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Fidelity Asset Management, L.L.C. v. Faine

A-1485-09T2 (N.J. Super. App. Div. 2010) (Unpublished)

TAX SALES; NOTICES — Where a owner of property that is being foreclosed for delinquent taxes is thought to live in Texas, publication of a notice of the sale in a New Jersey newspaper may not be adequate service upon that owner.

A successor in interest to the purchaser of a tax sale certificate pursued foreclosure against the underlying property. The complaint filed was captioned as an in personam tax foreclosure action to bar the right of redemption. The certificate holder named the deceased, the widowed title owner, and three alleged known heirs, believed to be two daughters and a grandson of the decedent, as the defendants. Its attorney certified that service had been made upon all named defendants, none had filed a responsive answer, and requested default as to all. Subsequent orders of redemption and a final judgment of foreclosure were entered against all named defendants. Later, the alleged true heirs applied to vacate the final judgment and to redeem the property. The lower court denied the application. The alleged true heirs appealed, contending they had not received notice of the foreclosure.

In the appeal, it was alleged that two sisters, who lived together in Texas, were the daughters of the decedent, who had left no will, and that they were her only heirs-at-law. One of them was not named at all in the foreclosure proceeding. It was her Nevada resident grandson who was named as a party; however, he was not an heir-at-law. Another defendant was a stranger and unknown to the family. The movants generally argued that the foreclosing certificate holder failed to engage in sufficient efforts to identify the property owner’s heirs, had failed to exercise reasonable diligence in identifying the one sister, had not effected personal service upon all the heirs, and had misused service by publication.

The Appellate Division reversed as to the sister not named as a defendant, and remanded the matter for a hearing to establish the basis upon which a default judgment could be entered in respect of her interest in the property. The Court found that service by publication in a newspaper in New Jersey was not likely to provide a Texas resident with actual notice of the foreclosure proceeding and of his or her right to redeem. Further, that the unnamed sister resided with another sister who was actually served raised a question as to whether the failure to identify the omitted sister as a potential defendant satisfied the diligent inquiry standard that governs the effectiveness of service by publication. It also raised the question as to whether mail service on one of them could be fairly deemed to be adequate service on another.

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