HICKORY HILL AT TOTOWA HOMEOWNERS ASSOCIATION INC v. MICHAEL ORTIZ

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R.1:36-3.

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

HICKORY HILL AT TOTOWA

HOMEOWNERS ASSOCIATION,

INC.,

Plaintiff-Appellant,

v.

MICHAEL ORTIZ,

Defendant-Respondent.

_______________________________

January 30, 2017

Submitted November 17, 2016 Decided

Before Judges O'Connor and Whipple.

On appeal from Superior Court of New Jersey, Law Division, Passaic County, Docket No. DJ-48215-15.

Law Offices of Arnold J. Calabrese, attorneys for appellant (Karl T. Meth, on the brief).

Respondent has not filed a brief.

PER CURIAM

Plaintiff appeals from a September 14, 2015 order denying reconsideration of an order permitting the sale of defendant's real property, in order to satisfy plaintiff's judgment against defendant. For the reasons that follow, we reverse and remand to the Law Division for further proceedings.

Defendant, Michael Ortiz, owns a home in the Hickory Hill at Totowa Homeowners Association community. Plaintiff, Hickory Hill at Totowa Homeowners Association, obtained a judgment of $6,907.87 against defendant on February 21, 2013, because he failed to pay association maintenances fees and other charges pursuant to plaintiff's governing documents. In order to collect on this judgment, plaintiff served defendant with a copy of the judgment and an Information Subpoena via certified mail on March 1, 2013. Although the certified mail was returned with a signed receipt, defendant never completed the Information Subpoena.

Plaintiff hired a private investigator to identify defendant's personal property subject to levy. The investigator determined defendant was running a business from his house and identified a bank account in defendant's name containing forty dollars, as well as a second account that was not subject to levy. Plaintiff filed a writ of execution against goods and chattel on July 1, 2013, which was issued July 8, 2013. The writ directed court officers to levy against defendant's personal property, including the bank account plaintiff discovered. The writ remained unsatisfied.

On June 18, 2015, plaintiff filed a motion to execute against defendant's real property pursuant to Rule 4:59-1(d)(1), asserting defendant had insufficient verifiable assets to satisfy plaintiff's judgment. The motion was denied on July 29, 2015, because plaintiff had not provided information establishing the value of the property, whether there was a mortgage or lien on the property, or whether any foreclosure proceedings or open tax liens were pending. On August 17, 2015, plaintiff moved for reconsideration and provided the court with additional information. In a certification to the court, plaintiff's counsel identified a $469,000 mortgage on defendant's property, a $427,000 estimated value of the home, the absence of any foreclosure proceeding, and additional liens on defendant's property by plaintiff in the amount of $20,183.50 and $3,391.87.

On September 14, 2015, the trial judge denied plaintiff's motion without prejudice, as plaintiff had not provided the mortgagee with notice and an opportunity to be heard regarding the request for sale of the property. Plaintiff argued it should be permitted leave to sell defendant's real property to satisfy the judgement and rent the property, notwithstanding the mortgage and the fact defendant still lived in the property. The judge explained plaintiff was already entitled to sell the judgment outright, but not the property under the circumstances presented, based upon the mortgage on the property. The judge denied plaintiff's motion without prejudice, so plaintiff would be able to refile with notice to the mortgagee. This appeal followed.

On appeal, plaintiff argues the motion judge denied the motion without analyzing whether plaintiff met the standard under Rule 4:59-1(d) and N.J.S.A. 2A:17-1. Specifically, plaintiff claims the judge erroneously relied on the lack of notice to defendant's lender. We agree. Plaintiff also asserts plaintiff met the requirements of Rule 4:59-1(d) and N.J.S.A. 2A:17-1, by making a good faith effort to locate and execute upon defendant's personal. We disagree.

After obtaining a judgment, a creditor must deliver a writ of execution to the sheriff with instructions for levying. Borromeo v. DiFlorio, 409 N.J. Super. 124, 137 (App. Div. 2009) (citing N.J.S.A. 2A:17-10). The creditor may conduct discovery to find the property to be levied. Ibid. The sheriff must first levy on goods and chattel in the county before proceeding to levy upon debtor's real property. Ibid. (citing N.J.S.A. 2A:17-1); Rule 4:59-1(d)(1).

To comply with N.J.S.A. 2A:17-1, a plaintiff must make "reasonable efforts to determine" whether a defendant has any personal assets, under Rule 4:59-1(e), prior to pursuing the sale of real estate. Pojanowski v. Loscalzo, 127 N.J. 240, 242 (1992). The test "is not whether there are assets in the county, . . . but rather whether a good faith effort was made to locate the assets." Borromeo, supra, 409 N.J. Super. at 137 (quoting Ponticelli v. Dobin, 99 Fed. App'x 414, 416 (3d Cir. 2004)). Not all "possible measures" must be taken to find the property; however, a plaintiff must make "reasonable efforts." Ibid. Pursuant to Rule 4:59-1(f), "permissive supplementary proceedings [are] available to a judgment creditor in aid of execution." Ibid.

A reviewing court should consider whether a plaintiff-creditor met the requirements of Rule 4:59-1(d) and N.J.S.A. 2A:17-1. Here, the trial judge denied plaintiff's motion to sell the property because there was no service on the mortgagee. The judge did not address plaintiff's compliance with the requirements set forth in Rule 4:59-1(d) and N.J.S.A. 2A:17-1.

The judge stated "at this posture, denying the motion requesting the sale of the property without prejudice to your refiling it, if you wish, only giving notice to the [mortgagee] so that when we yet again come in for oral argument, they have an opportunity to be heard." However, notice to a mortgage holder is not a necessary element of compliance with Rule 4:59-1(d) or N.J.S.A. 2A:17-1. The appropriate consideration when determining whether to allow the sale of real property is has the plaintiff first made reasonable efforts to find the defendant's personalty, including the utilization of supplementary proceedings available under Rule 4:59-1(f). The motion judge in this matter made no findings regarding whether plaintiff's efforts to locate defendant's personalty comported with the good faith and reasonableness standard. Plaintiff's generalized assertions regarding the sufficiency of its investigation herein do not demonstrate compliance sufficient for the trial court to enter an order permitting sale of defendant's real property. Therefore, we reverse and remand this matter for further proceedings consistent with this opinion.

Reversed and remanded. This court does not retain jurisdiction.