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C.J.T.C., LLC v. City of Newark


December 15, 2010


On appeal from Superior Court of New Jersey, Chancery Division, Essex County, Docket No. F-31261-08.

Per curiam.


Submitted February 3, 2010 - Decided Before Judges Graves and J.N. Harris.

Plaintiff C.J.T.C., LLC, appeals from an order dated December 19, 2008, denying its motion for summary judgment and granting the cross-motion of defendant City of Newark (the City) for summary judgment. We affirm.

This matter involves property located at 622-628 Bergen Street in the City of Newark, described as Block 2685, Lot 46, on the City's tax map. In 1994, the owner of the property, Brown's Fried Chicken (Brown) failed to pay taxes in the amount of $5313.66. As a result, on November 20, 1995, the City sold Tax Sale Certificate 950322 to "FUNB CUSTODIAN-NATL TAX FUNDING LP" (FUNB). FUNB recorded the certificate in the Essex County Register's Office on March 27, 1996.

Brown again failed to pay taxes in 1997, this time in the amount of $5689.65, and on August 28, 1997, the City sold Tax Sale Certificate 971317 to "FUNB AS CUSTODIAN FOR FUNDCO INC" (FUNB FUNDCO).*fn1 The certificate was recorded in the Essex County Register's Office on November 21, 1997.

On July 23, 2001, the City filed an in rem tax foreclosure complaint. As required by N.J.S.A. 54:5-104.48 and Rule 4:64-7, notice of the foreclosure action was published, posted, and mailed, and affidavits of compliance were filed by the City. R. 4:64-7(e).

Notices of foreclosure were sent to: FUNB, 1700 Palm Beach Lakes Boulevard, West Palm Beach, Florida, 33401; FUNB FUNDCO, 3950 RCA Boulevard, Suite 5002, Palm Beach Gardens, Florida, 33401; and First Union National Bank/CAR97, 3950 RCA Boulevard, Suite 2002, Palm Beach Gardens, Florida 33401. Signatures denoting receipt were obtained for the FUNB FUNDCO and First Union National Bank mailings; however, there was no signature on the FUNB return receipt card.

On October 1, 2001, the City obtained a tax foreclosure judgment. The judgment was recorded on October 12, 2001.

More than six years later, on November 13, 2007, both FUNB and FUNB FUNDCO assigned their tax sale certificates to plaintiff. On August 14, 2008, plaintiff filed a foreclosure complaint naming the City, Bergen Street Realty, and the State of New Jersey as defendants.

In November 2008, plaintiff filed a motion for summary judgment and the City cross-moved for summary judgment. Plaintiff's motion was supported by a seven paragraph statement of uncontested facts, signed by plaintiff's counsel. During oral argument, plaintiff's counsel acknowledged:

My client is an individual. He bought two liens on his property. He knew at that time, he wasn't misled, he knew that there had been a foreclosure intent. There's a . foreclosure judgment from 2001 when the City foreclosed on the property He went to Trenton himself, looked at the foreclosure records, says he didn't see any green cards. So he bought the lien.

In addition, counsel conceded that "the issue could have been brought as a motion to vacate judgment." Nonetheless, plaintiff argued that the City's service of notice of foreclosure on FUNB was defective,*fn2 and therefore plaintiff had a right to redeem that tax sale certificate.

In response, the City argued that plaintiff's motion was "unsupported by any documents [and] any evidence." In addition, the City emphasized that plaintiff had actual knowledge of the foreclosure judgment because "it was aware of the City's foreclosure when it took assignment of these tax sale certificates."

The court denied plaintiff's motion and granted the City's cross-motion for summary judgment. The court's findings and conclusions included the following:

[W]e're talking about [tax sale certificate] No. 950322 sold to FUNB, Custodian, National Tax Funding, LLP. And on the certificate of sale it listed an address, 1700 Palm Beach Lakes Boulevard, West Palm Beach, Florida, 33401.

The record discloses no change in that address, no update by any party to show that mailed notice should go anywhere other than that address that's set forth. And indeed the [City] did accomplish the mailing that the statute requires to the last known address.

The problem right now . . . is a lack of proof by way of a signed return receipt. They curiously have one for the other, [tax sale certificate] No. 971317 with respect to FUNB as custodian for Fundco Inc. at a different address, namely 3950 RCA Boulevard, Suite 5002, Palm Beach Gardens, Florida, 33401.

As the [City] points out the exact same entity, but as the plaintiff says different address, different custodianship. I don't necessarily think that the City can rely upon the fact that it was signed for at the RCA Boulevard address when it wasn't at the definitive address for this particular party.

I'm making my ruling on what I believe to be the intent of the tax sale law. There's no guarantee that a party's going to get the notice [it] desires. All [the City has] to do is see . . . that due process is accomplished. And I think [the City] did it. . . . And I don't know why [the FUNB return receipt card] isn't signed, but the fact that there is a . . . card with that address on it shows me that [the City] did what the statute wants them to do. . . . [E]specially when you consider here in a Court of Equity that the plaintiff did have actual notice. Plaintiff's sole argument on appeal is that "the motion was not ripe for summary judgment." We do not agree.

At the outset, we note that the In Rem Tax Foreclosure Act, N.J.S.A. 54:5-104.29 to -104.75, "shall be liberally construed as remedial legislation to encourage the barring of rights of redemption." N.J.S.A. 54:5-104.31; see also Bron v. Weintraub, 42 N.J. 87, 91 (1964) ("We are dealing with tax titles. Contrary to early hostility to such titles, the policy today is to support them, thereby to aid municipalities in raising revenue."); Lonsk v. Pennefather, 168 N.J. Super. 178, 182 (App. Div. 1979) ("The statutory provisions respecting tax foreclosures are to be liberally construed as remedial legislation designed to encourage the barring of the right of redemption by actions in the Superior Court and thereby secure marketable titles to land."), certif. denied, 82 N.J. 285 (1980).

In the present case, plaintiff bases its summary judgment argument on the undisputed fact that there was no signature acknowledging receipt for the in rem tax foreclosure notice sent to FUNB. However, as the trial court recognized, neither N.J.S.A. 54:5-104.48 nor Rule 4:64-7(c) required the City to obtain an acknowledgment signature on a return receipt card.

Rather, the law unambiguously required the City to simultaneously mail notice to FUNB at its "last known address by registered or certified mail, return receipt requested, and by ordinary mail." Rule 4:64-7(c); see Richardson v. Bd. of Trs., 192 N.J. 189, 195 (2007) ("If a plain-language reading of the statute leads to a clear and unambiguous result, then our interpretive process is over."); Wiese v. Dedhia, 188 N.J. 587, 592 (2006) ("When interpreting court rules, we ordinarily apply canons of statutory construction."). Here, the record fully supports the trial court's conclusion that the City satisfied the notice requirements for foreclosure.

Moreover, it is clear that plaintiff sought to vacate the City's 2001 foreclosure judgment even though plaintiff failed to file a Rule 4:50-1 motion. See Hous. Auth. v. Little, 135 N.J. 274, 283 (1994) ("A motion under Rule 4:50-1 is addressed to the sound discretion of the trial court, which should be guided by equitable principles in determining whether relief should be granted or denied."). Specifically, plaintiff claimed that the City's judgment was void pursuant to Rule 4:50-1(d) because of insufficient service of a notice of foreclosure. See Sourlis v. Borough of Red Bank, 220 N.J. Super. 434, 438 (App. Div. 1987) (stating that "a property owner is entitled to personal service or mailed notice of foreclosure as a requirement of constitutional due process of law, and that, without prior notice to him at his last known address, jurisdiction is lacking to enter an in rem foreclosure judgment"). To vacate a void judgment, a party must move for relief within a "reasonable time." R. 4:50-2; see Rogan Equities, Inc. v. Santini, 289 N.J. Super. 95, 114 (App. Div. 1996) ("It is clear that in some circumstances a motion to vacate a void judgment can properly be denied as untimely.").

A review of the record confirms that plaintiff did not file its complaint within a reasonable time. See Last v. Audubon Park Assocs., 227 N.J. Super. 602, 607-08 (App. Div. 1988) (finding that mortgagee who untimely filed for relief could not challenge tax foreclosure judgment as void for lack of notice), certif. denied., 114 N.J. 491 (1989); Jackson Constr. Co. v. Ocean Twp., 182 N.J. Super. 148, 152, 162-63 (Tax Ct. 1981) (finding a delay of nine months unreasonable under the circumstances).


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