Court Opinion

ID: 9917026
Source: CourtListenerOpinion
Date Created: 2024-01-11 15:05:27.528803+00
Date Added: 2024-06-11T07:55:01.873822
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NOT FOR PUBLICATION WITHOUT THE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-0105-22

TWIN BORO LUMBER &
SUPPLY CO.,

          Plaintiff-Appellant,

v.

JAMES K. BOGIE,

          Defendant-Respondent,

and

COMPLETE CONSTRUCTION
COMPANY, a/k/a COMPLETE
CONSTRUCTION CO., INC., and
JAMES K. BOGIE, INC., d/b/a
COMPLETE CONSTRUCTION CO. 1

          Defendants.

                   Argued December 5, 2023 – Decided January 11, 2024

                   Before Judges Rose and Perez Friscia.

1
     Improperly pled as James K. Bogie, Inc.
            On appeal from the Superior Court of New Jersey, Law
            Division, Union County, Docket No. L-4507-10.

            Andrew R. Turner argued the cause for appellant.

            John F. Wiley, Jr., argued the cause for respondent
            (Wiley Lavender Maknoor, attorneys; Pankaj Maknoor,
            on the brief.)

PER CURIAM

      Plaintiff Twin Boro Lumber & Supply Co. appeals from an October 6,

2022 Law Division order discharging its judgment against defendant, James K.

Bogie, pursuant to N.J.S.A. 2A:16-49.1. We affirm.

      The facts are straightforward and largely undisputed. Plaintiff supplied

lumber to businesses in the construction trade. In April 2010, Bogie personally

guaranteed payment of all goods purchased by his company, defendant

Complete Construction Company (collectively, defendants), from plaintiff.

      Thereafter, the account became delinquent. In November 2010, plaintiff

filed a complaint against defendants demanding $57,656.06 plus interest and

costs. Default judgment was entered against defendants in January 2011 for

failure to timely answer the complaint. In March 2011, a Union County sheriff's

officer attempted a levy on Bogie's personal property, but service was returned

unsatisfied. The following month, final judgment in the amount of $57,656.06

plus $240.00 in costs was recorded as a lien on Bogie's real property.

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      Four years later in June 2015, Bogie filed a voluntary Chapter 7 petition

in bankruptcy in the District of New Jersey. See 11 U.S.C. § 727. Relevant

here, Bogie's petition listed plaintiff as a creditor holding an unsecured

nonpriority claim. Bogie also listed his fee simple interest in real property

located in Clark. In its merits brief, plaintiff acknowledges it received notice of

the bankruptcy filing; there is no indication in the record that plaintiff objected

to Bogie's petition. In October 2015, the bankruptcy court discharged plaintiff's

judgment.

      In September 2022, the motion judge granted Bogie's application to vacate

final judgment by default pursuant to Rule 4:50-1 and N.J.S.A. 2A:16-49.1.

After plaintiff filed its notice of appeal, the judge held a conference with the

parties, expressing an interest in conducting oral argument.          We granted

plaintiff's ensuing motion for a temporary remand and the judge promptly held

oral argument.2 Shortly thereafter, the judge issued the October 6, 2022 order

under review, accompanied by a thorough statement of reasons. The judge

squarely addressed the issues raised in view of the governing law and discharged

plaintiff's judgment lien pursuant to N.J.S.A. 2A:15-49.1.

2
   Before the trial court, defendant withdrew his request to consider his
application under Rule 4:50-1.
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      On appeal, plaintiff argues the motion judge impermissibly "shift[ed] the

burden of proof for removal of a lien following bankruptcy" to the judgment

creditor.   Plaintiff further contends the judge erroneously concluded its

judgment lien "impaired" Bogie's exemption, see 11 U.S.C. § 522(f), because

Bogie failed to provide competent proof of his real property's value.

      We have considered plaintiff's contentions in view of the applicable legal

principles and conclude they lack sufficient merit to warrant extensive

discussion in a written opinion, R. 2:11-3(e)(1)(E), beyond the comments that

follow. We affirm substantially for the reasons stated in the motion judge's

cogent statement of reasons.

      N.J.S.A. 2A:16-49.1 provides that one year or more after a bankruptcy

discharge, a debtor may apply to a court where a judgment has been docketed

for an order canceling and discharging the judgment. The judgment should be

canceled and discharged "[i]f it appears . . . [the debtor] has been discharged

from the payment of that judgment or the debt upon which such judgment was

recovered." Ibid. However,

            [w]here the judgment was a lien on real property owned
            by the [debtor] prior to the time he was adjudged a
            bankrupt, and not subject to be discharged or released
            under the provisions of the Bankruptcy Act, the lien
            thereof upon said real estate shall not be affected by

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            said order and may be enforced, but in all other respects
            the judgment shall be of no force or validity . . . .

            [Ibid. (emphasis added).]

      It is well settled that "[t]o establish a lien against a judgment debtor's real

property, a creditor need only enter a judgment in the records of the Superior

Court; a levy and execution on real property owned by the judgment debtor are

not required." New Brunswick Sav. Bank v. Markouski, 123 N.J. 402, 411

(1991). "A holder of a docketed judgment has a lien on all real property held by

the judgment debtor in the state." Id. at 412 (citing N.J.S.A. 2A:16-1, 2A:17-

17); see also Chemical Bank v. James, 354 N.J. Super. 1, 8 (App. Div. 2002).

However, a judgment lien against a debtor's real property must be "perfected

. . . by levying against it prior to the filing of the bankruptcy petition." New

Century Fin. Servs. v. Staples, 379 N.J. Super. 489, 497 (App. Div. 2005).

      Thus, when a debtor attempts to discharge a valid and perfected judgment

lien on real property under N.J.S.A. 2A:16-49.1, "the threshold and controlling

issue is whether the judgment [lien] was subject to discharge or release in

bankruptcy." Gaskill v. Citi Mortg., Inc., 428 N.J. Super. 234, 241 (App. Div.

2012), aff'd 221 N.J. 501 (2015). The statute applies if "the debtor could have

obtained a discharge of the lien through the bankruptcy proceedings[;] the debtor

need not have actually obtained a discharge of the lien." Ibid.

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                                         5
      In Chemical Bank, we held abandonment of real property by a bankruptcy

trustee, and consequent survival of liens against real property, did not alter the

fact that a judgment lien against the property could have been discharged during

the bankruptcy proceeding. 354 N.J. Super. at 9, 11. A judgment lien becomes

non-dischargeable only if it is levied upon either before bankruptcy filing or

after the bankruptcy trustee's abandonment of the property. Id. at 9, 11-12; see

also Gaskill, 428 N.J. Super. at 243; Party Parrot, Inc. v. Birthdays & Holidays,

Inc., 289 N.J. Super. 167, 171-72, 175 (App. Div. 1996). As we explained in

Party Parrot:

            A lien on the real estate enforced by levy, as opposed
            to the underlying judgment or indebtedness by [the]
            defendants for a deficiency, is not subject to discharge
            or complete avoidance under the provisions of the
            Bankruptcy Code. If unperfected, however, [the]
            plaintiff's lien was subject to avoidance under the Code
            and therefore may now be discharged of record.

            [Id. at 171.]

      The statute has been described as a housekeeping measure to assure that

judgments discharged in bankruptcy do not remain of record, cloud title, or

require payment in the future. Id. at 173. The statute's purpose is aligned with

"the intention of the Bankruptcy Act, i.e.[,] to give the bankrupt a fresh start in

life." Assocs. Com. Corp. v. Langston, 236 N.J. Super. 236, 240 (App. Div.

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1989). Otherwise, "[i]f judgments that have been discharged in bankruptcy are

allowed to remain of record, the practical effect may be to require payment at

sometime in the future, thereby negating the intended benefits of the bankruptcy

proceedings." Ibid. (quoting Sponsor's Statement to N.J.S.A. 2A:16-49.1 (July

10, 1967)).

      In the present matter, although plaintiff obtained a valid judgment lien

against Bogie, plaintiff failed to levy on the debtor's real property. See Gaskill,

429 N.J. Super. at 239. Accordingly, plaintiff failed to perfect its judgment lien.

Because Bogie complied with the requirements set forth in N.J.S.A. 2A:16-49.1,

the motion judge correctly concluded plaintiff's judgment lien was dischargeable

under the statute and granted the motion.

      Nor do we discern any error in the judge's crediting the value of Bogie's

residential real property as declared in his bankruptcy petition, which was

accepted by the bankruptcy court, as the basis for her conclusion that "plaintiff's

judgment lien impair[ed] defendant's exemption" and the "entirety of the lien

was subject to avoidance under 11 U.S.C. § 522(f)(2)." Plaintiff was noticed

that Bogie listed its judgment lien in his bankruptcy proceeding but filed no

objection. We therefore discern no reason to disturb the motion judge's decision.

      Affirmed.

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