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National Enterprises, Inc., As the Successor In Interest To v. Manchester Property Co.

July 24, 2012

NATIONAL ENTERPRISES, INC., AS THE SUCCESSOR IN INTEREST TO THE RESOLUTION TRUST CORPORATION, PLAINTIFF-RESPONDENT,
v.
MANCHESTER PROPERTY CO., INC.; MFG HOLDING CORP., INC.; ROBERT G. CARR; JOHN A. FISHER; SALVATORE V. FRASSETTO; ANTHONY J. GERBINO; CARL D. SILVERMAN; JAMES E. WOODS; THE STATE OF NEW JERSEY; PAUL J. BUCCI, PLUMBING & HEATING CONTRACTOR, DEFENDANTS, AND WILLIAM M. PALADINI, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Chancery Division, Hudson County, Docket Nos. F-3574-91 and J-41438-93.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 14, 2012

Before Judges Axelrad and Sapp-Peterson.

Defendant, William Paladini, one of the guarantors of a commercial loan secured by a mortgage on a property in Jersey City, appeals from an order affirming a 1993 judgment against him in the amount of $511,350, less an offset of $190,000 for the fair market value of the mortgaged property at the time of the judgment. The 1993 judgment ordered the mortgagee to sell the mortgaged property and apply the proceeds of the sale to the judgment. At the time of the judgment, the property was encumbered by tax liens. The tax liens were never satisfied and the property was eventually lost in a tax foreclosure sale. Defendant argues he is entitled to relief from the judgment because the mortgagee failed to sell the property as ordered. We affirm substantially for the reasons expressed by Judge Thomas P. Olivieri in his June 21, 2011 well-reasoned oral decision.

Plaintiff, National Enterprises, Inc., is the successor in interest of the mortgagee, First Atlantic Federal Savings Association (First Atlantic). In 1993, First Atlantic obtained a judgment in the amount of $511,350 plus interest and fees against borrowers Manchester Property and defendant, an individual guarantor of the note,*fn1 for possession and foreclosure of the Jersey City property and collection of the outstanding balance on the note. The court ordered that the sums due "shall be raised and paid out of the [m]ortgaged [p]remises" and that

[p]laintiff shall not execute on the [f]inal

[j]udgment entered against the guarantors until after the sale of the [m]ortgaged

[p]remises, and that after said sale, the

[g]uarantors may apply to the [c]court for a determination of whether and to what extent, the amount the [f]inal [j]udgment shall be reduced, said determination to be established by the [c]court by conducting an evidentiary hearing on the fair market value of the [m]ortgaged [p]remises at the time of sale[.]

On February 8, 1996, the judgment was assigned to plaintiff.

In April 2002, plaintiff filed a motion seeking to compel defendant to submit to post-judgment discovery. The Chancery Division entered an order directing defendant to submit to a post-judgment deposition. The deposition was adjourned to allow defendant time to obtain counsel. There were additional adjournments, at defendant's request, a number of times thereafter. The last adjournment occurred in January 2003. The record contains no information regarding what then occurred, until April 9, 2010, when plaintiff filed a motion seeking to enforce litigant's rights.

One week later, defendant filed a cross-motion to vacate the judgment. In November 2010, the trial court scheduled a plenary hearing to determine what actions were taken, if any, by plaintiff to satisfy the conditions and to arrange for the foreclosure sale of the underlying property.

The hearing occurred on April 21, 2011. During the hearing, the court heard testimony from Karl Mucciolo, a real estate appraiser, as to the value of the subject property on April 12, 1993, the date of the original judgment. Mucciolo opined the fair market value of the property at that time was $190,000. Defendant proffered ...


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