Friday, June 27, 2014

The New Jersey Appellate Division Confirms The Premise That “The Law Does Not Compel One To Do a Useless Act: Equity Follows the Law”

 
In a per curiam opinion dated June 25, 2014, the Appellate Division, following the principles of equity, declined to set aside a sheriff’s sale based on the defendants’ allegation of lack of notice of the sale in strict compliance with Rule 4:65-2. The Court affirmed Judge Levy’s ruling that an extension of the redemption period sufficed to remedy any alleged defect in notice. Mortgage Electronic Registration Systems, Inc. v. Eschenbach, 2014 WL 2864959 (Appellate Division June 25, 2014)

Notwithstanding the allegation of lack of notice, the Judge Levy observed that the defendants’ failed to assert that they had the ability to redeem the property. Relying on the decision in United States v. Scurry, 193 N.J. 492 (2008), he determined that, rather than ordering a hearing to determine whether the defendants received actual notice of sale and whether the defendants had the ability to redeem, the defendants would be afforded sixty days to redeem. Judge Levy opined that it would not be practical to order a hearing if the defendants were not in a position to redeem. Judge Levy stated, " . . . the law does not compel one to do a useless act and that equity follows the law." . Mortgage Electronic Registration Systems, Inc. v. Eschenbach, 2014 WL 2864959

The Appellate Division agreed and determined that the decision of Judge Levy was not an abuse of discretion and the motion to vacate the sale was properly denied. The Appellate Division referred to the Supreme Court’s decision in Scurry which explained, "it makes little sense to return the parties to the procedural juncture where the error fist occurred". United States v. Scurry 193 N.J. at 506.




Thursday, June 19, 2014

The “Pay Now Litigate Later” Principal Applies to Property Tax Appeals for COAH Condominium Units


            In an unpublished letter opinion dated June 17, 2014, the New Jersey Tax Court ruled that the owner of a condominium unit, subject to COAH restrictions, was required to pay the taxes in full prior to challenging the amount of the tax owned.   Lafayette Navesink Homes, L.L.C. v. Borough of Rumson, Docket Nos. 016024-2012; 010718-2013 (June 17, 2014)

            In the Navesink case, the plaintiff argued that the tax payment required should be relaxed since the units were state mandated affordable housing units.  The plaintiff appealed the assessment to the Monmouth County Board of Adjustment which affirmed the assessments.

At the time, the complaint was filed with the Tax Court to  appeal the assessment, taxes were due on the units.  One of the arguments proffered by the plaintiff, and  rejected by the Tax Court, was that the taxes on the COAH units were disproportionate to the rents received and should, therefore, be relaxed “in the interests of justice”.  
             The Court reiterated what is referred to as the “pay now litigate later” principle
that is “well established” with local property tax assessments.    Lafayette Navesink Homes, LLC v. Borough of Rumson  at page 4 citing, Woodlake Heights Homeowners Association, Inc. v. Township of Middletown, 7 N.J.Tax 364, 366 (App. Div. 1984).   The statutory requirement that taxes be paid in full prior to challenging the liability for same “insures the that the flow of municipal revenues will not be interrupted by the filing of tax appeals”.  Route 88 Office Association v. Township of Brick, 13 N.J. 14, 21 (Tax 1992)
               The basic takeaway is that COAH status, standing alone, will not suffice to satisfy an "interest of justice" determination.