BAYVIEW LOAN SERVICING LLC v. HARRY S. PURSEL

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

BAYVIEW LOAN SERVICING, LLC,

Plaintiff-Appellant,

v.

HARRY S. PURSEL, INC., LTD,

HARRY S. PURSEL, DONALD PURSEL,

Defendants,

and

WARREN COUNTY DEPARTMENT OF LAND

PRESERVATION,

Defendant-Respondent.

December 3, 2015

Submitted March 17, 2015 - Decided

Before Judges Ostrer and Sumners.

On appeal from Superior Court of New Jersey, Chancery Division, Warren County, Docket No. F-21925-10.

Fein, Such, Kahn & Shepard, attorneys for appellant (Brian W. Kincaid, on the brief).

Courter, Kobert & Cohen, attorneys for respondent (Michael B. Lavery, of counsel; James F. Moscagiuri, on the brief).

The opinion of the court was delivered by

SUMNERS, JR., J.A.D.

In this foreclosure action, plaintiff Bayview Loan Servicing, LLC (Bayview), appeals from a summary judgment order granting priority to the later, recorded lien of defendant Warren County Department of Land Preservation (WCDLP). We affirm.

I.

We adduce the following facts and procedural history from the record. Harry S. Pursel, Inc., Ltd (Pursel), is a New Jersey corporation and owner of, the property at issue, Block 2805, Lot 13, and New Jersey Dam No. 2480, which is located on the property. On August 21, 2003, Pursel executed a mortgage to Interbay Funding, LLC (Interbay) which was recorded in the Warren County Clerk s Office on August 28, 2003. The mortgage was then assigned by Interbay to Bayview on June 14, 2004 and recorded in Warren County on August 10, 2004.

Upon discovering that the dam on the property was not in compliance with state regulation, Pursel and WCDLP, acting as the co-applicant, applied for a loan under the Dam, Lake, Stream, Flood Control, Water Resources, and Wastewater Treatment Project Bond Act of 2003, L. 2003, c. 162 (the Act). The Act was enacted to restore and repair deteriorated dams, lakes, and streams throughout the State of New Jersey. Ibid. In enacting this Act, the Legislature determined that it was in the public's interest to provide additional funding to State programs that are responsible for remediating the chronic conditions affecting these poorly maintained sites and facilities. L. 2003, c. 162, 2.

On December 12, 2005, Pursel and WCDLP entered into a loan agreement wherein $215,363.18 was provided to Pursel to undertake the necessary work on the Dam. WCDLP recorded the loan in Warren County on January 12, 2010, but a resolution confirming an assessment made against Pursel's property for the outstanding loan balance was not passed by the Warren County Board of Freeholders until July 27, 2011.

On January 1, 2010, Pursel defaulted on Bayview's mortgage and foreclosure proceedings were instituted on May 17, 2010. Following a delay due to Pursel's bankruptcy proceeding, WCDLP moved for summary judgment seeking to have the court order its lien superior in priority to the mortgage held by Bayview. In response, Bayview filed a cross-motion for summary judgment.

On November 16, 2012, the motions were heard before Judge Yolanda Ciccone. Bayview challenged the applicability of the Act to its mortgage, alleging WCDLP failed to properly confirm its lien as required by the Act and was consequently barred from enjoying the super-priority status. WCDLP argued that confirmation was irrelevant because there was no statutory deadline. Following both parties' arguments, Judge Ciccone rejected Bayview's arguments and ruled in favor of WCDLP.

In so finding, the judge determined that contrary to Bayview's contentions, "[it] admits that the meeting was held on July [27,] 2011 and a lien was confirmed" by WCDLP. She also found that the retroactive application of the statute was not a disputed issue, noting that "after reviewing the statute, it is clear that the priority was intended for loans of this type, regardless when they were executed, and, as such, this is not an issue in dispute." This appeal ensued.

II.

A summary judgment motion should be granted when the record reveals "no genuine issue as to any material fact" and "the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c). We review the trial court's ruling on summary judgment de novo, Davis v. Brickman Landscaping, Ltd., 219 N.J. 395, 405 (2014), employing the same standard as the motion judge. Gormley v. Wood-El, 218 N.J. 72, 86 (2014) (citation and internal quotation marks omitted). Giving the non-moving party "the benefit of the most favorable evidence and most favorable inferences drawn from that evidence[,]" ibid., we consider "whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

Before us on appeal, Bayview challenges the court's decision on two grounds.1 First, Bayview contends that WCDLP's failure to hold a public meeting and file a copy of the confirmed lien in the tax collector's cash book, prior to the commencement of the foreclosure action, barred it from enjoying the superior lien status provided by the Act. WCDLP counters that it has fulfilled all statutory procedural requirements regarding confirmation, noting that the statute does not mandate a set time period for the confirmation to occur. We agree.

The Act states, in pertinent part, as follows

Loans awarded under this section to owners of private dams, or to private lake associations, . . . shall be assessed, in the same manner as provided for the assessment of local improvements generally under chapter 56 of Title 40 of the Revised Statutes, against the real estate benefited thereby in proportion to and not in excess of the benefits conferred, and . . . from the date of confirmation shall be a first and paramount lien upon the real estate assessed to the same extent, and be enforced and collected in the same manner, as assessments for local improvements.

[L. 2003, c. 162, 5.f(1) (emphasis added)].

Its express reference and inclusion of "chapter 56 Title 40 of the Revised Statutes" provides the guidelines for proper confirmation of a lien. First, an assessment for benefits for local improvement must "be certified by the officer, board or commissioners making the same to the governing body of the municipality by a report in writing signed by the officer, or a majority of the board or commissioners making the said assessment[.]" N.J.S.A. 40:56-30. Then, a public meeting must be held to confirm a report of the assessment, accompanied by a map showing the real estate benefited by the improvements. Ibid. "[I]mmediately after the confirmation of any assessment a duplicate thereof duly certified by the clerk of the body confirming the same shall be delivered to the tax collecting officer of the municipality." N.J.S.A. 40:56-31.

Here, the record demonstrates that WCDLP held a public meeting on July 27, 2011. Thereafter, Warren County Board of Freeholders passed a resolution confirming the assessment made against Pursel's property for the outstanding loan and WCDLP filed a copy of the confirmed lien in the tax collector's cash book. Given that no statutory provision exists establishing a deadline for the confirmation process, we are satisfied that WCDLP properly complied with the statutory guidelines. Therefore, we conclude that Bayview's argument is without merit.

Next we address Bayview's contention that the Act should be given only prospective application as it does not pass the second prong of the inquiry set forth in our decision L.W. ex rel. L.G. v. Toms River Reg'l Sch. Bd. of Educ., 381 N.J. Super. 465, 499 (App. Div. 2005), aff'd as modified and remanded, 189 N.J. 381 (2007). Specifically, Bayview contends that the retroactive application of the Act would substantially interfere with its vested property rights. To the contrary, WCDLP asserts that Bayview's contention is misplaced as it is inconsistent with case law, as well as the express statutory language of the Act. In addition, WCDLP argues that Bayview raised this argument for the first time on appeal and we should not consider it. We agree.

We "'will decline to consider questions or issues not properly presented to the trial court when an opportunity for [47] such a presentation is available unless the questions so raised on appeal go to the jurisdiction of the trial court or concern matters of great public interest.'" Zaman v. Felton, 219 N.J. 199, 226-27 (2014) (quoting Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973)). Accordingly, a mere mention of an issue in oral argument does not require an appellate court to address it. Selective Ins. Co. v. Rothman, 208 N.J. 580, 586 (2012). Further, the Appellate Division has held that an issue not argued in a brief below is deemed abandoned. Noye v. Hoffmann-La Roche Inc., 238 N.J. Super 430, 432 n.2 (App. Div.), certif. denied, 122 N.J. 146 (1990), and certif. denied, 122 N.J. 147 (1990) (citing Matter of Bloomingdale Conval. Ctr., 233 N.J. Super. 46, 48 n.1 (App. Div. 1989)) (holding that we would not decide an issue that the attorney had not briefed and had raised for the first time during his oral argument).

Here, the record does not include the briefs submitted below. However, the record reveals that Bayview briefly mentioned the retroactive argument twice2. First, Bayview stated "the statue wasn t even in effect at the time the mortgage was placed on the property and there is no reactivity language within that statute." Finally, at the conclusion of its argument Bayview stated, "we don t believe that the statute is applicable to our mortgage, because it wasn't in place at the time that our mortgage was recorded." Although Bayview's contention is insufficiently preserved for our review, we will briefly address the merits of the argument.

It is well established that our courts generally favor prospective application of statutes. Hand v. Philadelphia Ins. Co., 408 N.J. Super. 124, 136-37 (2009), certif. denied, 200 N.J. 506 (2009) (internal quotations and citations omitted). When considering whether a statute should be applied prospectively or retroactively, we must first ascertain the intention [13] of the Legislature. Id. at 137. Legislative intent may be either expressed, meaning, "stated in the language of the statute or in the pertinent legislative history," or implied, meaning, "retroactive application may be necessary to make the statute workable or to give it the most sensible interpretation[.]" Gibbons v. Gibbons, 86 N.J. 515, 522 (1981) (internal quotations and citations omitted).

To determine whether the intention is expressed, we begin our analysis with the plain language of the statute. Hand, supra, 408 N.J. Super. at 138 (internal quotations and citations omitted). Courts should not look beyond the plain language of the statute when it is "clear and unambiguous, and susceptible to only one interpretation." DiProspero v. Penn, 183 N.J. 477, 492 (2005) (internal quotations and citations omitted). "If the intention to apply the statute retroactively is expressed, then 'the statute should be so applied.'" Hand, supra, 408 N.J. Super. at 137 (quoting Oberhand v. Dir., Div. of Taxation, 193 N.J. 558, 571 (2008)). We turn, now, to the language of the Act itself.

The Act states, "from the date of confirmation [the loan] shall be a first and paramount lien upon the real estate assessed to the same extent, and be enforced and collected in the same manner, as assessments for local improvements." L. 2003, c. 162 5.f(1). Through its reference of Chapter 56 Title 40 of the Revised Statutes, the Legislature makes clear that the statutory lien provided therein was intended to be superior to any pre-existing property interests. The statute provides in pertinent part as follows

every assessment for local improvements together with interest thereon and all costs and charges connected therewith, shall upon the effective date of the ordinance or resolution authorizing the assessment be a continuous first lien upon the real estate described in the assessment, paramount to all prior or subsequent alienations and descents of such real estate or encumbrances thereon[.]

[N.J.S.A. 40:56-33 (emphasis added).]

If the Legislature only intended to affect future property interests on the pertinent real estate, including N.J.S.A. 40:56-33 would be superfluous. The description of the lien position as "first and paramount" in the Act, coupled with the language in N.J.S.A. 40:56-33 expressly deeming the lien "paramount to all prior or subsequent alienations and descents of such real estate or encumbrances thereon," would dictate that the Legislature explicitly intended to affect not only future property interests but interests in existence as of the effective date of the Act. We are convinced that the statute, by explicit reference, establishes that this lien priority applies to or affects liens perfected prior to the effective date. There is, however, nothing to support the contention that the Legislature only intended that the statute be applied prospectively. We thus conclude that the Legislature impliedly intended to affect all property interests in existence on the effective date of the Act.

Even if a statute may be applied retroactively, we must consider whether such an application would result in an unconstitutional interference with an existing vested right or manifest injustice. Hand, supra, 408 N.J. Super. at 141. "Retroactive legislation that impairs or destroys a 'vested right' may violate the due process clauses of the federal . . . or state . . . constitutions." Ibid. (citing Twiss v. State, 124 N.J. 461, 469-70 (1991)). However, retroactive legislation does not violate due process unless it has harsh and oppressive consequences. Ibid. Retroactive application of such a statute, "may diminish in value or totally destroy an individual's right," provided that the promoted public interest sufficiently outweighs the private right which is impaired. Chase Manhattan Mortg. Corp. v. Spina, 325 N.J. Super. 42, 49 (Ch. Div. 1998), aff'd sub nom. Chase Manhattan Mortg. Corp. v. Heritage Square Ass'n, 325 N.J. Super. 1, 2 (App. Div. 1999).

Manifest injustice is apparent when the "affected party relied, to his or her prejudice, on the law that is now to be changed as a result of the retroactive application of the statute," and where "the consequences of this reliance are so deleterious and irrevocable that it would be unfair to apply the statute retroactively." Gibbons, supra, 86 N.J. at 523-24. However, not every modification of existing property rights through retroactive application of a statutory change is manifest injustice. This standard is based on equitable concerns espoused in Rothman v. Rothman, 65 N.J. 219, 225 (1974). The Court in Rothman provided,

A state may, in the exercise of the police power, enact a statute to promote the public health, safety, morals or general welfare. Such a statute, because of retroactive application or otherwise, may diminish in value or totally destroy an individual's right, whether in property as such or arising out of contract, provided that the public interest to be promoted sufficiently outweighs in importance the private right which is impaired.

[Ibid.]

Guided by these principles, we do not believe that the retroactive application of the Act presents an unconstitutional interference with its vested rights or manifest injustice. There is no doubt that Bayview's property interest, as the first mortgage holder, is impaired by granting priority to a later recorded municipal lien, resulting in Bayview's exposure to a risk substantially broader than expected. However, the super priority of municipal tax liens over all other liens against property, except subsequent municipal liens, N.J.S.A. 54:5-9, underscores New Jersey's vital reliance on property taxes as the principal source of revenue for its municipalities. Casino Reinvestment Dev. Auth. v. Teller, 384 N.J. Super. 408, 414 (App. Div. 2006) (internal quotations and citation omitted). Therefore, we conclude that the promoted public interest here sufficiently outweighs the private right which is impaired.

Affirmed.

1 The record suggests that Bayview also argued below, in the alternative, that if the court did properly grant summary judgment, WCDLP would be entitled to the value of the benefit of the loan and not the balance. However, although mentioned briefly by WCDLP and the motion judge, Bayview failed to include this argument in its brief. Therefore, we decline to consider it on appeal. See Telebright Corp. v. Dir., New Jersey Div. of Taxation, 424 N.J. Super. 384, 393 (App. Div. 2012) (finding that appellant waived the arguments not supported in its brief).

2 Bayview claims that this argument was made before a different trial judge on its first summary judgment motion which was withdrawn without prejudice, and refiled after the completion of discovery. However, nothing in the record supports this claim.