Opinion
A-1777-20
12-15-2022
CITY OF NEWARK, a Municipal Corporation of New Jersey, Plaintiff-Respondent, v. BLOCK 5088, LOT 1 (SCHEDULE #106) [Claim #1140], ASSESSED TO: CUNHA, ANTONIO F. AND MARIA A., 343-351 SOUTH STREET, Defendants-Appellants.
Michael T. Stewart argued the cause for appellants (Peri & Stewart, LLC, and Kyle T. Armstrong (Peri & Stewart, LLC) of the Virginia and Washington DC bar, admitted pro hac vice, attorneys; Michael T. Stewart, and Kyle T. Armstrong, on the briefs). 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).
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.
Argued December 5, 2022
On appeal from the Superior Court of New Jersey, Chancery Division, Essex County, Docket No. F-025265-15.
Michael T. Stewart argued the cause for appellants (Peri & Stewart, LLC, and Kyle T. Armstrong (Peri & Stewart, LLC) of the Virginia and Washington DC bar, admitted pro hac vice, attorneys; Michael T. Stewart, and Kyle T. Armstrong, on the briefs).
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 Whipple, Mawla and Marczyk.
PER CURIAM.
In a prior appeal, we reversed and remanded a portion of the trial judge's order, which denied defendant Maria Cunha's motion to vacate a default judgment of foreclosure entered in favor of plaintiff the City of Newark, pursuant to Rule 4:50-1(f). The matter now returns, with the judge having conducted the remand proceedings and entered a January 20, 2021 order denying defendant's motion. We affirm.
City of Newark v. Block 5088, No. A-5457-18 (App. Div. Apr. 8, 2020) (slip op. at 8).
The parties are familiar with the underlying facts, which we recounted in our prior opinion and need not repeat here. Block 5088, (slip op. at 1-5). This is a tax foreclosure matter involving a commercial property where taxes have gone unpaid for a lengthy period. When plaintiff obtained the default judgment, defendant moved to vacate it arguing: The judgment was void pursuant to Rule 4:50-1(d) for lack of notice; there was excusable neglect pursuant to Rule 4:50-1(a), because plaintiff refused to provide defendant's family members with a redemption amount; and, for relief pursuant to Rule 4:50-1(f), because defendant had contracted to sell the property and if the foreclosure judgment stood, plaintiff would receive a windfall and defendant would lose substantial equity. Id. at 4.
We affirmed the trial judge's rulings related to the arguments raised under Rule 4:50-1(a) and (d). Id. at 6-7. As for the argument raised under Rule 4:50-1(f), we noted defendant represented she had a buyer, and the attorney review and inspection processes had concluded, which conflicted with the judge's findings that a sale could not be consummated. Moreover,
considering the judge was "aware . . . [the elderly defendant] . . . will lose significant equity if the [c]ourt does not vacate the default judgment" and found "the contract in the amount that is stated would in fact cover the judgment amount due in full to [plaintiff,]" more findings were necessary before the judge could conclude the equities weighed in favor of plaintiff.[Id. at 9 (alterations in original).]
The remand proceedings revealed no evidence of a bona fide purchaser for the property. Defendant produced neither a contract nor a certification from the buyer detailing the alleged sale or tentative closing date. Instead, defendant proposed her grandson would redeem the property, but the grandson also lacked the funds to redeem. Defendant also resuscitated her prior arguments for relief under Rule 4:50-1(a) and (d), which the trial judge rejected because of our affirmance of her rulings and the limited scope of our remand.
Regarding the Rule 4:50-1(f) argument, the trial judge concluded the information provided did not convince her there was a likelihood defendant would be able to redeem the property. "There's really nothing in the record to give the [c]ourt a level of comfort that the . . . more than $470,000 needed to redeem this tax sale certificate now can be procured." She found the equities favored plaintiff because "defendant has not paid property taxes for at least [sixteen] years . . . . [T]his is a commercial property . . . with two businesses that have been [in] existence since . . . the mid 1990s. It's not a residence. It's a[n] . . . income generating property." The judge concluded as follows:
I do find under N.J.S.A. 54:5-85 that [plaintiff] is entitled to tax title here[,] which it has held for nearly five years. And, that [it] has a right to predictability in its tax receipts and to have residents who pay their taxes. Also, in light of the equities, this [m]otion to [v]acate the [j]udgment, originally before me, was brought more than three years after the final judgment was entered.
The judge denied the motion to vacate the judgment.
On appeal, defendant re-asserts the arguments under Rule 4:50-1(a) and (d) and repackages them as grounds for reversal under Rule 4:50-1(f). We decline to address these arguments again because they were adjudicated with finality and were not within the scope of the remand. As for the original Rule 4:50-1(f) claim subject to remand, defendant urges reversal on grounds the equities lie in her favor for the same reasons she articulated to the trial judge during the remand proceedings.
Whether to vacate a judgment pursuant to Rule 4:50-1 is a decision that rests in "the sound discretion of the trial court, which should be guided by equitable principles . . . ." Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994); see also U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467 (2012). An abuse of discretion exists "when a decision is 'made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.'" Guillaume, 209 N.J. at 467-68 (quoting Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123 (2007)).
"A court should view 'the opening of default judgments . . . with great liberality,' and should tolerate 'every reasonable ground for indulgence . . . to the end that a just result is reached.'" Mancini v. EDS ex rel. N.J. Auto. Full Ins. Underwriting Ass'n, 132 N.J. 330, 334 (1993) (quoting Marder v. Realty Constr. Co., 84 N.J.Super. 313, 319 (App. Div.), aff'd, 43 N.J. 508 (1964)). "In the tax sale certificate foreclosure context[,] considerations of public policy and equity are also taken into account." M&D Assocs. v. Mandara, 366 N.J.Super. 341, 350 (2004). "However, where the motion is based on R[ule] 4:50-1(f), . . . the motion must be supported by 'truly exceptional circumstances' in the interests of finality of judgments." Ibid (quoting Little, 135 N.J. at 286).
Pursuant to these principles and our review of the record, we conclude there were no exceptional circumstances to warrant disturbing the finality of the judgment entered in plaintiffs favor. The record supports the trial judge's finding the equities did not favor defendant. The findings were rationally based on the evidence presented and did not constitute an abuse of discretion.
Affirmed.