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Wachovia Bank, N.A. v. Juergensen

A-6400-04T1 (N.J. Super. App. Div. 2007) (Unpublished)

TAX SALES; MORTGAGES — The tax sale statute only entitles parties with specifically defined interests to redeem a tax certificate and an alleged “equitable interest” in a mortgage does not rise to the level required by that statute.

A bank bought a tax sale certificate and then filed a foreclosure complaint against “all individuals and entities having a recorded interest as of the date the complaint was filed.” Later, the bank was notified that an investor had redeemed the bank’s tax sale certificate. The investor claimed to have acquired an interest in a mortgage on the property by virtue of its assignment from the original mortgagee. It admitted that the previous mortgagee, from whom it allegedly acquired its interest, had previously assigned its interest to a third party. However, the investor claimed that the mortgagee had entered into a repurchase agreement with that third investor to repurchase its interest in the mortgage. This all allegedly occurred before the mortgagee assigned its interests to the investor. The investor claimed that the repurchase agreement gave the mortgagee an “equitable interest” in the mortgage, which the mortgagee in turn assigned to the investor. By virtue of that history, the investor claimed that it was entitled to redeem the bank’s tax certificate.

The lower court rejected the investor’s argument, denying its motion to intervene, and entered summary judgment for the bank. It held that there was no evidence to show that the mortgagee had ever repurchased its interest in the mortgage from the third party, and therefore the mortgagee could not have assigned its interest to the mortgage company, because it had no ownership interest to assign. Because the investor was unable to prove ownership interest in the mortgage, the lower court denied its motion to intervene. Additionally, as there existed no issue of material fact, the lower court directed summary judgment for the bank.

The Appellate Division affirmed, first holding that no competent evidence in the record supported the investor’s claims. The Court noted that the investor’s only evidence as to its purported ownership were certifications of counsel, yet the attorneys who made the certification had no personal knowledge regarding the ownership of the mortgage. The Court explained that “attorney’s certifications, not based on personal knowledge, are not competent evidence.” Moreover, the Court held that even assuming that the investor could prove that the mortgagee had some “ill-defined” equitable interest in the mortgage, which it transferred to the investor, this ill-defined interest would still have been insufficient to entitle the investor to redeem the tax sale certificate. It ruled that the applicable statute only entitled parties with specifically defined interests to redeem a tax certificate, and that the investor’s alleged “equitable interest” did not rise to the level required by the statute. In reaching this conclusion, the Court relied primarily upon the legislative history of the statute, which had been recently narrowed to include only very specific types of interest holders who may redeem a tax sale certificate.

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