PT CAPITAL, LLC v. WARREN J. SELLEN

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5758-11T4

PT CAPITAL, LLC,

Plaintiff-Respondent,

v.

WARREN J. SELLEN, HIS

HEIRS, DEVISEES AND PERSONAL

REPRESENTATIVES AND HIS, HER

THEIR OR ANY OF THEIR SUCCESSORS

IN RIGHT, TITLE AND INTEREST,

MRS. WARREN J. SELLEN, WIFE OF

WARREN J. SELLEN, and AMERICAN

BANKERS LIFE ASSURANCE CO.

OF FL n/k/a ASSURANT GROUP, FUNB -

CUSTODIAN FOR D H TRUSTEE n/k/a

WACHOVIA BANK, NA, STATE OF

NEW JERSEY,

Defendants,

and

BETH ANN FARREN,

Defendant-Appellant.

________________________________

ArguedJanuary 16, 2013 Decided May 3, 2013

Before Judges Simonelli and Koblitz.

On appeal from the Superior Court of New Jersey, Chancery Division, General Equity Part, Hudson County, Docket No. F-49621-10.

Richard D. Kraus argued the cause for appellant.

Joseph A. Ferrante argued the cause for respondent.

PER CURIAM

In this tax lien foreclosure matter, defendant Beth Ann Farren appeals from the July 13, 2012 order, which denied her motion to vacate a default judgment entered on April 5, 2012. We reverse.

Defendant jointly owned property located in Jersey City with Warren J. Sellen, who died in 2001 (the Jersey City property). Defendant also owned property in Wayne (the Wayne property), which was listed on the deed and tax records for the Jersey City property.

Defendant had been collecting rent from the Jersey City property, but had not paid taxes since 2007. In 2008, the municipality attached a valid tax lien on the property and sold the lien to American Tax Funding, who then sold it to plaintiff in 2010. Plaintiff filed a tax foreclosure complaint in October 2010.

Plaintiff attempted, unsuccessfully, to personally serve defendant at the Jersey City property. Plaintiff then conducted a postal inquiry, which revealed that the house on the property was vacant.

Plaintiff also attempted, unsuccessfully, to personally serve defendant at the Wayne property. The process server reported that defendant owned the Wayne property, but did not reside there. Plaintiff then mailed the summons and complaint to defendant at the Wayne address by regular and certified mail. The certified mail was returned "unclaimed" and the regular mail was not returned.

Plaintiff subsequently conducted a skip trace inquiry for defendant, which revealed she resided in Hawthorne (the Hawthorne property) and had a post office box in Wyckoff where she received mail (the Wyckoff address). Plaintiff's process server attempted, unsuccessfully, to personally serve defendant at the Hawthorne property, and reported that she was evading service. Plaintiff then mailed the summons and complaint to defendant at the Hawthorne property by regular and certified mail. The certified mail was returned marked "attempted, not known" and "no mail box," and the regular mail was returned marked "no mail receptacle."

Plaintiff did not attempt to serve defendant by mail at the Wyckoff address. Instead, plaintiff published a notice to absent defendant in The Jersey Journal. Following defendant's failure to file an answer, plaintiff obtained a default judgment.

Defendant timely filed a motion to vacate the default judgment pursuant to Rule 4:50-1(d), asserting that the court lacked jurisdiction because she was never served with the summons and complaint either personally or by mail, nor did she evade service. Defendant certified that she had resided at the Hawthorne property since 1979, and received mail at the Wyckoff address. She submitted a copy of her driver's license, which listed the Hawthorne property and Wyckoff address.

In opposition, shortly before oral argument, plaintiff submitted an affidavit from the process server who certified he had attempted to serve defendant on several occasions at the Hawthorne property, and the "[l]ights were on in the house and TV was on but no one [came] to the door." The process server also stated, "I confirmed name [of the person to be served] on the mailbox and there was a package on the porch." However, there was no mailbox at the Hawthorne property.

The trial judge denied the motion. Relying on the process server's affidavit, the judge found that defendant evaded personal service, and plaintiff complied with Rules 4:4-4 and 4:4-5 by attempting to serve defendant personally and by mail at the Jersey City, Wayne and Hawthorne properties. The judge did not mention the Wyckoff address. He concluded that the substituted service by publication was valid. This appeal followed.

On appeal, defendant contends the judge erred in denying her motion to vacate the default judgment and in failing to hold a plenary hearing.1 We review these contentions for abuse of discretion. Deutsche Bank Nat'l Trust Co. v. Russo, 429 N.J. Super. 91, 98 (App. Div. 2012).

The court may relieve a party from a final judgment or order if the judgment or order is void. R. 4:50-1(d). A tax sale foreclosure judgment is void where there was defective service of process on the property owner. M & D Assocs. v. Mandara, 366 N.J. Super. 341, 352-53 (App. Div.), certif. denied, 180 N.J. 151 (2004).

"[P]rocedural due process applies where state law does not entirely extinguish the taxpayers' property interest until foreclosure." Twp. of Montville v. Block 69, Lot 10, 74 N.J. 1, 8 (1977). Therefore, "under both state and federal constitutional guarantees . . . where an owner's name and address appear on the municipality's tax rolls, notice must be sent by mail before a taxpayer's right to redeem his property may be foreclosed." Id. at 19-20. The Court additionally noted that

[a]lthough not constitutionally impelled in this regard we concur that registered or certified mail, return receipt requested, should be utilized to notify a landowner of the foreclosure proceeding. If the letter is refused, or simply not accepted, notice by ordinary mail should be sent to that address and to the clerk of the court.

[Id. at 20 n.9.]

When notices sent to the property owner are returned as undelivered, additional reasonable steps are required under due process of law to notify the property owner. I.E.'s L.L.C. v. Simmons, 392 N.J. Super. 520, 530 (Law. Div. 2006). "[S]ervice by publication and posting does not meet due process requirements where the defendant's names and address are 'reasonably ascertainable.'" Ibid. (quoting New Brunswick Sav. Bank v. Markouski, 123 N.J. 402, 418-19 (1991)). Where the plaintiff has actual notice of the property owner's address change, a notice must be sent to the new address. Twp. of Brick v. Block 48-7, Lots 34, 35, 36, 210 N.J. Super. 481, 484-85 (App. Div.), certif. denied, 107 N.J. 67 (1986).

Here, plaintiff knew that defendant did not reside at the Jersey City and Wayne properties, and that she had addresses in Hawthorne and Wyckoff. Mail service at the Hawthorne property address was not effective because the mail was returned undelivered, and personal service was unsuccessful. Regardless of whether or not defendant was evading personal service at the Hawthorne property, plaintiff had an address for her in Wyckoff and had to take the additional step to serve her at that address by mail before resorting to substituted service by publication. Plaintiff's failure to do so renders the default judgment void.

1 We decline to address defendant's additional contention that the judgment must be vacated under Rule 4:50-1(f) based on the totality of circumstances. Defendant did not raise this issue before the trial judge. Alloway v. Gen. Marine Indus., L.P., 149 N.J. 620, 643 (1997).