HABITATE, LLC. VS. CITY OF BRIDGETON RENEWABLE JERSEY,LLC(L-517-13, CUMBERLAND COUNTY AND STATEWIDE)
A-2296-15T2
| N.J. Super. Ct. App. Div. | Jul 21, 2017Background
- Habitate LLC (tax certificate holder) obtained a default foreclosure judgment against record owner R&R Holdings for Block 132, Lot 1.02; Renewable Jersey LLC intervened and redeemed the certificate.
- After appeal of the tax-foreclosure redemption, Bridgeton adopted a council resolution and issued a corrective deed (reconveyance to Claus and Reyers Co. (CAR)) because the 2004 deed to R&R was made to a non-existent corporation; CAR later transferred the property to Renewable.
- Renewable encumbered the property with a $100,000 mortgage; Habitate alleges this sequence was an illegal title-manipulation conspiracy that deprived it of its property rights.
- Habitate and Thomas Martin sued in lieu of prerogative writs asserting claims to quiet title, fraud, conspiracy, and challenging Bridgeton’s resolution/deeds; Martin separately purchased a judgment lien against Reyers and asserted it as an interest.
- The Chancery judge granted summary judgment for defendants on res judicata/collateral estoppel/entire controversy and TCA immunity grounds, and denied discovery; plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Res judicata / collateral estoppel | The tax-foreclosure appeal did not decide claims about municipal title manipulation and fraud; new suit raises distinct causes and facts | Prior foreclosure judgment and appellate affirmance preclude relitigation of related title issues | Reversed: res judicata/collateral estoppel do not bar the first four counts at this stage; issues are distinct and were not decided on the merits for this claim |
| Entire controversy doctrine | Related facts do not produce a prior judgment on the merits that bars this separate prerogative-writs action | Plaintiffs’ claims arise from same transactional facts and should have been litigated previously | Reversed as to application; no prior judgment on the merits bars this later action now |
| Standing (Habitate) | Habitate as former tax-certificate holder suffered an ascertainable injury and can challenge municipal acts | Defendants implied standing improper because redemption occurred | Affirmed: Habitate has standing to pursue claims tied to loss of opportunity to acquire title and to challenge municipal fraud/corruption |
| Standing (Martin / Count Five) | Martin contends his post-judgment purchase gives him an interest in the property litigation | Defendants argue Martin purchased interest after redemption and lacks a property interest that attaches to the land | Affirmed dismissal of Count Five as to Martin; he lacks standing except for challenge to Reyers’ personal judgment lien |
| TCA immunity for Bridgeton | Plaintiffs: TCA does not bar equitable relief to void municipal action tainted by fraud | Defendants: TCA sections (59:2-4, 59:2-9, 59:2-10, 59:2-5) shield municipality from liability for the challenged acts | Reversed: TCA provisions relied on do not bar Habitate’s claims seeking to void the municipal resolution/deed where fraud is alleged (punitive damages barred) |
Key Cases Cited
- Davis v. Brickman Landscaping, 219 N.J. 395 (review standard for summary judgment)
- Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (summary judgment standard; view facts for nonmoving party)
- Watkins v. Resorts Int'l Hotel & Casino, 124 N.J. 398 (entire controversy doctrine requires prior judgment on the merits to preclude later action)
- Olivieri v. Y.M.F. Carpet, Inc., 186 N.J. 511 (elements of collateral estoppel)
- Triffin v. Somerset Valley Bank, 343 N.J. Super. 73 (standing threshold is low)
- Simon v. Deptford Twp., 272 N.J. Super. 21 (municipal action may be vulnerable to fraud-based challenge)
- Zakutansky v. Bayonne, 88 N.J. Super. 516 (judicial review of ordinance limited absent fraud or perversion of power)