CITADEL FEDERAL CREDIT UNION v. NEW JERSEY MOTOR VEHICLE COMMISSION

NOT FOR PUBLICATION WITHOUT THE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-4655-16T4

CITADEL FEDERAL CREDIT UNION,

       Plaintiff-Appellant,

v.

NEW JERSEY MOTOR VEHICLE
COMMISSION and STACY SUTTON,

     Defendants-Respondents.
__________________________________

              Argued May 7, 2018 – Decided May 21, 2018

              Before Judges Sabatino and Firko.

              On appeal from Superior Court of New Jersey,
              Law Division, Gloucester County, Docket No.
              L-1439-16.

              Jacob S. Perskie argued the cause for
              appellant (Fox Rothschild LLP, attorneys;
              Jacob S. Perskie, of counsel and on the
              briefs; Caroline R. Robb, on the briefs).

              Jennifer   R.   Jaremback,   Deputy   Attorney
              General, argued the cause for respondent New
              Jersey Motor Vehicle Commission (Gurbir S.
              Grewal, Attorney General, attorney; Melissa H.
              Raksa, Assistant Attorney General, of counsel;
              Jennifer R. Jaremback, on the brief).

PER CURIAM
     Plaintiff Citadel Federal Credit Union appeals from a March

3, 2017 Law Division order which dismissed its complaint with

prejudice for failing to state a cause of action against defendant,

New Jersey Motor Vehicle Commission ("MVC").           We affirm.

     We have considered the facts in the record submitted by the

parties in support of, and in opposition to, the motion to dismiss

in the light most favorable to plaintiff.           Printing Mart v. Sharp

Elecs. Corp., 
116 N.J. 739, 746 (1989); see also Major v. Maguire,


224 N.J. 1, 26 (2016).

     Plaintiff provided defendant Stacy Sutton with an automobile

loan in the amount of $47,000 in 2014 for the purchase of a

vehicle.     The    original   title   documents   reflected   the   security

interest.1         At oral argument on the appeal, counsel for MVC

suggested that Sutton may have presented a fabricated payoff letter

to MVC falsely indicating that the loan was paid off.                      The

duplicate title was not provided to plaintiff.             Sutton sold the

vehicle to a bona fide purchaser without satisfying plaintiff's




1
  For reasons not explained in the record, MVC issued a duplicate
title to her for the vehicle without reflecting plaintiff's
security interest.



                                        2                             A-4655-16T4
security   interest.        She       then       filed   for   bankruptcy        and    had

plaintiff's loan discharged.2

      Plaintiff    filed    a   complaint          alleging        breach   of   contract

against Sutton and negligence against the MVC.

      MVC filed a motion to dismiss with prejudice based on the

immunity afforded in 
N.J.S.A. 59:2-5.                    In opposition, plaintiff

argued that MVC is not protected from liability because its failure

to record plaintiff's lien is a ministerial act which is not immune

under the Tort Claims Act ("TCA"), 
N.J.S.A. 59:1-1 to 59:14-4.

Plaintiff further emphasized that it has no remedy if MVC is

afforded immunity.

      Judge David W. Morgan dismissed the complaint with prejudice

as to MVC.   In an oral opinion, Judge Morgan found that the TCA

should not be read narrowly and the mere fact that the word "title"

does not appear in the statute is not enough to prevent its

application to this case.            The judge also found that the statutory

immunity should be interpreted to apply to circumstances in which

a   governmental   entity       is    charged         with   the    responsibility          of

creating   and    issuing   thousands            of    documents      and   there      is   a

potential for error in the way the documents are produced.                                  On


2
  Plaintiff claims it never was served with the petition for
bankruptcy and that it never participated in the bankruptcy
proceedings.


                                             3                                    A-4655-16T4
appeal, both parties reiterate the arguments made to the trial

judge.3

       A reviewing court "'appl[ies] a plenary standard of review

from a trial court's decision to grant a motion to dismiss.'" 4

Gonzalez v. State Apportionment Comm'n, 
428 N.J. Super. 333, 349

(App. Div. 2012) (quoting Rezem Family Assocs., LP v. Borough of

Millstone, 
423 N.J. Super. 103, 114 (App. Div. 2011)). In the

dismissal context, this court owes "'no deference to the trial

court's conclusions.'"    Ibid.

       A governmental entity's ministerial functions in authorizing

permits, licenses, certificates, approval, orders, or similar

authorizations are granted immunity, as stated in pertinent part:

            A public entity is not liable for an injury
            caused by the issuance, denial, suspension or
            revocation of, or by the failure or refusal
            to issue, deny, suspend or revoke, any permit,
            license, certificate, approval, order, or
            similar authorization where the public entity
            or public employee is authorized by law to
            determine whether or not such authorization
            should be issued, denied, suspended or
            revoked.

            [
N.J.S.A. 59:2-5 (emphasis added).]


3
  The record reflects that Sutton filed a petition in bankruptcy
in the United States District Court of New Jersey in January 2017.
Plaintiff withdrew its request to enter default against her in
light of the automatic stay provisions set forth in 11 U.S.C.A.
§ 362.

4 See Rule 4:6-2(e).

                                  4                          A-4655-16T4
     "[T]he immunity granted in 
N.J.S.A. 59:2-5 is pervasive and

applies     to    all     phases    of    licensing       function,     whether    the

governmental acts be classified as discretionary or ministerial."

Malloy    v.     State,    
76 N.J.     515,     520   (1978).    Moreover,      "the

requirement that the public entity be 'authorized by law to

determine' whether a license, etc. be issued, denied, suspended

or revoked" does not "limit such immunity to the decision-making

process."        Ibid.     This requirement only serves "to identify the

public entity to whom the immunity extends . . . ." Ibid.

     The Comment to 
N.J.S.A. 59:2-5 instructively states:

                    This immunity is necessitated by the
               almost unlimited exposure to which public
               entities would otherwise be subjected if they
               were liable for the numerous occasions on
               which they issue, deny, suspend or revoke
               permits and licenses.     In addition, most
               actions of this type by a public entity can
               be    challenged    through    an    existing
               administrative or judicial review process.
               See Tyrell v. Burke, 
110 N.J.L. 225 (E. & A.
               1933); Bedrock Foundations, Inc. v. Geo. H.
               Brewster & Son, Inc., 
31 N.J. 124 (1959); Cf.
               Visidor Corp. v. Cliffside Park, 
48 N.J. 214
               (1966).

               [Comment, N.J.S.A. 59:2-5.]

     "Licensing          activity   is    a   vital     exercise   of   governmental

authority" and "[i]t is inevitable that with such a staggering

volume of activity, mistakes, both judgmental and ministerial,

will be made."           Malloy, 
76 N.J. at 521.             "The purpose of the


                                              5                              A-4655-16T4
immunity [codified at N.J.S.A. 59:2-5] is to protect the licensing

function and permit it to operate free from possible harassment

and the threat of tort liability."    Ibid.

      In Malloy, the plaintiff sued the Real Estate Commission in

the Department of Insurance for sending a notice that he had failed

the real estate license exam when, in fact, he had passed.        Id.

at 516.   For the reasons stated above, the Court found that even

though giving notice was not a discretionary act and was instead

a ministerial one, 
N.J.S.A. 59:2-5 granted immunity.    Id. at 520-

21.

      With respect to the matter at hand, MVC's obligation to notate

the security interest on title is set forth in 
N.J.S.A. 39:10-14,

in relevant part, as follows:

           The director [of the MVC] shall, on the record
           or abstract of every motor vehicle registered
           with him, which is subject to a security
           interest of which notice is required to be
           filed with him, make a notation of the
           existence of such security interest and shall
           index the same under the name of the owner of
           record of the vehicle, so long as the security
           interest remains unterminated of record.

           [
N.J.S.A. 39:10-14 (emphasis added).]

      Issuance of a duplicate certificate is addressed in 
N.J.S.A.

39:10-12, in pertinent part:

                If certificate of ownership, or title
           papers, are lost, the [MVC] director may, upon
           proof of certification or otherwise in the

                                 6                           A-4655-16T4
            manner required by him and if satisfied of the
            bona fides of the application, prepare a
            certificate of ownership, certify it and
            authorize its use in place of the original,
            with the same effect as the original.

            [
N.J.S.A. 39:10-12 (emphasis added).]

      It is noteworthy that the word "may" and not "shall" appears

in   this   latter    statutory    excerpt,     thus    providing     MVC   with

discretion when issuing a duplicate certificate.                  See Aponte-

Correa v. Allstate Ins. Co., 
162 N.J. 318, 325 (2000) ("Under the

'plain meaning' rule of statutory construction, the word 'may'

ordinarily   is    permissive     and   the    word    'shall'   generally     is

mandatory."); see also State v. C.W., 
449 N.J. Super. 231, 250

(App. Div. 2017).

      Moreover, the express terms of 
N.J.S.A. 59:2-5 cover the

MVC's issuance of an erroneous duplicate title because the terms

of the statute must be construed according to their intended

meaning.       A     duplicate    title       functions    as    a,   "similar

authorization," in that it allows the individual listed on the

document to hold himself or herself out as the owner of the

vehicle.

      The motion to dismiss with prejudice as to MVC therefore was

properly granted.

      Affirmed.



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