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Clarksboro, LLC v. Kronenberg

Superior Court of New Jersey, Appellate Division

May 16, 2019

CLARKSBORO, LLC, Plaintiff-Respondent,
v.
MARK KRONENBERG, Executor of the ESTATE OF ELBRIDGE KRONENBERG, MARK KRONENBERG, individually, ERICH
v.
KRONENBERG, NICHOLE KRONENBERG, wife of ERICH KRONENBERG, TLG INVESTMENTS, LLC, GREAT COVE MARINA, INC., BRUNSWICK CORP., DANIEL O'HEARN, RCM HOLDINGS, LLC, VERIZON DIRECTORY SERVICES f/k/a BELL ATLANTIC n/k/a DEX MEDIA, NATIONAL CITY BANK n/k/a PNC BANK, NA, CAVALRY SPVI, LLC, SUZANNE W. GINTER, and STATE OF NEW JERSEY, Defendants, and US BANKCUST/ SASS MUNI VI DTR, Defendant-Appellant.

          Argued April 3, 2019

          On appeal from Superior Court of New Jersey, Chancery Division, Morris County, Docket No. F-031537-16.

          Susan B. Fagan-Rodriguez argued the cause for appellant (Rodriguez Law Group, LLC, attorneys; Susan B. Fagan-Rodriguez, on the brief).

          Elliott J. Almanza argued the cause for respondent (Goldenberg, Mackler, Sayegh, Mintz, Pfeffer, Bonchi & Gill, attorneys; Keith A. Bonchi, of counsel and on the brief; Elliott J. Almanza, on the brief).

          Before Judges Koblitz, Currier and Mayer. [1]

          OPINION

          KOBLITZ, P.J.A.D.

         In this tax foreclosure matter, defendant, U.S. Bank-Cust/Sass Muni VI DTR (U.S. Bank), a large tax lien investment fund, appeals from the January 10, 2018 final judgment and the February 22, 2018 order denying its motion to vacate final judgment. U.S. Bank had previously obtained ownership of real property by foreclosing on a tax sale certificate, and then failed to pay property taxes. The Chancery Division granted the opposed motion for final judgment without affording the requested oral argument or providing a cogent reason to deny argument. U.S. Bank thus was not told when final judgment would be entered, which would also end its redemption period. Because oral argument was not provided, we reverse.

         On November 21, 2016, Christiana Trust filed the present complaint to foreclose the tax sale certificate. Christiana Trust named U.S. Bank as a defendant because of a prior tax certificate held on the property. On June 8, 2017, defendant was served with an "order fixing the time, place and amount of redemption." The order fixed July 24, 2017 as the time for redemption. Defendant did not file an answer or otherwise plead. Defendant did, however, file a notice of appearance in August 2017.[2]

         On August 14, 2017, Christiana Trust[3] filed a motion for final judgment with the Foreclosure Unit of the Superior Court. Defendant asserts it was "unable to complete resolution of the environmental assessment by the time [p]laintiff moved for entry of final judgment." Defendant opposed the motion and sought a temporary stay, alleging it had filed a complaint in 2013, obtained final judgment in 2016, and owned the property. Defendant certified the property had "extensive environmental problems." Defendant asserted it was "attempting to sell the [p]roperty," and "hope[d] to have a contract to sell the [p]roperty in the near future." After opposition was filed, the Foreclosure Unit sent the contested matter to the Chancery Division.

         On January 10, 2018, the court entered final judgment. In its statement of reasons, the court explained:

Defendant fails to demonstrate any of the [Crowe v. DeGioia, 90 N.J. 126 (1982)] factors. Defendant raises no valid legal argument or defense that would defeat [p]laintiff's right to proceed with the foreclosure. Defendant asserts that it is in the process of attempting to sell the property and it hopes to have a contract to sell same in the near future. On the other hand, [d]efendant has not paid the concurrent property taxes although it completed its own foreclosure and has held an unrecorded ownership interest for the past sixteen months since May 2016. Further, [p]laintiff argues that [d]efendant is a large investment fund with financial ability to redeem the tax lien, and that it could easily redeem the tax lien and preserve its interest. The court is persuaded that equities favor [p]laintiff as [p]laintiff has been paying property taxes to secure the priority of its lien, and [d]efendant has failed to demonstrate any elements that warrant stay of the entry of final judgment.

         The order further provided: "Plaintiff did not request oral argument. Defendant opposed and requested oral argument. The court did not hear oral argument pursuant to Palombi v. Palombi, 414 N.J.Super. 274 (App. Div. 2010)."

         In Palombi, we considered Rule 5:5-4 in the context of a litigious family matter. Rule 5:5-4(a) states, in pertinent part:

Motions in family actions shall be governed by [Rule] 1:6-2(b) except that, in exercising its discretion as to the mode and scheduling of disposition of motions, the court shall ordinarily grant requests for oral argument on substantive and non-routine discovery motions and ordinarily ...

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