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Township of Middletown v. Simon

387 N.J. Super. 65, 903 A.2d 418 (App. Div. 2006)

STREETS; DEDICATION — When lands are sold with reference to a map upon which lots and streets are delineated, there is a dedication of such streets to the public and such dedication continues and cannot be revoked except by consent of the municipality; therefore, when those lots upon which the streets are located are sold, even in a tax sale, they are sold subject to the municipality’s right to accept the dedication.

A municipal governing body approved an application by a couple to subdivide a tract of vacant land into fifty-seven lots for residential development. Fifty six of the lots were numbered, and one lot, designated on the map as “Park,” was unnumbered. Thereafter, the couple recorded the approved subdivision map. Although the proposed subdivision was located on a lake, only twenty of the fifty-six numbered lots and the lot designated as a park afforded direct access to the lake. At one point, the couple conveyed two lots in the subdivision by reference to the subdivision map. The deed to the purchaser restricted the development to construction of single-family residences and imposed various other restrictions. The deeds to the two lots provided that these restrictions would run with the land and continue until a specified year.

The couple entered into an agreement with the purchasers of the first two lots to impose restrictions on development of their lots and nineteen of the unsold lots. The agreement provided that these restrictions would run with the land and continue to a specified year. Additionally, the agreement obligated the couple and their successors to maintain the lot designated “Park” and certain streets in the development until this responsibility was assumed by the municipality.

The couple later conveyed twenty-one other lots in the subdivision. The deeds all described the lots by reference to the filed subdivision map. One deed conveyed a lot together with the right to the use of, in common with others, the park and the lake. Only one of the deeds included a specific reference to the agreement between the couple and the purchasers of the first two lots.

For tax purposes, the park lot was initially appended to an adjoining lot and given only a nominal assessment. When the adjoining lot was sold, a question arose as to whether its boundaries corresponded with the tax records. To resolve this problem, the tax assessor gave the park lot a separate lot designation and assessment. Because the assessor was unable to identify the owner of this lot, the tax records indicated: “Owners Unknown.” Thereafter, no taxes were paid for this lot.
Eventually, the municipality sold a tax sale certificate for the park lot to an investor, who subsequently paid delinquent taxes on the lot as well as the interest and costs of the tax sale. Later, the investor brought a tax foreclosure action seeking title to the park lot. Those opposing the foreclosure action filed an answer contending the municipality was an indispensable party to the tax foreclosure action because the subdivision map recorded by the couple had dedicated the lot as a park, and the municipality had a continuing right to accept the dedication. The lower court rejected this contention and held that the park had not been dedicated to public use.

The investor subsequently entered into a contract to sell the lot to a developer who planned to construct a residence on it. When these plans became known, the owners of homes in the lake development voiced objections to the municipal governing body, claiming that the park lot was dedicated for park use and therefore could not be developed.

The municipality then filed this particular action against the investor and the developers, seeking a declaration that the park lot had been dedicated for use as a park. During the pendency of this action, the municipality’s governing body adopted an ordinance accepting dedication of the park lot.

At trial, the lower court concluded that the municipality was in privity with the property owner who opposed the tax foreclosure action, and therefore, the municipality was barred under the doctrine of res judicata and collateral estoppel from relitigating the ruling in the foreclosure action that the park was not dedicated to public use. The lower court also indicated that even if the municipality had not been barred from relitigating the issue, it would have concluded that the park lot had not been dedicated to public use. Accordingly, the lower court dismissed the municipality’s complaint. The municipality appealed.

In addressing the argument that the municipality was barred by collateral estoppel from asserting that the park lot was dedicated to public use, the Appellate Division explained that to foreclose relitigation of an issue based on collateral estoppel, the party asserting the bar must show that: (1) the issue to be precluded is identical to the issue decided in the prior proceeding; (2) the issue was actually litigated in the prior proceeding; (3) the court in the prior proceeding issued a final judgment on the merits; (4) the determination of the issue was essential to the prior judgment; and (5) the party against whom the doctrine is asserted was a party to, or in privity with, a party to the earlier proceeding. The Court found that the issue of whether the couple dedicated the park lot for public use was actually litigated in the foreclosure action, and the identical issue was presented in this case. Furthermore, the tax foreclosure action resulted in a final judgment in the investor’s favor. Consequently, the investor had established the first three prerequisites for collateral estoppel. However, the Court concluded that a finding of whether the couple dedicated the park lot was not essential to the judgment in the tax foreclosure action, and therefore, the fourth prerequisite for invocation of collateral estoppel to bar relitigation of this issue had not been established.

The Court then discussed the interest a municipality acquires when land is dedicated for public use and the interest a foreclosing party acquires when a final judgment is entered in a tax foreclosure action. When a private property owner dedicates land for public use, he or she makes an offer of a public easement and the municipality has a continuing right to accept the dedication at any time, unless it rejects the dedication by official municipal action. Until the municipality accepts the dedication, it acquires no interest in the land. When a party acquires title to property by a tax foreclosure action, that party only acquires the fee interest in the land that was subject to taxes. Consequently, if the former owner dedicated the property to a public use, a party that acquires title by a tax foreclosure action takes the property subject to the public use and the municipality’s continuing right to accept the dedication. In light of this analysis, the Court concluded that the determination whether the couple dedicated the park lot for use as a park was not essential to the judgment in the tax foreclosure action.

The municipality had not accept the alleged dedication until it adopted an ordinance for this purpose. Thus, even if the couple made a valid dedication of the lot for use as a park, the couple and their successors in title continued to own the lot and remained subject to property taxes. Therefore, the Court held that the lower court’s conclusions in the foreclosure action regarding the dedication of the park lot for public use were unnecessary dicta and for that reason, did not prevent the municipality from relitigating the issue in this case.

Next, the Court explained that when lands are sold with reference to a map upon which lots and streets are delineated, there is a dedication of such streets to the public, and such dedication continues and cannot be revoked except by consent of the municipality. The Court found that the couple’s recording of the subdivision map and subsequent sale of residential lots with reference to that map constituted an irrevocable dedication of the lot for public use as a park. Thereafter, the public rights conferred by the dedication could only be destroyed by proper municipal action. The Court reasoned that the conveyances of remaining lots in the subdivision by reference to the filed map reinforced the conclusion that the couple made an irrevocable dedication of the park lot for public use as a park.

Further, the Court explained that despite the couple’s dedication of the lot for use as a park, it remained subject to taxes. When the taxes were not paid, the municipality had a right to issue a tax sale certificate, and the investor acquired valid title to the lot in the tax foreclosure action. But the title was subject to the dedication of the land for use as a park, just as it would have been if the couple had retained title to the lot or sold it to a third party. Therefore, the municipality’s issuance of a tax sale certificate for the lot and the tax foreclosure judgment vesting title to the lot in the purchaser were not inconsistent with the Court’s conclusion that the lot is dedicated for use as a public park.

Lastly, the Court rejected the argument that the municipality’s claim that the park lot was dedicated to public use, and its subsequent acceptance of that dedication, was unfair to the investor and the developers. The Court reasoned that the investor and the developers had record notice of the subdivision map that designated the lot for use as a park, and an inspection of the lot would have revealed that it was developed and maintained as a park providing access to the lake. It further found that the investor and the developers had to have been aware that they would be able to construct a house on the lot only if neither the municipality nor the owners of other lots in the lake development attempted to enforce the dedication; or if the investor and developers were able to persuade a court that the filed subdivision map had not resulted in a dedication of the lot for use as a park.

Accordingly, the Court reversed the final judgment dismissing the complaint and remanded the case to the lower court for entry of a judgment declaring that the park lot had been dedicated to public use as a park.


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