DEBORAH THOMPSON v. SUSAN CARVALHO

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

DEBORAH THOMPSON,

Plaintiff-Appellant,

v.

SUSAN CARVALHO,

Defendant-Respondent.

_____________________________

September 8, 2015

Submitted August 17, 2015 Decided

Before Judges Haas and Whipple.

On appeal from Superior Court of New Jersey, Chancery Division, Ocean County, Docket No. C-147-13.

Deborah Thompson, appellant pro se.

Charles D. Bauer, attorney for respondent.

PER CURIAM

Plaintiff appeals from an order dismissing her complaint without prejudice. We affirm substantially for the reasons expressed by the Honorable Frank R. Buczynski, and add the following brief remarks.

We discern the following facts from the record. Defendant Susan Carvalho and her former husband, Daniel Carvalho, owned a home in Manchester Township which was subject to a mortgage. On October 8, 2011, they entered into an agreement conveying "their right, title and interest in and to [the property] to Joel Cooper in consideration of the payment of five hundred dollars each, subject to all liens and encumbrances." The agreement further provided that Joel Cooper would "negotiate or litigate, or both, with the holders of any and all such encumbrances and resolve their claims." Two days later, plaintiff Deborah Thompson prepared a deed which purportedly transferred the property from the Carvalhos to Cooper. The affidavit of consideration was never signed by the Carvalhos and the deed was never recorded.

On October 29, 2011, defendant entered into another agreement and lease renting the house to Cooper and a tenant. In a certification, defendant stated that she believed Cooper was an attorney who could help her work out something with her mortgage company and that it was necessary to sign the documents so he could speak with the mortgage company. Defendant claimed that she never intended to relinquish her rights to the property.

After being served with a complaint from the homeowners' association for non-payment of association dues in 2012, defendant decided to terminate the agreement with Cooper, refund him $1000 as provided by her second agreement, and bring an action against the tenant. In preparation for filing the tenancy complaint, defendant tried to file a landlord registration statement and learned that Cooper had already filed one after forging her name on the document.

Cooper moved to dismiss the tenancy complaint. On June 14, 2013, an order was entered dismissing the complaint to evict the tenant and requiring that all future payments under the tenancy be paid to defendant in accordance with the terms of the written lease. The order also directed Cooper to turn over the security deposit and all other money paid by the tenant to defendant. On June 25, 2013, Cooper moved for reconsideration of the June 14, 2013 order and to disqualify the Law Division judge. However, before the motion was heard Cooper executed a deed to the property to plaintiff dated July 1, 2013, and recorded July 2, 2013.

The Law Division judge denied Cooper's motions, informed the parties that other filings should be made with regard to ownership of the property, and stated that "[i]f Cooper believes he is the owner of the property and deserving of the rents, Cooper needs to file his own [c]omplaint regarding that issue. [Susan Carvalho] is the record owner of the property and the owner under the Landlord Register filed with [the] Township." Cooper did not appeal the Law Division decision, nor did he file a complaint to address his claim of ownership.

On August 16, 2013, plaintiff filed an order to show cause and a verified complaint for injunctive and declaratory relief in the Chancery Division against defendant, asserting that Cooper had assigned the lease to plaintiff in March 2013, had conveyed the property to her on July 1, 2013, and had recorded a deed on July 2, 2013, establishing that she was the rightful owner.

On November 8, 2013, the court entered an order denying the order to show cause and directing defendant to file a responsive pleading. Defendant filed a motion to dismiss the verified complaint for failure to state a claim upon which relief could be granted, which the court granted without prejudice on December 6, 2013. In doing so, the court found that plaintiff could not determine the proper chain of title because, while there was a recorded deed conveying the property from Cooper to plaintiff, there was no recorded deed between the Carvalhos and Cooper, the judge in the prior proceeding had determined that plaintiff was the record owner of the property, and there was a pending foreclosure action which would likely proceed to final judgment.

On appeal, plaintiff asserts that the court erred in dismissing her complaint, argues that the October 10, 2011 unrecorded deed is valid and enforceable between the Carvalhos and Cooper, and contends that she was the owner of the property as a result of a subsequent conveyance, as per the last recorded deed. We disagree.

We apply a plenary standard of review over a trial court's decision to grant a motion to dismiss pursuant to Rule 4:6-2(e). Rezem Family Associates, L.P. v. Borough of Millstone, 423 N.J. Super. 103, 114 (App. Div.), certif. denied, 208 N.J. 366 (2011).

A motion to dismiss for failure to state a claim under Rule 4:6-2(e) should be approached with great caution and be granted only in the rarest of instances. Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 771-72 (1989). The reviewing court must search "the complaint in depth and with liberality to ascertain whether the fundament of a cause of action may be gleaned even from an obscure statement of claim, opportunity being given to amend if necessary." Id. at 746 (citation and internal quotation marks omitted).

Here, Judge Buczynski properly applied the standard when he evaluated plaintiff's claims. Plaintiff asserts that as a result of the order entered in the prior proceeding, the prior court found that defendant was the owner of the property on the last recorded deed but Cooper had subsequently transferred the property to plaintiff. Judge Buczynski stated that

[t]he only recorded [d]eed on this matter is showing record owners in the [de]ed of the Carvalhos at this point in time. . . . I don't know that you have any standing to bring this cause of action at this point, not in the nature of which you have it.

Plaintiff's reliance upon N.J.S.A. 46:22-11 and cases cited involving unrecorded deeds are not persuasive and do not address the issue.

Plaintiff relies on Tobar Construction Company v. R.C.P. Associates, 293 N.J. Super. 409 (App. Div. 1996), and H.K. v. State, 184 N.J. 367 (2005), for the proposition that the unrecorded deed is valid and enforceable. In Tobar, we said that where no notice of settlement has been filed, a judgment docketed after a deed disposing of a judgment debtor's interest in real property is delivered, but before the deed is recorded, becomes a lien on the property by virtue of N.J.S.A. 46:22-1. Supra, 293 N.J. Super. at 413-14. In H.K., our Supreme Court recognized that: (1) a deed transfers property upon delivery; (2) acceptance and delivery can be shown by anything that clearly manifests a grantor's intention that a deed become immediately operable; and (3) a deed need not be recorded to pass title. Supra, 184 N.J. at 382.

Neither the cases cited by plaintiff nor N.J.S.A. 46:22-1 suggest that an unrecorded deed creates a valid chain of title under her circumstances because, while an unrecorded deed might be effective for conferring title from the grantor to the grantee, the unrecorded, incomplete deed between the Carvalhos to Cooper is void in establishing the validity of her purchase from Cooper. Plaintiff's pleading did not establish a sufficient claim to the property because it had previously been determined that Cooper did not own the property when he conveyed it to her.

Affirmed.

1 N.J.S.A. 46:22-1 was repealed in 2011 and replaced by N.J.S.A. 46:26A-12

a. Any recorded document affecting the title to real property is, from the time of recording, notice to all subsequent purchasers, mortgagees and judgment creditors of the execution of the document recorded and its contents.

b. A claim under a recorded document affecting the title to real property shall not be subject to the effect of a document that was later recorded or was not recorded unless the claimant was on notice of the later recorded or unrecorded document.

c. A deed or other conveyance of an interest in real property shall be of no effect against subsequent judgment creditors without notice, and against subsequent bona fide purchasers and mortgagees for valuable consideration without notice and whose conveyance or mortgage is recorded, unless that conveyance is evidenced by a document that is first recorded.