Opinion
DOCKET NO. A-3656-14T2
06-17-2016
JEREMY DOPPELT REALTY MANAGEMENT, L.L.C., DEFINED BENEFIT PLAN, Plaintiff-Respondent, v. A.F. JOHNSTON REALTY, L.L.C., Defendant-Appellant, and EFRAIM HERSHKOWITZ, Defendant.
Robert M. Rich argued the cause for appellant. Keith A. Bonchi argued the cause for respondent (Goldenberg, Mackler, Sayegh, Mintz, Pfeffer, Bonchi & Gill, attorneys; Mr. Bonchi, of counsel and on the brief; Matthew S. Maisel, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Leone and Whipple. On appeal from Superior Court of New Jersey, Chancery Division, Hudson County, Docket No. F-19269-13. Robert M. Rich argued the cause for appellant. Keith A. Bonchi argued the cause for respondent (Goldenberg, Mackler, Sayegh, Mintz, Pfeffer, Bonchi & Gill, attorneys; Mr. Bonchi, of counsel and on the brief; Matthew S. Maisel, on the brief). PER CURIAM
Defendant A.F. Johnston Realty, L.L.C. appeals a November 6, 2014 order denying its motion to vacate a judgment of foreclosure. We affirm.
The other defendant in this case, Efraim Hershkowitz, does not appear in the briefs or elsewhere in this litigation. Hershkowitz is only named as a mortgagee of the property that is the subject of this appeal. Accordingly, we refer only to A.F. Johnson Realty, L.L.C., when using the term "defendant." --------
Defendant owned property at 323 Johnston Avenue in Jersey City. After defendant failed to pay its real estate taxes on the property, the city sold the tax lien against the property on July 7, 2009 to Pat Carabellese. On May 24, 2013, Carabellese filed a complaint to foreclose on the tax sale certificate, and on June 27, 2013, filed a notice of lis pendens against the property with the Hudson County Register of Deeds.
When the foreclosure complaint was filed, defendant corporation was solely owned by Aaron Puretz. On January 15, 2014, Etta Ostreicher acquired a fifty percent shareholder interest in defendant, approximately eight months after Carabellese filed the foreclosure complaint. On April 9, 2014, Carabellese assigned his tax sale certificate to plaintiff.
In a June 2, 2014 order, the trial court set the amount, time and date for redemption of the premises from the tax sale certificate as $73,376.28, plus interest and costs, to the tax collector by no later than 4:00 p.m. on July 17, 2014. On July 21, 2014, the Jersey City Tax Collector executed an affidavit indicating that redemption had not been made. On July 23, 2014, plaintiff applied for final judgment. Two days later, on July 25, 2014, Ostreicher delivered a certified check in the amount of $79,026.93 to the tax collector. The check listed Mark J. Nussbaum as the remitter.
On August 19, 2014, plaintiff sent a letter to the tax collector, objecting to redemption, asserting the attempted redemption was invalid and indirect and requesting the tax collector to take no action pending further investigation. On August 29, 2014, a final judgment of foreclosure was entered in favor of plaintiff. In a September 10, 2014 letter, defendant informed plaintiff that the redemption amount had been timely paid, and enclosed documentation that Ostreicher had acquired an interest in the LLC in January 2014. The letter made no mention of Nussbaum, whose name appeared on the check as the remitter.
On September 19, 2014, defendant moved to vacate the final judgment. In support of its motion, defendant submitted a certification by Puretz, which stated that: (1) both he and Ostreicher are shareholders of defendant; (2) Ostreicher delivered the cashier's check to the tax collector on July 25, 2014; (3) there were sufficient funds to cover the check; and (4) the redemption check had been rejected by plaintiffs. On October 14, 2014, plaintiff filed a cross-motion to compel discovery and for a constructive trust to be placed upon any transaction between defendant and Ostreicher. On November 6, 2014, the trial court denied defendant's motion to vacate the final judgment, finding that Nussbaum was a third-party investor who had not properly intervened in the foreclosure, that the attempted redemption was invalid, and accordingly, that defendant had failed to provide cause to vacate the final judgment.
On November 21, 2014, defendant moved for reconsideration with supporting documents which included a certification by Ostreicher; a receipt from the Jersey City Division of Tax Collection for the above referenced amount, indicating: "Received From: A.F. Johnston Realty, LLC;" a certification by Nussbaum, certifying that he was Ostreicher's attorney, and that the monies used to purchase the certified check belonged to "Etta Ostreicher and no one else;" and a copy of the certified check. The trial court denied the motion on December 19, 2014. On January 13, 2015, the trial court dismissed plaintiff's cross-motion as moot. This appeal followed.
Defendant asserts that the trial court erred in entering a final judgment of foreclosure because it properly redeemed the tax certificate; it was the party that redeemed the certificate; and that the trial court's finding, that Nussbaum was the remitting party, was not supported by evidence in the record. We disagree.
In Simon v. Cronecker, 189 N.J. 304, 318 (2007), our Supreme Court held that after the filing of an action to foreclose a tax certificate on property, a third party investor purchasing the property may not redeem the certificate without first complying with the Tax Sale Law, N.J.S.A. 54:5-1 to -137, which delineates the competing rights of tax certificate holders and property owners. Under a plain reading of N.J.S.A. 54:5-89.1 and 54:5-98, a third-party investor must intervene in the foreclosure action before attempting to redeem a tax sale certificate at the tax collector's office. The Simon Court explained that "[t]he sale of a tax certificate is a conditional conveyance of the property to the purchaser, subject to a person with an interest in the property having the right to redeem the certificate, as prescribed by statute." Simon, supra, 189 N.J. at 318. "Unless redemption occurs, however, a purchaser who forecloses on the tax certificate becomes the owner of the property in fee simple." Ibid. (citing N.J.S.A. 54:5-87).
There are no restrictions on how a third-party investor may arrange for the purchase of a property and pay the redemption on a tax certificate prior to the filing of a foreclosure complaint. Ibid. "After the filing of the foreclosure complaint, however, both the property's sale and the redemption procedure are subject to court supervision, primarily to protect property owners from exploitation by third-party investors." Ibid. "To facilitate judicial review of the adequacy of the consideration offered to the owner, the [Tax Sale] Act requires that third-party investors who seek either directly or indirectly to acquire the property and redeem the tax sale certificate intervene in the foreclosure action." Ibid.
Once the foreclosure complaint has been filed, a third-party investor must file a motion to intervene which "establish[es] that he has offered more than nominal consideration for the interest." Id. at 338. "Without leave of court, the investor has no right to participate, directly or indirectly, in the redemption process." Ibid. Neither Ostreicher nor Nussbaum filed motions to intervene, Ostreicher acquired her fifty percent interest in defendant after the foreclosure complaint had been filed, and no showing was made that she had offered more than nominal consideration for the interest. Thus, under Simon, Ostreicher was a third-party investor, and neither she nor Nussbaum had any right to redeem the property from the tax sale.
Moreover, "[w]hen a person attempts to redeem a tax certificate, the tax collector need only look to the foreclosure complaint for the names of persons with an interest in the property." Id. at 336. "Any person not named in the complaint must move to intervene in the action. Without the court's approval, that person is not entitled to redeem the tax certificate." Ibid. Here, the only name on the check was Mark J. Nussbaum, who was not named in the complaint. Thus, he could not redeem the certificate, and the tax collector should not have issued a receipt to defendant.
Defendant did not allege that Nussbaum was an attorney for Ostreicher until it moved for reconsideration of the denial of its motion to vacate. Defendant concedes that this information was available to defendant. There is no evidence that the remitter of the check, Mark J. Nussbaum, was anything but a third-party investor. The certifications alleging that Nussbaum was acting as the agent and attorney of Ostreicher, and that the funds used to purchase the certified check belonged solely to Ostreicher, were not submitted in defendant's motion to vacate the final judgment. The certification submitted in support of the motion to vacate the final judgment represented that Ostreicher delivered the cashier's check to the tax collector, and makes no mention of Nussbaum whatsoever. Therefore, the trial court's denial of reconsideration was a proper under Rule 4:49-2. A "motion is properly denied if based on unraised facts known to the movant prior to the entry of judgment." Pressler & Verniero, N.J. Current Court Rules, comment 2 on R. 4:49-2 (2016) (citing Del Vecchio v. Hemberger, 388 N.J. Super. 179, 188-189 (App. Div. 2006); Palombi v. Palombi, 414 N.J. Super. 274, 289 (App. Div. 2010)). A motion based on legal arguments that were not presented to the court in the underlying motion is also properly denied. Ibid. (citing Medina v. Pitta, 442 N.J. Super. 1, 18 (App. Div.), certif. denied, 223 N.J. 555 (2015)); see also Hinton v. Meyers, 416 N.J. Super. 141, 150 (App. Div. 2010) (rejecting motion based on certification that differed from deposition testimony).
"[T]he decision to grant or deny a motion for reconsideration rests within the sound discretion of the trial court." Pitney Bowes Bank, Inc. v. ABC Caging Fulfillment, 440 N.J. Super. 378, 382 (App. Div. 2015) (citation omitted). "Reconsideration should be used only where '1) the [c]ourt has expressed its decision based upon a palpably incorrect or irrational basis, or 2) it is obvious that the [c]ourt either did not consider, or failed to appreciate the significance of probative, competent evidence.'" Ibid. (quoting D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)). "Thus, a trial court's reconsideration decision will be left undisturbed unless it represents a clear abuse of discretion." Ibid. (citing Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994)). We discern no abuse of discretion on the part of the trial court.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION