Court Opinion

ID: 4550070
Source: CourtListenerOpinion
Date Created: 2020-07-22 14:07:54.484347+00
Date Added: 2024-06-11T13:03:08.487728
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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 NOS. A-2361-18T1
                                                                    A-2362-18T3

US BANK CUST FOR PC7
FIRST TRUST AND PC7REO LLC,

          Plaintiff-Respondent,

v.

BLOCK 64, LOT 6
21 WHITE HORSE PIKE,
BOROUGH OF OAKLYN,
ASSESSED TO SAM'S
ROUTE 73, LLC,

          Defendant-Appellant.

US BANK CUST FOR PC 7
FIRST TRUST AND PC7REO LLC,

          Plaintiff-Respondent,

v.

BLOCK 5.04, LOT 16
336 WHITE HORSE PIKE,
BOROUGH OF MAGNOLIA,
ASSESSED TO SAM'S
ROUTE 73, LLC,

      Defendant-Appellant.

            Submitted October 22, 2019 – Decided July 22, 2020

            Before Judges Fisher and Accurso.

            On appeal from the Superior Court of New Jersey,
            Chancery Division, Camden County, Docket Nos.
            F-008524-18 and F-010707-18.

            Law Offices of Igor Sturm, attorneys for appellant
            (William C. MacMillan, on the briefs).

            Gary C. Zeitz, LLC, attorneys for respondents (Linda
            Sue Fossi, on the brief).

PER CURIAM

      In December 2017, plaintiff purchased tax sale certificates on two

properties, one in Oaklyn and the other in Magnolia. As a private tax sale

certificate holder, plaintiff was obligated to wait two years from the sale date

to seek foreclosure unless it could show the properties were abandoned.

N.J.S.A. 54:5-86(a). These two foreclosure actions were filed on April 23,

2018 – less than two years from the sale date – so the propriety of the

commencement of these actions and the legitimacy of the judgments under

review were dependent on whether the properties were abandoned, which the

judge summarily found had occurred. Because we conclude the judge's

disposition of that issue was at best premature, we reverse the abandonment

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                                        2
orders, vacate the judgments that followed, and remand for further

proceedings.1

      N.J.S.A. 54:5-86(b) not only declares that the question of abandonment

is governed by N.J.S.A. 55:19-81, but also that a tax sale certificate holder

may show abandonment in two general ways. First, the holder may file with

the complaint "a certification by the public officer or the tax collector that the

property is abandoned." N.J.S.A. 54:5-86(b). Plaintiff was unable to secure

such a certification. The second path allows a court to make such a finding by

considering both the plaintiff's "evidence that the property is abandoned,

accompanied by a report and sworn statement by an individual holding

appropriate licensure or professional qualifications," ibid., and, of course, any

opposing evidential material.

      In summarily moving for a declaration that the Oaklyn property was

abandoned, plaintiff submitted two certifications. The first merely established

plaintiff's ownership of the tax sale certificate, its unsuccessful attempt to

obtain a certificate of abandonment from a municipal authority, and that Dino

M. Cavalieri – a licensed building inspector – examined the property. The

second was a certification in the form of a checklist executed by Cavalieri. He

1
  The property owner, Sam's Route 73, LLC, filed separate appeals, which we
now consolidate and decide by way of this single opinion.

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                                         3
checked off some boxes and adding a few specific items, Cavalieri asserted

that:

                 the property was "in need of rehabilitation and
                  no rehabilitation has taken place during the last
                  six months";

                 the repairs required were: "paint rear deck,"
                  "paint front trim," and "deck missing top rail";

                 "[a]t least one installment of property tax
                  remains unpaid and delinquent";

                 the property is "unfit for human habitation,
                  occupancy or use" because "electric meter not
                  operating";

                 "the condition and vacancy of the [p]roperty
                  materially increases the risk of fire to the
                  property and adjacent properties"; and

                 there was "trash/debris" under the rear deck.

        In response, Esam Salah, the sole member of Sam's Route 73, LLC,

which appears to presently own the property, provided a certification that

explained the convoluted litigation history in both Pennsylvania and New

Jersey courts regarding a contract of sale of a restaurant business in

Pennsylvania that also involved the Oaklyn and Magnolia properties in

question here. Briefly, Salah asserted that, in April 2016, another entity in

which he was involved contracted to sell a Pennsylvania restaurant business

with a liquor license to another entity. That purchase price to be paid was

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$1,900,000, but part of that consideration included three properties in New

Jersey, two of which are the Oaklyn and Magnolia properties here in question ,

that would be conveyed to the seller.2 After the closing, the seller transferred

the Oaklyn and Magnolia properties to Sam's Route 73 LLC. When disputes

arose after closing, however, the buyer commenced an action in Pennsylvania

seeking to rescind the restaurant contract. At the time the question of

abandonment arose in these tax sale foreclosure actions, that Pennsylvania

action was pending undecided, leaving the ultimate ownership of the properties

in question in flux.

        In addition, Sam's Route 73 LLC brought an action in the Law Division

seeking to discharge notices of lis pendens placed on the Oaklyn and Magnolia

properties and, in December 2017, a judge entered an order granting that relief.

The buyer then commenced an action in General Equity and obtained an order

in March 2018 that temporarily restrained Sam's Route 73 LLC from

transferring or encumbering the properties in question; that action, however,

was dismissed around the time of the abandonment orders entered in these

actions because the buyer was pursuing the same relief in the Pennsylvania

action.

2
    The third property consists of vacant land also in Oaklyn.

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      This explanation about the other litigation was offered by Salah to show

not only that the restaurant buyer was an indispensable party to these actions

but also to show that whoever was ultimately going to be the owner of the

properties here in question had by no means abandoned them. As Salah

asserted, if Sam's Route 73 LLC ended up being the true owner – when the

dust from the Pennsylvania action settled – it had no intent to abandon but

instead an intent to resell those properties.

      More to the abandonment point, Salah asserted that the Oaklyn property

was "not in any way, shape or form abandoned." He explained the absence of

occupants by referring to the uncertainty about ownership and the desire to

resell that were frustrated by the notices of lis pendens and the other litigation.

      Of course, the lack of occupants is alone insufficient to prove

abandonment. Lack of occupancy is only the starting point, as N.J.S.A. 55:19-

81 defines abandonment as "any property that has not been legally occupied

for a period of six months and which meets any one of the following additional

criteria" (emphasis added), to which we will shortly turn. The fact that the

power was turned off was explained – as Salah asserted – by the lack of

occupancy and, again, the uncertain ownership status that was a subject of

litigation.

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                                         6
      As noted, plaintiff was required to prove not only a six-month lack of

occupancy but also "any one" of other criteria listed in N.J.S.A. 55:19-81.

Plaintiff appears to have relied on two of the listed criteria, one of which is

that the property "is in need of rehabilitation" and that rehabilitation had not

been undertaken in the six-month period, N.J.S.A. 55:19-81(a), and the other

that the property "has been determined to be a nuisance by the public officer,"

N.J.S.A. 55:19-81(d).

      Cavalieri, however, did not show that the property was in need of

rehabilitation beyond his conclusory assertion except for his mention of a need

for some painting of some trim in the front and the rear deck and the need to

repair the deck railing. On its face those assertions are hardly convincing that

the property was in need of rehabilitation; as Salah pointed out, if it were

otherwise, innumerable properties in this State could be deemed abandoned.

      Cavalieri also asserted – based on these minor circumstances and the

presence of debris under the rear deck – that the property constituted a

nuisance. That allegation is to be considered in light of N.J.S.A. 55:19-82,

which defines a property to be a nuisance if any one of five conditions exist:

            a. The property has been found to be unfit for human
            habitation, occupancy or use . . .;

            b. The condition and vacancy of the property
            materially increases the risk of fire to the property and
            adjacent properties;

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            c. The property is subject to unauthorized entry
            leading to potential health and safety hazards; the
            owner has failed to take reasonable and necessary
            measures to secure the property; or the municipality
            has secured the property in order to prevent such
            hazards after the owner has failed to do so;

            d. The presence of vermin or the accumulation of
            debris, uncut vegetation or physical deterioration of
            the structure or grounds have created potential health
            and safety hazards and the owner has failed to take
            reasonable measures to remove the hazards; or

            e. the dilapidated appearance or other condition of the
            property materially affects the welfare, including the
            economic welfare, of the residents of the area in close
            proximity to the property, and the owner has failed to
            take reasonable and necessary measures to remedy the
            conditions.

As noted, no municipal official ever took the position or advised the owner of

any of the conditions that might support such a finding. Moreover, even

though Cavalieri checked boxes on his form certification to suggest some of

these conditions were present, for the most part, his certification only presents

conclusions that parrot the statutory language. The only actual detail Cavalieri

provided suggested that the concerns were minor and could have been quickly

remedied if they were known or reported.

      In any event, we need not determine whether, on its face, Cavalieri's

certification sufficiently supported a claim of abandonment. His assertions,

both general and specific, were disputed by Salah's certification. The judge

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                                        8
should have conducted an evidentiary hearing on the issues presented by the

parties' competing certifications rather than decide the issue by concluding that

it was in defendant's best interests to lose the property; the judge's entire

rationale for summarily deciding the abandonment issue against defendant i s

the following:

            So here's what I'm going to do. I am going to grant
            your motion to have the property [in Oaklyn] declared
            vacant and abandoned. And that's – this – after this
            one and the next one in July [referring to the similar
            motion to deem the Magnolia property abandoned],
            unfortunately, the plaintiff and the defendant in the
            other case [presumably referring to the Pennsylvania
            suit] are going to have less to fight about because the
            properties are going to be really taken out of the
            picture altogether. Plaintiff [sic: defendant or the
            buyer of the restaurant property?] should have thought
            about that if they wanted to preserve their rights.
            They could have redeemed this property in the hopes
            that if they win their lawsuit [again, presumably the
            Pennsylvania lawsuit] they get the three properties
            back, and there would have been something then to –
            to retrieve. Right now I'm taking one of the three
            away, pretty much, by doing it this way.

We find this rationale to be wholly disconnected from the issues presented.

      Whatever the judge's holding meant, it had nothing to do with the

condition of the property. As we have observed in reviewing the parties'

allegations concerning the Oaklyn property, there were factual issues to be

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                                         9
developed and examined at an evidentiary hearing. 3 The declaration of

abandonment in that case was, at best, premature. Because that determination

is pivotal to whether plaintiff was entitled to seek foreclosure when it did, all

that followed must be vacated.

      We lastly note that defendant argues in both appeals that the judge erred

in determining that the restaurant buyer was not an indispensable party. We

deem it appropriate not to presently reach that issue because the status of the

Pennsylvania suit may have changed during the pendency of this appeal and

such change might impact any such ruling. The need for that party's joinder

should be reconsidered following today's remand and in light of the current

status of the other litigation.

                                       ***

      To summarize, the final judgments in both matters are vacated, the

orders determining the properties abandoned in both cases are reversed, and

the matters remanded for evidentiary hearings on the question of abandonment

3
  Defendant did not oppose the abandonment motion on the Magnolia property
in the second foreclosure action. Cavalieri's assertions regarding that property
were similar to those asserted about the Oaklyn property. And, although
undisputed – because the judge's abandonment ruling in the Oaklyn matter
demonstrated the futility of any opposition – we conclude as well that the
abandonment determination in the Magnolia matter was also premature.

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                                        10
and for reconsideration of whether the restaurant buyer should be joined as a

party.

         Vacated in part, reversed in part, and remanded for further proceedings

in conformity with this opinion. We do not retain jurisdiction.

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