TOWNSHIP OF MEDFORD v. BLOCK 2909, LOT 8

NOT FOR PUBLICATION WITHOUT THE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-0272-16T2

TOWNSHIP OF MEDFORD, a
Municipal Corporation of
the State of New Jersey,

              Plaintiff-Respondent,

v.

BLOCK 2909, LOT 8, assessed to
WEBBER 23 HOLLY, LLC,

              Defendant-Appellant.

___________________________________

              Submitted October 5, 2017 – Decided January 30, 2018

              Before Judges Simonelli and Gooden Brown.

              On appeal from Superior Court of New Jersey,
              Chancery Division, Burlington County, Docket
              No. F-011484-15.

              McNally & Associates, LLC, attorneys for
              appellant (Stephen B. McNally, of counsel and
              on the brief).

              Christopher J. Norman, attorney for respondent.

PER CURIAM

        In this tax sale foreclosure case, defendant Webber 23 Holly,

LLC (Webber 23) appeals from the August 5, 2016 Chancery Division
order    denying    its    motion    to     vacate     the    final    judgment       of

foreclosure and extend the time for redemption.                  We affirm.

      On November 10, 2011, Webber 23 acquired the subject property

by quitclaim deed for $1 from Philip Webber, the prior owner.                         On

the     same   date,     Webber    executed      an    addendum       to   the     deed

acknowledging      "an    oil   spill     on   the    property    from     a   leaking

underground heating oil tank" requiring remediation as directed

by the New Jersey Department of Environmental Protection (DEP).

Webber "agree[d] to be responsible and bound to remediate the

property post ownership transfer . . . at [his] sole cost and

expense" and to "indemnify" Webber 23 "from any and all liability

or loss . . . which may occur as a result of the oil spill."                        The

deed was recorded on February 7, 2012.                       Michael and Cynthia

McDonald owned and operated Webber 23.

      Shortly after Webber 23 took title to the property,                             in

accordance     with      its    municipal      ordinance,     plaintiff        Medford

Township demolished the Webber dwelling as an unsafe structure and

placed dumpsters on the property for the removal of substantial

quantities of debris occasioned by the demolition. Michael1 agreed

to fill the dumpsters to minimize the amount of the Township's

lien to recoup the demolition costs.


1
  We refer to the McDonalds by their first names to avoid any
confusion caused by their common surname. We intend no disrespect.

                                          2                                    A-0272-16T2
     From the time Webber 23 acquired the property in 2011, no

property taxes were paid on the property.          On November 15, 2012,

Medford Township purchased a tax sale certificate in the amount

of $21,192.92 for unpaid 2011 and 2012 sewer service charges and

property taxes on the property.           The certificate was recorded on

January 24, 2013.

     On   March   30,   2015,   the   Township    filed   an   in   rem   tax

foreclosure complaint pursuant to 
N.J.S.A. 54:5-104.29 against

Webber 23, the record owner of the property.         An amended complaint

was filed on April 13, 2015 to update the recording date of the

tax sale certificate.    Pursuant to Rule 4:64-7(b) and (c), on July

15, 2015, notice of the foreclosure was published in the local

newspaper and notification was mailed by certified and ordinary

mail to the prior owner, the record owner and its registered agent,

Cynthia McDonald.   On November 23, 2015, the Office of Foreclosure

entered an uncontested final judgment.

     Over six months later on June 7, 2016, Webber 23 moved to

vacate the final judgment and revive the equity of redemption

pursuant to Rule 4:50-1(a), (d), and (f).             In a certification

submitted in support of the motion, Cynthia stated that she and

Michael "invested years and large sums of money"2 to acquire and


2
 In a supporting certification, Michael averred that they incurred
over $50,000 in expenses prior to the entry of final judgment.

                                      3                              A-0272-16T2
clean-up the property. They removed the debris from the Township's

unauthorized demolition of Webber's residence and remediated the

contamination caused by the leaking underground storage tank,

resulting in the issuance of an October 9, 2015 "No Further Action

letter" from DEP.    She averred that "Christopher Schultz, Medford

Township Manager, had assured [them] that Webber [23] would not

be   responsible    for   any   tax   liens   if   [they]   completed   the

remediation . . . and cleaning of debris from the structure on the

[p]roperty."

      Although Schultz resigned in August 2014 "in the midst of the

remediation and clean-up of the [p]roperty[,]" Cynthia certified

that "[t]hroughout the pendency of this matter, [they] were in

continuous discussions with Township officials about resolving the

open tax liens for the [p]roperty" but             their "requests were

continuously put off by Medford officials."             She claimed that

"Webber [23] ha[d] the ability to redeem the outstanding tax

obligations."

      Cynthia also averred that "Webber [23] did not receive proper

notice of the commencement of the In Rem Foreclosure" and she "had

no personal knowledge that there was a pending tax foreclosure."

According to Cynthia, "[t]he certified mail card that was used as

proof of service on [their] post office box has a signature that

is unrecognizable" and "[t]he notice allegedly delivered to [her]

                                      4                            A-0272-16T2
home on July 17, 2015 appear[ed] to be signed by [her] daughter"

who   "was   visiting   and   does   not   reside   at   [her]   residence."

Moreover, her "daughter . . . never delivered the notice to [her]."

      In opposition to the motion, Medford Township Manager, Kathy

Burger, certified that from the time Webber 23 acquired ownership

of the property, Webber 23 and the McDonalds "failed to pay any

real property taxes due and owing on the Webber [p]roperty."

According to Burger, Michael was granted meetings with Township

officials

             to   convince  Medford   Township   that   his
             assistance in filling dumpsters with the
             demolition debris (done on his own accord),
             and in procuring a no further action letter
             from [DEP] regarding an underground storage
             tank (UST) removal, somehow entitled . . . him
             to a settlement on the amounts due and owing
             to Medford Township for outstanding real
             property taxes and the municipal lien to
             reimburse the municipality for its costs in
             the demolition of the Webber dwelling.

      However, according to Burger, the offer was presented to and

rejected by the Council on the ground that "all property owners

must incur the costs of property ownership and maintenance (and

environmental remediation, if necessary), including the payment

of real property taxes."       Burger acknowledged that the Township

did not object to Michael offering to fill the dumpsters because

he held title to the property at the time but averred that there

was "[n]o written agreement(s) . . . between Medford Township and

                                      5                              A-0272-16T2
defendant    and/or      Michael    McDonald   for   any   work    he    may   have

performed during his term of ownership of the Webber property

subsequent to the demolition of the Webber dwelling."

      Regarding notice, Medford's counsel certified that following

the filing of the complaint, he published notice of the foreclosure

in the local newspaper and mailed the notification by certified

and ordinary mail to Webber 23's post office box address, Cynthia's

home address, and Webber's home address.              He received certified

mailing receipts executed as received from all three mailings, and

the ordinary mailing was never returned.

      During oral argument on the motion, Webber 23's attorney

conceded that Webber 23 did not pay the property taxes for four

years and that there was no agreement with the Township to waive

or reduce the property taxes due.              However, he argued that the

McDonald's efforts over a four-year period of cleaning-up the

demolition debris and obtaining the No Further Action letter from

the   DEP,     coupled    with     ongoing   communications       with   Township

officials to negotiate payment of the tax liens as well as improper

service   of    the   foreclosure      complaint,    entitled      defendant      to

equitable relief from the final judgment of foreclosure.

      In an August 5, 2016 order, Judge Paula T. Dow denied the

motion.      Judge Dow determined that defendant failed to show

"excusable neglect, a meritorious defense[,] or even a grave

                                         6                                 A-0272-16T2
injustice . . . ."    In her statement of reasons accompanying the

order, Judge Dow explained:

           Although service was not properly executed in
           the form of personal service to an in-state
           corporation's registered agent, [p]laintiff's
           counsel did go to great lengths to effectuate
           service by publishing a 45[-]day notice in the
           Burlington    County   Times,   mailing    all
           documentation (including the complaint and
           subsequent documents) by certified mail to
           [d]efendant[']s[]    business   address    and
           mailing all documentation by certified mail
           to Cynthia McDonald, as registered agent at
           her home address . . . . Defendant and its
           agents should have acquired knowledge of the
           foreclosure action between July 15, 2015, the
           first mailing of the complaint and summons,
           to November 23, 2015 during entry of final
           judgment, since [d]efendant asserts that there
           had   been     ongoing   communication    with
           [p]laintiff about the tax liens on the
           [p]roperty. Finally, [d]efendant and its co-
           owners should not have relied on the
           assertions of the township employees that
           taxes could be waived for cleaning up their
           own [p]roperty. Waiver of taxes is done only
           through official Township action or by code,
           regulations, or laws. On this record, an oral
           representation and [d]efendant's remediation
           of [p]roperty that it owns are insufficient
           to waive legally approximately $75,000.00 in
           taxes and liens.

    This   appeal    followed.   On    appeal,   defendant   renews   the

arguments rejected by Judge Dow.       We affirm substantially for the

reasons articulated by Judge Dow in her cogent statement of

reasons.   We add only the following comments.




                                   7                             A-0272-16T2
      Although 
N.J.S.A. 54:5-87 of the Tax Sale Law provides that

"no application shall be entertained to reopen the judgment after

three months from the date thereof," except for grounds of lack

of jurisdiction or fraud in the conduct of the suit, Rule 4:50-1

governs a motion for relief from a tax sale foreclosure judgment,

notwithstanding 
N.J.S.A. 54:5-87.              See M & D Assocs. v. Mandara,


366 N.J. Super. 341, 351 (App. Div. 2004) (holding that Rule 4:50-

1 is paramount).

      Under Rule 4:50-1(a), a defendant must show excusable neglect

and a meritorious defense.     "'Excusable neglect' may be found when

the   default   was   'attributable       to    an   honest   mistake   that    is

compatible with due diligence or reasonable prudence.'"                 US Bank

Nat'l Ass'n v. Guillaume, 
209 N.J. 449, 468 (2012) (quoting Mancini

v. Eds ex rel. N.J. Auto. Full Ins. Underwriting Ass'n, 
132 N.J.
 330, 335 (1993)).      Under Rule 4:50-1(d), relief may be afforded

if it can be shown that the judgment or order was void.                      Rule

4:50-1(f) permits courts to vacate judgments for "any other reason

justifying relief from the operation of the judgment or order."

Relief under Rule 4:50-1(f), however, is reserved for exceptional

situations where "truly exceptional circumstances are present[.]"

Hous. Auth. of Morristown v. Little, 
135 N.J. 274, 286 (1994)

(quoting Baumann v. Marinaro, 
95 N.J. 380, 395 (1984)).                 The rule



                                      8                                  A-0272-16T2
is limited to "situations in which, were it not applied, a grave

injustice would occur."    Id. at 289.

     Our limited review recognizes that

          [t]he trial court's determination under [Rule
          4:50-1] warrants substantial deference, and
          should not be reversed unless it results in a
          clear abuse of discretion.     The Court finds
          an abuse of discretion when a decision is
          "made   without    a   rational   explanation,
          inexplicably    departed    from   established
          policies, or rested on an impermissible
          basis."

          [Guillaume, 
209 N.J. at 467 (internal citation
          omitted) (quoting Iliadis v. Wal-Mart Stores,
          Inc., 
191 N.J. 88, 123 (2007)).]

Given the facts and equities of this case, we discern no abuse of

discretion by Judge Dow.

     Affirmed.




                                 9                         A-0272-16T2