The New Jersey Appellate Division recently reversed the finding of a lower court, which had denied a lender and property owner's motion to vacate a final judgment in a tax sale foreclosure. See Pc8reo v. Block 3031, 2022 N.J. Super. Unpub. LEXIS 670 (App. Div. Apr. 22, 2022). In the case, BRR purchased a property in 2019 via a loan secured by a mortgage that was assigned to lender, Toorak. BRR failed to pay taxes, and the municipal tax collector sold the tax lien certificate to Plaintiff. Plaintiff brought a foreclosure action in June 2020, claiming that the tax sale certificate was eligible to be foreclosed upon immediately pursuant to N.J.S.A. 54:5-86(b) because the property was abandoned. Plaintiff then served both BRR and Toorak with the complaint in October 2020. Toorak retained a third party, Cold River, to satisfy the tax lien. Cold River claimed to have reached out to the tax collector that same month, however, it did not receive a response until December 1, and that response was "confusing." In the interim, Plaintiff filed a motion for final judgment, which the trial court granted on December 8. On December 11, Cold River sent a second request for payment instructions to the city. On that same day, Plaintiff mailed the final judgment to BRR and Toorak. On December 18, Cold River remitted payment to the city, who rejected the payment. On December 23, Toorak filed a motion to vacate the final judgment. The trial court denied the motion "without addressing the merits of the Rule 4:50-1 motion," finding that the affidavits submitted in support of the motion were not based on personal knowledge.
On appeal, the Appellate Court vacated and remanded the case. The Court found that the trial court erred in striking all of the appellants' affidavits, holding that at least some of them were based on personal knowledge. It also held that, because the trial court had denied the motion solely based on the finding that the affidavits were improper, the action should be remanded to the trial court to determine the merits of the Rule 4:50-1 arguments. In light of this remand, the Court noted a few arguments that the trial court "should consider" on remand. First, the trial court should consider whether Toorak's efforts to redeem were "compatible with due diligence or reasonable prudence," considering Cold River sent its first request for payment information to the city "only thirteen days after Toorak had been served with the complaint." Second, the Court stated that the trial court should consider whether the property was really abandoned in light of the fact that BRR submitted an affidavit that the property conditions were a result of ongoing renovations and that it had a property manager living at the building at the time. Finally, the Court stated that the trial court "should consider Toorak's prompt filing of the application, only fifteen days after final judgment was entered."
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