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Lombardi v. Falcone

A-0238-2T5 (N.J. Super. App. Div. 2003) (Unpublished)

QUIET TITLE—The jurisdictional requirement that a claimant, not in possession of vacant land, seeking to quiet its title, has paid the past five years’ taxes will not be set aside just because the failure to pay taxes was based on a belief that someone else fraudulently promised to pay those taxes.

A lower court dismissed a woman’s “quiet title cause of action [to eliminate a mortgage lien] on jurisdictional grounds on the basis that [she] had failed to pay the property taxes on the subject property for five consecutive years before instituting any action.” Her defense was that she had been defrauded by her father. Her father had conveyed a vacant lot to her. She claimed her father had told her that he would take care of the taxes. That is the reason why she made no payment of taxes on the property, nor did she inquire about the status of the taxes. Five years after getting the property, she and her father became estranged and she moved out of the state. She had no contact with her father for almost ten years. Shortly after she moved, it appears that her father forged a deed, conveying the property to his own mother, the woman’s grandmother. When the grandmother died, the property was conveyed by the father, individually, and as executor of his mother’s estate, to his then wife, presumably as a gift. Real estate taxes were paid by the man’s wife and she even obtained a mortgage loan on the property. When the father died, his daughter, after reading the will, became concerned about title to the property, and a title search revealed the series of conveyances. The lower court determined that the deed to the grandmother was forged, and therefore the subsequent deed to the woman’s father’s second wife was also invalid. It ruled that the property belonged to the daughter. It would not, however, vacate the mortgage. That is why the daughter filed her quiet title action. The lower court placed a lien against the property, in favor of the second wife, for the amount of taxes that she had paid during her record ownership. It refused to grant a set-off in the amount of the mortgage.

On appeal, the daughter argued that, for equitable reasons, she should not have been barred from filing the quiet title action to eliminate the mortgage. In the alternative, she argued that she should have received a set-off credit. “A plaintiff’s peaceable possession of [] property is a jurisdictional prerequisite to an action to quiet title.” In the case of unimproved land, the claimant must have paid taxes for five years and, if no other person was in actual possession of the land during that period, the person claiming ownership is presumed to be in peaceable possession thereof. Consequently, if a claimant does not satisfy the tax-payment condition, the claimant does not have the requisite “possession in fact” to permit a quiet title action to take place. The woman’s claim that her father fraudulently represented that he would pay the property taxes was without any authority. Further, the action was not against her father, but against the father’s second wife who had no knowledge of what had transpired. Consequently, the second wife could not have been guilty of common law fraud because, to be guilty, a showing of justifiable reliance is required. The Court felt that after the daughter’s relationship with her father ended, she should have made an inquiry with the tax collector to determine that her father “was in fact true to his promise to pay the taxes on the property.” She was the title owner, and subject to loss of the property by a tax sale. Consequently, any reliance she may have had on her father’s purported promise was unjustifiable. Further, the lower court had no power to void the mortgage because the mortgagee, “who obviously had an interest in the continued viability of his lien was not made a party-defendant to [the] proceeding.” The Court pointed out that the daughter never raised the set-off issue before the lower court. Further, after the lower court gave the property back to the daughter, but before the appeal was heard, the woman sold the property and the mortgage was satisfied. The Appellate Division felt that there was an insufficient record upon which it could determine whether the sales price was adversely affected by the mortgage.

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