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Columbia Equities, Ltd. v. Damm

A-6816-98T1 (N.J. Super. App. Div. 2000) (Unpublished)

MORTGAGES; FORECLOSURE; NOTICE—Where a co-tenant is aware or chargeable with awareness that a foreclosure action has commenced, it can not set aside a sheriff’s sale or reopen the redemption period based upon lack of actual service.

A bank filed an action to foreclose a mortgage on a home owned by a married couple. Process in the name of both husband and wife was served personally on the husband. He allegedly kept his wife in the dark about the foreclosure and about their deteriorating financial status. Nonetheless, the wife had signed the return receipt card for an envelope containing a copy of the complaint, and she also read other correspondence. When she asked her husband about the complaint, he continued to mislead her. The complaint was never answered and a default judgment was entered. The property was subsequently sold at a sheriff’s sale. Several months after the sale, the wife was able to gather sufficient funds to redeem the property and sought judicial relief to reopen the judgment or to extend the equity of redemption period. The lower court ruled that: (1) service of process was proper under R. 4:4-4, (2) the wife was chargeable with knowledge of the action, and assumed the risk of vesting sole management of their financial affairs in her husband, (3) although reliance on her husband was neglectful, it was not excusable neglect within the meaning of R. 4:50-1(a), (4) there was no meritorious defense to the action and thus no reason to vacate the judgment, and (5) the intervening interest of the buyer at the sheriff’s sale was important. The wife appealed, relying on Schulling v. Lintner wherein that court allowed relief for an elderly, non-English speaking woman who knew nothing about an entry of judgment or advertising the sale of her property. That court considered the age, language barrier, and the woman’s mistaken belief about the notice and set aside that sale on equitable principles. Here, the Appellate Division concluded that Schulling was distinguishable in that the wife read English and should have understood the consequences of the complaint. Further, it was inexcusable not to verify her husband’s story when such critical papers arrived. The Appellate Division held that the right to redeem survives ten days after a sheriff’s sale to permit objection to the sale. Because no objection was made within this ten day window, the rule should not be relaxed except in the exercise of great care and only when necessary for compelling reasons such as a showing of fraud, accident, surprise, mistake or the like.


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