PRO CAP II, LLC, ETC. VS. BLOCK 682, LOT 49, ETC. (F-001407-16, MONMOUTH COUNTY AND STATEWIDE) ( 2018 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1822-16T2
PRO CAP II, LLC BY ITS
CUSTODIAN U.S. BANK,
Plaintiff-Respondent,
v.
BLOCK 682, LOT 49, 6 KOOSMAN
DRIVE, MIDDLETOWN, NEW JERSEY,
ASSESSED TO: JOHN S. DENKER,
single,
Defendant,
and
CLEARVIEW EQUITIES, LLC,
Appellant.
_______________________________
Argued March 12, 2018 – Decided June 11, 2018
Before Judges Accurso and Vernoia.
On appeal from Superior Court of New Jersey,
Chancery Division, Monmouth County, Docket
No. F-001407-16.
Richard O. Venino, Jr., argued the cause for
appellant.
Amber J. Monroe argued the cause for
respondent (Gary C. Zeitz, LLC, attorneys;
Amber J. Monroe, on the brief).
PER CURIAM
In this in rem tax foreclosure, Clearview Equities, LLC
appeals from a final order denying its motion to redeem
plaintiff Pro Cap II, LLC's1 subsequent tax sale certificate.
The Chancery judge found the motion came too late, after
Clearview's right of redemption had already been cut off by Pro
Cap's judgment in foreclosure, notwithstanding the judgment had
yet to be recorded. We agree and affirm.
The facts are undisputed and easily summarized. In
December 2012, the tax collector of Middletown sold tax sale
certificate 12-00411 on the property at 6 Koosman Drive to US
Bank/Cust Tower DBW II. The following December, the tax
collector sold tax sale certificate 13-00314 to Pro Cap. In
July 2015, DBWII assigned its certificate to Clearview.
Following pre-suit notice, which Clearview admits it
received, Pro Cap filed a verified complaint in rem to foreclose
its tax lien in January 2016. The following month, the Chancery
1
Pro Cap assigned its certificate to PCII REO LLC in May 2016,
and the Chancery judge thereafter granted Pro Cap's motion to
substitute PCII as plaintiff in the action. We follow the
parties in continuing to refer to Pro Cap as plaintiff in this
matter for ease of reference only.
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judge granted Pro Cap's motion declaring the property abandoned.
When Clearview failed to answer following service of the
complaint, Pro Cap entered default against it in June 2016.
Final judgment was entered on July 5, 2016. Pro Cap served
Clearview with the final judgment on August 17, 2016, and it was
recorded nine days later.
On August 22, a representative of Clearview appeared at the
tax collector's office attempting to redeem Pro Cap's tax sale
certificate, which the tax collector refused in light of the
judgment debarring redemption. Clearview subsequently filed a
motion contending its request to redeem was timely pursuant to
N.J.S.A. 54:5-104.65 because Pro Cap had not yet recorded its
judgment.
Judge Del Bueno Cleary denied the motion. Acknowledging
that N.J.S.A. 54:5-104.65 provides "the plaintiff shall be
seized of an estate in fee simple . . . absolute and free and
clear of all liens and encumbrances" upon the recording of a
certified copy of the judgment, the judge found it provided
Clearview no right to relief. Instead, the judge found N.J.S.A.
54:5-104.64(a) makes clear it is the entry of the judgment that
gives
full and complete relief, in accordance with
the provisions of [the Tax Lien Law], and in
accordance with any other statutory
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authority, to bar the right of redemption,
and to foreclose all prior or subsequent
alienations and descents of the lands and
encumbrances thereon, and to adjudge an
absolute and indefeasible estate of
inheritance in fee simple in the lands
therein described, to be vested in the
plaintiff.
[N.J.S.A. 54:5-104.64(a).]
Clearview moved for reconsideration and to reopen the
judgment under R. 4:50-1(d), rearguing the same points and
adding that the judgment was void because the complaint was not
verified by the tax collector and no tax foreclosure list had
been prepared by the tax collector pursuant to resolution of the
Township governing body. The judge denied reconsideration for
the same reasons the initial motion was denied, determined the
lack of verification by the tax collector was not fatal pursuant
to Preparatory Temple and House of Prayer for All People, Inc.
v. Seery, 81 N.J. Super. 429 (Ch. Div. 1963), and that
plaintiff, obviously not a municipality, was not required to
comply with N.J.S.A. 54:5-104.35. Plaintiff appeals, reprising
the arguments made to the Chancery court.
Our review of the record convinces us that none of
plaintiff's arguments is of sufficient merit to warrant
discussion in a written opinion. R. 2:11-3(e)(1)(E).
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N.J.S.A. 54:5-104.64(a) could not be clearer: it is the
entry of final judgment, not the recording of that judgment,
that gives "full and complete relief" barring "the right of
redemption," and "foreclos[ing] all prior or subsequent
alienations and descents of the lands and encumbrances thereon"
and "adjudg[ing] an absolute and indefeasible estate of
inheritance in fee simple in the lands therein described, to be
vested in the plaintiff." As Judge Wecker cogently explained in
Town of Phillipsburg v. Block 1508, Lot 12, 380 N.J. Super. 159,
165 (App. Div. 2005), "[t]he holder of a prior tax sale
certificate has an absolute right of redemption until that right
is cut off by a judgment in foreclosure." " N.J.S.A. 54:5-
104.64(a) provides that such judgment 'shall give full and
complete relief . . . to bar the right of redemption, and to
foreclose all prior or subsequent . . . encumbrances' and grant
an estate in fee simple to the plaintiff, which is accomplished
by recording the judgment[,] N.J.S.A. 54:5-104.65." Id. at 166.
That is precisely what occurred here. Clearview, the
holder of a tax sale certificate that pre-dated Pro Cap's
certificate, had an absolute right to redeem Pro Cap's
certificate until that right was cut off by the July 5, 2016
final judgment. That Pro Cap was required to perfect its estate
in fee simple by recording that judgment pursuant to N.J.S.A.
5 A-1822-16T2
54:5-104.65, does not alter the effect of the judgment as to
Clearview.
We agree with Judge Del Bueno Cleary that the alleged
procedural defects, improper verification and failure to prepare
the Township resolution and tax foreclosure list, have not been
found to invalidate an entire in rem proceeding. See Borough of
Paramus v. Block 1527, Lots 1-2, etc., 42 N.J. Super. 369, 375
(App. Div. 1956); Preparatory Temple, 81 N.J. Super. at 432-34.
Further, it is obvious that the two requirements of which
Clearview complains both reflect obligations imposed on
municipalities, the only entities permitted to pursue in rem
foreclosures prior to the 2015 statutory amendments permitting
any person holding a tax lien on abandoned property to institute
an in rem tax foreclosure. N.J.S.A. 54:5-86; L. 2015, c. 16.
Affirmed.
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