Opinion ID: 2091965
Heading Depth: 1
Heading Rank: 2

Heading: Simon v. Cronecker

Text: At a tax sale auction in October 1999, Sea Isle City put up for bid a tax sale certificate covering the unpaid sewer charges and real estate taxes on four lots owned by Mary E. Ross in that municipality. [1] The successful bidder, plaintiff Richard Simon (Simon), purchased the tax certificate valued at $4841.40, agreeing to satisfy the tax and sewer arrearages on the Ross property. At the auction, the interest rate on the certificate was fixed at twelve percent per annum. Over the next four years, Simon continued to pay the property taxes and sewer costs. In October 2003, Simon filed an action to foreclose on the tax certificate and thereafter amended the complaint multiple times to identify those with a potential interest in the Ross property. [2] Among those named were the heirs of Mary and Emmett W. Ross. Their grandchild, defendant Emmett W. Ross, Jr. (Ross), acquired his interest through his grandmother's will. By court order, August 22, 2005 was set as the last possible day for a person with a valid property interest to redeem the tax sale certificate, then valued at approximately $56,000. Simon stood poised to foreclose on the property. Cherrystone Bay, LLC (Cherrystone), the intervenor in this case, is in the business of investing in properties subject to foreclosure. Through a search of public records, Cherrystone learned of Simon's foreclosure complaint and obtained the information necessary to contact Ross. Cherrystone then contracted with Ross to purchase Ross's property interest for $250,000. Ross claimed that he had been unable to find a buyer for the property until Cherrystone made its overture. On August 22, 2005, the last day to redeem the tax sale certificate, Cherrystone and Ross closed on the property. That same day, Ross and a title company representative delivered a cashier's check to the tax collector's office in the amount necessary for the redemption of the tax sale certificate. Up to that point, Cherrystone had not sought to intervene in the foreclosure action and apparently had not revealed its legal rights to the Ross property. Although the tax collector accepted the redemption check, Simon refused to surrender the tax sale certificate, claiming that the redemption was illegal. In September 2005, Simon filed a motion to bar the redemption of the tax sale certificate, and in response Cherrystone for the first time moved to intervene in the foreclosure action. Plaintiff Simon and intervenor Cherrystone then became locked in a battle for the rights to the property. An appraisal valued the Ross property at approximately $1,200,000. After deducting from the property's purchase price of $250,000, the $56,000 value of the tax sale certificate and the amounts placed in escrow to cover a judgment and overdue taxes, Ross was left with a cash disbursement of $63,422.77. Cherrystone asserted that Ross would receive more cash-in-hand from the escrowed funds if the amount of the outstanding judgment were reduced. In any event, Cherrystone maintained that Ross was gaining a true benefit with the use of the escrowed funds for the satisfaction of the judgment.