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Penn Business Credit, Inc. v. The Beach Club, L.L.C.

A-0650-03T2 (N.J. Super. App. Div. 2004) (Unpublished)

FORECLOSURE; SHERIFF’S FEES—Just because a judgment of foreclosure is vacated as part of settlement between a foreclosing mortgager and its mortgagee doesn’t mean that the Sheriff is not entitled to its statutory commission.

A default judgment of foreclosure was issued and a writ of execution followed. Prior to the scheduled sheriff’s sale, the mortgagee sold the property and paid off the mortgage. Therefore, the mortgagee canceled the sheriff’s sale, but required the mortgagor to escrow about $24,000 which was the calculated amount of the statutory sheriff’s commission before the mortgage liens could be released. Subsequently, a consent order was entered vacating the judgment of foreclosure and dismissing the case with prejudice. As a result, the mortgagor contended that “the vacation of the judgment rendered the execution null and void so that there were no commissions due to the sheriff on account of the voided execution.” Sheriff’s commissions are payable pursuant to a New Jersey statute which provides, in pertinent part, “[w]hen the execution is settled without actual sale and such settlement is made manifest to the officer [i.e. sheriff], the officer shall receive one half of the amount of percentage allowed herein in the case of sale.” According to case law, a sheriff’s right to compensation “is derived from statute and must be strictly construed.” In 1859, a court explained: “This allowance [for fees and commissions to the sheriff] is made for the trouble, care, and risk of the officer in discovering and levying upon the property of the defendant… It is of no consequence to the sheriff how the matter is arranged between the plaintiff and defendant. If anything is done between them, by which a sale is rendered unnecessary, that must be considered a settlement within the meaning of the act.” Based on the foregoing, the Appellate Division rejected the mortgagor’s “argument that the consent order to vacate the judgment of foreclosure eliminated the underpinning for [mortgagor’s] requirement to pay the statutory fees and commission.” According to the Court, to hold otherwise would constitute “a refutation of the expressed [statutory] intent.”

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