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Community Bank of Bergen County, New Jersey v. J.D. Levin & Associates

BER-F-8558-05 (N.J. Super. Ch. Div. 2008) (Unpublished)

FORECLOSURE; MARITAL RIGHTS — The wife of a corporation’s president and shareholder does not have the right to remain in a marital home owned by the corporation because the corporate ownership makes the officer and his wife tenants, not owners.

A corporate mortgagor, solely owned by an individual who also was its president, owned a residential home where the president lived with his wife. The mortgagor was also a part owner of a company that owned a twenty-acre property that had been designated as wetlands. The mortgagee on the properties was the president’s mother, who along with a junior mortgagee, prevailed in a foreclosure action of the mortgagor’s residential property. The junior mortgagee emerged as the successful bidder on the residential home. The mortgagor sought to enjoin the sheriff’s office from transferring the deed while it was attempting to redeem the property and satisfy its debts to the mortgagees. According to the mortgagor, the funding for the redemption of the house was to come from the sale of the twenty-acre property. The mortgagor requested the sheriff’s title transfer be delayed so that the sale of the twenty-acre property could be completed. The Court granted a twenty-day temporary restraint of the title transfer based on certain conditions including one that the purchase agreement not be conditioned on governmental approvals for use or development. During the twenty-day period, the mortgagor declared bankruptcy. After missing the twenty-day deadline, the mortgagor claimed that it entered into a purchase agreement with a developer and that funds had been deposited with the developer’s attorney.

In consideration of the mortgagor’s attempt to redeem the property through a sale to the developer, the Court pointed out that forfeitures were to be avoided when possible and that the judiciary had a preference for redemption by mortgagors. It did not consider either of the mortgagees prejudiced by the temporary restraint or by the sixty-day bankruptcy stay during which time the mortgagor was attempting to negotiate a sale to the developer far in excess of the amounts owed to the mortgagees. The Court, however, determined that, given the contingent nature of the purchase agreement, including the extended time for the developer to gain governmental approvals, as well as the fact that the mortgagor’s corporation did not hold title to the property, the viability of purchase agreement with the developer was in question. Additionally, it determined that to stay a final judgment of foreclosure so that the mortgagor could negotiate a sale to the developer would have been tantamount to the Court revising the contract between the parties which allowed the stay pending the property’s sale to the buyer. The Court rejected the mortgagor’s argument that the president’s wife retained the right to remain in the marital home noting that title to it was held by the mortgagor corporation making the president and his wife tenants, but not owners. As a result of the failure of the mortgagor to complete the transaction with the buyer under the terms of the temporary restraint, the Court dissolved the temporary restraint in favor of the mortgagor and allowed the sheriff’s office to proceed with the transfer of title of the residential property to the junior mortgagee.

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