EAST WINDSOR FAIRGROUNDS, INC. v. SHEPHERD MERLE STEPHENS, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6103-04T26103-04T2

EAST WINDSOR FAIRGROUNDS, INC.,

Plaintiff-Respondent,

v.

SHEPHERD MERLE STEPHENS, his heirs,

devisees and personal representatives,

and his, her or their successors in

right, title, and interest, IRENE

STEPHENS and DOROTHY STEPHENS,

Defendants-Appellants.

________________________________________________________________

 

Submitted July 5, 2006 - Decided July 26, 2006

Before Judges Skillman and Lisa.

On appeal from the Superior Court of New Jersey, Chancery Division, Mercer County, C-42-04.

James E. Sacks-Wilner, attorney for appellants.

Sham, Shipers & Lonski, attorneys for respondent (Jason E. Shamy, on the brief).

PER CURIAM

Defendants appeal from a summary judgment in favor of plaintiff, quieting title to real property based on plaintiff's adverse possession. Defendants argue that plaintiff's adverse possession claim should have been precluded under the unclean hands doctrine. We reject this argument and affirm.

By virtue of a 1954 deed, Shepherd Merle Stephens and Irene Stephens, his wife, acquired title to the property which is the subject of this dispute. The property is in East Windsor Township and is identified on the tax map as block 47, lot 29. In 1965, Fred L. Dey entered into an agreement with plaintiff for the sale of real estate, by which Dey would convey to plaintiff a tract of land contiguous to lot 29. The agreement provided that Dey would also convey all of his right, title and interest to four tax sale certificates. One of those certificates was dated December 14, 1956, recorded in the Mercer County Clerk's Office, and assigned by the Township of East Windsor to Dey. The assignment was also recorded. The certificate was identified as covering lot 29, "and being premises formerly owned by S. Stephens, also k/a Stephen Shepard." Dey and his wife executed a deed to plaintiff on August 24, 1965, which was recorded in the Clerk's Office. The deed conveyed a tract of land containing forty-nine-and-fifteen-hundredths acres, and which excepted certain listed parcels, including the parcel conveyed to Shepherd Merle Stephens and his wife in the referenced 1954 deed.

After the conveyance to plaintiff in 1965, the tax assessor began forwarding tax bills for lot 29 to plaintiff. The assessor did the same with respect to the tax bills pertaining to the other parcels covered by the tax sale certificates transferred by Dey in his agreement of sale with plaintiff and referenced in his deed to plaintiff. Plaintiff has paid all real estate taxes on lot 29 since 1965.

Shepherd Merle Stephens and Irene Stephens are deceased. Their title interest to lot 29 passed to their heirs, namely their children, who are defendants in this action.

Since 1965, plaintiff has used lot 29 as part of its operation of a raceway and fairgrounds. In particular, lot 29 is used as a parking lot. Plaintiff mows the lawn on lot 29 and otherwise maintains it for use as a parking lot. Plaintiff's operation is seasonal, from Spring to Fall. During the off-season, plaintiff bars access to lot 29 by use of locked cable wires. The only access to lot 29 from the nearest public street, Airport Road, is by way of private roadways owned by plaintiff. Since 1965, plaintiff's operation, including lot 29, has been identified to the public by virtue of signs placed on Airport Road.

Since 1965, no one has questioned plaintiff's purported ownership or right to use lot 29. Plaintiff's principals have certified that based upon the provisions and representations in the agreement of sale and deed from Dey, they mistakenly understood since 1965 that plaintiff owned lot 29. Plaintiff's principals deny engaging in any action to induce the tax assessor to send the tax bills for lot 29 to plaintiff. Although we have not been furnished with documentation, from the colloquy at oral argument it appears that the tax bills sent to plaintiff were designated Stephen Shepherd in care of Don Jones. Donald Jones, Sr. was the principal of plaintiff in 1965. In 1982, he turned over ownership of the property to his son, Donald Jones, Jr., and his daughter, Donna Jones. Apparently similar "in care of" designations were also utilized by the assessor in sending the bills to plaintiff pertaining to the other properties covered by tax sale certificates conveyed to plaintiff by Jones. In his deposition testimony, Donald Jones, Sr. denied taking any action to cause the assessor to make any modification to the tax bills. According to him, "[t]he township changed it when they got the deed, what do you call it, from the lawyers."

Plaintiff commenced this action in 2004. By that time, it had openly, exclusively and adversely occupied and exercised dominion and control over lot 29, without interruption, for thirty-nine years. By such conduct, plaintiff was entitled to obtain title by adverse possession. N.J.S.A. 2A:14-30; J & M Land Co. v. First Union Nat'l Bank, 166 N.J. 493, 496-97 (2001). The statute pertains to possession "in whatever way or manner such possession might have commenced or have been continued." N.J.S.A. 2A:14-30. "Any entry, whether mistaken or intentionally hostile, is sufficient to support a claim of title by adverse possession, provided it is exclusive, continuous, uninterrupted, visible and notorious." Patton v. N. Jersey Dist. Water Supply Comm'n, 93 N.J. 180, 187 (1983).

Defendants do not dispute that plaintiff has openly and adversely possessed lot 29 without interruption for more than thirty years. It defends plaintiff's claim by asserting that by fraudulent means, plaintiff caused the tax assessor to alter the tax bills and send them to plaintiff. Defendants provide no direct evidence of such fraudulent conduct. They argue that a reasonable inference can be drawn that the assessor would not have implemented the "in care of" designation without authorization from the title owner, and therefore plaintiff must have provided the assessor with a forged document to that effect. Based upon the alleged fraudulent conduct, defendants argue that plaintiff should be barred by the doctrine of unclean hands from obtaining title by adverse possession. Defendants also argue that plaintiff has subverted the notice provisions of the Tax Sale Law (N.J.S.A. 54:5-1 to -137), because it did not foreclose the tax sale certificate covering lot 29, which would have required notice to the title owner and an opportunity to redeem. Instead, plaintiff chose to forego tax foreclosure, continued paying taxes for thirty-nine years, and then began this quiet title action.

Applying the Brill standard, Judge Shuster viewed the evidence in the light most favorable to defendants. He therefore assumed for purposes of analysis "that plaintiff knew that he was paying the taxes on the property and that he might have known that it was still owned by Mr. Stephens." The judge concluded, however, "that even applying a generous interpretation of the facts that such an action was at most in the nature of 'bootstrapping' himself into the property rather than the perpetration of fraud." The judge also rejected the Tax Sale Law argument, noting that plaintiff had the right to forego the available remedy of foreclosure, which did not prejudice defendants because it in no way interfered with their right or ability to reenter or assert their right to the property for decades, while it was being openly used by plaintiff. The judge concluded that the doctrine of unclean hands was therefore inapplicable. He found the conclusion bolstered by the statutory language contemplating any manner of commencement of and continued possession of property.

We agree with Judge Shuster's analysis. The record contains no evidence from which it could be reasonably inferred that plaintiff engaged in any fraudulent conduct. Defendants' contention in that regard is pure speculation. Even if it is assumed that plaintiff, by virtue of the "in care of" designation on the tax bills knew, might have known, or should have known that defendants were the title owners of the lot 29, such knowledge would not defeat its adverse possession claim. The very basis of the claim supposes that the claimant occupies the land adversely to a title owner.

We also find no merit in the Tax Sale Law argument. Plaintiff did nothing wrong by foregoing its available remedy of foreclosure of the tax title lien. Its decision to forego that remedy in no way prejudiced defendants. Defendants paid no taxes on this property since sometime prior to 1965. Tax records are, of course, public records, and it is incumbent upon a property owner to inquire of the assessing authorities if there is any question as to why the owner is not receiving a tax bill. During all of these years of nonpayment by defendants of taxes on lot 29, that property was being openly and actively occupied and used by another party. Any detriment to defendants resulted from their own lack of diligence.

 
Affirmed.

Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

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A-6103-04T2

July 26, 2006