Former Gas Station Property/Tax Sales Subject Certificates: New Jersey Court of Appeals Buyer’s Request to Set Aside Default Foreclosure Judgment | Mitchell, Williams, Selig, Gates & Woodyard, LLC

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The New Jersey Superior Court – Appellate Division (“Court”) described in a September 8 opinion the issues arising from the purchase of tax sale certificates associated with a former gas station. See Independent Investors vs. Goleman2022 WL 4100212.

The notice describes (but does not decide) an attempt by the party filing the foreclosure complaint to overturn the default foreclosure judgment on the basis that the borough of New Jersey misrepresented the environmental condition of the property.

Jesse J. Goleman (“Goleman”) allegedly purchased real estate in 2008 that had been used as a gas station. Goleman used the real estate to maintain automobiles without selling gasoline. As a result, the Borough of Audubon (“Borough”) issued Goleman a permit to remove an underground storage tank (“UST”).

Goleman’s son was later made administrator of the estate after Goleman’s death.

The borough in 2013 filed liens on real estate for unpaid taxes. The Independent Investor Applicants (“IIs”) purchased tax sale certificates for two taxation years.

II filed a foreclosure complaint against the estate in 2016. In 2018, he obtained an uncontested final judgment of default foreclosure in April 2018. As a result, Plaintiff II was vested with legal title to the real estate.

In February 2019, the plaintiff (without notice to the borough) sought to have the default foreclosure judgment set aside. The basis of the request for annulment is described as:

. . . one of the plaintiff’s partners, Ethel Roerdomp, certified the borough’s environmental consultant, and an unnamed borough employee misrepresented the environmental condition of the property prior to plaintiff’s filing of its foreclosure action.

Roerdomp allegedly claimed that the consultant:

. . . said his company had removed underground tanks, tested the soil on the property and “there was no contamination and no further action was required.”

Roerdomp claimed that:

  • The information was wrong
  • If He had received truthful information, He would not have made the final judgment.

The lower court granted II’s motion without opposition and set aside the default foreclosure judgment. As a result, title to the real estate reverted to the estate and II’s foreclosure complaint was dismissed.

The borough filed a motion to intervene in the foreclosure suit a year later, which I opposed.

The borough supported:

  • He didn’t find out that II succeeded in overturning the default judgment until August 2019
  • II’s allegations of misrepresentation by municipal employee were unsubstantiated
  • He was under constructive notice of the environmental conditions on the property because Goleman had asked for the removal of the UST and it was a matter of public record.

The Court did not rule on the merits of these questions. The notice focuses on the lower court’s decision to dismiss the district’s intervention because the case was deemed to “no longer exist.”

The borough appealed arguing that the intervention was appropriate since it was an interested party in the foreclosure suit and I alleged misrepresentation by a borough employee in seeking to vacate the judgment.

He replied that the call was late.

The remainder of the opinion focuses on the Court’s finding that the Borough was entitled to intervene whether or not the lower court overturned the foreclosure judgment. The Court did not address the merits of the Borough’s opposition to the motion to quash. Instead, he sent the case back to the lower court to reconsider II’s motion to set aside the foreclosure judgment.

A copy of the notice can be downloaded here.

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