Court Opinion

ID: 4708959
Source: CourtListenerOpinion
Date Created: 2021-08-04 14:10:08.725637+00
Date Added: 2024-06-11T08:06:52.933644
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NOT FOR PUBLICATION WITHOUT THE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 NO. A-2075-19

MICHAEL BALICE,

          Plaintiff-Appellant,

and

ROSEWATER TRUST,

          Plaintiff,
v.

AVS PROPERTIES, LLC,

     Defendant-Respondent,
______________________________

RONALD OTTAVIANO, Trustee,
and ROSEWATER TRUST,

          Plaintiffs,

and

MICHAEL BALICE,

          Plaintiff-Appellant,

v.
AVS PROPERTIES, LLC

     Defendant-Respondent.
________________________________

            Submitted April 19, 2021 – Decided August 4, 2021

            Before Judges Rothstadt and Susswein.

            On appeal from the Superior Court of New Jersey,
            Chancery Division, Middlesex County, Docket Nos. C-
            000001-19 and C-000165-18.

            Michael Balice, appellant pro se.

            Respondent has not filed a brief.

PER CURIAM

      Plaintiff Michael Balice appeals from a December 10, 2019 Chancery

Division order dismissing without prejudice his complaints against defendant

AVS Properties, LLC (AVS). Plaintiff seeks declaratory and injunctive relief

and damages relating to the court-ordered public auction of a house in Metuchen

that was owned by Rosewater Trust and in which Balice resided as a tenant.

AVS was the winning bidder at the public auction and was not involved in the

federal tax litigation that led to the court-ordered sale. We affirm the dismissal

of the complaints against AVS substantially for the reasons patiently explained

by the Chancery judge on the record.

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                                        2
      The litigation involving the Metuchen home is protracted and this appeal

comes to us by a circuitous route. We discern the following facts and procedural

history from the record before us, which includes a detailed written opinion

rendered on July 15, 2019 by a United States District Court judge. Ottaviance

v. AVS Props., LLC, No. 18-CV-16429 (D.N.J. 2019). In 2014, the Internal

Revenue Service (IRS) brought a federal tax collection action against Balice and

his former spouse. United States v. Balice, No. 14-CV-3937 (D.N.J. 2014). The

IRS reduced to judgment the overdue tax liability against the Balices. The

United States District Court found that Rosewater Trust—the nominal owner of

the Metuchen property—was Balice's nominee or alter ego. The federal judge

issued an order directing Balice to vacate the premises and authorizing the IRS

to sell the property at public auction. AVS Properties submitted the winning

bid. The federal judge confirmed the sale and directed the distribution of the

proceeds, applying a portion to plaintiff's unpaid tax liabilities. The federal

judge also directed the United States government to convey the real property to

AVS by deed.

      Balice thereafter filed a series of motions in federal court that argued, inter

alia, that the federal income tax is unconstitutional. The federal judge issued

fifteen decisions rejecting those motions. A federal Magistrate judge issued nine

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similar decisions.   Balice appealed all twenty-four decisions, which were

subsequently affirmed by the Third Circuit Court of Appeals in a single

consolidated opinion. United States v. Balice, No. 17-3134 (3d Cir. 2017).

      Balice also filed a state court action in Superior Court, Middlesex County,

to prevent the sale of the home and enforcement of the federal court judgment.

The complaint was brought against the United States, the U.S. Attorney General,

two IRS agents, and the District Court judge who ordered the sale of the

property. That action was removed to federal court pursuant to 28 U.S.C.

§1442(a)(1). Balice v. United States, No. 17-CV-13601 (D.N.J. 2017). The

complaint was dismissed with prejudice based on sovereign and judicial

immunity and again affirmed by the Third Circuit. Balice v. United States, 763

F. App'x 154 (3d Cir. 2019).

      Thereafter, Balice filed a second complaint in state court that was

substantively identical to the first state-court complaint. This second complaint

also was removed to federal court and subsequently dismissed. Balice v. United

States, No. 17-CV-10291 (D.N.J. 2017). Balice then filed for bankruptcy and

sought to discharge the tax debt by filing a series of motions. The bankruptcy

case was dismissed without discharge. In re Balice, No. 17-32967 (Bankr.

D.N.J. 2017).

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                                       4
      In August 2018, Balice filed a third state-court suit, again attacking the

basis of the underlying federal tax action. The third complaint once again

mirrored the allegations and claims made in the two prior state-court complaints.

The third action also was removed to federal court and dismissed. Balice v.

United States, No. 18-CV-13560 (D.N.J. 2018).

      Balice and Rosewater Trust next filed a complaint against AVS seeking

declaratory and injunctive relief and a complaint seeking damages. This time,

plaintiff did not name federal agencies as defendants. Plaintiff alleges that AVS

committed an "unlawful . . . invasion of the plaintiff's . . . property."   Plaintiff

contends AVS violated several New Jersey statutes and the New Jersey

Constitution in seeking to enforce the foreign judgment—that is, the federal

court orders that directed the sale of the property and directed the United States

government to convey the property to AVS.

      The complaints against AVS were first heard in federal court. As noted,

the United States government was not named as a defendant but moved to

intervene and dismiss the complaint. Plaintiff moved to remand the matter to

state court. The federal judge granted plaintiff's motion to remand the case to

the New Jersey Superior Court, rendering moot the federal government's

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                                         5
motions to intervene and dismiss the complaint. Ottaviance, No. 18-16429 (slip

op. at 3).

      AVS did not respond to the complaint in Superior Court and plaintiff

moved for default judgment. That motion was heard at a proof hearing before

the Chancery judge on November 7, 2019. The Chancery judge ruled the

complaints against AVS are without merit. We agree.

      Although the complaints at issue in this appeal are couched in terms of

AVS's unlawful invasion of plaintiff's property rights, the true gist of plaintiff 's

contention is a collateral attack against the sale of the Metuchen property that

had been ordered by the federal court. As the federal judge aptly noted in his

written opinion, "[a]lthough the complaint is brought against AVS, it actually

says very little about any supposedly wrongful conduct by that entity. Rather,

the alleged wrongdoing is attributed to the [United States] Government's

conduct in the underlying tax action in connection with its efforts to collect on

Balice's unpaid income tax liabilities."

      The Chancery judge reached the same conclusion. We note that plaintiff's

counsel at the November 7, 2019 hearing acknowledged that the gravamen of

the complaints is that the Metuchen property should not have been sold at

auction. Counsel argued the order to sell the property was made "under false

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                                           6
pretenses." The Chancery judge asked counsel, "You're arguing that the federal

district court erred in granting the order [to sell the property at public auction],

right?" Counsel replied, "Fundamentally, yes."

      Relatedly, Balice's testimony at the hearing focused on misconduct by

United States government officials, not by AVS. Balice claimed, for example,

IRS "forged liens" and the United States Attorney "hid evidence." He also

claimed at the hearing that, "The [United States District Court] judge is getting

paid off from the IRS and press fund. He's not going to do anything. He's just

trying to make some money."

      Plaintiff's reliance on the Uniform Enforcement of Foreign Judgments

Act, N.J.S.A. 2A:49A-25 to -33, is misplaced and unavailing. N.J.S.A. 2A:49A-

27 provides,

             A copy of any foreign judgment [1] authenticated in
             accordance with an act of Congress or the statutes of
             this State may be filed in the office of the Clerk of the
             Superior Court of this State. The clerk shall treat the
             foreign judgment in the same manner as a judgment of
             the Superior Court of this State. A judgment so filed
             has the same effect and is subject to the same
             procedures, defenses[,] and proceedings for reopening,

1
  The term "foreign judgment" means "any judgment, decree, or order of a court
of the United States or of any other court which is entitled to full faith and credit
in this State." N.J.S.A. 2A:49A-26.

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                                         7
            vacating, or staying as a judgment of a Superior Court
            of this State and may be enforced in the same manner.

      The general rule in applying N.J.S.A. 2A:49A-27 is that a litigant seeking

to assert merit or substantive defenses against a foreign judgment must do so in

the forum jurisdiction. See Sonntag Rep. Serv., Ltd. v. Ciccarelli, 374 N.J.

Super. 533, 535 (App. Div. 2005). There is an exception, however, when the

litigant claims that his or her due process rights were violated in the forum

jurisdiction. In Sonntag, we explained,

            In accordance with the constitutional [Full Faith and
            Credit] mandate, New Jersey courts will enforce the
            judgments entered by the courts of sister states unless
            there has been a denial of due process. These due
            process denials occur when "the rendering state 1)
            lacked personal jurisdiction over the judgment debtor,
            2) lacked subject matter jurisdiction, or 3) failed to
            provide the judgment debtor adequate notice and an
            opportunity to be heard." Choi v. Kim, 50 F.3d 244,
            248 (3d Cir. 1995); see also Security Benefit Life Ins.
            Co. v. TFS Ins. Agency, 279 N.J. Super. 419, 423 (App.
            Div. 1995). Trial courts of sister states may inquire into
            defenses of lack of jurisdiction in the foreign court or
            fraud in procurement of the judgment, provided that
            those issues have not been litigated in the forum court.
            Firstar Bank Milwaukee, NA v. Cole, 678 N.E.2d 668,
            670 (1997).

            [Id. at 538 (emphasis added).]

      We do not doubt that plaintiff's claims of government misconduct and

corruption in the federal tax litigation, if true, would constitute both fraud in

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                                        8
procurement of the judgment and a deprivation of due process. Those claims,

however, were litigated and repeatedly rejected in federal courts—that is, the

forum jurisdiction. In these circumstances, we do not read N.J.S.A. 2A:49A-27

to require the Chancery court to decide, for example, whether the IRS forged

liens, the United States Attorney's Office hid evidence, or the United States

District Court judge was "paid off" by the IRS. We stress that plaintiff in his

latest complaints made a strategic decision not to name federal government

officials as defendants, naming only the entity that submitted the winning bid at

the court-ordered public auction. We believe the Uniform Enforcement of

Foreign Judgments Act does not contemplate that in these unusual

circumstances, AVS should be expected to re-litigate plaintiff's government-

conspiracy allegations in a state court proceeding to enforce the federal

judgment. Accordingly, the complaints against AVS at issue in this appeal were

properly dismissed.

      To the extent we have not addressed them, any remaining arguments

raised by plaintiff lacks sufficient merit to warrant discussion in a written

opinion. R. 2:11-3(e)(1)(E).

      Affirmed.

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