Title: Winberry Realty Partnership v. Borough of Rutherford

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

SYLLABUS

This syllabus is not part of the Court’s opinion. It has been prepared by the Office of the
Clerk for the convenience of the reader. It has been neither reviewed nor approved by the
Court. In the interest of brevity, portions of an opinion may not have been summarized.

   Winberry Realty Partnership v. Borough of Rutherford (A-22/53-19) (083156)

Argued January 19, 2021 -- Decided June 28, 2021

ALBIN, J., writing for a unanimous Court.

        In this civil rights action, the Court considers whether the Borough of Rutherford’s
Tax Collector is entitled to qualified immunity and, if not, whether the Borough may be
liable for her actions. Plaintiffs allege (1) that the Tax Collector violated their clearly
established constitutional and statutory right to redeem the tax sale certificate on their
home before entry of a final foreclosure judgment; and (2) that the Borough is liable for
the Tax Collector’s violation of their right because the Tax Collector is the Borough’s
final policymaker in the area of tax sale certificate redemptions.

        Plaintiffs fell into arrears on the taxes on their home in the Borough. To collect
unpaid property taxes, a municipality may sell at public auction a tax sale certificate. The
successful bidder agrees to pay the taxes due and may institute a foreclosure action if the
property owner does not redeem the certificate within two years of the auction. The
property owner has the right to redeem the certificate until barred by the judgment of the
Superior Court. See  N.J.S.A. 54:5-86; R. 4:64-6(b). Here, four years after buying the tax
sale certificate on plaintiffs’ home, the purchaser initiated foreclosure proceedings. The
trial court ordered that “redemption shall be permitted up until entry of final judgment,
including the whole of the last day upon which judgment is entered.” (emphasis added).

        After the date of redemption but before entry of final judgment, plaintiff John
Winberry called the Tax Collector to determine the total amount needed to redeem the
certificate. According to Winberry’s deposition testimony, the Tax Collector told him
that she “[didn’t] have the time” to give him either the total amount or the per diem
interest rate. Winberry testified that he then offered to pay an amount well over what he
estimated to be the redemption amount and that the Tax Collector replied, “No. . . .
[Y]ou’ve had years to pay this,” and “I can’t accept your check anymore.”

        When deposed, the Tax Collector acknowledged the right to redemption at any
time before entry of a final foreclosure judgment, and that her computer software could
calculate arrearages “within a matter of minutes.” She testified that her policy as Tax
Collector required that the property owner put the redemption request in writing and also
stated that her policy was to contact the certificate holder to get the correct amount owed.

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        The day after plaintiffs attempted to redeem the certificate, the court entered the
final foreclosure judgment. After costly legal proceedings, plaintiffs succeeded in having
the foreclosure judgment overturned and reclaimed their property.

        Plaintiffs brought this action under the New Jersey Civil Rights Act (CRA),
 N.J.S.A. 10:6-1 to -2, and 42 U.S.C. §§ 1983 and 1985, alleging that the Tax Collector
and the Borough violated their constitutional, statutory, and common law rights to
reclaim their property. The trial court granted summary judgment to defendants, finding
that the Tax Collector was entitled to qualified immunity and the Borough derivative
immunity. The Appellate Division reversed and reinstated the case against the Tax
Collector but dismissed the Borough from the case, holding that plaintiffs failed to
establish municipal liability because the Tax Collector’s policy was not the Borough’s
policy. The Court granted certification regarding the Borough’s liability,  240 N.J. 64
(2019), and the denial of qualified immunity to the Tax Collector,  241 N.J. 88 (2020).

HELD: The Court affirms the decision to deny the Tax Collector qualified immunity.
Based on the summary judgment record, the Tax Collector’s refusal to provide the
redemption amount to plaintiffs because the request was not in writing or timely made
was not objectively reasonable. The Court disagrees, however, that plaintiffs have not
established the basis for municipal liability. The Tax Collector is the final policymaker
on matters related to the redemption of tax sale certificates in the Borough. The Borough
is liable if the Tax Collector violated the constitutional or statutory rights of plaintiffs.

1. To make out a CRA claim, plaintiffs must establish that: (1) the right of redemption is
a substantive right conferred by the Tax Sale Law,  N.J.S.A. 54:5-1 to -137, or the
Constitution; (2) the Tax Collector deprived them of that right; and (3) the Tax Collector
acted under color of law when she did so. Here, defendants concede that (1) and (3) are
met. The issue is whether they deprived plaintiffs of the right of redemption. (pp. 20-21)

2. The Tax Sale Law clearly confers on plaintiffs a substantive right to redeem the tax
sale certificate and reclaim their land. And the right to own and enjoy one’s property
without arbitrary interference by the State is enshrined in the New Jersey Constitution. In
this case, the chancery court ordered that the redemption of the certificate be paid “to the
Tax Collector.” One of the essential duties of a municipal tax collector in the case of an
outstanding tax sale certificate is to communicate to a property owner the amount
necessary to redeem the certificate. A property owner cannot redeem a tax sale certificate
if the tax collector will not tell him the redemption amount. (pp. 22-24)

3. Whether a public official is entitled to qualified immunity on summary judgment
depends on (1) whether the evidence, viewed in the light most favorable to the plaintiff,
establishes that the official violated the plaintiff’s constitutional or statutory rights, and
(2) whether the right allegedly violated was clearly established at the time of the officer’s
actions. Whether a right is clearly established is judged by a standard of objective

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reasonableness. The ultimate question is this: was the law clearly established that when
Winberry called and requested the redemption amount, the Tax Collector was obligated
to provide that information promptly and to accept a redemption payment? (pp. 24-26)

4. When Winberry called the Tax Collector, a final foreclosure judgment had not yet
been entered. The Tax Collector refused to provide the redemption amount even though
she could calculate the arrearages within minutes. She told Winberry that she did not
have the authority to accept his check, but both  N.J.S.A. 54:5-86(a) and - - - 4:64-6(b)
                                                                            Rule
stated otherwise, as did the court’s order. Although the Tax Collector testified that her
policy required the property owner to provide a written redemption request, no law or
regulation at the time mandated such a requirement. She stated that her policy was to
contact the tax sale certificate holder to verify the amount owed, but she did not recall
doing so. The Tax Collector withheld, or made no effort to secure, the information
necessary for plaintiffs to vindicate their substantive right to reclaim their home. And she
flatly refused to accept the redemption payment at a point when the right to redeem the
tax sale certificate had not been cut off. The Tax Collector did not act in an objectively
reasonable manner and therefore is not entitled to qualified immunity. (pp. 26-29)

5. Prudence dictates that a tax collector contact the tax certificate holder when a
redemption figure is requested to determine the final redemption amount, and the
certificate holder should know the amounts due and make that information immediately
available to the tax collector upon request. (pp. 29-30)

6. A municipality may be accountable for the action of an official who possesses final
authority to establish municipal policy and who exercises that authority in violation of a
person’s rights. An official need only have final policymaking authority in a particular
area or on a particular issue of municipal business to be a final policymaker. (pp. 30-33)

7. Here, Caryn Miller was the “Department Head” of the Borough’s Department of the
Tax Collector, and, in that role, she served as the Borough’s policymaker in the realm of
tax redemption. The Tax Sale Law identifies the tax collector as the sole person with the
authority to accept payment to redeem a tax sale certificate.  N.J.S.A. 54:5-54. As the
Borough’s tax collector, Miller set the policy for the redemption of tax sale certificates.
No other municipal official or body was empowered to set or veto the tax collector’s
redemption procedures. Because Miller spoke as a final policymaker for the Borough on
matters of redemption, Miller’s policy was the Borough’s policy. On that basis, the
Borough may be held liable for Miller’s violation of the Tax Sale Law. (pp. 33-36)

       AFFIRMED in part; REVERSED in part. REMANDED to the Law Division.

CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, PATTERSON,
FERNANDEZ-VINA, SOLOMON, and PIERRE-LOUIS join in JUSTICE
ALBIN’s opinion.

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       SUPREME COURT OF NEW JERSEY
           A-22/
53 September Term 2019
                       083156

            Winberry Realty Partnership,
      John Winberry, Mary Lourdes Winberry,
      Celeste Winberry, and Gregory Winberry,

      Plaintiffs-Appellants/Cross-Respondents,

                          v.

      Borough of Rutherford, and Caryn Miller,
       in her official and individual capacities,

     Defendants-Respondents/Cross-Appellants,

                         and

      Stephen Krisch, in his individual capacity,

                      Defendant.

        On certification to the Superior Court,
                  Appellate Division .

       Argued                        Decided
   January 19, 2021                June 28, 2021

Lawrence S. Lustberg argued the cause for
appellants/cross-respondents (Gibbons and Lite DePalma
Greenberg, attorneys; Lawrence S. Lustberg, Sylvia-
Rebecca Gutiérrez, and Bruce D. Greenberg, on the
briefs).

Kathy A. Kennedy argued the cause for
respondents/cross-appellants (Hanrahan Pack, attorneys;

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              Thomas B. Hanrahan, of counsel and on the briefs, and
              Kathy A. Kennedy, on the briefs).

              Joseph A. Fischetti argued the cause for amicus curiae
              Consumers League of New Jersey (Lowenstein Sandler,
              attorneys; Joseph A. Fischetti, on the brief).

              Daniel M. Ortner, of the California and Virginia bars,
              admitted pro hac vice, argued the cause for amicus curiae
              Pacific Legal Foundation (Pacific Legal Foundation,
              attorneys; Steven Simpson, of counsel, and Mark Miller,
              on the brief).

              John C. Gillespie, argued the cause for amici curiae New
              Jersey State League of Municipalities and New Jersey
              Institute of Local Government Attorneys (Parker McCay,
              attorneys; John C. Gillespie, on the brief).

              Keith A. Bonchi argued the cause for amicus curiae Tax
              Collectors and Treasurers Association of New Jersey
              (Goldenberg, Mackler, Sayegh, Mintz, Pfeffer, Bonchi &
              Gill, attorneys; Keith A. Bonchi, of counsel and on the
              brief, and Elliott J. Almanza, on the brief).

              Adam D. Greenberg argued the cause for amicus curiae
              National Tax Lien Association, Inc. (Honig & Greenberg,
              attorneys; Adam D. Greenberg, on the brief).

               JUSTICE ALBIN delivered the opinion of the Court.

        The right to enjoy and possess one’s property -- free from arbitrary

government interference -- has been deeply embedded in our laws from the

beginning of our Republic. That fundamental principle is the subject of t his

case.

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      Plaintiffs fell into arrears on the real estate taxes on their home located

in the Borough of Rutherford. In accordance with the New Jersey Tax Sale

Law (Tax Sale Law),  N.J.S.A. 54:5-1 to -137, the Borough sold a tax sale

certificate to a purchaser, who paid the arrears. The sale of the certificate

entitled the purchaser to charge interest on the outstanding taxes and to

foreclose on the property if plaintiffs did not redeem the certificate in the

manner provided by the statute. The Tax Sale Law required that, to redeem

the certificate, plaintiffs pay the outstanding taxes, accumulated interest, and

costs to the Borough’s Tax Collector before the entry of a final foreclosure

judgment.

      Plaintiffs attempted to redeem the tax sale certificate before the entry of

the final foreclosure judgment on their property, only to be turned away by the

Tax Collector. As a result of the denial of their right of redemption, plaintiffs

lost their home. After costly legal proceedings, plaintiffs succeeded in having

the foreclosure judgment overturned and reclaimed their property.

      In this action brought under the New Jersey Civil Rights Act (CRA),

 N.J.S.A. 10:6-1 to -2, and the Federal Civil Rights Act, 42 U.S.C. § 1983,

plaintiffs allege before this Court that defendants -- the Tax Collector and the

Borough -- violated their constitutional right of redemption and their statutory

right of redemption under the Tax Sale Law, which in turn protected their right

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to the enjoyment and possession of their home. The trial court granted

summary judgment in favor of defendants, finding that the Tax Collector was

entitled to qualified immunity on the ground that she did not violate the clearly

established constitutional or statutory rights of plaintiffs.

      The Appellate Division reversed and reinstated the case against the Tax

Collector. It concluded that, viewing the evidence in the light most favorable

to plaintiffs, the Tax Collector did not act in an objectively reasonable manner

and therefore was not entitled to qualified immunity. The Appellate Division,

however, dismissed the Borough from the case because plaintiffs failed to

establish municipal liability under the civil rights laws -- that is, failed to

establish that the Tax Collector’s policy was endorsed or adopted by the

Borough. See Monell v. Dep’t of Soc. Servs.,