Appellate Court: Ensure Your Address Is Current With The Tax Assessor, Or It May Cost You

by: Thomas Olson
18 Jun 2021

The Appellate Division recently decided a case between the City of Newark and IMJ1, LLC, regarding three parcels of property which IMJ1 owned in Newark. The three parcels of property were purchased in January 2017 and were characterized by IMJ1’s counsel as being abandoned. From January 2017 through the present day, IMJ1 never paid the property taxes on the three lots. In December of 2017, the City of Newark auctioned the tax sale certificates and purchased the certificates themselves after receiving no bids. In February of 2019, Newark filed for the deeds to the properties under the New Jersey In Rem Tax Foreclosure Act. In order to satisfy the notice requirements under the Act, the City of Newark attempted to notify IMJ1 the following ways: they posted notice about the suit in the newspaper the Star Ledger; posted the notice in the offices of the tax collector, county clerk, and City clerk; posted it in the Newark Municipal Courthouse and three different medical centers in Newark; sent via certified and regular mail to the last address the City had for IMJ1 on file, which was located in Lewes, Delaware; and finally, to IMJ1’s registered agent (under corporate law you must have a registered agent who may be served on your behalf), Registered Agents, Inc., located in Marlboro, NJ, as well as to IMJ1’s former legal counsel in New York; to each of the three properties; and to IMJ1’s business address in Brooklyn. After these methods of notice, IMJ1 did not respond to the lawsuit and a default judgment was entered in July 2019.

IMJ1 moved before the trial to vacate the judgment. According to IMJ1’s counsel, the sole member of the corporation did not hear of the judgment until October of 2019 when he attempted to sell the properties in question. After finding out about the judgment, he requested the City of Newark to drop the judgment and allow the property sale to go through. When the City of Newark declined the request, IMJ1 filed to open the judgment pursuant to New Jersey Court Rule 4:50 based on excusable neglect, improper service, and lack of due process. The alleged lack of proper service was the City of Newark’s failure to serve the suit at its Brooklyn office address. Additionally, while the City of Newark served the registered agent for the corporation, the registered agent did not notify IMJ1, so IMJ1 was not aware of the service. An additional part of IMJ1’s argument was that during the proceedings to strip title from IMJ1, the City of Newark successfully executed a personal service to IMJ1’s Brooklyn office regarding a separate lawsuit concerning IMJ1’s failure to maintain the three properties in question. The trial court upheld the original judgment and dismissed IMJ1’s motion to reopen the judgment. The chancery court found that since the corporation’s agent had been served and there was a mailing of the suit to the Delaware address for IMJ1 which the City had on file from IMJ1, then service was proper.

The Appellate Division agreed with the chancery court’s decision and also denied IMJ1’s motion to reopen the judgment. The Appellate Division found that service was properly made by Newark because the City did everything in their power in order to ensure proper service was maintained. The court focused upon the issue of whether service should have been made to the Brooklyn address. In its determination, the Appellate Division said that it was incumbent upon IMJ1, not the Newark Tax Collector, to ensure the Brooklyn address was the proper address to have on file. Additionally, it was determined that the reason IMJ1 did not receive word from their personal representative upon effective service was due to the failure of IMJ1 to pay the personal representative. Therefore, since proper service was made towards IMJ1 in mailing to the addresses on file, if IMJ1 wanted service to be provided elsewhere it should have notified the City of the different address. Since that did not happen here, the Appellate Division said that the City satisfied their burden, and it was incumbent upon IMJ1 to ensure that their addresses were current.

Regarding the personal service, negotiations, and eventual settlement regarding the failure to upkeep the three parcels of property which took place between IMJ1 and the City of Newark, the Appellate Division dismissed that as irrelevant to the current case. The trial court’s refusal to vacate the foreclosure judgment was therefore affirmed.

To read the decision, please click here.

The author acknowledges the assistance of William Olson, a law clerk at McKirdy, Riskin, Olson & DellaPelle, in preparing this article. Mr. Olson is a member of the class of 2021 at Rutgers Law School.