Opinion
DOCKET NO. A-4468-12T1
07-16-2014
US BANK CUST/CCTS CAPITAL, LLC, Plaintiff-Respondent, v. PRESTON J. ROSE, Defendant-Appellant.
Law Offices of David J. Khawam, LLC, attorneys for appellant (Mr. Khawam, on the brief). Honig & Greenberg, L.L.C., attorneys for respondent (Adam D. Greenberg, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Ostrer and Carroll.
On appeal from the Superior Court of New Jersey, Chancery Division, Camden County, Docket No. F-9554-11.
Law Offices of David J. Khawam, LLC, attorneys for appellant (Mr. Khawam, on the brief).
Honig & Greenberg, L.L.C., attorneys for respondent (Adam D. Greenberg, on the brief). PER CURIAM
Defendant Preston J. Rose appeals from a May 3, 2013, Chancery Division order denying his motion to vacate a default judgment of foreclosure on a tax sale certificate held by plaintiff US Bank, as custodian for CCTS Capital, LLC (US Bank). We affirm.
On October 15, 2009, US Bank purchased a tax sale certificate on 41 Pinewood Lane, formally Block 10201, Lot 7, in Winslow Township. The purchase amount was $2992.92, including $2541.72 in municipal taxes and interest, and $392.52 in amounts due to the Camden County Municipal Utilities Authority. US Bank also paid an additional $300 premium.
Defendant had owned the 41 Pinewood property since December 2002. He did not reside there, however. The property was apparently held for investment purposes. The tax sale certificate was duly recorded. Defendant continued to fail to pay taxes and other charges on the property. Once they became delinquent, US Bank paid them, including: $5554.08 on December 4, 2009; $6340.05 in five payments in 2010; $7303.28 in six payments in 2011; and $2841.86 on May 31, 2012.
US Bank served defendant a pre-foreclosure notice on October 6, 2011, reciting that $20,768 was then due as the redemption amount. On November 9, 2011, after defendant failed to redeem, US Bank filed a complaint seeking to foreclose on the tax sale certificate. The complaint alleged an amount due of
$2992.92, which was the original amount due for unpaid taxes and costs, together with subsequent taxes paid thereon with statutory interest due to the Plaintiff. In addition, the tax colector [sic] will add any additional interest, additional taxes and/or penalties that may become due and owing as of the date that redemption occurs.
The summons and complaint were served on March 16, 2012. Defendant later certified that he did not receive the complaint "because [he] was not living at 41 Pinewood Lane, Sicklerville, NJ 08081 rather [he] was living at 16 Stable Court, Sicklerville, NJ 08081." However, he apparently withdrew his challenge to service after US Bank produced a certification of personal service on his wife at 16 Stable Court. Defendant did not respond to the complaint and default was entered.
The record does not include the entry of the default, or service of it on defendant. See R. 4:43-1.
US Bank then filed with the court in August 2012 a proposed order setting time, place and amount of redemption. As entered on October 17, 2012, the order recited that the amount required to redeem the premises consisted of $31,276.35, plus interest on that sum from July 31, 2012, and costs of $1388.40. Any additional interest, taxes and/or penalties that become due would be added to the redemption amount. The order recited, "An exact redemption amount must be obtained from the municipal tax collector . . . ." The order set December 3, 2012 as the deadline for redemption. The order also provided that it was to be served upon defendant within twenty days.
On or before October 30, 2012, defendant personally acknowledged receipt of the certified mailing of the order setting time, place and amount of redemption. However, he failed to redeem, or otherwise seek any relief from the court. Final judgment of foreclosure was entered on February 5, 2013. The judgment recited that $31,276.35 was due as of July 31, 2012. The order vested title to the 41 Pinewood property in US Bank.
Soon thereafter, on February 19, 2013, defendant filed a motion to vacate the default judgment. In support of the motion, defendant argued the court should vacate the default judgment to resolve a discrepancy between the $2992.92 amount that the foreclosure complaint stated was due, and the $31,276.35 amount set forth in the order setting time, place and amount of redemption. The sole evidential support for the motion was defendant's certification, discussed above, denying service. See R. 1:6-6 (describing manner of presenting evidence on a motion). Defendant's counsel also argued that he, as counsel, attempted unsuccessfully to obtain an explanation of the amount from Winslow Township.
At oral argument on the initial return date of the motion, Judge Mary Eva Colalillo agreed to adjourn the motion to permit defendant to supplement the record with competent evidence to support his argument that he could not ascertain the redemption amount. Apparently a certification of counsel was filed, however, it is not before us. On the second hearing, the court read from a letter from defense counsel to US Bank's counsel dated November 1, 2012, inquiring as to the basis for the difference between $2992.92 and $31,276.35. Defense counsel argued that defendant was then prepared to redeem the property, and resell it to another buyer for $113,000, however, he provided no competent evidence of defendant's capacity to do so.
US Bank had provided evidence that defendant was in default of numerous other financial obligations, including federal income tax for several years, and unpaid child support.
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After reciting the procedural history of the case, Judge Colalillo denied the motion. She found that defendant was aware of the redemption amount — based on defense counsel's own letter — and defendant had not demonstrated excusable neglect in failing to answer the complaint. Judge Colalillo also found that defendant had not provided a meritorious defense to the action.
On appeal, defendant argues that he had a meritorious defense to the foreclosure action because of counsel's alleged inability to ascertain the redemption amount. He argues that defendant demonstrated excusable neglect by repeating the argument, apparently abandoned before the trial court, that service was not proper. He also argues that the court should have vacated the default judgment pursuant to Rule 4:50-1(e) and (f).
We affirm substantially for the reasons stated in Judge Colalillo's oral decision. Defendant's arguments lack sufficient merit to warrant further discussion in a written opinion. R. 2:11-3(e)(1)(E).
We add the following brief comments. The determination whether to grant a motion to vacate a default judgment pursuant to Rule 4:50-1 is left to the trial court's sound discretion, which we will not disturb absent an abuse of discretion. Mancini v. EDS ex rel. N.J. Auto. Full Ins. Underwriting Ass'n, 132 N.J. 330, 334 (1993). The rule balances "the strong interests in finality of judgments and judicial efficiency" with the equitable goal of avoiding unjust results. Manning Eng'g, Inc. v. Hudson Cnty. Park Comm'n, 74 N.J. 113, 120 (1977).
The movant bears the burden to show he is entitled to relief. Jameson v. Great Atl. & Pac. Tea Co., 363 N.J. Super. 419, 425-26 (App. Div. 2003), certif. denied, 179 N.J. 309 (2004). A defendant claiming excusable neglect under Rule 4:50-1(a) must also demonstrate a meritorious defense to the action. See Marder v. Realty Constr. Co., 84 N.J. Super. 313, 318 (App. Div.), aff'd, 43 N.J. 508 (1964). Relief under Rule 4:50-1(e) — which allows relief from a judgment whose continued prospective application is inequitable — must be supported by changed circumstances. DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 266 (2009). Under Rule 4:50-1(f), the so-called "catch-all" provision, a court may vacate a judgment for "any other reason justifying relief from the operation of the judgment or order." However, relief under this subsection is unavailable absent a showing of "exceptional and compelling circumstances." Schwartzman v. Schwartzman, 248 N.J. Super. 73, 77 (App. Div.) (internal quotation marks and citation omitted), certif. denied, 126 N.J. 341 (1991).
Applying these principles, we discern no mistake in the trial court's exercise of discretion. Defendant was properly served. His argument to the contrary is unsupported by competent evidence. He has failed to present a meritorious defense to the complaint. Moreover, his failure to redeem based on alleged confusion over the amount due is meritless. The complaint clearly provided that the amount due included not only the original $2992.92 cost of the tax sale certificate, but also all other taxes that thereafter came due and US Bank paid. Defendant, as the record owner of the property, presumably was aware of the taxes that accrued during the two years after US Bank acquired the tax sale certificate. See Bron v. Weintraub, 42 N.J. 87, 91 (1964) ("Everybody knows that taxes must be paid."). See also N.J.S.A. 54:5-60 (stating that the amount required to redeem a tax sale certificate includes the original amount paid at the tax sale, plus any subsequent liens paid by the lienholder, and costs).
Defendant also has demonstrated no change in circumstances warranting relief under Rule 4:50-1(e). Nor has he demonstrated "exceptional and compelling circumstances" allowing relief, particularly in light of the public policy of the Tax Sale Law, N.J.S.A. 54:5-1 to -137, to promote the marketability of tax titles, to enable municipalities to recover unpaid property taxes, and to return properties to the tax rolls. See, e.g., Town of Phillipsburg v. Block 1508, Lot 12, 380 N.J. Super. 159, 162 (App. Div. 2005).
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION