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M Credit Iv v. Ernest Tweedle

January 27, 2011


On appeal from the Superior Court of New Jersey, Chancery Division, Essex County, Docket No. F-19763-06.

Per curiam.


Submitted: January 12, 2011 - Decided: Before Judges Axelrad and J. N. Harris.

Ralph P. Allocca, attorney for appellant. Respondent has not filed a brief.

Defendant-Intervenor 18 Stone Realty, LLC appeals from a May 8, 2009 order of the Chancery Division denying its motion to extend the date of redemption of plaintiff's tax sale certificates. We dismiss part of appellant's appeal as moot and affirm as to the balance.

This case arises from a property located in Newark whose record owners were Ernest and Nadine Tweedle. There were unpaid municipal taxes and plaintiff, M Credit IV, Inc. (M Credit), had purchased tax sale certificates. Appellant's principal apparently ascertained that the Tweedles were deceased and by deed dated August 24, 2006 and recorded on August 28, 2006, appellant purchased the property from the Tweedles' purported son. At the time of purchase, appellant's principal was aware of M Credit's tax lien in excess of $20,000. M Credit, however, was not aware of the Tweedles' deaths, as their estates were never probated, or of the transfer, which apparently occurred after the title search. Accordingly, M Credit failed to join appellant as a defendant in its in rem tax foreclosure complaint filed in the Chancery Division on October 27, 2006. M Credit obtained a final judgment of foreclosure on May 17, 2007.

On May 22, 2007, appellant apparently sold the property to RENE161Z with significant escrows retained for payment of outstanding liens against the property, including the amount to redeem M Credit's tax sale certificates. Thereafter, appellant was unsuccessful in redeeming the tax sale certificates from the City due to the foreclosure judgment.

On June 21, 2007, appellant moved to vacate the foreclosure judgment. M Credit filed opposition, questioning the validity of appellant's deed based on the purportedly suspicious circumstances surrounding the transfer and its belief that the grantor may not have been the legitimate owner of the property. Judge Harriet Klein embarked upon a lengthy process of case management intended to culminate in a plenary hearing to enable the court to decide whether or not to vacate M Credit's foreclosure judgment. The plenary hearing commenced with one day of testimony on May 20, 2008, but was never completed.

By letter of October 23, 2008, M Credit's attorney informed the court that, as a result of the significant defense costs, M Credit consented to the entry of an order vacating the final judgment conditioned on the redemption occurring within a month. Appellant's counsel responded by letter of October 31, 2008, agreeing to the order but requesting no deadline be fixed for the redemption because of problems it was apparently encountering with its purchaser finalizing the transaction.

On or about February 11, 2009, M Credit moved for entry of an order granting appellant's motion to vacate the final judgment of foreclosure and fixing the date for redemption.

Appellant argued that the date of redemption for interest calculation should be fixed as May 21, 2007 - the date of the closing - because it had tendered to the tax collector the redemption amount of $42,295.44 at that time. Appellant represented that the escrowed sum was still available and requested the court order M Credit to accept that amount. By order of February 27, 2009, Judge Klein denied appellant's request following oral argument,*fn1 entering an order on that date vacating M Credit's final judgment of tax foreclosure to allow appellant to redeem the tax sale certificates. She further ordered that redemption of the certificates, inclusive of taxes and interest to date, occur by April 13, 2009, or M Credit would be permitted to apply to the foreclosure unit for the entry of final judgment with prejudice.

On April 9, 2009, appellant moved to extend the redemption date to allow a Rabbinical Court to resolve a dispute between it and RENE161Z respecting the sale. Following oral argument on May 8, 2009, Judge Klein denied appellant's motion, memorialized in an order of the same date. She found the issue was "purely a money issue" as between appellant and its purchaser as to which one would bear the cost of the redemption. Noting the case had been going on for two years at appellant's behest to obtain a vacation of M Credit's foreclosure judgment, the consequence of which the lien had to be paid, and as appellant had represented on multiple occasions that the funds were available for redemption, the equities did not merit a further extension of the redemption date. This appeal ensued.*fn2

Appellant asserts the following ...

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