UNITED SUPPLY COMPANY, INC. v. O'MALLEY & SONS, INC. et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1989-04T11989-04T1

UNITED SUPPLY COMPANY, INC.

Plaintiff-Appellant,

v.

O'MALLEY & SONS, INC. and

RICHARD O'MALLEY,

Defendants-Respondents,

CITIMORTGAGE, INC.,

Respondent.

________________________________________________________

 

Argued November 15, 2005 - Decided

Before Judges Kestin and R. B. Coleman.

On appeal from the Superior Court of New Jersey, Law Division, Somerset County,

L-42797-88.

Andrew R. Turner argued the cause for appellant United Supply Company, Inc.

Timothy P. Neumann argued the cause for respondent Richard O'Malley (Broege, Neumann, Fischer & Shaver, attorneys; Mr. Neumann of counsel and on the brief).

Jerome F. Gallagher, argued the cause for respondent Citimortgage Inc. (Olshan Grundman Frome Rosenzweig & Wolosky, attorneys; Mr. Gallagher, of counsel and on the brief; Kerry A. Duffy, on the brief.

PER CURIAM

On April 12, 1989, plaintiff United Supply Company obtained a judgment against defendants O'Malley & Sons Inc., a New Jersey Corporation, and Richard O'Malley, individually (O'Malley). Plaintiff docketed the judgment in 1990 but did not levy or execute upon it before O'Malley and his wife filed a voluntary petition in bankruptcy on August 11, 1989. The O'Malleys claimed an exemption as to real property in Toms River and that exemption was allowed. The Trustee filed a Notice of Abandonment and the real property passed through the bankruptcy proceedings, reverting to the O'Malleys, subject to the judgment lien which remained as an encumbrance upon the property. On October 23, 1990, the United States Bankruptcy Court released the O'Malleys from all dischargeable debts, which included the debt owed personally by O'Malley to plaintiff on the April 12, 1989 judgment.

In 2001, the O'Malleys, who were no longer the title owners of the real property but who continued to live there as renters, sought a discharge of plaintiff's judgment lien pursuant to N.J.S.A. 2A:16-49.1. There are two requirements for a discharge under N.J.S.A. 2A:16-49.1: (1) the debtor must wait one year and (2) the lien must have been subject to discharge in the bankruptcy proceeding. Plaintiff's lien was subject to discharge by the Trustee under 11 U.S.C.A. 544(a) since plaintiff never perfected the lien. Thus, the Trustee was a creditor of equal or higher rank regarding plaintiff's judgment lien and could have discharged it. Plaintiff's assertion that it levied on the property on September 11, 1989, is to no avail since that was during a time when the automatic stay due to the bankruptcy proceeding was in effect.

Plaintiff, who never attempted to execute on its lien after the Trustee's abandonment and release of the property nor for more than one year after the conclusion of the bankruptcy proceedings, initially succeeded in opposing the O'Malleys' motion to discharge the judgment lien. Upon a motion for reconsideration, the trial court entered an order dated October 1, 2004 vacating its order of August 10, 2004 and granted the O'Malleys' motion to discharge the lien against the real property.

 
Plaintiff has appealed from that October 1, 2004 order, as well as the order dated December 3, 2004 denying its request for a stay. We affirm the October 1, 2004 and December 3, 2004 orders of the Law Division substantially for the reasons expressed by Judge Derman in her written memorandum of decision on the motion for reconsideration and in her oral statement from the bench on December 3, 2004, denying a stay.

Affirmed.

(continued)

(continued)

3

A-1989-04T1

December 16, 2005