Opinion
DOCKET NO. A-4357-13T2
04-08-2015
BIRCH GLEN CONDOMINIUM ASSOCIATION, INC., Plaintiff-Appellant, v. FRED BOAHENE and LETICIA DOE BOAHENE, Defendants-Respondents.
McGovern Legal Services, L.L.C., attorneys for appellant (Marlena S. Miller, on the brief). Respondents have not filed briefs.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Koblitz and Haas. On appeal from Superior Court of New Jersey, Law Division, Civil Part, Middlesex County, from Docket No. DJ-221668-13. McGovern Legal Services, L.L.C., attorneys for appellant (Marlena S. Miller, on the brief). Respondents have not filed briefs. PER CURIAM
Plaintiff, Birch Glen Condominium Association, appeals the April 11, 2014 order denying its motion for reconsideration of the denial of permission to sell the condominium belonging to defendants, Fred Boahene and Leticia Doe Boahene, to satisfy a judgment of $13,820. The judgment was obtained based on nonpayment of the $165 monthly maintenance fees and the associated fines, late fees, attorney costs and other assessments that had accrued since 2008. Deutsche Bank, which holds defendants' mortgage but is not a party in this action, opposed plaintiff's sale of defendants' condominium before the motion judge. On appeal, however, Deutsche Bank reversed its position and filed no brief in opposition. Defendants also filed no opposition. Because the motion judge made no finding as to whether plaintiff had made sufficient efforts to collect its relatively small judgment from defendants' personalty, we reverse and remand for further proceedings consistent with this opinion.
We refer to the two parties by their first names for ease of reference, intending no disrespect.
In July 2009, Deutsche Bank filed a foreclosure complaint against both defendants and recorded its lis pendens. On September 13, 2013, its foreclosure was dismissed.
Plaintiff is a nonprofit corporation formed under the New Jersey Condominium Act, N.J.S.A. 46:8B-1 to -38. Defendants, formerly husband and wife, acquired the deed to a unit in September 2006 for $422,000, $337,600 of which was financed by a mortgage with Washington Mutual Bank. Subsequently, the mortgage was assigned to Deutsche Bank.
In July 2009, plaintiff filed a complaint against Fred seeking payment of $1920 in unpaid condominium maintenance fees, plus late fees, fines, penalties and attorney fees, totaling $5467.32. Fred never answered plaintiff's complaint. In November 2009, a default judgment of $6366.36 was entered against him in the Law Division, Special Civil Part, Middlesex County. An asset search conducted the following month found only one checking account for Fred, with a $38.24 balance. In March 2010, a judgment of $6565.69 was entered against Fred, in favor of plaintiff, in the Law Division, Special Civil Part. Leticia and Fred also divorced in 2010. In April 2011, plaintiff sent Fred an information subpoena at the condominium address, which he did not complete or return.
The papers we received do not disclose whether defendants divorced before or after the judgment was entered in 2010.
Rule 6:7-2(b)(1) states: "An information subpoena may be served upon the judgment debtor, without leave of court, accompanied by an original and copy of written questions and a prepaid, addressed return envelope." Answers must be in writing, under oath or certification, and "returned to the judgment creditor's attorney within 14 days after service thereof." Ibid.
In June 2011, plaintiff's motion for an order for discovery concerning Fred's "property and things" was granted. Fred failed to appear for the asset deposition scheduled in June 2011. In January 2012, a subsequent asset search for Fred found a single checking account with a balance of $1.48.
In February 2013, plaintiff filed a complaint in the Law Division, Special Civil Part, against both Fred and Leticia, seeking $15,000 for maintenance fees, late fees, special assessments and other fees. Leticia answered the complaint. Plaintiff asserted that Fred failed "to plead or otherwise defend." On April 29, 2013, a stipulation of settlement between Leticia and plaintiff was entered, requiring Leticia to pay the $15,000 settlement in $375 monthly installments plus the ongoing regular monthly maintenance fee on the unit. Leticia defaulted on the settlement agreement. A default judgment of $15,000 was entered against Fred and Leticia on June 13, 2013. Four days later, plaintiff sent an information subpoena, addressed to both Fred and Leticia at the condominium address.
Leticia filled out a questionnaire, dated June 7, 2013, signed "Leticia Doe," stating that she received child support of $676 per month but no alimony. She also wrote that she had no bank accounts, had $500 cash on hand and received $667 per month in government benefits. She stated that she owned two cars, a 1996 Ford Explorer and a 2001 Audi, and did not indicate that either car had a lien.
Approximately one week later, a writ of execution naming Fred as the defendant was issued for the 2009 judgment of $6565.69. The writ of execution commanded the judgment be satisfied out of personal property, but continued: "[I]f sufficient personal property cannot be found then out of real property in your County belonging to the judgment debtor(s) at the time when the judgment was entered and docketed in the office of the Clerk of this Court or at any time thereafter, in whosesoever hands the same may be."
In August 2013, a "bank levy" on Fred's bank issued by plaintiff regarding the first judgment showed that Fred had no funds. Fred was ordered to appear for an asset deposition on September 30, 2013. Neither he nor Leticia appeared.
On October 23, 2013, plaintiff docketed the 2013 judgment for $15,000 in the Law Division, Special Civil Part. After a credit of $1190 was applied, the total amount due became $13,820.
Plaintiff's counsel certified that a writ of execution was then forwarded to the sheriff, requesting that the sheriff "inventory and levy the defendants' personal property." As written on the sheriff's response, dated December 2, 2013, the writ was addressed to Fred only at the condominium address. The sheriff's response stated: "No one by that name lives there, as per occupant." On December 30, 2013, plaintiff filed a notice of motion to permit sale of real property. Both Fred and Leticia were listed as defendants.
The accompanying certification by plaintiff's counsel stated that plaintiff requested an order for the sale of defendants' real property. In its accompanying certification, plaintiff's counsel listed the following as actions undertaken to locate defendants' personal property: information subpoenas, completed by Leticia only, in which she indicated that she was not currently employed and had no bank accounts; Fred's failure to respond to the information subpoena and his failure to appear for the asset deposition; and the sheriff's inability to serve the writ of execution. The certification stated that an order to enforce litigant's rights was sent by certified mail and was returned unclaimed. Leticia filed a certification in opposition to the motion, stating that she had no job and was a single mother of three with a child with disabilities.
On January 17, 2014, the motion judge denied plaintiff's motion without prejudice, writing on the order: "No proof of status of [defendants'] personalty [and] no service on mortgagee, or proof of no other liens in the chain of title."
On March 25, 2014, plaintiff filed a motion for reconsideration of the January 17, 2014 order. Both Leticia and Fred were named, with both of their addresses listed as the condominium address. Deutsche Bank was also given notice.
Leticia opposed the motion for reconsideration, as did Deutsche Bank. At oral argument on the motion for reconsideration, plaintiff and Deutsche Bank were represented by counsel; Leticia appeared pro se. Plaintiff's counsel acknowledged that, as the mortgagee, Deutsche Bank had "full priority" over plaintiff, except for the statutory provision giving a condominium association a priority for six months of maintenance fees. N.J.S.A. 46:8B-21(b)(1).
Fred did not appear. Plaintiff's counsel asserted that she believed he was still residing at the condominium because nothing plaintiff sent to him at that address was returned. Leticia said she had given counsel a new home address for Fred.
"A trial court's interpretation of the law and the consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995)(citations omitted). An appellate court is not bound by the legal conclusions of a trial court. State v. Gandhi, 201 N.J. 161, 176 (2010). "[C]onclusions of law are reviewed de novo." Zaman v. Felton, 219 N.J. 199, 216 (2014).
Plaintiff argues on appeal that the motion judge erred by failing to base his decision on whether to permit the sale of defendants' real property on whether plaintiff complied with the requirements set forth in R. 4:59-1(d) and N.J.S.A. 2A:17-1. We agree.
Rule 4:59-1 governs the process to execute the enforcement of a judgment. Subsection (d)(1), "Order of Property Subject to Execution; Required Motion," states:
Execution First Made Out of Personal Property; Motion. The execution shall be made out of the judgment debtor's personal property before the judgment-creditor may proceed to sale of the debtor's real property. If the debtor's personal property is insufficient or cannot be located, the judgment creditor shall file a motion, on notice, for an order permitting the sale of the real property. The motion, which shall not be joined with any other application for relief, shall be supported by a certification specifying in detail the actions taken by the judgment creditor to locate and proceed against personal property. . . .
"An execution of the sale of realty will not be valid unless the creditor has first sought resort to the debtor's personalty." Pressler & Verniero, Current N.J. Court Rules, comment 1.2.2 on R. 4:59-1 (2015). "[T]he test is not whether all possible measures to locate personalty have been undertaken, but rather has the judgment creditor exerted 'reasonable efforts' in good faith to locate personal property." Borromeo v. DiFlorio, 409 N.J. Super. 124, 137 (App. Div. 2009) (citations omitted).
N.J.S.A. 2A:17-1 addresses the sequence of execution against goods, chattel and real estate:
In every writ of execution which shall be issued against real estate, the sheriff or other officer to whom such writ may be directed shall be commanded that he cause to be made, of the goods and chattels in his county of the party against whom such execution issues, the debt, damages and costs or sums of money mentioned in such execution; and that, if sufficient goods and chattels of such party cannot be found in his county, he cause the whole or the residue, as the case may require, of such debt, damages and costs or sum of money to be made of the real estate whereof such party was seized on the day when such real estate became liable to such debt, damages and costs or sum of money, specifying the day particularly, or at any time afterwards, in the hands of any person then having the same.
"In order to comply with the requirements of N.J.S.A. 2A:17-1, the judgment creditor must make a good faith attempt to ascertain the location of the debtor's personalty within the county and supply this information to the sheriff along with the writ of execution." Borromeo, supra, 409 N.J. Super. at 137 (citing Raniere v. I & M Invs. Inc., 159 N.J. Super. 329, 337 (Ch. Div. 1978), aff'd, 172 N.J. Super 206 (App. Div.), certif. denied, 84 N.J. 473 (1980)).
In Borromeo, we found that the trial court's determination that the judgment creditor's efforts were reasonable was supported by substantial and credible evidence, when the creditor conducted a judgment search and issued interrogatories to which the debtor responded that he had "no bank accounts, physical assets, accounts receivable or automobiles." Ibid. "The debtor's denial alone will ordinarily satisfy the creditor's obligation to proceed first against personalty before levying upon real property." Pressler & Verniero, supra, comment 1.2.2 on R. 4:59-1 (citing Borromeo, supra, 409 N.J. Super. at 137).
In Pojanowski v. Loscalzo, 127 N.J. 240, 242 (1992), our Supreme Court found that the plaintiff had made a good faith effort to discover the debtor's personal property when he filed a motion to compel post-judgment deposition, and defendant-debtor responded either "negatively or evasively" to questions "about whether she had any checking account, stocks, bonds, property [or] any income other than social security . . . ." The Court concurred with our finding that "'[t]here can be no question but that she is insolvent, based on her own testimony, without any personal property to levy upon.'" Ibid.
Here, plaintiff never received a response from one of the presumed debtors, Fred, nor is it clear what actions, if any, were taken concerning Leticia's personalty, such as the two automobiles she claimed to own in June 2013. On the initial order denying plaintiff's motion, the judge wrote that plaintiff did not provide proof of defendants' personalty. At oral argument on the motion for reconsideration, the judge asked why plaintiff had not had Fred arrested, like "almost everybody does in debt collection cases[,]" when he failed to respond to the subpoena. The judge later stated: "[E]ven if I were to accept, which I probably would, that you made some efforts—whether or not they're adequate or not maybe is another issue, we may disagree about that or we may not - - is the bank prior to you or not?" (emphasis added).
There is a $1000 minimum value threshold for personalty that can be executed upon. N.J.S.A. 2A:17-19 states: "Goods and chattels . . . and personal property of every kind, not exceeding in value . . . $1,000.00 . . . shall not be liable to be seized or taken by virtue of any execution or civil process . . . ."
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The April 11, 2014 order does not expand on the judge's earlier findings, stating only that the motion is denied without prejudice. Thus, the judge made no express findings as to whether plaintiff's efforts to locate defendants' personalty comported with the "good faith" and "reasonable efforts" required. We therefore remand to the motion judge to permit plaintiff to submit further evidence to enable the court to determine whether plaintiff has met its burden of establishing good faith in making reasonable efforts to locate both defendants' assets to satisfy its judgment, or for a plenary hearing if there are material factual issues concerning those efforts.
Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION