On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-1923-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Stern, Sabatino and J. N. Harris.
Plaintiff, City of Jersey City (the City), appeals from a judgment of the Law Division dismissing its amended complaint, and seeks to reinstate a "second repayment mortgage." The City argues (1) summary judgment was erroneously granted to defendant, Theresa Vasquez, (2) "dismissal of plaintiff's complaint due to procedural deficiencies constituted reversible error," (3) the decision of the Law Division is "contrary to important public policy," (4) it was improper to dismiss the complaint for lack of standing, (5) it was "reversible error" to dismiss the complaint for lack of joinder of an indispensable party, and (6) the dismissal on the merits also constituted "reversible error." Plaintiff requests "reinstate[ment]" of the complaint "to the trial list," presumably in the Chancery Division, as it now seeks only equitable relief.
As part of the City's federally assisted efforts to revitalize neighborhoods and provide affordable housing to its inhabitants, the City initiated the Green Villa Affordable Housing Project (the Project). The Project was substantially funded by federal aid through the Community Development Block Grant Program administered by the Jersey City Department of Housing and Economic Development.*fn1 The Project was in the area of Bergen and Orient Avenues in Jersey City and the City selected J.P. Affordable Housing Holding Co., Inc. (J.P.) as the developer. Consistent with the purpose of the Project, J.P. built two-family houses that were to be sold only to individuals of low and moderate income. In order to purchase one of these houses, the prospective buyer had to qualify as a low or moderate income purchaser.
On August 9, 1991, defendant purchased a two family home on Bergen Avenue as a qualified buyer. At the time of the purchase, she executed two mortgages as required by the Project. The lender on the first mortgage was the United Jersey Bank (UJB). The UJB first mortgage had a face value of $69,250 and a thirty-year amortization period with September 1, 2021, as the final payoff date. Defendant was to pay both the principal and the interest on this mortgage.
Defendant also executed a "second repayment mortgage," with the City as lender, in the amount of $59,000. This mortgage was subordinate to the UJB mortgage pursuant to regulations of the Council on Affordable Housing. To assure long term benefits for low and moderate income families, the terms of the "second repayment mortgage," entitled "Borrower Acknowledgments," provided that the premises had "been designated as housing which must remain affordable to low and moderate income households for ten years." Accordingly, the provision entitled "Borrower's Promises" stated that "[w]ithin the restricted period starting with the date the Borrower obtained title to the Property and continuing for a period of a minimum of ten years," defendant could not "sell or transfer title" to the premises for an amount exceeding the resale price the City had established, and that:
c) At the first non-exempt transfer of title of the Property after the ending date of the restricted period [August 9, 2001], the Borrower agrees to repay [ninety-five percent] of the incremental amount between the maximum allowable resale price and the fair market selling price which has accrued to the Property during the restricted period to the Municipality.
A provision, entitled "Rights Given To Lender," further stated that the restrictions placed on the premises were "covenants running with the land."
On March 29, 1993, the City assigned the "second repayment mortgage" to the Jersey City Development Corporation (JCDC). The assignment was executed by the Mayor of Jersey City. It is undisputed that the JCDC is an autonomous agency created by the City to administer the federal grants being used to implement the Project. The JCDC is managed by a Board of seventeen trustees who are appointed by the Mayor of Jersey City.
On June 22, 2001, the JCDC discharged Vasquez's "second repayment mortgage." The "Discharge of Mortgage" provided that "[t]his Mortgage has been PAID IN FULL or otherwise SATISFIED and DISCHARGED. It may now be discharged of record. This means that this Mortgage is now cancelled and void." The discharge was executed by JCDC's Vice President, attested to by the JCDC secretary and notarized by a New Jersey Notary Public. On June 27, 2001, the discharge was recorded by the Hudson County Register. According to the Jersey City Tax Assessor, at the time of the discharge, the premises were valued at $195,500.
Subsequently, Vasquez refinanced the premises on three occasions. The first refinancing occurred on July 24, 2001, when defendant refinanced the premises with HomeAmerica Credit, Inc. (HomeAmerica) discharging her mortgage with UJB. Defendant's mortgage to HomeAmerica had a face value of $172,000. According to the City, this mortgage was "in excess of the then fair market value of the [p]remises." The second refinancing occurred on March, 27, 2002,*fn2 when defendant discharged the HomeAmerica mortgage and refinanced the premises with HomeAmerica Credit, Inc., d/b/a Upland Mortgage (Upland). This mortgage had a face value of $180,000. The final refinancing took place on September 8, 2006, in the amount of $300,000. This mortgage was ...