May 10, 2011
DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE, PLAINTIFF-RESPONDENT, AND NEW JERSEY HOME CONSTRUCTION, PLAINTIFF/INTERVENOR-RESPONDENT,
DEBORAH L. ROFFMAN, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Cape May County, Docket No. F-20977-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued April 12, 2011
Before Judges Yannotti and Roe.
Defendant Deborah L. Roffman appeals from an order entered by the Chancery Division on June 3, 2010, which denied her motion to set aside a sheriff's sale. We affirm.
In October 2006, defendant executed a promissory note and mortgage to Chase Bank USA, N.A., in the amount of $311,250. In June 2008, plaintiff Deutsche Bank National Trust Company, as Trustee for J.P. Morgan Chase Bank, N.A., commenced this foreclosure action. Defendant did not contest the foreclosure, and a final judgment of foreclosure was entered on May 26, 2009, in the amount of $337,290.42, together with contract and lawful interest thereon. The judgment directed that the mortgaged premises be sold at a sheriff's sale "to raise and satisfy" the amount found due and owing.
The sheriff's sale was initially scheduled for July 29, 2009. The sale was adjourned twice to afford defendant time to negotiate a loan modification. Defendant was unable to modify the loan and, therefore, the sheriff's sale went forward on May 19, 2010. The property was sold for $190,200 to an independent third party, New Jersey Home Construction, Inc.
On May 27, 2010, defendant filed a motion in the trial court, seeking an order invalidating the sale and instructing the sheriff not to deliver any deed conveying title to the property. Defendant argued that the price at which the property had been sold was "grossly inadequate" because it was less than fair market value. She argued that the court should not confirm the sale because the property had not been sold at its highest and best price, as required by Rule 4:65-6(c).
In support of this motion, defendant submitted a copy of the most recent real property tax assessment for the property, which was $376,900. She also submitted a competitive market analysis, which indicated that the property could be sold for between $295,000 and $305,000. In addition, defendant requested that the court conduct a fair market value hearing so that she could "protect" herself "against the inequity of a large deficiency judgment."
The trial court considered the motion on June 3, 2010, and placed an oral decision on the record on that date. The court found that there was no irregularity in the sale, and the price at which the property was sold was not grossly inadequate, as defendant claimed. The court additionally refused to conduct a fair market value hearing, stating that such a hearing would only be required in the event that the mortgagee asked the court to enter a deficiency judgment against defendant. The court entered an order dated June 3, 2010, denying defendant's motion.
On appeal, defendant argues that the trial court erred by denying her motion to set aside the sheriff's sale. She contends that the court should have applied a "fair market value standard" in determining whether the sales price was adequate, and should have conducted a fair market value hearing. We reject these arguments and affirm.
The Chancery Division "has the authority to set aside a sheriff's sale and order a resale of property." First Trust Nat. Assoc. v. Merola, 319 N.J. Super. 44, 49 (App. Div. 1999). The power to set aside a judicial sale should be "sparingly exercised" and then "only when necessary to correct a plain injustice." Id. at 52 (quoting Karel v. Davis, 122 N.J. Eq. 526, 529 (E. & A. 1937)). "[O]ur courts will set aside a sheriff's sale for fraud, accident, surprise, or mistake, irregularities in the conduct of the sale, or for other equitable considerations[.]" Id. at 50 (citing Karel, supra, 122 N.J. Eq. at 526). However, "inadequacy of price is not sufficient alone to justify equitable relief." Ibid. (citing Crane v. Bielski, 15 N.J. 342, 348 (1954)).
Here, defendant sought to set aside the sheriff's sale on the ground that the $192,200 sale price was "grossly inadequate." Defendant presented the trial court with a comparative market assessment, which indicated that the property could be sold for between $295,000 and $305,000. She also presented the court with evidence that the property had been recently assessed at $376,000 for property tax purposes.
However, as we stated previously, a sheriff's sale cannot be set aside solely on the basis of an alleged inadequate sales price. Moreover, the court found that there was no evidence of any irregularity in the sale. Therefore the court correctly found that there was insufficient evidence to set aside the sale.
Defendant nevertheless argues that the court erred by failing to apply a "fair market value standard" in determining whether the sales price was inadequate. This contention fails because Rule 4:65-6(c) only requires that the property be "sold at its highest and best price at the time of sale[.]" The rule does not require sale of property at its fair market value. Furthermore, a sheriff's sale "is a form of distress sale that cannot reasonably be expected to produce full fair market value." G.E. Capital Mortg. Servs., Inc. v. Marilao, 352 N.J. Super. 274, 285 (App. Div. 2002).
Roffman also argues that the trial court erred by failing to conduct a fair market value hearing. In support of this contention, she relies upon Borden v. Cadles of Grassy Meadows II, L.L.C., 412 N.J. Super. 567 (App. Div. 2010). In Borden, the court noted that a mortgagor should not be personally liable for more than the difference between the fair market value of the mortgaged property and the mortgage debt. Id. at 592 (citing 79-83 Thirteenth Avenue, Ltd. v. DeMarco, 44 N.J. 525, 535 (1965)). In order to preserve the right to a fair market value credit, a mortgagor is required to object to a sheriff's sale pursuant to Rule 4:65-5 and seek a fair market value hearing. Ibid.
Here, defendant objected to the sale and sought a fair market value hearing to protect herself against a potential deficiency judgment. The statute of limitations for seeking such a deficiency judgment is three months from the date of sale. N.J.S.A. 2A:50-22(b). However, the mortgagee has not filed an action against defendant for a deficiency judgment within the statutory period. Furthermore, at argument, plaintiff's attorney confirmed that plaintiff will not seek a deficiency judgment against defendant. Thus, the question of whether the trial court should have conducted a fair market value hearing is moot.
Even so, defendant asserted for the first time at oral argument that she may be subject to certain tax liabilities as a result of the alleged inadequate sales price for the property. Because defendant did not raise this issue in the trial court, she is precluded from raising this issue on appeal. Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973). In addition, defendant did not address this issue in her appellate brief. An issue that is not briefed is deemed waived. Jefferson Loan Co., Inc. v. Session, 397 N.J. Super. 520, 525, n.4 (App. Div. 2008).
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