Simon v. Oldmans Tp.Simon v. Oldmans Tp.
Plaintiff in this action seeks rescission of the purchase of certain tax sale certificates and restitution of the purchase price. This matter is before the court on cross-motions by plaintiff and defendants. On the return date of the motions, the court rendered an oral decision which is embodied in this written opinion.
The facts are as follows. On September 15, 1984, defendant Oldmans Township conducted a public tax sale of premises known as Block 37, Lot 2 and Block 39, Lots 17 and 21 which were owned by National Smelting of New Jersey, Inc. Although National Smelting is in bankruptcy, the automatic stay of the bankruptcy court had been lifted, making the tax sale possible. Plaintiff, through his representatives, was the only bidder for the three tax sale certificates. Plaintiff paid a total of $61,751.56 for the three certificates.
Subsequently, plaintiff learned of environmental problems associated with the property in question. As a result of these problems, plaintiff was informed that the State of New Jersey was asserting a “super lien” for the clean-up of toxic wastes on the property, pursuant to
In addition, plaintiff learned that an appeal of the decision to vacate the automatic stay of the bankruptcy court is pending, which would prevent plaintiff from foreclosing on the tax sale certificates.
Plaintiff alleges that the township solicitor for Oldmans Township, who is named as a defendant, withheld information
On November 14, 1984, plaintiff sought an order to show cause with temporary restraints to have the funds paid by plaintiff removed from Oldmans Township‘s general account. The court denied any restraints and entered an order to show cause why the relief sought by plaintiff should not be granted, returnable November 30, 1984.
On December 20, 1984, the adjourned return date of the order to show cause, defendants moved to dismiss the complaint pursuant to
On January 22, 1985, plaintiff moved for summary judgment against defendants for the relief sought in its complaint and for counsel fees and costs. In the alternative, plaintiff moved for an order permitting the late filing of a New Jersey tort claims notice pursuant to
The court will first address the issue of the applicability of the New Jersey Tort Claims Act,
Turning to the statute, it is clear that an equitable action for rescission is not subject to the Tort Claims Act. Section 1-4 of the statute states:
Nothing in this act shall affect liability based on contract or the rights to obtain relief other than damages against the public entity or one of its employees. [
N.J.S.A. 59:1-4 ; emphasis supplied]
This language specifically excludes this action from the Tort Claims Act. See also Blazer Corp. v. N.J. Sports & Exposition Authority, 195 N.J. Super. 542, 549 (Law Div. 1984) (Tort Claims Act not applicable to contract cases or cases in which purely equitable relief is sought); Lloyd v. Stone Harbor, 179 N.J. Super. 496, 512 (Ch.Div. 1981) (employment discrimination claim for reinstatement not subject to notice requirements of Tort Claims Act). Thus, plaintiff is not required to file a notice of claim under the Tort Claims Act.
This finding, however, does not complete the analysis. In addition to the provision covering tort claims, Title 59 also contains provisions on contractual liability.
While this action for recission is based on contract, the court finds that the provisions of
Plaintiff contends that he is entitled to summary judgment because of undisclosed information concerning the condition of the subject premises and the possibility of a “super lien” pursuant to
Responding to the environmental threat imposed by the discharge of hazardous substances throughout the State, the New Jersey Legislature passed the Spill Compensation and Control Act.
The section of the Spill Compensation and Control Act which is of the most relevance to this action is section 23.11f(f) which states:
f. Any expenditures made by the administrator pursuant to this act shall constitute a first priority claim and lien paramount to all other claims and liens upon the revenues and all real and personal property of the discharger, whether or not the discharger is insolvent. All liens under P.L. 1976, c. 141 (C. 58:10-23.11 et seq.) shall be filed with the clerk or register of deeds and mortgages of the county wherein the affected property is located, and with the clerk of the Superior Court, and shall immediately attach to, and become binding upon, all the property, whether real or personal, of the party against whom the lien is filed. If it is believed that the party chargeable under the lien
has an interest or estate, whether vested or contingent, in property within the State, but the exact location of the property is not known, then the liens shall be filed with the clerk of the Superior Court and shall become binding upon all the property of the party chargeable under the lien wherever situated within the State. [ N.J.S.A. 23:11f(f) ; emphasis supplied]
The language of this section is clear. It creates a lien which takes priority over any other claim or lien upon the property of a discharger of hazardous waste whether prior in time or not. The statute, therefore, creates a lien with retroactive effect. State Department of Environmental Protection v. Ventron Corp., 94 N.J. 473 (1983); Kessler v. Tarrats, 191 N.J. Super. 273 (Ch.Div. 1983), aff‘d 194 N.J. Super. 136 (App.Div. 1984).
Obviously, given this statutory scheme, there is no question that if the State asserts a lien on the property in question, it would take priority over the tax sale certificates held by plaintiff. The problem, however, which is presented is one of timing. The so-called super lien does not come into existence and is not recorded until expenditures are made out of the Spill Compensation Fund. Thus, the question is not whether the lien is a first lien, but whether in circumstances where the lien has not been asserted and is, therefore, not of record, its potential existence gives rise to an action for rescission.
Plaintiff argues that he is entitled to summary judgment because defendants had a duty to disclose and not to misrepresent or conceal the environmental problems on the subject premises and the potential super lien thereon. Since there was no lien of record or clean-up of the property being undertaken at the time of the tax sale which would put a potential purchaser on notice, plaintiff argues that he depended upon full disclosure by defendants, which he claims was not forthcoming.
Seen, not from the clinical viewpoint of an environmentalist but from the coldly practical position of those whose interests involve the status of land titles in New Jersey, this statute, while highly commendable in its intent is, with respect to land titles, a hibernating time bomb. Our whole system of recordation of land titles depends upon the ability of one who
Into this arena of crystal clarity, the spill act introduces doubt. The statute provides the costs involved shall be a “first priority claim and lien” upon real property involved.
Even a cursory analysis at once reveals that no simplistic solution can be had. For example, there are obviously many places in New Jersey where any person who inspects property could reasonably expect a potential spill act claim (without casting aspersions, the Kill Van Kull springs to mind) yet other sources of potentially lethal pollution are far from civilization. Prices Pit in Atlantic County is dangerously close to a public water supply and in a seemingly innocuous location. Thus, placing on the potential buyer the duty of a prior inspection is not a monolithic solution.
The court is of the opinion that, if there were no representations of any kind made by defendants, rescission should be granted. Clearly, given the nature of this transaction and the amount of money involved, the potential existence of a super lien constituted a material fact. If neither party were aware of any environmental problems which would give rise to a super lien, then the case is a classic example of mutual mistake.
The general rule concerning mutual mistake is set forth in the case of Beachcomber Coins, Inc. v. Boskett, 166 N.J. Super. 442 (App.Div. 1979) where the court stated:
where parties entering into a transaction that affects their contractual relations are both under a mistake regarding a fact assumed by them as the basis on which they entered into the transaction, it is voidable by either party if enforcement of it would be materially onerous to him than it would have been had the fact been as the parties believed it to be [at 445 (citing Restatement, Contracts, § 502 at 961 (1932)); 13 Williston on Contracts (3 ed. 1970) § 1543 at 64-75].
If there were representations made to plaintiff‘s agents as alleged in the complaint, the court would rescind the tax sale on the basis that plaintiff had the right to rely on such representations. Testimony, however, is necessary to resolve the factual issue as to what kind of representations, if any, were made.
The standard for the granting of summary judgment is well-known. Summary judgment is an extraordinary measure which a court should grant only with extreme caution. Robbins v. Jersey City, 23 N.J. 229, 240 (1957); Ruvolo v. American Cas. Co., 39 N.J. 490, 499 (1963). Our Supreme Court has stated that “sight should never be lost of the fact that such procedure is no substitute for a full plenary trial.” United Advertising Corp. v. Metuchen, 35 N.J. 193, 196 (1961).
The burden is on the movant to exclude reasonable doubt as to the existence of a factual issue. Costa v. Josey, 83 N.J. 49, 53 (1980). Plaintiff argues that he has met this burden because defendants have not filed an answer or any answering affidavits. The Court does not agree.
In this instance, defendants elected to pursue their motion to dismiss on the basis of the Tort Claims Act. The court, on a motion for summary judgment, should not penalize a party for electing a particular legal strategy. Further, since the court finds that testimony is necessary to resolve the issue concerning any representations made by defendants, the court finds
Defendants, however, are instructed to file and serve responsive pleadings as soon as possible. In addition, given the limited nature of the discovery necessary in this case, the parties are to proceed with discovery on an expedited basis. Upon completion of discovery, this matter will be immediately set down for trial. The crucial issue to be tried will be the question of what plaintiff knew, or should have known, of the true situation at the time of sale.
Finally, plaintiff has moved for costs and counsel fees. The Court finds no basis for such relief and the motion is denied. See
Defendants’ counsel will submit an appropriate order.