Court Opinion

ID: 2680422
Source: CourtListenerOpinion
Date Created: 2014-06-25 14:02:27.555862+00
Date Added: 2024-06-11T11:18:29.717857
License: Public Domain

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)

            In re: Princeton Office Park v. Plymouth Park Tax Services, LLC (A-107-11) (069521)

Argued October 21, 2013 -- Reargued February 3, 2014 -- Decided June 25, 2014

PATTERSON, J., writing for a majority of the Court.

          In this case, the Court considers a question of law certified by the United States Court of Appeals for the
Third Circuit pursuant to Rule 2:12A-1. The Third Circuit’s inquiry is whether, under New Jersey law, a tax sale
certificate purchaser holds a tax lien.

          In 1998, plaintiff Princeton Office Park, L.P. (Princeton Office Park) purchased a 220,000 square foot
commercial building on thirty-seven acres of land in the Township of Lawrence (Township). Princeton Office Park
did not satisfy its real estate tax obligation to the Township and by 2005 owed the Township $204,296.79, consisting
of $192,643.92 in back taxes and $11,652.87 in unpaid penalties. On December 19, 2005, exercising the authority
granted to it by N.J.S.A. 54:5-19, the Township conducted a public auction of municipal tax liens. Defendant
Plymouth Park Tax Services, LLC (Plymouth Park) bid on a tax sale certificate for Princeton Office Park’s property.
Plymouth Park agreed to take a zero percent interest rate on the certificate, and to pay $204,296.79 for the taxes and
penalties due on the property, plus a $600,100.00 premium and $100.00 to cover the cost of the sale. The Township
issued a tax sale certificate to Plymouth Park. Pursuant to N.J.S.A. 54:5-58, Princeton Office Park was required to
pay $204,396.79 to redeem the certificate.

          As the owner of the tax sale certificate following the public auction, Plymouth Park paid municipal real
estate taxes and charges for Princeton Office Park’s property through the second quarter of 2008. Pursuant to
N.J.S.A. 54:4-67 and N.J.S.A. 54:5-6, the redemption amount accrued interest at a rate of eighteen percent following
the sale. On December 18, 2007, Plymouth Park filed a tax lien foreclosure action against Princeton Office Park in
the Chancery Division, seeking to enjoin Princeton Office Park from exercising any right of redemption of the
certificate, and requesting a declaration that Plymouth Park was the owner in fee simple of the disputed property.
On June 6, 2008, the Chancery Division established a deadline by which Princeton Office Park could redeem the
certificate and set the redemption amount at $1,012,188.80.

         On September 9, 2008, while Plymouth Park’s foreclosure action was pending in the Chancery Division,
Princeton Office Park filed a voluntary Chapter 11 bankruptcy petition in the United States Bankruptcy Court for
the District of New Jersey. Princeton Office Park then filed its Plan of Reorganization and, among other provisions,
the Plan envisioned Princeton Office Park’s execution of a note and mortgage, securing its obligation to Plymouth
Park with interest accrued at a rate of six percent beginning on the Plan’s effective date. On July 13, 2009,
Plymouth Park objected to Princeton Office Park’s Plan of Reorganization. It asserted that it had obtained a tax lien
under New Jersey law, and that because the rate of interest governing “tax claims” is “determined under applicable
nonbankruptcy law,” 11 U.S.C.A. § 511(a), the Bankruptcy Court was not authorized to reduce the statutory rate of
eighteen percent to the six percent interest rate requested by Princeton Office Park. The parties thus framed the
question that is now before this Court: whether by virtue of its purchase of the tax sale certificate, Plymouth Park
acquired a tax lien.

          The United States Bankruptcy Court ruled in favor of Princeton Office Park. In re Princeton Office Park,
L.P., 423 B.R. 795, 797 (Bankr. D.N.J. 2010). Reasoning that the municipality had not assigned or subrogated its
rights to Plymouth Park, the court determined that Plymouth Park’s lien did not constitute a tax lien. The court held,
accordingly, that the tax sale certificate did not transfer a tax claim and granted Princeton Office Park’s motion for
partial summary judgment. The United States District Court for the District of New Jersey affirmed, substantially

                                                           1
adopting the reasoning of the United States Bankruptcy Court. The District Court characterized the tax sale
certificate holder’s lien to be one that secures the property owner’s obligation to pay the redemption amount, and not
as an interest rooted in the obligation to pay taxes to the municipality.
          Plymouth Park appealed to the United States Court of Appeals for the Third Circuit. Following oral
argument, the Third Circuit invoked Rule 2:12A to raise a question that it considered to be “an important and
unresolved question concerning the type of lien acquired by a purchaser of a tax certificate under New Jersey law.”
The Third Circuit noted that the Bankruptcy Court and District Court had relied upon non-precedential opinions of
New Jersey state courts in determining that “the purchase of a tax sale certificate extinguishes the underlying tax
claim.” The Third Circuit posed the following question to this Court: “Whether, under New Jersey law, a tax sale
certificate purchaser holds a tax lien.” On May 1, 2012, this Court entered an order accepting the question as
certified, pursuant to Rule 2:12A.

HELD: The Court answers the Third Circuit’s certified question in the affirmative: The purchaser of a tax sale
certificate possesses a tax lien on the encumbered property.

1. The Tax Sale Law confers on a municipality that is owed real estate taxes “ ‘a continuous lien on the land’ for the
delinquent amount as well as for ‘all subsequent taxes, interest, penalties and costs of collection.’ ” Simon v.
Cronecker, 189 N.J. 304, 318 (2007) (quoting N.J.S.A. 54:5-6). “The Tax Sale Law converts that lien into a stream
of revenue by encouraging the purchase of tax certificates on tax-dormant properties.” Ibid. After providing notice
to the public and the property owner, the municipality may sell the certificate at a public auction. Pursuant to
N.J.S.A. 54:5-32, an investor includes in its bid the rate of interest that it is willing to accept upon redemption of the
certificate. The winning bidder is the investor who “will purchase the property, subject to redemption at the lowest
rate of interest, but in no case in excess of 18% per annum.” N.J.S.A. 54:5-32. The successful bidder’s purchase of
a tax sale certificate “does not divest the delinquent owner of his title to the land.” Twp. of Jefferson v. Block 447A,
Lot 10, 228 N.J. Super. 1, 4 (App. Div. 1988). Instead, the sale operates as “a conditional conveyance of the
property to the purchaser, subject to a person with an interest in the property having the right to redeem the
certificate, as prescribed by statute.” Simon, supra, 189 N.J. at 318 (citing N.J.S.A. 54:5-31 to -32, -46). By virtue
of a foreclosure, however, the purchaser of the tax sale certificate may become “the owner of the property in fee
simple.” Ibid (citing N.J.S.A. 54:5-87). (pp. 11-16)

2. The legislative purpose of the Tax Sale Law is to “aid municipalities in raising revenue,” by attracting “third
parties to the opportunity to acquire . . . property.” Bron v. Weintraub, 42 N.J. 87, 91-92 (1964). In short, “[t]he
purpose of the Tax Sale Law is to enhance the collection of taxes.” Simon v. Rando, 374 N.J. Super. 147, 152 (App.
Div. 2005), aff’d, 189 N.J. 339, 344-45 (2007). The Third Circuit’s certified question requires that the Court
classify the lien held by a purchaser of a tax sale certificate. As a general principle, “[a] lien is defined as a charge
upon real or personal property for the satisfaction of some debt or duty.” Sargeant Bros. v. Brancati, 107 N.J.L. 84,
87 (E & A 1930). The lien is thus premised upon an underlying debt. The Court looks to the Legislature’s language
to define that lien, and the debt from which it derives. The Court premises its construction of the Tax Sale Law on
five statutory provisions: N.J.S.A. 54:5-6, which defines the municipality’s continuous tax lien; N.J.S.A. 54:5-42,
which provides that the lien is conveyed to the purchaser of a tax sale certificate; N.J.S.A. 54:5-54, which uses the
term “tax lien certificate” to describe a tax sale certificate; N.J.S.A. 54:5-43, which recognizes the purchaser’s
compensable “interest in the tax;” and N.J.S.A. 54:4-67, which provides that the tax delinquency survives the
issuance of a certificate. The plain language of these provisions confirms that the debt underlying a certificate
holder’s lien is the property owner’s obligation to pay taxes, and that the lien conferred with the certificate is a tax
lien. Moreover, this statutory language reflects the Legislature’s intent that a property owner’s tax delinquency
survive the sale of a tax certificate, and that the certificate holder will hold a lien that is based on that delinquency.
(pp. 16-26)

         CHIEF JUSTICE RABNER and JUDGE CUFF (temporarily assigned) filed a separate, DISSENTING
opinion, stating that they dissent for the reasons expressed in Judge Kaplan’s opinion. In re Princeton Office Park,
L.P., 423 B.R. 795 (Bankr. D.N.J. 2010).

         JUSTICES LaVECCHIA, ALBIN, FERNANDEZ-VINA, and JUDGE RODRÍGUEZ (temporarily

                                                            2
assigned) join in JUSTICE PATTERSON’s opinion. CHIEF JUSTICE RABNER and JUDGE CUFF
(temporarily assigned) filed a separate, dissenting opinion.

                                           3
                                     SUPREME COURT OF NEW JERSEY
                                      A-107 September Term 2011
                                                069521

IN RE: PRINCETON OFFICE PARK,
LP,

    Plaintiff-Respondent,

         v.

PLYMOUTH PARK TAX SERVICES,
LLC,

    Defendant-Appellant.

         Argued October 21, 2013
         Reargued February 3, 2014 – Decided June 25, 2014

         On appeal from the United States District
         Court, District of New Jersey.

         Stephen B. McNally argued the cause for
         appellant (McNally & Associates, attorneys;
         Lauren Busche, of counsel).

         Lawrence S. Berger argued the cause for
         respondent (Berger & Bornstein and Norris
         McLaughlin & Marcus, attorneys; Mr. Berger
         and Morris S. Bauer, of counsel; Mr. Berger,
         Mr. Bauer, and Robert A. Bornstein, on the
         briefs).

         Keith A. Bonchi argued the cause for amici
         curiae New Jersey State League of
         Municipalities, Tax Collectors and
         Treasurers Association of New Jersey,
         Township of Lawrence, and Northeast Regional
         Tax Collectors and Treasurers Association
         (Goldenberg, Mackler, Sayegh, Mintz,
         Pfeffer, Bonchi & Gill, attorneys; Mr.
         Bonchi and Rachelle J. Armbruster, on the
         briefs).

                                1
         Adam D. Greenberg argued the cause for
         amicus curiae National Tax Lien Association,
         Inc. (Honig & Greenberg and Taylor and
         Keyser, attorneys; Mr. Greenberg and Robert
         W. Keyser, on the brief).

    JUSTICE PATTERSON delivered the opinion of the Court.

    In this case, the Court considers a question of law

certified by the United States Court of Appeals for the Third

Circuit pursuant to Rule 2:12A-1.    The Third Circuit’s inquiry

is whether, under New Jersey law, a tax sale certificate

purchaser holds a tax lien.   Construing the plain language of

several provisions of the Tax Sale Law, N.J.S.A. 54:5-1 to -137,

in accordance with the statute’s purpose to promote the sale of

tax sale certificates as a source of municipal revenue, we hold

that the purchaser of a tax sale certificate possesses a tax

lien on the encumbered property.     Accordingly, we respond to the

Third Circuit’s inquiry in the affirmative.

                                I.

    The Third Circuit’s certified question is posed in the

setting of a record in which the facts are undisputed.     In 1998,

plaintiff Princeton Office Park, L.P. (Princeton Office Park)

purchased a 220,000 square foot commercial building on thirty-

seven acres of land in the Township of Lawrence.     Princeton

Office Park did not satisfy its real estate tax obligation to

                                2
the Township of Lawrence.   By 2005, Princeton Office Park owed

the Township of Lawrence $204,296.79, consisting of $192,643.92

in back taxes and $11,652.87 in unpaid penalties.

    On December 19, 2005, exercising the authority granted to

it by N.J.S.A. 54:5-19, the Township of Lawrence conducted a

public auction of municipal tax liens.   Defendant Plymouth Park

Tax Services, LLC (Plymouth Park) bid on a tax sale certificate

for Princeton Office Park’s property.    Plymouth Park agreed to

accept a zero percent interest rate on the certificate, and to

pay $204,296.79 for the taxes and penalties due on the property

-- the entire amount of Princeton Park’s outstanding real estate

taxes -- plus a $600,100.00 premium and $100.00 to cover the

cost of the sale.   Consistent with the provisions of N.J.S.A.

54:5-32, which designates as the winning bidder the party that

commits to accept the lowest interest rate on the tax

certificate not to exceed eighteen percent, the Township of

Lawrence issued a tax sale certificate to Plymouth Park.

N.J.S.A. 54:5-32.   Under the terms set forth in the tax sale

certificate, and pursuant to N.J.S.A. 54:5-58, Princeton Office

Park was required to pay $204,396.79 to redeem the certificate.

    As the owner of the tax sale certificate following the

public auction, Plymouth Park paid municipal real estate taxes

and charges for Princeton Office Park’s property through the

                                 3
second quarter of 2008.   By operation of N.J.S.A. 54:5-6,

Plymouth Park’s additional payments were added to the sum

required for Princeton Office Park to redeem the tax sale

certificate owned by Plymouth Park.     Pursuant to N.J.S.A. 54:4-

67 and N.J.S.A. 54:5-6, the redemption amount accrued interest

at a rate of eighteen percent following the sale.

     On December 18, 2007, Plymouth Park filed a tax lien

foreclosure action against Princeton Office Park in the Chancery

Division, seeking to enjoin Princeton Office Park from

exercising any right of redemption of the certificate, and

requesting a declaration that Plymouth Park was the owner in fee

simple of the disputed property.1   On June 6, 2008, the Chancery

Division entered an order establishing a deadline by which

Princeton Office Park could redeem the certificate.    The court

determined that the total amount that Princeton Office Park was

required to pay to redeem the certificate was $1,012,188.80.

     On September 9, 2008, while Plymouth Park’s foreclosure

action was pending in the Chancery Division, Princeton Office

Park filed a voluntary Chapter 11 bankruptcy petition, pursuant

to 11 U.S.C.A. § 1101 to 1174, in the United States Bankruptcy

Court for the District of New Jersey.    On October 29, 2008,
1
  The named plaintiff in the Chancery Division action was
“Wachovia CUST for Plym Pk Tax Srvs.” The record does not
reveal the relationship between that entity and Plymouth Park.

                                4
Plymouth Park filed an initial proof of claim in the Bankruptcy

Court, citing “taxes” as the basis for its claim.   Following an

amendment, Plymouth Park’s proof of claim sought $1,155,487.81.

According to Plymouth Park’s amended proof of claim, this figure

represented the amount that Plymouth Park had paid for the tax

sale certificate, the post-sale tax payments made to the

Township of Lawrence, other penalties, and the accrued post-

petition interest calculated at the rate of eighteen percent as

authorized by N.J.S.A. 54:4-67 and N.J.S.A. 54:5-6.

    On June 10, 2009, Princeton Office Park filed its Plan of

Reorganization in the Bankruptcy Court.   Among other provisions,

the Plan of Reorganization envisioned Princeton Office Park’s

execution of a note and mortgage, securing its obligation to

Plymouth Park with interest accrued at a rate of six percent

beginning on the Plan’s effective date.

    On July 13, 2009, Plymouth Park objected to Princeton

Office Park’s Plan of Reorganization.   It asserted that it had

obtained a tax lien under New Jersey law, and that because the

rate of interest governing “tax claims” is “determined under

applicable nonbankruptcy law,” 11 U.S.C.A. § 511(a), the

Bankruptcy Court was not authorized to reduce the statutory rate

of eighteen percent to the six percent interest rate requested

by Princeton Office Park.   The parties thus framed the question

                                 5
that is now before this Court: whether by virtue of its purchase

of the tax sale certificate, Plymouth Park acquired a tax lien.

    The United States Bankruptcy Court ruled in favor of

Princeton Office Park.    In re Princeton Office Park, L.P., 423
B.R. 795, 797 (Bankr. D.N.J. 2010).       Noting that a tax lien is

described in 11 U.S.C.A. § 724(b) of the Bankruptcy Code as a

lien that “secures an allowed claim for a tax,” the Bankruptcy

Court concluded that Plymouth did “not possess an allowed claim

for taxes” because the underlying taxes owed by Princeton Office

Park to the Township of Lawrence had been paid, and Plymouth

Park had no authority to assess or collect taxes.       Id. at 801.

Reasoning that the municipality had not assigned or subrogated

its rights to Plymouth Park, the court determined that Plymouth

Park’s lien did not constitute a tax lien.       Id. at 805-06.   The

court held, accordingly, that the tax sale certificate did not

transfer a tax claim.    Id. at 808.     The Bankruptcy Court granted

Princeton Office Park’s motion for partial summary judgment.

Ibid.

    The United States District Court for the District of New

Jersey affirmed, substantially adopting the reasoning of the

United States Bankruptcy Court.       The District Court construed

the Tax Sale Law to confer on the purchaser of a tax sale

certificate a lien, but not a lien that would permit the holder

                                  6
of the certificate to collect unpaid taxes owed to the

municipality.   It determined that a 1997 amendment to N.J.S.A.

54:4-67, which provides that a tax delinquency persists after a

tax certificate sale, did not bolster Plymouth Park’s contention

that it held a tax lien, because that amendment was held

unconstitutional by the Tax Court in Ramos v. Passaic City, 19
N.J. Tax 97, 104 (Tax 2000).     The District Court characterized

the tax sale certificate holder’s lien to be one that secures

the property owner’s obligation to pay the redemption amount,

and not as an interest rooted in the obligation to pay taxes to

the municipality.    It acknowledged that its ruling could reduce

demand for tax sale certificates and thus constrain

municipalities from raising revenue, but concluded that that was

a matter for the Legislature to resolve.

    Plymouth Park appealed to the United States Court of

Appeals for the Third Circuit.    Following oral argument, the

Third Circuit invoked Rule 2:12A to raise a question that it

considered to be “an important and unresolved question

concerning the type of lien acquired by a purchaser of a tax

certificate under New Jersey law.”     The Third Circuit observed

that N.J.S.A. 54:4-67 provides that a property owner’s tax

delinquency is not extinguished by the issuance of a tax sale

certificate.    It noted that the Bankruptcy Court and District

                                  7
Court had relied upon non-precedential opinions of New Jersey

state courts in determining that “the purchase of a tax sale

certificate extinguishes the underlying tax claim.”     The Third

Circuit posed the following question to this Court: “Whether,

under New Jersey law, a tax sale certificate purchaser holds a

tax lien.”

     On May 1, 2012, this Court entered an order accepting the

question as certified, pursuant to Rule 2:12A.2

                               II.

     Plymouth Park argues that the holder of a tax sale

certificate acquires a tax lien under New Jersey law.     It

disputes the conclusion of the Bankruptcy Court and the District

Court that real property taxes should be deemed satisfied when a

municipality is paid by the holder of a tax sale certificate,

contending that N.J.S.A. 54:5-42 and -46 effect a conveyance of

a lien that is indivisible from the underlying tax debt.       Citing

N.J.S.A. 54:4-67, Plymouth Park asserts that taxes owed to a

municipality constitute an in rem obligation that persists after

2
  At reargument on February 3, 2014, the parties informed the
Court that on January 31, 2014, the Bankruptcy Court had held
that Plymouth Park’s tax sale certificate is subject to
forfeiture pursuant to N.J.S.A. 54:5-63.1, and voided its lien
on Princeton Office Park’s property pursuant to 11 U.S.C.A. §
506(d). The Court, however, has not been advised by the Third
Circuit that the Bankruptcy Court’s forfeiture decision affects
the certified question.

                                8
the tax sale certificate is sold, rather than an in personam

obligation of the taxpayer.   It argues that case law has not

abrogated N.J.S.A. 54:4-67’s provision that a municipal tax

delinquency survives the conveyance of a tax sale certificate

and the certificate holder’s payment of taxes.

    Princeton Office Park counters that the lien held by the

purchaser of a tax sale certificate secures the purchaser’s

investment in the certificate, the interest that accrues in

accordance with the purchaser’s bid, and other sums authorized

by statute, but not the payment of taxes.   It differentiates

municipal liens from tax sale certificates on the basis that,

after the sale is conducted, and the outstanding real estate

taxes are paid, the private purchaser of the certificate has a

more limited interest than the municipality.     Princeton Office

Park characterizes the conveyance of the tax sale certificate as

a loan, noting that when the certificate is redeemed, the

purchaser is repaid the amount that it paid on outstanding real

estate taxes.   Princeton Office Park disputes Plymouth Park’s

reliance on N.J.S.A. 54:4-67.   It argues that the “delinquency”

preserved after a tax sale certificate is conveyed refers only

to the interest and discount authority granted by statute to the

municipality.

                                 9
    Amici curiae New Jersey State League of Municipalities, Tax

Collectors and Treasurers Association of New Jersey, the

Township of Lawrence, and Northeast Regional Tax Collectors and

Treasurers Association argue that the Tax Sale Law clearly

establishes that the holder of a tax sale certificate holds a

tax lien.   They characterize the lien held by the owner of a tax

sale certificate to be closely analogous to a lien held by a

municipality or a third party.    Amici assert that the purpose of

the Tax Sale Law is to make tax sale certificates an attractive

investment in order to permit municipalities to raise revenue,

and that the statute should be construed accordingly to confer

on the holder of a certificate a tax lien that is exempt from

the interest rate reduction that would otherwise be authorized

by the Bankruptcy Code.

    Amicus curiae National Tax Lien Association, Inc. (NTLA)

contends that the Bankruptcy Court and District Court decisions

would, if affirmed, effectively eliminate the New Jersey market

for tax sale certificates.   It asserts that investors typically

borrow money to purchase tax sale certificates, and that

limiting the interest rates available to them would chill the

demand for the certificates.     NTLA relies upon N.J.S.A. 54:4-67,

arguing that the tax delinquency survives the certificate

holder’s payment of the real estate taxes, and contends that

                                  10
municipal liens and liens acquired by virtue of the purchase of

tax sale certificates differ only in minor respects.        NTLA urges

the Court to hold that the owner of a tax sale certificate

acquires a tax lien.

                               III.

    We begin by reviewing the statutory scheme for the purchase

and sale of tax sale certificates.     The Tax Sale Law serves “as

a framework to facilitate the collection of property taxes.”

Varsolona v. Breen Capital Servs. Corp., 180 N.J. 605, 620

(2004) (citing Dvorkin v. Twp. of Dover, 29 N.J. 303, 309

(1959)).   It confers on a municipality that is owed real estate

taxes “‘a continuous lien on the land’ for the delinquent amount

as well as for ‘all subsequent taxes, interest, penalties and

costs of collection.’”   Simon v. Cronecker, 189 N.J. 304, 318

(2007) (quoting N.J.S.A. 54:5-6).     “The Tax Sale Law converts

that lien into a stream of revenue by encouraging the purchase

of tax certificates on tax-dormant properties.”     Ibid.     By

authorizing the sale of liens in a commercial market, the Tax

Sale Law gives rise to “a municipal financing option that

provides a mechanism to transform a non-performing asset into

cash without raising taxes.”   Varsolona, supra, 180 N.J. at 610.

                                11
     The Tax Sale Law sets forth the procedure by which tax sale

certificates are generated, purchased, and sold.3    The

certificate, drafted by an official designated by the

municipality, verifies “the taxes, assessments or other

municipal liens or charges, levied or assessed against the

property described in the application” as of the certificate’s

effective date.   N.J.S.A. 54:5-11, -12.   After providing notice

to the public and the property owner as required by N.J.S.A.

54:5-26 and -27, the municipality may sell the certificate at a

public auction.

     Pursuant to N.J.S.A. 54:5-32, an investor includes in its

bid the rate of interest that it is willing to accept upon

redemption of the certificate.   N.J.S.A. 54:5-32.   The winning

bidder is the investor who “will purchase the property, subject

to redemption at the lowest rate of interest, but in no case in

excess of 18% per annum.”   N.J.S.A. 54:5-32.   The statute

authorizes bidders who are willing to accept redemption “at a

3
  The original Tax Sale Law was enacted in 1918. L. 1918 c. 237.
The sponsor’s statement appended to the original bill stated
that the act was “intended to revise the procedure for tax
sales” that were “scattered throughout many different acts, and
to provide a uniform and simple procedure for the enforcement of
all classes of delinquent municipal arrears, in order that the
municipality may get its money without difficulty or question,
with the least burden on the property owner, consistent with
fair protection to the purchaser at a tax sale.” Assemb. 52
(Sponsor’s Statement), 142d Leg. (1918).

                                 12
rate of interest less than 1%, or at no interest,” to offer to

pay “a premium over and above the amount of taxes, assessments

or other charges . . . due the municipality.”   N.J.S.A. 54:5-32.4

“[T]he property [is] struck off and sold to the bidder who

offers to pay the amount of such taxes, assessments or charges,

plus the highest amount of premium.”   N.J.S.A. 54:5-32.

    The successful bidder’s purchase of a tax sale certificate

“does not divest the delinquent owner of his title to the land.”

Twp. of Jefferson v. Block 447A, Lot 10, 228 N.J. Super. 1, 4

(App. Div. 1988).   Instead, the sale operates as “a conditional

conveyance of the property to the purchaser, subject to a person

with an interest in the property having the right to redeem the

certificate, as prescribed by statute.”   Simon, supra, 189 N.J.

at 318 (citing N.J.S.A. 54:5-31 to -32, -46).   The purchaser

acquires an

         inchoate interest [that] consists of three
         rights: the right to receive the sum paid
         for the certificate with interest at the
         redemption rate for which the property was
         sold; the right to redeem from the holder a
4
  If such a premium is a component of an accepted bid, it is
“held by the collector and returned to the purchaser of the fee
if and when redemption is made.” N.J.S.A. 54:5-33. If the
certificate is not redeemed within five years of the date of
sale, the premium payment is “turned over to the treasurer of
the municipality.” N.J.S.A. 54:5-33. That five-year period is
“extended for each day that the foreclosure action is precluded”
by a petition for bankruptcy filed by the property owner.
N.J.S.A. 54:5-33.

                                13
         subsequently issued tax sale certificate;
         and   the   right   to   acquire  title   by
         foreclosing the equity of redemption of all
         outstanding interests, including that of the
         property owner.

         [Varsolona, supra, 180 N.J. at 618 (citing
         Twp. of Jefferson, supra, 228 N.J. Super. at
         4-5).]

The right to acquire title by foreclosure is asserted in the

Superior Court, which may enter final judgment “to foreclose all

prior or subsequent alienations and descents of the lands and

encumbrances thereon, except subsequent municipal liens, and to

adjudge an absolute and indefeasible estate of inheritance in

fee simple, to be vested in the purchaser.”   N.J.S.A. 54:5-87;

Town of Phillipsburg v. Block 1508, Lot 12, 380 N.J. Super. 159,

163 (App. Div. 2005).   Thus, by virtue of foreclosure, the

purchaser of the tax sale certificate may become “the owner of

the property in fee simple.”   Simon, supra, 189 N.J. at 318

(citing N.J.S.A. 54:5-87).

    The issue raised by this case -- whether the lien created

by the conveyance of a tax sale certificate is a tax lien --

arises from language that appears in 11 U.S.C.A. § 511 of the

Bankruptcy Code.   In a plan of reorganization, a bankruptcy

court overseeing the confirmation of a Chapter 11 reorganization

plan may in appropriate settings reduce, or “cram down,” the

rate of interest to be paid by a debtor to a creditor.   See 11

                                14
U.S.C.A. § 1129(b); Till v. SCS Credit Corp., 541 U.S. 465, 473-

80, 124 S. Ct. 1951, 1958-61, 158 L. Ed. 2d 787, 797-800 (2004)

(adopting “formula approach” to determine “cram down” interest

rate in Chapter 13 bankruptcy proceedings governed by 11

U.S.C.A. 1325(a)(5)(B)); In re Tex. Grand Prairie Hotel Realty,

L.L.C., 710 F.3d 324, 333 (5th Cir. 2013) (noting that “the vast

majority of bankruptcy courts” have elected to follow Till

formula for “cram down” determinations in Chapter 11 context);

In re Cantwell, 336 B.R. 688, 690-93 (Bankr. D.N.J. 2006)

(applying principles from United States Supreme Court’s analysis

in Till in determination of “cram down” interest rates in

Chapter 11 setting governed by 11 U.S.C.A. § 1129).      The

Bankruptcy Code, however, specifically excludes a “tax claim”

from the “cram down” procedure authorized by 11 U.S.C.A. §

1129(b) and case law.   11 U.S.C.A. § 511(a) provides:

         If any provision of this title requires the
         payment of interest on a tax claim or on an
         administrative expense tax, or the payment
         of interest to enable a creditor to receive
         the present value of the allowed amount of a
         tax claim, the rate of interest shall be the
         rate     determined     under     applicable
         nonbankruptcy law.

         [11 U.S.C.A. § 511(a).]

                                15
In light of this limitation on the Bankruptcy Court’s authority

to “cram down” interest rates if the claim at issue is a tax

claim, the Third Circuit has posed its certified question.

                                IV.

    In our interpretation of the Tax Sale Law, we are guided by

established principles of statutory construction.    “When

interpreting statutory language, the goal is to divine and

effectuate the Legislature’s intent.”     State v. Shelley, 205
N.J. 320, 323 (2011).   In so doing, “‘words and phrases shall be

read and construed with their context, and shall, unless

inconsistent with the manifest intent of the legislature or

unless another or different meaning is expressly indicated, be

given their generally accepted meaning, according to the

approved usage of the language.’”     Livsey v. Mercury Ins. Grp.,

197 N.J. 522, 530 (2009) (quoting In re Liquidation of Integrity

Ins. Co., 193 N.J. 86, 94 (2007); N.J.S.A. 1:1-1).    “To

accomplish that, we read the statutes in their entirety and

construe ‘each part or section . . . in connection with every

other part or section to provide a harmonious whole.’”       State v.

Marquez, 202 N.J. 485, 499 (2010) (alteration in original)

(quoting Bedford v. Riello, 195 N.J. 210, 224 (2008)).

    “When the Legislature’s chosen words lead to one clear and

unambiguous result, the interpretative process comes to a close,

                                16
without the need to consider extrinsic aids.”    Shelley, supra,

205 N.J. at 323.   A court “seek[s] out extrinsic evidence, such

as legislative history, for assistance when statutory language

yields ‘more than one plausible interpretation.’”    Id. at 323-24

(quoting DiProspero v. Penn, 183 N.J. 477, 492 (2005)); see also

Patel v. N.J. Motor Vehicle Comm’n, 200 N.J. 413, 419 (2009)

(stating that “if there is ambiguity in the statutory language

that leads to more than one plausible interpretation, [a court]

may turn to extrinsic evidence, including legislative history,

committee reports, and contemporaneous construction, for further

assistance in [its] interpretative task” (internal quotation

marks omitted)).   A court “may also turn to extrinsic guides if

a literal reading of the statute would yield an absurd result,

particularly one at odds with the overall statutory scheme.”

Wilson v. City of Jersey City, 209 N.J. 558, 572 (2012).

    In accordance with those principles, we construe the

relevant provisions of the Tax Sale Law.    The statute is a

“remedial statute . . . [to be] liberally construed to

effectuate the remedial objects thereof.”    N.J.S.A. 54:5-3.   The

legislative purpose is to “aid municipalities in raising

revenue,” by attracting “third parties to the opportunity to

acquire . . . property.”   Bron v. Weintraub, 42 N.J. 87, 91-92

(1964); see also In re Curry, 493 B.R. 447, 451 (Bankr. D.N.J.

                                17
2013) (stating that certain “provisions of the Tax Sale Law make

it evident that the process created by the statute has but one

goal -- the collection of taxes”); Lonsk v. Pennefather, 168
N.J. Super. 178, 182 (App. Div. 1979) (noting that “the public

policy in this State is to encourage tax sale foreclosure so as

to assist municipalities in the collection of delinquent

taxes”).   In short, “[t]he purpose of the Tax Sale Law is to

enhance the collection of taxes.”    Simon v. Rando, 374 N.J.

Super. 147, 152 (App. Div. 2005), aff’d, 189 N.J. 339, 344-45

(2007); see Varsolona, supra, 180 N.J. at 617-18; In re Kopec,

473 B.R. 597, 600-01 (Bankr. D.N.J. 2012).

    The Third Circuit’s certified question requires that we

classify the lien held by a purchaser of a tax sale certificate.

As a general principle, “[a] lien is defined as a charge upon

real or personal property for the satisfaction of some debt or

duty.”   Sargeant Bros. v. Brancati, 107 N.J.L. 84, 87 (E & A

1930) (internal quotation marks omitted); see Chase Manhattan

Mortg. Corp. v. Spina, 325 N.J. Super. 42, 48-49 (Ch. Div. 1998)

(“The word lien is a generic term that includes in its

definition any claim, encumbrance, or charge on property for

payment of some debt, obligation or duty whether acquired by

contract or by operation of law.” (internal quotation marks

omitted)), aff’d sub nom., Chase Manhattan Mortg. Corp. v.

                                18
Heritage Square Ass’n, 325 N.J. Super. 1, 2 (App. Div. 1999).

The lien is thus premised upon an underlying debt.       We look to

the Legislature’s language to define that lien, and the debt

from which it derives.

    In five statutory provisions, the Legislature has offered

substantial guidance on this issue.       First, N.J.S.A. 54:5-6

provides that “[t]axes on lands shall be a continuous lien on

the land on which they are assessed and all subsequent taxes,

interest, penalties and costs of collection which thereafter

fall due or accrue shall be added to and be a part of such

initial lien.”    N.J.S.A. 54:5-6.     Second, the continuous lien is

conveyed to the holder of a tax sale certificate by operation of

N.J.S.A. 54:5-42, which provides that “[w]hen a sale is made in

the enforcement of a municipal lien, the lien shall pass, with

the title, to the purchaser, and if the sale shall be set aside

for defect in the proceedings to sell, the lien shall be thereby

continued.”    N.J.S.A. 54:5-42; see also Varsolona, supra, 180

N.J. at 618.     As the Appellate Division held in Savage v.

Weissman, a tax sale certificate does not give rise to an

outright conveyance of the property, but rather creates “a lien

on the premises and conveys the lien interest of the taxing

authority.”    355 N.J. Super. 429, 436 (App. Div. 2002); see also

Twp. of Jefferson, supra, 228 N.J. Super. at 4 (noting that

                                  19
“[t]he certificate holder succeeds to the lien interest of the

taxing district”).   The purchaser of a tax sale certificate thus

acquires a lien formerly held by the municipality’s taxing

authority, derived from the property owner’s obligation to pay

real estate taxes.

    Third, in N.J.S.A. 54:5-54, the Legislature identified as

one of the parties entitled to redeem a tax sale certificate the

holder of a “prior outstanding tax lien certificate.”    The

Legislature used “tax lien certificate” as an alternative term

for “tax sale certificate.”   That section provides in part:

          Except as hereinafter provided, the owner,
          his heirs, holder of any prior outstanding
          tax lien certificate, mortgagee, or occupant
          of land sold for municipal taxes, assessment
          for benefits pursuant to [N.J.S.A.] 54:5-7
          or other municipal charges, may redeem it at
          any time until the right to redeem has been
          cut off in the manner in this chapter set
          forth, by paying to the collector, or to the
          collector of delinquent taxes on lands of
          the municipality where the land is situate,
          for the use of the purchaser, his heirs or
          assigns, the amount required for redemption
          as hereinafter set forth.

          [N.J.S.A. 54:5-54 (emphasis added).]

    The Legislature’s interchangeable use of the terms “tax

lien certificate” and “tax sale certificate” is evidence of its

intent.   See, e.g., Perez v. Rent-A-Center, Inc., 186 N.J. 188,

212 (2006) (noting, in context of Retail Installment Sales Act,

                                20
that “the terms interest and time price differential are used

interchangeably” and have been given equivalent meaning).

N.J.S.A. 54:5-54 thus evinces a legislative intent to confer on

the certificate owner a “tax lien.”

    A fourth provision further indicates that the tax sale

certificate purchaser acquires a lien derived from the property

owner’s obligation to pay taxes to the municipality.   N.J.S.A.

54:5-43, which prescribes the procedure to be followed in the

event that the sale of a certificate is set aside, provides in

part:

         If the sale shall be set aside, the
         municipality shall refund to the purchaser
         the price paid by him on the sale, with
         lawful interest, upon his assigning to the
         municipality the certificate of sale and all
         his interest in the tax, assessment or other
         charges and in the municipal lien therefor,
         and the municipality may readvertise and
         sell if the municipal lien remains in force.

         [N.J.S.A. 54:5-43 (emphasis added)].

    That statutory language -- acknowledging that the holder of

a certificate has an “interest in the tax” and “the municipal

lien therefor” -- demonstrates that the certificate’s owner

holds a tax lien based on a tax debt, not another form of lien

independent of the property owner’s obligation to pay taxes.

See Kopec, supra, 473 B.R. at 601 (stating that N.J.S.A. 54:5-

43’s “language strongly suggests that the claim of the holder of

                               21
a tax sale certificate is based on the underlying tax”); Curry,

supra, 493 B.R. at 450 (“As the purpose of a lien is to secure

payment of a debt, logically the debt owed to the taxing

authority is conveyed as well.”).       We find that N.J.S.A. 54:5-43

provides compelling evidence of legislative intent.

    A fifth provision, N.J.S.A. 54:4-67, rebuts property owner

Princeton Office Park’s argument that a tax sale certificate

holder’s lien is not a tax lien because a tax lien cannot

survive the payment of real estate taxes owed to the

municipality.    N.J.S.A. 54:4-67 governs the discounts that a

municipality may give if real estate taxes are paid prior to

delinquency, and determines the interest that may be charged on

delinquent taxes.    N.J.S.A. 54:4-67.     In accordance with a 1994

amendment to N.J.S.A. 54:4-67, a property owner’s tax

“delinquency” survives, despite the sale of a tax sale

certificate.    L. 1994, c. 32, § 4.5    Under a 1997 amendment, a

5
  The 1994 amendment to N.J.S.A. 54:4-67 was a legislative
response to a Tax Court decision, Freehold Office Park, Ltd. v.
Twp. of Freehold, in which the Tax Court held that real estate
taxes should be considered paid when the municipality receives
the proceeds from a tax sale certificate for purposes of
determining, pursuant to N.J.S.A. 54:3-27, whether the property
owner is authorized to institute a tax appeal. 12 N.J. Tax 433,
440-41 (Tax 1992). N.J.S.A. 54:3-27 codifies the principle of
“pay now, litigate later” for purposes of determining whether a
property owner may file a tax appeal. It specifically provides
that “[a] taxpayer who shall file an appeal from an assessment
against him shall pay to the collector of the taxing district no

                                 22
property owner’s tax delinquency survives notwithstanding “the

payment of delinquent tax by the purchaser of the total property

tax levy . . . and for the purposes of satisfying the

requirements for filing any tax appeal with the county board of

taxation or the State tax court.”   L. 1997, c. 99, § 4.   Thus,

as amended, N.J.S.A. 54:4-67(c) provides in relevant part:

         The property shall remain delinquent, as
         defined herein, until such time as all
         unpaid taxes, including subsequent taxes and
         liens, together with interest thereon shall
         have been fully paid and satisfied.       The
         delinquency shall remain notwithstanding the
         issuance of a certificate of sale pursuant
         to [N.J.S.A.] 54:5-32 and [N.J.S.A.] 54:5-
         46, the payment of delinquent tax by the
         purchaser of the total property tax levy
         pursuant to [N.J.S.A. 54:5-113.5] and for
         the purposes of satisfying the requirements
         for filing any tax appeal with the county
         board of taxation or the State tax court.

         [N.J.S.A. 54:4-67(c).]6

This statutory language thus reflects the Legislature’s intent

that a property owner’s tax delinquency survive the sale of a

tax certificate, and that the certificate holder will hold a

lien that is based on that delinquency.

less than the total of all taxes and municipal charges due, up
to and including the first quarter of the taxes and municipal
charges assessed against him.” N.J.S.A. 54:3-27.
6
  N.J.S.A. 54:4-67 defines “delinquency” to denote “the sum of
all taxes and municipal charges due on a given parcel of
property covering any number of quarters or years.”

                               23
       That expression of legislative intent is unaltered by the

Tax Court’s decision in Ramos, supra, 19 N.J. Tax 97.      In Ramos,

the Tax Court held that, as amended, N.J.S.A. 54:4-67 was

intended “to define a tax delinquency as continuing after the

sale of a tax sale certificate.”      Id. at 106.   Although the Tax

Court rejected substantive due process claims asserted by the

taxpayer, id. at 109, it found a constitutional infirmity in the

1997 amendment to N.J.S.A. 54:4-67, which would preclude the

property owner from filing a tax appeal following the sale of a

tax sale certificate, id. at 106, 113-14.      The Tax Court held

that N.J.S.A. 54:51A-1(b)’s bar on the property owner’s filing

of a tax appeal, following the conveyance of a tax sale

certificate and the purchaser’s payment of outstanding taxes,

violated procedural due process.      Id. at 111-13 (citing Mathews

v. Eldridge, 424 U.S. 319, 334-35, 96 S. Ct. 893, 903, 47 L. Ed.
2d 18, 33 (1976)).    The Tax Court held unconstitutional the tax

appeal language in the 1997 amendment to N.J.S.A. 54:4-67

“because, when (as here) a tax sale certificate is acquired by a

third-party purchaser, the Provisions offer only a

postdeprivation remedy under circumstances which do not warrant

or justify a denial of the predeprivation remedy generally

required by due process.”    Id. at 113.7
7
    The Tax Court’s decision in Ramos was not reviewed on appeal,

                                 24
       The Tax Court’s opinion in Ramos does not undermine the

expression of legislative intent found in the text of N.J.S.A.

54:4-67.   Regardless of whether a property owner may file a tax

appeal after the issuance of a tax sale certificate -- an issue

not raised by this case -- the Legislature clearly intended that

the “delinquency” survive the payment of taxes following the

issuance of a tax sale certificate, as the Tax Court in Ramos,

supra, acknowledged. 19 N.J. Tax at 104 (citing N.J.S.A. 54:4-

67).   N.J.S.A. 54:4-67 thus confirms that a certificate holder’s

lien is derived from the property owner’s obligation to pay real

estate taxes.   As the Bankruptcy Court did in Curry, supra, 493

B.R. at 451-52, and Kopec, supra, 473 B.R. at 601-02, we

construe N.J.S.A. 54:4-67 to indicate that the certificate

holder’s lien is indeed a tax lien.

       In sum, we premise our construction of the Tax Sale Law on

five provisions of the statute: N.J.S.A. 54:5-6, which defines

the municipality’s continuous tax lien; N.J.S.A. 54:5-42, which

and the Legislature did not amend N.J.S.A. 54:4-67 in its wake.
Without discussing Ramos, the Appellate Division panel deciding
Dover-Chester Assocs. v. Randolph Twp. recently concluded that
the public policy behind the statutory mandate that taxes be
paid before a tax appeal is filed is “to protect the
municipality’s interest in receiving timely payment,” and
suggested that the requirement “may not be satisfied by the
subsequent issuance of a tax certificate.” 419 N.J. Super. 184,
201-02 (App. Div. 2011). This case does not raise the
procedural issue addressed by Ramos and Dover-Chester Assocs.,
and we do not reach that issue.

                                 25
provides that the lien is conveyed to the purchaser of a tax

sale certificate; N.J.S.A. 54:5-54, which uses the term “tax

lien certificate” to describe a tax sale certificate; N.J.S.A.

54:5-43, which recognizes the purchaser’s compensable “interest

in the tax;” and N.J.S.A. 54:4-67, which provides that the tax

delinquency survives the issuance of a certificate.    The plain

language of these provisions confirms that the debt underlying a

certificate holder’s lien is the property owner’s obligation to

pay taxes, and that the lien conferred with the certificate is a

tax lien.   This statutory interpretation furthers the Tax Sale

Law’s fundamental objective of making tax sale certificates an

attractive investment for third parties, thereby assisting

municipalities in raising revenue.   Varsolona, supra, 180 N.J.

at 617-18; Bron, supra, 42 N.J. at 91-92; Lonsk, supra, 168 N.J.

Super. at 182.

    Should the Legislature determine that a municipality’s

issuance of a tax sale certificate does not convey a tax lien on

the purchaser, it can amend the statute accordingly.

     JUSTICES LaVECCHIA, ALBIN, FERNANDEZ-VINA; and JUDGE
RODRÍGUEZ (temporarily assigned) join in JUSTICE PATTERSON’s
opinion. CHIEF JUSTICE RABNER and JUDGE CUFF (temporarily
assigned) filed a separate, dissenting opinion.

                                26
                                      SUPREME COURT OF NEW JERSEY
                                       A-107 September Term 2011
                                                 069521

IN RE: PRINCETON OFFICE PARK,
LP,

    Plaintiff-Respondent,

         v.

PLYMOUTH PARK TAX SERVICES,
LLC,

    Defendant-Appellant.

    CHIEF JUSTICE RABNER and JUDGE CUFF (temporarily assigned),

dissenting.

    We dissent from the majority’s response to the question of

law certified by the United States Court of Appeals for the

Third Circuit substantially for the reasons expressed in Judge

Kaplan’s opinion.   In re Princeton Office Park, L.P., 423 B.R.
795 (Bankr. D.N.J. 2010).

                                1
                  SUPREME COURT OF NEW JERSEY

NO.      A-107                                   SEPTEMBER TERM 2011

On appeal from the United States District Court, District of New Jersey

IN RE: PRINCETON OFFICE PARK,
LP,

        Plaintiff-Respondent,

                 v.

PLYMOUTH PARK TAX SERVICES,
LLC,

        Defendant-Appellant.

DECIDED               June 25, 2014
                  Chief Justice Rabner                       PRESIDING
OPINION BY              Justice Patterson
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY             Chief Justice Rabner and Judge Cuff

                                          FOR THE
 CHECKLIST                                                    DISSENT
                                         JUDGMENT
 CHIEF JUSTICE RABNER                                             X
 JUSTICE LaVECCHIA                          X
 JUSTICE ALBIN                              X
 JUSTICE PATTERSON                          X
 JUSTICE FERNANDEZ-VINA                     X
 JUDGE RODRÍGUEZ (t/a)                      X
 JUDGE CUFF (t/a)                                                 X
 TOTALS                                      5                    2

                                                    1