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ATFH REAL PROPERTY, LLC v. WINBERRY REALTY PARTNERSHIP

November 30, 2010

ATFH REAL PROPERTY, LLC, PLAINTIFF-RESPONDENT,
v.
WINBERRY REALTY PARTNERSHIP, DEFENDANTS.
DEFENDANT-APPELLANT, AND KEARNY FEDERAL SAVINGS BANK AND THE STATE OF NEW JERSEY,



On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. F-21870-06.

The opinion of the court was delivered by: Fisher, J.A.D.

New Jersey Court of Appeals CA-a1189_09.pdf

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Submitted October 27, 2010 - Decided Before Judges Fisher, Sapp-Peterson and Simonelli.

The opinion of the court was delivered by

Defendant Winberry Realty Partnership (WRP), a partnership consisting of four siblings, appeals a series of orders entered in this foreclosure action. WRP's appeal chiefly focuses on the order of July 9, 2009, which favorably vacated the judgment of foreclosure but on the conditions, which WRP finds objectionable, that WRP pay plaintiff's attorneys fees and hold plaintiff harmless for potential claims resulting from the actions taken by plaintiff in reliance on the vacated judgment. We find no abuse of discretion in the equitable remedy crafted by the chancery judge and affirm.

I

Plaintiff ATFH Real Property, LLC filed a complaint alleging it purchased a tax sale certificate issued on property owned by WRP in Rutherford. The complaint demanded that the court fix the amount due on the certificate, foreclose WRP and all other persons claiming a right to redeem, and vest in plaintiff an indefeasible fee simple in the property.

Plaintiff attempted personal service of the summons and complaint on WRP at its registered business address in Clifton -- the home of John Winberry, one of WRP's partners -- but an individual inside refused to open the door. Plaintiff thereafter mailed the summons and complaint to the same address by regular and certified mail. The certified mail was refused; the regular mail was not returned to plaintiff.

Winberry, who is not an attorney, filed an answer to the complaint on behalf of WRP.*fn1 Consequently, the Office of Foreclosure*fn2 forwarded the matter to the trial court as a contested matter. When WRP failed to attend both the original and rescheduled case management conferences, the judge handling the matter at the time struck the pro se answer by order entered on August 6, 2007.

A few weeks later, Winberry filed a pro se motion for relief from the August 6, 2007 order. Winberry appeared late on the return date and claimed he was unprepared and too ill to proceed. The judge rescheduled the motion.

At the rescheduled hearing, Winberry informed the judge he was unprepared to proceed because he had misplaced his file. The judge was prepared to adjourn the matter for a few hours; Winberry requested more time. Because the judge was unavailable the following week, he refused that request. However, the judge also sua sponte questioned the propriety of Winberry's representation of WRP in light of Rule 1:21-1(c).*fn3 Without drawing any conclusions, the judge asked plaintiff's counsel --because plaintiff was, in the judge's words, "purportedly being prejudiced" -- whether it was her desire to consent to an adjournment "for in excess of a week and try to compel Mr. Winberry to get counsel, or did you wish to do this today without counsel?" Plaintiff's counsel stated her preference to proceed because that was her third appearance in the matter. Plaintiff's counsel noted, however, that she did not wish to cut off "anyone's rights to argue substantively" even though, in her view, the answer asserted no meritorious defense.

In deciding to hear the motion, the judge appeared to accept as legitimate what he referred to as Winberry's "sundry excuses" for failing to previously appear. He also preliminarily observed that the pro se answer contained no valid defense and the argument regarding the sufficiency of service of process was "likely without merit" because WRP "clearly had notice" and any likelihood of prevailing on such a defense was "negligible." With these and other comments, the judge advised he would hear ...


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