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JNH Funding Corporation v. Ayed

Superior Court of New Jersey, Chancery Division, Hudson

March 21, 2017


          Decided: March 21, 2017

          Howard D. Lipstein for plaintiff.

          Amy E. Forman for defendant Highland House Condominium Association (McGovern Legal Services, LLC, attorneys).

          SARKISIAN, P.J. CH.


         Presently before the court is plaintiff's motion to vacate a redemption of a tax sale certificate, Tax Sale Certificate No. 2006-1326, by defendant Highland House Condominium Association, Inc. ("Highland House"). This matter arises out of plaintiff's action to foreclose a tax sale certificate that it purchased on June 22, 2006, at a public sale, for defendant Ali M. Ayed's ("Ayed") property located at 2700 Kennedy Boulevard, Unit 114, Jersey City, New Jersey, which is a unit within defendant Highland House.

         On November 22, 2016, plaintiff filed an order to show cause with a verified complaint to vacate the redemption. On December 29, 2016, the court denied the order to show cause without prejudice to seek the relief by motion. Plaintiff filed the instant motion on January 31, 2017. The motion was adjourned with the parties attempting, without success, to resolve their differences. It was ultimately set down for a plenary hearing on March 17, 2017, with the court, in its letter of March 10, 2017, identifying the court's need to hear testimony and consider documentary evidence on the communications between counsel primarily in early September 2016, which led to the defendant's redemption of the subject tax sale certificate on September 19, 2016.

         Statement of Operative Facts and Contentions

         On June 22, 2006, plaintiff purchased Tax Sale Certificate No. 2006-1326, which related to Ayed's property at 2700 Kennedy Boulevard, Unit 114, Jersey City, at a public sale. The Tax Sale Certificate was recorded on August 15, 2007.

         On March 10, 2014, plaintiff filed the instant foreclosure complaint seeking to foreclose the tax sale certificate, naming Ayed and Highland House Condominium Association as defendants. The order of final judgment, entered on March 11, 2016, noted that plaintiff was entitled to the sum of $19, 472.29 plus interest from the tax foreclosure sale. However, on June 24, 2016, Judge Innes granted plaintiff's motion for an order vacating judgment. On July 25, 2016, Judge Innes entered an order fixing the amount, time, and place for redemption, which established the amount due as $20, 756.15 and the redemption date to be September 8, 2016. The order notes that redemption should be permitted up until the entry of final judgment.

         However, Highland House had also recorded a lien for unpaid assessments against the property in the amount of $5, 018.03 on October 8, 2013, and recorded a second lien in the amount of $8, 144.24 on December 28, 2015. Thereafter, on January 6, 2014, approximately two months before plaintiff had filed its foreclosure action, Highland House filed its own foreclosure complaint against Ayed under Docket No. F-000222-14. Ultimately, Highland House was awarded a final judgment of foreclosure in that action on September 26, 2016, in the amount of $8, 330.77.

         The court's focus for the plenary hearing began in early September 2016 regarding the communications between plaintiff's attorney, Howard Lipstein, and the defendant's attorney, Tiffany Byczkowski, of McGovern Legal Services. The court considered their testimony and exhibits marked into evidence on March 17, 2017.

         On September 2, 2016, Highland House's counsel contacted plaintiff's counsel to discuss plaintiff assigning the tax sale certificate to Highland House or plaintiff paying off the Association's liens. Mr. Lipstein indicated his client was interested in acquiring title to the property and countered with inquiring on the amount defendant would require from plaintiff to satisfy their lien for condominium maintenance charges. Defendant's attorney had made plaintiff's attorney aware of their pending foreclosure action.

         On September 6, 2016, plaintiff informed Highland House that it intended to complete the foreclosure action to obtain title to the property and repeated his client's interest in satisfying the defendant's lien. Plaintiff's attorney was advised by defendant's attorney that once she had a current account ledger she would forward it to him. Lipstein testified at the hearing that he was under the mistaken opinion that the Condominium Association, as a named defendant in his action, would have the right to redeem the tax sale certificate.

         On September 7, 2016, a telephone conversation took place between the attorneys, in which plaintiff's counsel advised he would have an answer shortly on whether he would consider an assignment/sale of the tax sale certificate versus the option of paying off the condominium lien. His client wanted a further explanation of a charge on the lien account ledger. Lipstein agreed to extend the redemption time for three weeks in order to allow the settlement negotiations to continue. Plaintiff's attorney then sent an email the same day to Highland House's counsel advising her that it would extend the period of time for Highland House to redeem the tax sale certificate by three weeks from the September 8, 2016, date set by Judge Innes's July 25, 2016 order, "based upon [the parties'] continuing ...

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