Court Opinion

ID: 9941319
Source: CourtListenerOpinion
Date Created: 2024-02-16 15:16:05.002637+00
Date Added: 2024-06-11T13:46:31.712030
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NOT FOR PUBLICATION WITHOUT THE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-1727-22

ADAR ALEPH, LLC,

          Plaintiff-Appellant,

v.

TDJP PROPERTIES, LLC,

     Defendant-Respondent.
_________________________

                   Submitted January 30, 2024 – Decided February 16, 2024

                   Before Judges Smith and Perez Friscia.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Ocean County, Docket No. L-2118-22.

                   Law Office of Michael C. Schonberger, LLC, attorneys
                   for appellant (Michael C. Schonberger, of counsel and
                   on the briefs).

                   Law Offices of Honig & Greenberg, LLC, attorneys for
                   respondent (Adam D. Greenberg, on the brief).

PER CURIAM
      Plaintiff Adar Aleph, LLC (Adar) appeals from a December 16, 2022 Law

Division order, which granted defendant TDJP Properties, LLC's (TDJP) motion

to dismiss Adar's complaint for failure to state a claim. We affirm.

      These parties are before us for a second time. In our prior opinion, we

detailed the relevant facts and procedural history regarding the parties'

underlying tax sale foreclosure. See TDJP Properties, LLC, v. Adar Aleph,

LLC, No. A-1198-20 (App. Div. Apr. 13, 2022) (slip op. at 2-5). Therefore, we

only recite the salient facts here.

                                         I.

      TDJP initiated a tax sale foreclosure as the assignee of a tax sale certificate

for Adar's property in Barnegat. Id. 2-3. The Chancery judge entered final

judgment in favor of TDJP after Adar failed to answer the complaint. Id. at 3.

When TDJP acquired the property, it was vacant and dilapidated. The property

had no working utilities, a faulty roof, and major interior damage.

      After TDJP began repairing the property, Adar moved to vacate final

judgment and redeem the tax sale certificate. Ibid. On October 16, 2020, a

Chancery judge vacated final judgment, permitting redemption conditioned "on

the payment of reasonable costs and fees." See id. at 4. Adar redeemed the tax

sale certificate and regained title to the property. The judge denied TDJP's

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motion for reconsideration and TDJP appealed from the memorializing order.

Id. at 5.

       While TDJP's appeal was pending, Adar began renovating the property.

Adar allegedly improved the roof, flooring, kitchen cabinets, counters, walls,

kitchen appliances, and plumbing system.       Adar obtained a certificate of

occupancy, leased the property, and collected rent. After Adar's alleged $93,700

in improvements, the property's value increased.

       On April 13, 2022, we reversed the judge's order vacating final judgment

and revested title to TDJP. On September 26, Adar filed a one-count Law

Division complaint against TDJP alleging unjust enrichment and seeking

recovery of "thousands of dollars" expended for improvements. On October 31,

TDJP moved to dismiss the complaint for failure to state a claim in lieu of an

answer, which Adar opposed.

       On December 16, 2022, without hearing argument, 1 the motion judge

granted TDJP's motion. The order provided a one-sentence written statement of

reasons: "The [c]omplaint is dismissed pursuant to [Rule] 4:6-2(e) and the New

Jersey Appellate Division's decision in [Wilmington Savings Fund Soc'y, FSB

1
  Adar argues the motion judge failed to hold oral argument, pursuant to Rule
1:6-2(d), but the record does not show argument was requested.
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for Pretium Mortgage Acquisition Trust v. Daw, 469 N.J. Super. 437 (App. Div.

2021)]."

      On appeal, Adar argues the judge erred because: reliance on Wilmington

Savings was misplaced as it concerns mortgage foreclosures rather than tax sale

foreclosures; and the complaint adequately pleaded an unjust enrichment claim

against TDJP.

                                        II.

      We review de novo a motion to dismiss for failure to state a claim upon

which relief can be granted under Rule 4:6-2(e). Baskin v. P.C. Richard & Son,

LLC, 246 N.J. 157, 171 (2021). "A reviewing court must examine 'the legal

sufficiency of the facts alleged on the face of the complaint,' giving the plaintiff

the benefit of 'every reasonable inference of fact.'"             Ibid.    (quoting

Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl, P.C., 237

N.J. 91, 107 (2019)). Courts should search the complaint thoroughly "and with

liberality to ascertain whether the fundament of a cause of action may be gleaned

even from an obscure statement of claim, opportunity being given to amend if

necessary." Ibid. (quoting Printing Mart-Morristown v. Sharp Elecs. Corp., 116

N.J. 739, 746 (1989)). In this early stage of litigation, we are not concerned

with a pleading party's ability to prove its allegations. Printing Mart, 116 N.J.

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at 746. However, "pleadings reciting mere conclusions without facts . . . do not

justify a lawsuit," and warrant dismissal. Neuwirth v. State, 476 N.J. Super.

377, 390 (App. Div. 2023) (alteration in original) (quoting Glass v. Suburban

Restoration Co., 317 N.J. Super. 574, 582 (App. Div. 1998)).

        "The essential test is 'whether a cause of action is suggested by the facts.'"

Sashihara v. Nobel Learning Cmtys., Inc., 461 N.J. Super. 195, 200 (App. Div.

2019) (internal quotation marks omitted) (quoting Printing Mart, 116 N.J. at

746). But "if the complaint states no claim that supports relief, and discovery

will not give rise to such a claim, the action should be dismissed."

Dimitrakopoulos, 237 N.J. at 107. "A trial court's interpretation of the law and

the legal consequences that flow from established facts are not entitled to any

special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140

N.J. 366, 378 (1995).

        Our Supreme Court has long recognized "two competing public policy

goals" embodied in the New Jersey Tax Sale Law (TSL), N.J.S.A. 54:5-1 to

-137:     "one to enhance the tax-collecting ability of municipalities by

encouraging tax sale foreclosures and the other to protect property owners from

the devastating consequences of foreclosure." Simon v. Cronecker, 189 N.J.

304, 315 (2007). A tax sale certificate is created when a municipality enforces

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a tax lien prescribed by the procedure set forth in N.J.S.A. 54:5-19. Varsolona

v. Breen Cap. Servs. Corp., 180 N.J. 605, 617 (2004) (quoting Savage v.

Weissman, 355 N.J. Super. 429, 435-36 (2002)). The court has long recognized

the interest in promoting marketability of tax sale certificates. See BV001 REO

Blocker, LLC v. 53 W. Somerset St. Props., LLC, 467 N.J. Super. 117, 128

(App. Div. 2021). In Cronecker, our Supreme Court further "acknowledge[d]

that the primary goal of the [TSL] is to encourage the sale of tax certificates."

189 N.J. at 331 (citing N.J.S.A. 54:5-85). Pursuant to the TSL, a tax sale

certificate holder acquires certain rights, including the right "to acquire title by

foreclosing the equity of redemption of all outstanding interests, including that

of the property owner." In re Princeton Off. Park L.P. v. Plymouth Park Tax

Servs., LLC, 218 N.J. 52, 63 (2014) (quoting Varsolona, 180 N.J. at 618).

      Once final judgment is entered, the right of redemption in a tax sale

foreclosure action is extinguished. N.J.S.A. 54:5-87.       As a result of a "final

judgment of foreclosure under the [TSL]," a tax certificate holder "is vest[ed]

title to the property in fee simple." Town of Phillipsburg v. Block 1508, Lot 12,

380 N.J. Super. 159, 166 (App. Div. 2005); N.J.S.A. 54:5-87. Historically, once

title vested to the tax certificate holder, any outstanding rights to equity or value

in the property were extinguished. In re Princeton, 218 N.J. at 63.

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      The United States Supreme Court in Tyler v. Hennepin County held the

confiscation of a property owner's equity in a tax-related foreclosure violated

the Fifth Amendment Takings Clause, reasoning that there was "no opportunity

for the taxpayer to recover the excess value[] once absolute title ha[d]

transferred." 598 U.S. 631, 644 (2023). 2 We recently held "retroactive pipeline

application of the holding in Tyler to the TSL [wa]s mandated because the Court

constitutionally recognized a property owner's interest in surplus equity." 257-

261 20th Ave. Realty, LLC v. Roberto, ___ N.J. Super. ___, ___ (App. Div. Dec.

4, 2023) (slip op. at 23).

                                       III.

      While Adar correctly contends our decision in Wilmington Savings

involved a mortgage foreclosure and this is a tax sale foreclosure, we glean the

judge's reliance was based on the premise that Adar's unjust enrichment claim

was insufficient because, accepting every inference, a quasi-contract was not

asserted. In Wilmington Savings, we held a mortgage lender or its assignee had

a duty under the implied covenant of good faith and fair dealing to timely advise

a borrower regarding its application of insurance proceeds received. 469 N.J.

2
  After the parties' briefs were filed, TDJP filed a supplemental letter, pursuant
to Rule 2:6-11(d), refuting the application of Tyler.
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Super. at 455. We further held that the homeowner's quantum meruit and unjust

enrichment claims for repair costs were precluded under the parties' mortgage

contract because no "equitable basis to warrant" reimbursement existed. Id. at

460-61. "Recovery based on quasi-contract, sometimes referred to as a contract

implied-in-law, 'is wholly unlike an express or implied-in-fact contract in that it

is "imposed by the law for the purpose of bringing about justice without

reference to the intention of the parties."'" Weichert Co. Realtors v. Ryan, 128

N.J. 427, 437 (1992) (quoting Saint Barnabas Med. Ctr. v. County of Essex,

111 N.J. 67, 79 (1988)). Notwithstanding the judge's terse statement of reasons,

see Rule 1:7-4(a),3 we conclude the judge's reference to Wilmington Savings

pertained to Adar's failure to allege an equitable basis for relief.

      "The doctrine of unjust enrichment rests on the equitable principle that a

person shall not be allowed to enrich himself unjustly at the expense of another."

Goldsmith v. Camden Cnty. Surrogate's Off., 408 N.J. Super. 376, 382 (App.

Div. 2009) (quoting Assocs. Com. Corp. v. Wallia, 211 N.J. Super. 231, 243

(App. Div. 1986)). To prove a claim for unjust enrichment, a party must

3
  Rule 1:7-4(a) requires courts to make "[r]equired [f]indings," in "an opinion
or memorandum decision, either written or oral," which "find[s] the facts and
state[s] its conclusions of law . . . on every motion decided by a written order
that is appealable as of right . . ."
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demonstrate that the opposing party "received a benefit and that retention of that

benefit without payment would be unjust." Iliadis v. Wal-Mart Stores, Inc., 191

N.J. 88, 110 (2007) (quoting VRG Corp. v. GKN Realty Corp., 135 N.J. 539,

554 (1994)). "That quasi-contract doctrine also 'requires that plaintiff show that

it expected remuneration from . . . defendant at the time it performed or

conferred a benefit on defendant and that the failure of remuneration enriched

defendant beyond its contractual rights.'" Thieme v. Aucoin-Thieme, 227 N.J.

269, 288 (2016) (quoting Iliadis, 191 N.J. at 110).

      We reject Adar's contention that it stated a claim against TDJP for unjust

enrichment for the value of the property improvements. The claim evinces a

fundamental misunderstanding of the doctrine of unjust enrichment. Notably,

Adar's complaint does not allege any expectation of remuneration from TDJP.

Adar was notified of TDJP's appeal, which sought reversal of the Chancery

judge's order vacating final judgment. Yet, it knowingly made improvements

with the possibility of a reversal pending; thus, Adar accepted the risk.

Accordingly, giving(?) Adar every reasonable inference from the facts alleged

in support of its quasi-contract claim for unjust enrichment, we discern "no basis

for relief" was pleaded. See Sparroween, LLC v. Twp. of W. Caldwell, 452 N.J.

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Super. 329, 339 (App. Div. 2017) (quoting J.D. ex rel. Scipio-Derrick v. Davy,

415 N.J. Super. 375, 397 (App. Div. 2010)).

      Finally, we note the December 16, 2022 order does not state that the

complaint was dismissed with prejudice. Dismissal of a complaint for failure to

state a claim pursuant to Rule 4:6-2(e) is "ordinarily without prejudice." Smith

v. SBC Commc'ns, 178 N.J. 265, 282 (2004); see also Pressler & Verniero,

Current N.J. Court Rules, cmt. 4.1.1 on R. 4:6-2(e) (2024) ("[A] dismissal for

failure to state a claim is [ordinarily] without prejudice."). "Under [Rule] 2:2-

3(a)(1), an appeal as of right may be taken to the Appellate Division only from

a 'final judgment.'" Vitanza v. James, 397 N.J. Super. 516, 518 (App. Div. 2008)

(quoting Janicky v. Point Bay Fuel, Inc., 396 N.J. Super. 545, 939 (App. Div.

2007)). Nevertheless, because dismissal of this appeal would cause undue delay

at this juncture, we sua sponte grant leave to appeal nunc pro tunc the order to

dismiss. See R. 2:4-4(b)(2); see also Medcor, Inc. v. Finley, 179 N.J. Super.

142, 144-45 (App. Div. 1981) (holding this court has discretion on whether to

grant leave to appeal from an interlocutory order). We therefore modify the

court's order to reflect that the complaint has been dismissed without prejud ice.

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      The court's order of December 16, 2022, is affirmed as modified. We

remand to the motion judge for the limited purpose of modifying the order of

dismissal to provide that Adar's complaint is dismissed without prejudice.

      To the extent not addressed, Adar's remaining arguments lack sufficient

merit to warrant discussion in our written opinion. R. 2:11-3(e)(1)(E).

      Affirmed as modified and remanded for correction of the order. We do

not retain jurisdiction.

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