal marital residence. Nevertheless, we permitted Kim to make an application to the Chancery Division based upon the statute. We specifically stated that "any such application must be filed on or before December 21, 2007."
On December 21, 2007, Kim's attorney filed a motion "for an order restoring this case to the active docket and for a hearing to establish her claim of right for one-half the surplus funds" pursuant to N.J.S.A. 3B:28-3 and this court's decision dated November 28, 2007. Kim submitted no certification or affidavit in support of that motion. Rather, her attorney submitted a certification simply requesting restoration of the case to the active docket. On January 18, 2008, the motion was denied.
On April 14, 2008, Kim submitted an affidavit stating that she was unaware of the January 18, 2008 order until the previous week when her "attorneys were finally able to get in touch with [her], since [she] had not left an address after moving out [of the foreclosed home]." The affidavit stated: "I am now ready to appear and certify that I have lived and shared the marital home with my husband at 215 Third Street in Palisades Park since I emigrated to the United States in 1995 and until we moved out in August 2007, when our home was foreclosed."
Kim stated in the affidavit that the reason her attorneys were unable to get in touch with her was
[b]ecause of the several moves [her] husband and [she] had to make since the foreclosure, personal records (including bills) attesting to my domicile in the marital home currently in my possession, are very limited. Nonetheless, I submit a photocopy of my driver's license card... issued to me by the New Jersey Motor Vehicle Services on November 1, 2000.
She further indicated that "[t]he driver's license lists the marital property as my home address: 215 Third Street, Palisades Park, New Jersey 07650. As the Court is well aware, in order for me to obtain a driver's license, I need to show proof of address and social security number, among other required identification." The driver's license appended to the affidavit was issued in 2000 to Jung O. Lee, not to Jung Ok Kim, as plaintiff certified her name, and the regulations requiring proofs of address, et cetera, were not adopted until June 16, 2003.*fn4
Other than her claim to have "moved around the country to live with countless family members," Kim gave no reason why she could not be contacted by her attorneys through a cell phone, an e-mail address or a family member. More importantly, the certification does not establish by a preponderance of the evidence that the Palisades Park home was her principal marital residence. Nevertheless, the Chancery Division again heard argument on Kim's motion to restore the case to the active calendar and her application for her share of the surplus funds based upon N.J.S.A. 3B:28-3.
After hearing argument on August 15, 2008, the trial court found that Kim's explanation for why she was unable to submit her application to the Chancery Division by December 21, 2007, was "sparse." The court noted that "[t]he Appellate Division gave a specific window for the assembling of proofs with respect to a claim that was not previously made to either the trial court or the Appellate Division, so that the novel proposition sought to be raised [for] the first time could be supported with the factual predicate; which is, i.e., this was the principal marital residence of the couple." The court found that Kim's explanation for her failure to comply with the December 21, 2007 deadline was insufficient because "no equitable considerations under the equitable tolling doctrine are even remotely present in this case." (citing Binder v. Price Waterhouse & Co., L.L.P., 393 N.J. Super. 304, 312 (App. Div. 2007)).
In this appeal, Kim argues that the Chancery Division erred in rejecting her proofs because she "substantially complied" with the Appellate Division directive to file her application by December 21, 2008.
The doctrine of substantial compliance requires the defaulting party to show:
(1) the lack of prejudice to the defending party; (2) a series of steps taken to comply with the statute involved; (3) a general compliance with the purpose of the statute; (4) a reasonable notice of petitioner's claim; and (5) a reasonable explanation why there was not a strict compliance with the statute. [Ferreira v. Rancocas Orthopedic Assocs. 178 N.J. 144, 151 (2003) (international citations and quotations omitted).]
Kim claims that her attorney's filing of the motion to reopen the case on December 17, 2007, substantially complied with our directive. That motion, however, was completely deficient. Rule 1:6-6 requires that a moving party submit an affidavit on personal knowledge "setting forth only facts which are admissible in evidence to which the affiant is competent to testify and which may have annexed thereto certified copies of all papers or parts thereof referred to therein."
Here, the motion filed on December 21, 2007 was supported only by a certification of Kim's attorney stating that she was requesting the matter to be reopened. There were no facts whatsoever included in that motion. Consequently, the motion did not even come close to complying with the rule.
In considering the substantial compliance doctrine, we note that Kim took virtually no steps to comply with our directive and gave no reasonable explanation of why she could not have remained in touch with her attorneys when she knew such a substantial claim was pending appeal. Moreover, Kim's failure to comply with our directive does prejudice the government, in that it has a very substantial lien against her husband's assets. Her continued efforts to delay turnover of the funds results in a consequence for all taxpayers.
Moreover, as we noted in our November 28, 2007 decision, Kim did not raise the statutory argument before the trial court. Our directive that she be permitted to re-submit her application under the statute simply gave her the opportunity to present her proofs, which were not included even in her late submission. In short, Kim did not present the proofs necessary to establish that the foreclosed property was the principal marital home.
Further, with respect to the equitable tolling doctrine relied upon by the Chancery Division, Binder states:
Equitable tolling has generally been applied in three circumstances:
(1) [where] the complainant has been induced or tricked by his adversary's misconduct into allowing the filing deadline to pass...
(2) where a plaintiff has 'in some extraordinary way' been prevented from asserting his rights [and]...
(3) where a plaintiff has timely asserted his rights mistakenly by either defective pleading or in the wrong form. [393 N.J. Super. at 312 (citations and internal quotations omitted).]
We further indicated in Binder that "[e]quitable tolling 'requires the exercise of reasonable insight and diligence by a person seeking its protection.'" Id. at 313 (citation omitted).
Kim does not meet any of the equitable tolling criteria. She was certainly not induced or tricked by the government or anyone else. That was solely the result of her failure to maintain contact with her attorney. She presented no extraordinary circumstances to prevent her from filing timely, nor was she mistaken in filing the motion on December 21, 2007.
Indeed, her attorney, in an abundance of caution, filed the motion on Kim's behalf even though she could not reach Kim to prepare the necessary affidavit setting forth facts from her personal knowledge to support the application.
Kim has not met the requirements of the substantial compliance doctrine, the equitable tolling doctrine or the statutory requirements of N.J.S.A. 3B:28-3. She has presented no proofs beyond her bare assertion that the foreclosed property was her marital home. As we have indicated previously, the driver's license issued to her in 2000 does not even bear the name under which she has pursued this claim.