MAS CAPITAL, LLC VS. BLOCK 1, LOT 83, 121 COURT STREET (F-017541-16, UNION 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NOT FOR PUBLICATION WITHOUT THE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-1173-17T3
MAS CAPITAL, LLC,
Plaintiff-Appellant,
v.
BLOCK 1, LOT 83, 121 COURT
STREET, ELIZABETH CITY, NEW
JERSEY ASSESSED TO: ALFREDO
LEYVA-CAMPOS and ANA
LEYVA-CAYADO,
Defendants,
and
CARISBROOK ASSET HOLDING
TRUST,
Intervenor-Respondent.
______________________________________
Argued November 28, 2018 – Decided December 13, 2018
Before Judges Nugent and Reisner.
On appeal from Superior Court of New Jersey,
Chancery Division, Union County, Docket No. F-
017541-16.
Jeffrey B. Datz argued the cause for appellant (Taylor
and Keyser, attorneys; Robert W. Keyser, of counsel
and on the briefs; Jeffrey B. Datz, on the briefs).
Sonya Gidumal Chazin argued the cause for respondent
(Phelan Hallinan Diamond & Jones, PC, attorneys;
Sonya Gidumal Chazin, of counsel and on the brief).
PER CURIAM
In this tax foreclosure case, plaintiff Mas Capital, LLC (Mas Capital)
appeals from an October 27, 2017 order, permitting a mortgage holder,
Carisbrook Asset Holding Trust (Carisbrook), leave to intervene in the
foreclosure action and redeem the outstanding tax sale certificates held by
plaintiff. We affirm.
Because we write this opinion primarily for the parties, who are familiar
with the background of the case and the governing law, a short discussion will
suffice. The case began when Mas Capital purchased tax lien certificates that
were issued due to the nonpayment of a few hundred dollars in municipal utility
charges. The property was also subject to a $133,726 mortgage, held by
Newlands Asset Holding Trust (Newlands), which had bought the mortgage as
part of a bundle of thousands of mortgages.
Upon learning that this particular mortgaged property was subject to a tax
lien, Newlands sought to pay off the lien with the tax collector. The payment
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was rejected, due to the pending foreclosure. Newlands then filed a motion to
intervene in the foreclosure case. The trial court first granted Newlands'
application, but then denied it after Mas Capital filed a reconsideration motion.
Newlands then transferred the mortgage to Carisbrook. The trial court initially
denied Carisbrook's motion to intervene and redeem the tax certificates, but
granted the motion on reconsideration. This appeal followed.
After reviewing the record, we conclude that the trial court initially erred
in denying Newlands permission to intervene in the foreclosure action. There
is no evidence that either Newlands or Carisbrook was a title raider. Rather, as
previously noted, the mortgage in question was purchased as part of a larger
transaction, in which these companies bought and sold bundles of mortgages.
There is no evidence that Newlands or Carisbrook bought the mortgage for only
nominal value. As a mortgage holder, Newlands had the right to redeem the tax
lien. See N.J.S.A. 54:5-54. Newlands' prior attempt to redeem through the tax
collector did not bar its intervention motion.
Mas Capital contends that if a tax foreclosure suit is pending, an entity
that attempts to redeem a tax certificate with the tax collector, instead of moving
to intervene in the foreclosure action, is thereafter forever barred from filing an
intervention motion. We disagree. Mas Capital's argument is based on a
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misreading of a trilogy of foreclosure cases – Simon v. Cronecker, 189 N.J. 304(2007), Simon v. Rando, 189 N.J. 339 (2007), and Malinowski v. Jacobs, 189
N.J. 345 (2007). In those cases, mortgagees or real estate investors actually
succeeded in paying off the tax certificates, despite pending foreclosure
litigation. The Court disapproved that procedure, holding that once a tax
foreclosure suit is filed, any third party seeking to redeem the certificates must
first move to intervene in the foreclosure action. Cronecker, 189 N.J. at 336-
37; Rando, 189 N.J. at 342-44; Malinowski, 189 N.J. at 353; see N.J.S.A. 54:5-
98 (after foreclosure suit is filed, redemption may only take place in that
action).1 As a remedy, the Court ordered that the entities that wrongfully
redeemed the properties would hold them in constructive trust for the original
tax lien holder. Cronecker, 189 N.J. at 338. The Court did not hold that an
entity that mistakenly, but unsuccessfully, attempts to redeem certificates
through the tax collector is thereafter forever barred from following the correct
procedure by moving to intervene in the foreclosure action.
1
The Court observed that the primary purpose for that procedure was to prevent
the exploitation of financially distressed homeowners, by assuring the trial court
that the third party was paying the homeowner more than a nominal
consideration for the property. Cronecker, 189 N.J. at 320-22; see N.J.S.A. 54:5-
89.1 (no person shall be permitted to intervene "whenever it shall appear that he
has acquired such interest in the lands for a nominal consideration after the filing
of the complaint . . .").
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Mas Capital's arguments on the redemption issue are without sufficient
merit to warrant further discussion. R. 2:11-3(e)(1)(E).
On the record presented to us, Mas Capital's next contention – that
Carisbrook was not authorized to transact business in New Jersey – was not
briefed, argued or decided in the trial court. Nor has Mas Capital cited any case
law on the issue. We decline to address the issue for the first time on appeal.
See Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234-35 (1973).
The trial court's January 5, 2018 order, staying Carisbrook's right of
redemption pending appeal, is hereby vacated.
Affirmed.
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