CAVALIER CONSTRUCTION COMPANY, INC. v. JERSEY CENTRAL POWER & LIGHT COMPANY

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0997-05T10997-05T1

CAVALIER CONSTRUCTION

COMPANY, INC.,

Plaintiff-Respondent,

v.

JERSEY CENTRAL POWER & LIGHT

COMPANY,

Defendant,

and

MENK CORPORATION,

Defendant-Appellant.

______________________________________________________

 

Submitted October 17, 2006 - Decided November 6, 2006

Before Judges Coburn and Axelrad.

On appeal from the Superior Court of New Jersey,

Law Division, Ocean County, L-3996-05.

Scott R. Baron, attorney for appellant

(Mr. Baron, of counsel; Mr. Baron and

Jeffrey Zajac, on the brief).

Schuman & Butz, attorneys for respondent

(Harold A. Schuman, on the brief).

PER CURIAM

Two companies, plaintiff Cavalier Construction Company, Inc. ("Cavalier"), and defendant Menk Corporation ("Menk"), claim the right to a $114,576 deposit held by Jersey Central Power & Light Company ("JCP&L"). Summary judgment was granted to Cavalier, and Menk appealed.

The material facts are not in dispute. In 1989 Ridgeway Development Company ("Ridgeway") planned to develop housing on property it owned in the Township of Barnegat. It deposited $183,433.09 with JCP&L to insure payment for needed electrical services. It then borrowed a substantial sum of money from National State Bank ("NSB") to finance the project. The loan was secured by a mortgage that included an assignment of, among other things, the deposit given to JCP&L as "further security." Although effective immediately, the assignment said

that so long as there shall exist no event of default under any of the Loan Documents, there is reserved to the Mortgagor a right to use, possess and otherwise control all permits, licenses, approvals and contracts relating to and [affecting] the project.

Also in 1989, Ridgeway employed Cavalier to clear and grade the land, build and install water mains, sanitary sewer lines, and make drainage improvements, all for the sum of $979,000. Ridgeway defaulted on the mortgage loan, and on March 11, 1991, NSB obtained a final judgment of foreclosure. Ridgeway also failed to fully pay Cavalier for the work it performed on the land, and on April 19, 1991, Cavalier obtained a judgment against Ridgeway for $572,896.04. In May 1991, the sheriff sold the property to NSB for $100, and thereafter the property was conveyed to purchasers, who, in 1994, sold the property to a limited partnership. That sale included assignment of the JCP&L deposit "to the extent assignable."

On September 1, 1995, Cavalier obtained a writ of execution on its judgment against Ridgeway. On September 29, 1995, the land was sold to Menk with an assignment of "prepaid fees held by any . . . utility authority . . . ." That same day, the sheriff placed a levy on behalf of Cavalier on the deposit held by JCP&L, and shortly thereafter Cavalier filed the instant action against JCP&L. On December 19, 2003, an order was entered permitting Menk to intervene in this action.

On appeal, Menk's primary contention is that it is entitled to the deposit as an assignee of the rights assigned by Ridgeway to NSB. After carefully considering the record and briefs, we are satisfied that all of Menk's arguments are without sufficient merit to warrant discussion in a written opinion,

R. 2:11-3(e)(1)(E), and we affirm substantially for the reasons expressed by Judge Clyne in his thorough and well-reasoned written opinion of August 23, 2005. Nevertheless, we add the following comments.

An assignment clause within a mortgage may be absolute or merely intended as further security for the note or bond secured by the mortgage. New Jersey Nat'l Bank & Trust Co. v. Wolf, 108 N.J. Eq. 412, 413-14 (Ch. 1931); Stanton v. Metropolitan Lumber Co., 107 N.J. Eq. 345, 347-48 (Ch. 1930); 6 Am. Jur. 2d. Assignments 146 (1999). Here, the assignment clause expressly stated that the assignment was being given as "further security" for the loan, and there is no evidence of any contrary intent. Had NSB filed a timely deficiency action against Ridgeway, seeking Ridgeway's interest in the JCP&L deposit, Ridgeway would have been entitled to the deposit over NSB if it had been shown that the fair value of the foreclosed land equaled or exceeded the debt. Citibank, N.A. v. Errico, 251 N.J. Super. 236, 246-48 (App. Div. 1991). Since no such timely action was filed, it must be presumed that the conveyance of the land satisfied the debt in full, and Menk's claim, filed over ten years after the foreclosure sale, was both unsound and clearly barred by the statute of limitations, as Judge Clyne ruled.

 
Affirmed.

(continued)

(continued)

4

A-0997-05T1

November 6, 2006