MICHAEL BALICE VS. AVS PROPERTIES, LLC (C-000165-18 AND C-000001-19, MIDDLESEX COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE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-2075-19
MICHAEL BALICE,
Plaintiff-Appellant,
and
ROSEWATER TRUST,
Plaintiff,
v.
AVS PROPERTIES, LLC,
Defendant-Respondent,
______________________________
RONALD OTTAVIANO, Trustee,
and ROSEWATER TRUST,
Plaintiffs,
and
MICHAEL BALICE,
Plaintiff-Appellant,
v.
AVS PROPERTIES, LLC
Defendant-Respondent.
________________________________
Submitted April 19, 2021 – Decided August 4, 2021
Before Judges Rothstadt and Susswein.
On appeal from the Superior Court of New Jersey,
Chancery Division, Middlesex County, Docket Nos. C-
000001-19 and C-000165-18.
Michael Balice, appellant pro se.
Respondent has not filed a brief.
PER CURIAM
Plaintiff Michael Balice appeals from a December 10, 2019 Chancery
Division order dismissing without prejudice his complaints against defendant
AVS Properties, LLC (AVS). Plaintiff seeks declaratory and injunctive relief
and damages relating to the court-ordered public auction of a house in Metuchen
that was owned by Rosewater Trust and in which Balice resided as a tenant.
AVS was the winning bidder at the public auction and was not involved in the
federal tax litigation that led to the court-ordered sale. We affirm the dismissal
of the complaints against AVS substantially for the reasons patiently explained
by the Chancery judge on the record.
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The litigation involving the Metuchen home is protracted and this appeal
comes to us by a circuitous route. We discern the following facts and procedural
history from the record before us, which includes a detailed written opinion
rendered on July 15, 2019 by a United States District Court judge. Ottaviance
v. AVS Props., LLC, No. 18-CV-16429 (D.N.J. 2019). In 2014, the Internal
Revenue Service (IRS) brought a federal tax collection action against Balice and
his former spouse. United States v. Balice, No. 14-CV-3937 (D.N.J. 2014). The
IRS reduced to judgment the overdue tax liability against the Balices. The
United States District Court found that Rosewater Trust—the nominal owner of
the Metuchen property—was Balice's nominee or alter ego. The federal judge
issued an order directing Balice to vacate the premises and authorizing the IRS
to sell the property at public auction. AVS Properties submitted the winning
bid. The federal judge confirmed the sale and directed the distribution of the
proceeds, applying a portion to plaintiff's unpaid tax liabilities. The federal
judge also directed the United States government to convey the real property to
AVS by deed.
Balice thereafter filed a series of motions in federal court that argued, inter
alia, that the federal income tax is unconstitutional. The federal judge issued
fifteen decisions rejecting those motions. A federal Magistrate judge issued nine
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similar decisions. Balice appealed all twenty-four decisions, which were
subsequently affirmed by the Third Circuit Court of Appeals in a single
consolidated opinion. United States v. Balice, No. 17-3134 (3d Cir. 2017).
Balice also filed a state court action in Superior Court, Middlesex County,
to prevent the sale of the home and enforcement of the federal court judgment.
The complaint was brought against the United States, the U.S. Attorney General,
two IRS agents, and the District Court judge who ordered the sale of the
property. That action was removed to federal court pursuant to 28 U.S.C.
§1442(a)(1). Balice v. United States, No. 17-CV-13601 (D.N.J. 2017). The
complaint was dismissed with prejudice based on sovereign and judicial
immunity and again affirmed by the Third Circuit. Balice v. United States, 763
F. App'x 154 (3d Cir. 2019).
Thereafter, Balice filed a second complaint in state court that was
substantively identical to the first state-court complaint. This second complaint
also was removed to federal court and subsequently dismissed. Balice v. United
States, No. 17-CV-10291 (D.N.J. 2017). Balice then filed for bankruptcy and
sought to discharge the tax debt by filing a series of motions. The bankruptcy
case was dismissed without discharge. In re Balice, No. 17-32967 (Bankr.
D.N.J. 2017).
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In August 2018, Balice filed a third state-court suit, again attacking the
basis of the underlying federal tax action. The third complaint once again
mirrored the allegations and claims made in the two prior state-court complaints.
The third action also was removed to federal court and dismissed. Balice v.
United States, No. 18-CV-13560 (D.N.J. 2018).
Balice and Rosewater Trust next filed a complaint against AVS seeking
declaratory and injunctive relief and a complaint seeking damages. This time,
plaintiff did not name federal agencies as defendants. Plaintiff alleges that AVS
committed an "unlawful . . . invasion of the plaintiff's . . . property." Plaintiff
contends AVS violated several New Jersey statutes and the New Jersey
Constitution in seeking to enforce the foreign judgment—that is, the federal
court orders that directed the sale of the property and directed the United States
government to convey the property to AVS.
The complaints against AVS were first heard in federal court. As noted,
the United States government was not named as a defendant but moved to
intervene and dismiss the complaint. Plaintiff moved to remand the matter to
state court. The federal judge granted plaintiff's motion to remand the case to
the New Jersey Superior Court, rendering moot the federal government's
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motions to intervene and dismiss the complaint. Ottaviance, No. 18-16429 (slip
op. at 3).
AVS did not respond to the complaint in Superior Court and plaintiff
moved for default judgment. That motion was heard at a proof hearing before
the Chancery judge on November 7, 2019. The Chancery judge ruled the
complaints against AVS are without merit. We agree.
Although the complaints at issue in this appeal are couched in terms of
AVS's unlawful invasion of plaintiff's property rights, the true gist of plaintiff 's
contention is a collateral attack against the sale of the Metuchen property that
had been ordered by the federal court. As the federal judge aptly noted in his
written opinion, "[a]lthough the complaint is brought against AVS, it actually
says very little about any supposedly wrongful conduct by that entity. Rather,
the alleged wrongdoing is attributed to the [United States] Government's
conduct in the underlying tax action in connection with its efforts to collect on
Balice's unpaid income tax liabilities."
The Chancery judge reached the same conclusion. We note that plaintiff's
counsel at the November 7, 2019 hearing acknowledged that the gravamen of
the complaints is that the Metuchen property should not have been sold at
auction. Counsel argued the order to sell the property was made "under false
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pretenses." The Chancery judge asked counsel, "You're arguing that the federal
district court erred in granting the order [to sell the property at public auction],
right?" Counsel replied, "Fundamentally, yes."
Relatedly, Balice's testimony at the hearing focused on misconduct by
United States government officials, not by AVS. Balice claimed, for example,
IRS "forged liens" and the United States Attorney "hid evidence." He also
claimed at the hearing that, "The [United States District Court] judge is getting
paid off from the IRS and press fund. He's not going to do anything. He's just
trying to make some money."
Plaintiff's reliance on the Uniform Enforcement of Foreign Judgments
Act, N.J.S.A. 2A:49A-25 to -33, is misplaced and unavailing. N.J.S.A. 2A:49A-
27 provides,
A copy of any foreign judgment [1] authenticated in
accordance with an act of Congress or the statutes of
this State may be filed in the office of the Clerk of the
Superior Court of this State. The clerk shall treat the
foreign judgment in the same manner as a judgment of
the Superior Court of this State. A judgment so filed
has the same effect and is subject to the same
procedures, defenses[,] and proceedings for reopening,
1
The term "foreign judgment" means "any judgment, decree, or order of a court
of the United States or of any other court which is entitled to full faith and credit
in this State." N.J.S.A. 2A:49A-26.
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vacating, or staying as a judgment of a Superior Court
of this State and may be enforced in the same manner.
The general rule in applying N.J.S.A. 2A:49A-27 is that a litigant seeking
to assert merit or substantive defenses against a foreign judgment must do so in
the forum jurisdiction. See Sonntag Rep. Serv., Ltd. v. Ciccarelli, 374 N.J.
Super. 533, 535 (App. Div. 2005). There is an exception, however, when the
litigant claims that his or her due process rights were violated in the forum
jurisdiction. In Sonntag, we explained,
In accordance with the constitutional [Full Faith and
Credit] mandate, New Jersey courts will enforce the
judgments entered by the courts of sister states unless
there has been a denial of due process. These due
process denials occur when "the rendering state 1)
lacked personal jurisdiction over the judgment debtor,
2) lacked subject matter jurisdiction, or 3) failed to
provide the judgment debtor adequate notice and an
opportunity to be heard." Choi v. Kim, 50 F.3d 244,
248 (3d Cir. 1995); see also Security Benefit Life Ins.
Co. v. TFS Ins. Agency, 279 N.J. Super. 419, 423 (App.
Div. 1995). Trial courts of sister states may inquire into
defenses of lack of jurisdiction in the foreign court or
fraud in procurement of the judgment, provided that
those issues have not been litigated in the forum court.
Firstar Bank Milwaukee, NA v. Cole, 678 N.E.2d 668,
670 (1997).
[Id. at 538 (emphasis added).]
We do not doubt that plaintiff's claims of government misconduct and
corruption in the federal tax litigation, if true, would constitute both fraud in
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procurement of the judgment and a deprivation of due process. Those claims,
however, were litigated and repeatedly rejected in federal courts—that is, the
forum jurisdiction. In these circumstances, we do not read N.J.S.A. 2A:49A-27
to require the Chancery court to decide, for example, whether the IRS forged
liens, the United States Attorney's Office hid evidence, or the United States
District Court judge was "paid off" by the IRS. We stress that plaintiff in his
latest complaints made a strategic decision not to name federal government
officials as defendants, naming only the entity that submitted the winning bid at
the court-ordered public auction. We believe the Uniform Enforcement of
Foreign Judgments Act does not contemplate that in these unusual
circumstances, AVS should be expected to re-litigate plaintiff's government-
conspiracy allegations in a state court proceeding to enforce the federal
judgment. Accordingly, the complaints against AVS at issue in this appeal were
properly dismissed.
To the extent we have not addressed them, any remaining arguments
raised by plaintiff lacks sufficient merit to warrant discussion in a written
opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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