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Robinhood Properties, LLC v. Nj Tlc Holdings and Arianna Financial Corp.

January 25, 2011

ROBINHOOD PROPERTIES, LLC, PLAINTIFF-RESPONDENT,
v.
NJ TLC HOLDINGS AND ARIANNA FINANCIAL CORP., LLC., DEFENDANTS-APPELLANTS.



On appeal from the Superior Court of New Jersey, Chancery Division, Union County, Docket No. C-40-08.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: January 6, 2010

Before Judges Cuff and Payne.

The opinion of the court was delivered by CUFF, P.J.A.D.

Plaintiff Robinhood Properties, LLC (Robinhood) acquired an interest in real property located in Elizabeth in which defendant NJ TLC Holdings (TLC) and its successor in interest, defendant Arianna Financial Corp., LLC. (Arianna), also held an interest. Plaintiff filed a partition action and sought contribution from TLC and Arianna for their proportionate share of the redemption of a tax sale certificate encumbering the shared property. This appeal is limited to the portion of the February 17, 2009 order that provides that TLC shall reimburse Robinhood two-thirds of the $47,332.41 or $31,570.72 paid by Robinhood to redeem the tax sale certificate. We affirm.

On June 7, 2004, Phoenix Funding, Inc. (Phoenix) purchased a tax sale certificate for a parcel of property located in Elizabeth. It continued to pay taxes on the property to preserve and increase the value of its lien. On January 22, 2007, it filed a complaint to foreclose the tax sale certificate and the property owners' right of redemption.

We discern from the record that title to the property was held by six persons as tenants in common. Phoenix settled with three of the co-owners on October 25, 2006, by accepting a deed in lieu of foreclosure to a one-third undivided share of the property. On March 27, 2007, it settled with two other co-owners, who held an undivided one-third interest in the property. Phoenix promptly assigned its rights to TLC.

The remaining property owner did not settle with Phoenix but conveyed his one-third share of the property to Robinhood. Their agreement provided for a purchase price of $35,000 and further provided that the sale was contingent on Robinhood's successful intervention in the pending foreclosure action initiated by Phoenix. A third-party investor, such as Robinhood, must intervene and obtain permission from the court before redeeming a tax sale certificate. Simon v. Cronecker, 189 N.J. 304, 320-22 (2007); N.J.S.A. 54:5-89.1 and N.J.S.A. 54:5-98.

The court granted Robinhood's motion to intervene. The court accepted Robinhood's representation that it would assume responsibility for redemption of the lien, and after being informed that the full $35,000 purchase price constituted the remaining owner's net consideration for the property, it concluded that Robinhood offered more than nominal consideration. Robinhood acquired the last one-third share of the property on January 31, 2008, and redeemed the lien for $47,332.41 on February 4, 2008. Pursuant to statute, funds given to the municipal tax collector for redemption, which cover the certificate holder's initial investment, subsequent tax payments, costs, interest, and a statutory premium, are remitted to the certificate holder upon surrender of the certificate. N.J.S.A. 54:5-54 to -55, -57 to -58, and -60 to -61.

Robinhood then filed its complaint for partition on March 10, 2008. The court entered partial summary judgment resolving some issues but not Robinhood's claim for contribution by order dated September 25, 2008. TLC and Robinhood filed cross motions for summary judgment. Following oral argument, Judge Malone entered an order partitioning the property, appointed a realtor to sell the property, and apportioned certain expenses between the parties. The judge also granted Robinhood's contribution claim. In his oral opinion addressing plaintiff's request for contribution, Judge Malone stated

[W]here there are co-tenants, . . . of the property, they are each entitled to contribution from the other co-tenant for payments made to preserve the property.

And I think taxes are, clearly, one of those payments made to preserve the property.

When Robinhood paid $47,332.41, it was certainly acting to protect its own interest, but incidentally, it worked to ...


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