On appeal from Superior Court of New Jersey, Chancery Division, Mercer County, Docket No. C-107-89.
The opinion of the court was delivered by: Lihotz, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Axelrad, Parrillo and Lihotz.
Carol Migliaccio appeals from an April 10, 2008 Chancery Division order denying her motion to vacate a writ of execution levied against her real property and allowing the property's sale to satisfy a judgment in favor of plaintiff Frank Borromeo. Plaintiff's judgment was entered in 1990 against Dominic DiFlorio. In this appeal, we examine whether plaintiff's delivery of a corrected writ of execution cured a prior defective writ and review whether DiFlorio's bankruptcy affected the enforceability of plaintiff's judgment lien. Following our review of the arguments on appeal, the record and the applicable law, we affirm in part, reverse in part, and remand for additional proceedings.
The controversy arises out of the following complex, but undisputed facts. The subject property is composed of twenty-eight acres used for commercial farming, designated as Block 9, Lots 45 and 45Q on the Tax Map of Franklin Township, Somerset County, commonly known as 90 Old Georgetown Road (the Property).*fn1
On December 31, 1988, Evan H. Snyder and Joanne E. Snyder (the Snyders) executed a deed as grantors, transferring the Property to Vincenzo and Patricia Trani (the Tranis) as grantees.
On that same date, a shared-equity agreement (Agreement) was executed between the Tranis and DiFlorio. The Agreement, at paragraph one, acknowledged "legal title to the Property shall be held in the name of [the] Trani[s]." However, in paragraph two, "the parties argee[d] that their respective equitable interests" would be equal. The Tranis had contributed half of the realty's purchase price and, therefore, held a fifty-percent interest. An equal contribution to the purchase price and the costs of securing the mortgage was provided by DiFlorio, who held the remaining fifty-percent interest. The Agreement further contained executory provisions requiring each owner to share equally the ongoing expenses of the Property, including the mortgage, real estate taxes, utilities, and insurance, and allowed each to claim an equal share of any income tax benefits. Either party, upon providing sixty days notice, could withdraw from the Agreement, allowing the other to purchase the withdrawing party's interest.
On January 5, 1989, the deed from the Snyders to the Tranis was recorded in Deed Book 1717 at Page 809 in the Somerset County Clerk's Office. On May 26, 1989, the Agreement between the Tranis and DiFlorio was recorded in Deed Book 1735 at Page 136 of the Somerset County Clerk's office.
Plaintiff and DiFlorio were friends and business partners. For reasons not disclosed, their relationship deteriorated and on April 26, 1990, plaintiff recorded a $100,000 judgment (J-044814-1990) against DiFlorio and two other defendants, as a result of a business dispute.
Migliaccio and DiFlorio began their relationship in 1991. The two were engaged in similar businesses. They began residing together and have three children.*fn2
On October 2, 1995, the Tranis executed a "Memorandum of Agreement" (Memorandum) granting a beneficial ownership interest in the Property to Migliaccio. The terms of the understanding provided for an installment sale, whereby Migliaccio assumed full responsibility to pay the mortgage and real estate taxes on the Property for ten years. After this period, Migliaccio would pay additional consideration of $256,000 for full ownership of the realty. The Memorandum was recorded in Deed Book 2031 at Page 723 of the Somerset County Clerk's office on October 24, 1995.
On October 5, 1995, the Tranis and DiFlorio executed a second document declaring the Agreement "null and void" and providing that each party released all claims held by one against the other (Termination Agreement). Documents in the record suggest the Termination Agreement resulted because, shortly after the execution of the Agreement, DiFlorio failed to comply with his obligations for payment of the Property's expenses.
Migliaccio asserts that over the ensuing years, the Tranis were required to shoulder all of the mortgage, real estate tax and insurance expenses. Thus, the Termination Agreement intended to sever the parties' relationship and eliminate DiFlorio's equitable interest in the Property in satisfaction of the obligations due to the Tranis. Simultaneously, the Memorandum secured Migliaccio's equitable interest in the Property for the consideration expressed.
The Termination Agreement was not recorded until July 10, 2004, in Deed Book 5173 at Page 814 of the Somerset County Clerk's office. Thereafter, on September 22, 2005, a deed transferring the Property from the Tranis to Migliaccio was recorded in Deed Book 5803 at Page 135 of the Somerset County Clerk's office. Since that date, legal title to the realty has remained in Migliaccio's name.
Seventeen years after entry of the judgment, plaintiff secured a writ of execution seeking satisfaction of his debt against DiFlorio. The writ plaintiff secured was filed on April 24, 2006 and commanded the Mercer County Sheriff to satisfy  said judgment out of personal property of the judgment debtor within your [c]county, and if sufficient personal property can not be found, then out of the real property in your county belonging to the judgment debtor at the time when the judgment was entered or docketed in the office of the C[lerk] of this Court[.]
After filing, plaintiff delivered the sealed writ to the Somerset County Sheriff with a formal request to levy on the Property. On May 11, 2006, the Somerset County Sheriff posted the writ on the door of Migliaccio's residence at Block 9 Lot 45, and scheduled the execution sale for July 25, 2006.*fn3
Migliaccio adjourned the sale and moved to vacate the levy, contending DiFlorio did not own the Property, and, further, that plaintiff had not made a "good faith attempt" to locate DiFlorio's personal property prior to levying on the realty. Without benefit of a evidentiary hearing, the court denied Migliaccio's motion by order dated August 16, 2006. "The [c]court found that there appeared to be collusion between Migliaccio and DiFlorio, specifically that the transfer of the Property from [DiFlorio] to the Tranis, and then to Migliaccio appeared to be a scheme to hide DiFlorio's assets from his creditors."
Sheriff's sale was rescheduled for September 5, 2006. Prior to that date, plaintiff was contacted by the Somerset County Sheriff regarding the error in the writ. On September 1, 2006, plaintiff sent, by facsimile, a "corrected writ" redirecting the command to execute and sell the Property to the Somerset County Sheriff rather than the Mercer County Sheriff. The corrected writ was delivered to the Somerset County Sheriff on September 5, 2006.*fn4
Migliaccio moved for reconsideration of the August 16, 2006 order, arguing the Somerset County Sheriff's execution using the first writ was defective and void. Migliaccio asserted, since the writ was directed to the Mercer County Sheriff, the Somerset County Sheriff had no authority to enter upon, post notice or list for sale the realty owned by Migliaccio. Finally, Migliaccio informed the court DiFlorio had filed for bankruptcy relief on September 2, 2006, in which he scheduled plaintiff's debt as an unsecured claim. The court postponed the sheriff's sale until October 10. Thereafter, the sale was adjourned several times and finally adjourned without date pending final disposition of the matter.
Counsel for the Chapter 7 Trustee, appointed by the Bankruptcy Court to administer DiFlorio's estate, concluded the creditors had no interest in the Property. DiFlorio had not scheduled the Property as an asset and, as demonstrated by the facts, the nature of his interest in the Property, and consequently, the interest available to creditors, was unclear. Although discussed in correspondence between the attorneys, the record does not reflect whether an order to vacate the automatic stay was obtained. On April 20, 2007, the Bankruptcy Court issued ...