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City of East Orange v. Kynor

383 N.J. Super. 639, 893 A.2d 46 (App. Div. 2006)

FORECLOSURE; TAX SALES—It is a violation of due process for a municipality to demand payment in excess of the amount stated in a foreclosure complaint and published notice because due process requires a municipality to include the amount of subsequent liens in its complaint and in the notice so that a person seeking to redeem will have notice of the amount actually required.

A municipality issued a tax sale certificate and thereafter began foreclosure proceedings on a homeowner’s property. The homeowner, appearing pro se throughout the proceedings, filed a “motion to show cause” to compel the municipality to permit her to exercise her right of redemption for the amount of the tax sale certificate both listed in the municipal resolution and published in the newspaper. The lower court denied the homeowner’s application and transferred the matter to the foreclosure unit to proceed as an uncontested case. The homeowner sought a stay of that order, but the lower court denied the request. Both the Appellate Division and the Supreme Court denied the homeowner’s appeals to reverse the denial of her request to stay entry of judgment.

The municipality eventually obtained a judgment of foreclosure. However, the amount of taxes owed according to both the foreclosure complaint and the published notice was less than the amount stated in the judgment of foreclosure. The homeowner claimed that she attempted to redeem the tax certificate based on what was in the judgment, but the municipal tax collector refused to accept payment in that amount, claiming more was owed because additional tax periods had passed since the adoption of the municipal resolution. After the final judgment of foreclosure was entered, the homeowner moved before the Supreme Court for “reconsideration of her motion for leave to appeal.” The Supreme Court rejected this appeal as well as the homeowner’s subsequent motion for reconsideration of the denial. The homeowner continued to file other papers with the lower court seeking to stay entry of the judgment of foreclosure. Eventually, the lower court ordered that the homeowner obtain written permission from the vicinage’s assignment judge prior to filing any further pleadings. The homeowner then appealed the most recent denial of her motion seeking to vacate the judgment of foreclosure.

On this appeal, the Appellate Division found that the homeowner had been denied due process because she was never provided with a hearing on her “motion to show cause” originally filed in response to the foreclosure complaint to determine if she was denied due process by attempting to redeem the tax sale certificate based on the amount owed as published in the municipal ordinance and newspaper. It is a violation of due process for a municipality to demand payment in excess of that stated in a foreclosure complaint and published notice. According to the Appellate Division, due process requires the municipality to include the amount of subsequent liens in a foreclosure complaint and in the published notice so that a person with an interest in the property will have notice as to the amount actually required to redeem the tax sale certificate and to avoid foreclosure. The Court held that the denial of due process is an exceptional circumstance under Court Rule 4:50-1(f), entitling the homeowner to relief from a final judgment. Consequently, the issue was remanded for an evidentiary hearing to determine if the published notice and the foreclosure complaint had stated the full amount required to redeem the tax sale certificate.


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