GEORGE BARNES v. WILLIAM J. PITRE, JR. et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6062-04T36062-04T3

GEORGE BARNES, TRUSTEE OF

THE BERGEN EASTERN PENSION

TRUST,

Plaintiff-Appellant,

v.

WILLIAM J. PITRE, JR. and

DEBORAH PITRE,

Defendants-Respondents.

________________________________________________________________

 

Argued May 3, 2006 - Decided June 28, 2006

Before Judges Parker, Grall and Newman.

On appeal from the Superior Court of New

Jersey, Chancery Division, Bergen County,

Docket No. F-1710-03.

Paul H. Schafhauser argued the cause for

respondent (Herrick, Feinstein, attorneys;

Mr. Schafhauser, on the brief).

William C. La Tourette argued the cause for

respondents (Hubschman & Roman, attorneys;

John J. Roman, Jr., of counsel; Mr. La Tourette,

on the brief).

PER CURIAM

In this action to foreclose on a tax sale certificate, plaintiff George Barnes, as Trustee of the Bergen Eastern Pension Trust, appeals from an order entered on April 19, 2005 vacating a default judgment entered on May 14, 2003; and an order entered on June 13, 2005 denying plaintiff's motion for reconsideration.

Final judgment in foreclosure was entered on May 14, 2003 in favor of plaintiff. Twenty-two months later, defendants William J. Pitre, Jr. and Deborah Pitre moved to vacate the judgment. The Chancery Division granted the motion under R. 4:50-1(f), finding as exceptional circumstances (1) Mr. Pitre's claim that he first learned in August 2004 that his wife had not paid the real estate taxes and had allowed a foreclosure judgment to be entered; and (2) the disparity between the amount plaintiff paid for the tax sale certificate and the property's alleged value. The trial judge made these findings notwithstanding the fact that plaintiff had fully complied with all of the rules and had properly served all notices on defendants. The judge stated on the record that "no one is suggesting that [plaintiff] did anything wrong. There is a question posed as to whether or not due process has been met as it pertains to the husband, but that does not reflect on either [plaintiff's counsel] or [his] client."

In this appeal, plaintiff argues that (1) defendants failed to move timely to vacate the judgment; (2) the trial court erred in finding that the judgment should be vacated on the ground of exceptional circumstances; and (3) defendants should be required to pay plaintiff's legal fees.

The alleged facts pertinent to this appeal are as follows. Defendants were married in 1979 and William purchased the family home in Maywood in October 1981 in his name alone. By 1989, he owned the home "free and clear of any mortgage or other encumbrances." During the course of the marriage, William was continuously employed and supported the family, which grew to include three sons.

Deborah certified that she "would occasionally discard bills, so that [her] husband would not feel pressured about money" and "just threw out mail that had to do with bills." She began to shop and gamble compulsively and attested that she "would steal [her] husband's money and . . . hide the bills . . . and lie to [her] husband about them."

In about 1997, Deborah obtained a job outside the home and was earning her own money. Rather than pay the bills, however, she began to gamble and shop more compulsively. She "threw all the mail into plastic garbage bags and hid them without looking at the envelopes." She claimed that she "never gave any of the mail to [her] husband, neither the bills nor the letters from the lawyer nor any notices from the Court." She told her husband that she had paid the taxes in person and in cash.

On July 21, 2004, Deborah fell and broke her hip. William then began to see the mail and discovered a tax bill showing someone else was the owner of his home. He immediately called the tax assessor's office and was advised that his home had been sold in a tax foreclosure in 1998. William attested that he was "shocked and stunned." He then began to "straighten out the house" and "discovered seven or eight plastic garbage bags full of unopened mail that [his] wife never showed to [him]. [He] found summonses and court notices for parking tickets . . . past-due credit card bills . . . [and] 300 items of clothing that were never worn, many still in the bags provided by the store at the time they were purchased, with the original receipts."

After discovering the tax sale foreclosure, William offered to pay the back taxes, but plaintiff was unwilling to vacate the foreclosure. A month after breaking her hip, Deborah was diagnosed with breast cancer and underwent intensive treatment. William maintains that because he was preoccupied with Deborah's illnesses and the financial chaos, he was unable to address the legal aspects of the foreclosure in a more timely manner. Plaintiff took no action to evict the family since the final judgment was entered on May 31, 2003.

On February 28, 2005, defendants moved to vacate the default. In a written opinion dated April 8, 2005, the trial judge granted the motion based upon exceptional circumstances pursuant to R. 4:50-1(f). The judge rendered a written opinion detailing his findings of fact and conclusions of law.

Plaintiff moved for reconsideration and sought (1) either to reinstate the final judgment or, in the alternative, payment of the full amount due and owing on the tax sale certificate, including the $6,400 premium; (2) payment of all taxes subsequently paid by plaintiff, plus interest on all such sums at a rate of 18% (except for the first $1,500, which was to bear interest at 8% per annum); (3) payment of all legal fees and costs incurred by plaintiff in connection with the matter; and (4) payment of any other out-of-pocket expenses, such as insurance. Defendants cross-moved for an order enforcing litigant's rights because plaintiff refused to tender the tax sale certificate and, as a result, the municipality refused to accept the redemption amount.

On June 13, 2005, the judge entered an order denying plaintiff's motion for reconsideration but modified it

to the extent of the amount of redemption costs, as set forth below:

1. In addition to all other amounts required to redeem as set forth in the Court's Decision, dated April 8th, 2005 and the Court Order dated April 19th, 2005, defendants shall pay interest on all subsequently paid taxes at the statutory rate of 18%, except for the first $1500.00 of such taxes, which shall accrue at a rate of 8%.

2. Defendants shall reimburse the Plaintiff $6,400.00 premium fee paid for the purchasing of the Tax Sale Certificate, plus interest thereon as set forth at the post judgment rates mandated by the Court Rules;

3. Defendant(s) shall reimburse the plaintiff reasonable insurance costs paid by the plaintiff that pertained to the property in question during the operative period;

4. Defendants shall reimburse the plaintiff for the title insurance premium paid by the plaintiff, in the sum of $1,785.00;

5. The monies paid by the Defendants to the Town of Maywood to redeem the property, which includes the amounts referred to in Paragraph One (1) hereinabove, shall be held in escrow by Defendants' attorney, pending resolution of an appeal; and

6. Defendants shall be responsible for the payment of all carrying costs, while the appeal is pending subject to any further application that the parties might perfect after appellate resolution; and

7. Defendants shall name plaintiff as an additional insured under the existing insurance policy covering the subject premises and provide written confirmation of same to plaintiff, pending the appellate resolution; and

8. Plaintiff's action is dismissed with prejudice except if it necessitates prejudice to any party's right to assert noncompliance [with] the final order in accordance with the court's decision, dated April 19th, 2005, as all monies due plaintiff to redeem the property have been paid by the defendants, in accordance with the term of this Order[.]

The trial judge again rendered a written decision detailing his reasons for the disposition of the cross-motions.

Plaintiff argues, among other points, that the trial court should not have accepted defendants' attestations of the underlying facts of their hardship claim and should have allowed discovery and conducted an evidentiary hearing before making a final decision. We agree.

Plaintiff points out that despite Deborah's representation that she disregarded all the bills, "[d]efendants offered no evidence that a single other creditor had taken any discernable action against them." Plaintiff notes, moreover, that defendants failed to present medical evidence as to Deborah's "mental competence." Defendants have made extraordinary claims about Deborah's mental capacity and conduct over a lengthy period of time without any supporting or corroborative evidence. These claims, if proven, may well constitute extraordinary circumstances warranting vacation of the judgment of foreclosure. But, given Deborah's assertion that she lied to her husband for years, her attestation cannot be accepted as true absent discovery, investigation and an evidentiary hearing. Nolan v. Lee Ho, 120 N.J. 465, 474 (1990); Jenkins v. Rainner, 69 N.J. 50, 56 (1976).

Accordingly, we reverse and remand to the trial court for further proceedings in accordance with this opinion. The escrow account established in paragraph five of the June 13, 2005 order shall remain in effect pending the outcome of the evidentiary hearing.

We have carefully considered plaintiff's remaining arguments in light of the applicable law, and we are satisfied that they lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). Nevertheless, we note that if the foreclosure judgment is vacated after the hearing, the vacation shall be conditioned on defendant's making plaintiff whole, including payment of all legal fees incurred in this action.

Reversed and remanded.

 

(continued)

(continued)

8

A-6062-04T3

June 28, 2006