Mary Rose 22, LLC v. Block 270, Lot 14 65 Claremont Ave

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the

internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1036-23

MARY ROSE 22, LLC,

Plaintiff-Respondent,

v.

BLOCK 270, LOT 14

65 CLAREMONT AVENUE,

TOWNSHIP OF IRVINGTON,

STATE OF NEW JERSEY

ASSESSED TO: ROSA E.

ALVAREZ-LOJA, ALFREDO

ALVAREZ and JOSE E.

ANGAMARCA,

Defendants-Appellants,

and

BLACKBALL, LLC,

Defendant/Intervenor-

Respondent.

__________________________

Argued May 13, 2025 – Decided May 30, 2025

Before Judges Susswein, Perez Friscia and Bergman.

On appeal from the Superior Court of New Jersey,

Chancery Division, Essex County, Docket No. F-

006378-22.

Stephen B. McNally argued the cause for appellants

(McNallyLaw, LLC, attorneys; Stephen B. McNally, on

the briefs).

Amber J. Monroe argued the cause for respondent Mary

Rose 22, LLC (Gary C. Zeitz, LLC, attorneys; Amber

J. Monroe and Robin London-Zeitz, on the briefs).

Elliott J. Almanza argued the cause for intervenor-

respondent Blackball, LLC (Goldenberg, Mackler,

Sayegh, Mintz, Pfeffer, Bonchi & Gill, attorneys; Keith

A. Bonchi and Elliott J. Almanza, of counsel and on the

briefs).

PER CURIAM

In this tax sale foreclosure, defendants Rosa E. Alvarez-Loja, Alfredo

Alvarez, and Jose E. Angamarca appeal from the Chancery Division's: April 3,

2023 order denying without prejudice their Rule 4:50-1 motion to vacate the

default final judgment entered in favor of plaintiff Mary Rose 22, LLC (Mary

Rose); September 27 order denying intervenor Blackball LLC's motion to

compel and extend discovery; and November 15 order denying defendants'

motion to reconsider the April 3 and September 27 orders. Having reviewed the

record, parties' arguments, and applicable legal principles, we reverse and

remand for further proceedings.

A-1036-23

2

I.

To give context to the issues presented on appeal, we review the governing

statutory framework at the time the trial court entered the final judgment. New

Jersey's Tax Sale Law (TSL), N.J.S.A. 54:5-1 to -137,1 "serves 'as a framework

to facilitate the collection of property taxes.'" In Re Princeton Office Park L.P.

v. Plymouth Park Tax Servs., LLC, 218 N.J. 52, 61 (2014) (quoting Varsolona

v. Breen Cap. Servs. Corp., 180 N.J. 605, 620 (2004)). When a property owner

fails to pay property taxes, the TSL grants the municipal government a

"continuous lien" on the property for the unpaid taxes owed, in addition to any

"penalties and costs of collection." N.J.S.A. 54:5-6. "The [TSL] converts that

lien into a stream of revenue by encouraging the purchase of tax certificates on

tax-dormant properties." In Re Princeton Office Park L.P., 218 N.J. at 62

(quoting Simon v. Cronecker, 189 N.J. 304, 318 (2007)). A tax sale certificate

is created and sold when a municipality "enforce[s] the lien by selling the

property as prescribed by [N.J.S.A. 54:5-19]." Cherokee LCP Land, LLC v.

1

In July 2024, the New Jersey Legislature amended the TSL, L. 2024, c. 39 and

included that the "act shall have no effect on any foreclosure action in which a

final judgment has been entered prior to the effective date of this act." L. 2024,

c. 39 § 11.

A-1036-23

3

City of Linden Plan. Bd., 234 N.J. 403, 415 (2018) (second alteration in original)

(quoting Varsolona, 180 N.J. at 617). "[B]y creating an alternate stream of

revenue for delinquent taxes, and providing for tax foreclosures by private

lienholders, the TSL enables municipalities 'to obtain the payment of . . . taxes

without going into the real estate business.'" 257-261 20th Ave. v. Roberto, 259

N.J. 417, 446 (2025) (quoting Varsolona, 180 N.J. at 618).

While the TSL is remedial legislation to secure the payment of taxes , it

also seeks to "'protect property owners' from forfeiture." BV001 REO Blocker,

LLC v. 53 W. Somerset St. Props., LLC, 467 N.J. Super. 117, 128 (App. Div.

2021) (quoting Simon, 189 N.J. at 322 n.10); see also N.J.S.A. 54:5-85.

"Significantly, although the [TSL's] main aim 'is to encourage the purchase of

tax certificates, another important purpose is to give the property owner the

opportunity to redeem the certificate and reclaim [their] land.'" BV001 REO

Blocker, LLC, 467 N.J. Super. at 128 (quoting Simon, 189 N.J. at 319).

N.J.S.A. 54:5-86(a) (2023) authorized a private tax sale certificate holder

to file a foreclosure complaint two years after the sale of a tax sale certificate.

An exception to the two-year tax sale foreclosure waiting period existed under

N.J.S.A. 54:5-86(b) (2023). The exception provided that "[a]ny person holding

a tax sale certificate on a property that me[t] the definition of abandoned

A-1036-23

4

property" under the Abandoned Property Rehabilitation Act (APRA), N.J.S.A.

55:19-78 to -107, "either at the time of the tax sale or thereafter," was permitted

to file an action at any time "demanding that the right of redemption on such

property be barred" under the TSL "or the In Rem Tax Foreclosure Act [ (the

Act), N.J.S.A. 54:5-104.29 to -104.75]." N.J.S.A. 54:5-86(b). Specifically, the

Act allows "any municipality or abandoned property certificate holder" to bring

an action in rem "to bar rights of redemption." N.J.S.A. 54:5-104.32.

N.J.S.A. 54:5-86(b) stated that the tax sale certificate holder must provide

with its filing a "certification by the public officer or the tax collector that the

property is abandoned . . . pursuant to" N.J.S.A. 55:19-83(d). If the tax sale

certificate holder failed to obtain a certification of abandonment from a public

officer or tax collector, "the certificate holder" was permitted to submit "to the

court evidence that the property [wa]s abandoned, accompanied by a report and

sworn statement by an individual holding appropriate licensure or professional

qualifications" for the court to "determine whether the property me[t] the

definition of abandoned property." Ibid. Under APRA, a property may be

deemed abandoned if it "has not been legally occupied for a period of six

months" and satisfies one of four additional criteria:

a. The property is in need of rehabilitation in the

reasonable judgment of the public officer, and no

A-1036-23

5

rehabilitation has taken place during that six-month

period;

b. Construction was initiated on the property and was

discontinued prior to completion, leaving the building

unsuitable for occupancy, and no construction has taken

place for at least six months as of the date of a

determination by the public officer pursuant to this

section;

c. At least one installment of property tax remains

unpaid . . . ; or

d. The property has been determined to be a nuisance

by the public officer in accordance with . . . [N.J.S.A.

55:19-82].

[N.J.S.A. 55:19-81.]

Pursuant to N.J.S.A. 55:19-81(d), a property may be found to be a

nuisance if:

a. The property has been found to be unfit for human

habitation, occupancy or use pursuant to . . . [N.J.S.A.

40:48-2.3];

b. The condition and vacancy of the property materially

increases the risk of fire to the property and adjacent

properties;

c. The property is subject to unauthorized entry leading

to potential health and safety hazards; the owner has

failed to take reasonable and necessary measures to

secure the property; or the municipality has secured the

property in order to prevent such hazards after the

owner has failed to do so;

A-1036-23

6

d. The presence of vermin or the accumulation of

debris, uncut vegetation or physical deterioration of the

structure or grounds have created potential health and

safety hazards and the owner has failed to take

reasonable and necessary measures to remove the

hazards; or

e. The dilapidated appearance or other condition of the

property materially affects the welfare, including the

economic welfare, of the residents of the area in close

proximity to the property, and the owner has failed to

take reasonable and necessary measures to remedy the

conditions.

[N.J.S.A. 55:19-82.]

II.

On April 20, 2020, defendants purchased a residential property on

Claremont Avenue in Irvington (the property) as an investment for $163,000.

They purchased the property intending to renovate and convert the existing two-

family residence into a three-family residence.

Defendants paid Irvington property taxes through the third quarter of

2021, but they failed to pay the fourth quarter taxes. Irvington is an "accelerated

tax sale municipality," which allows for tax certificate sales in the same year the

property taxes are due. Therefore, Irvington ensures that after "November 11[],"

"any properties with delinquencies . . . [are] included in the accelerated tax sale."

"After November 11[], Tax Sale Notices," are mailed for "past-due accounts,"

A-1036-23

7

which would include unpaid fourth quarter taxes. Irvington mailed defendants'

tax bills to the property. Defendants allege they did not receive a delinquency

notice.

On December 16, 2021, FIG purchased a tax sale certificate from

Irvington for defendants' unpaid property taxes of $1,420,73, representing the

unpaid fourth quarter taxes plus interests and costs. On February 15, 2022, FIG

recorded the tax sale certificate with the Essex County Register. It also paid the

real estate taxes for the first and second quarters of 2022. On December 15, FIG

purchased a tax sale certificate for defendants' third and fourth quarter taxes.

Meanwhile, in 2021, defendants filed a land use application with the

Irvington Zoning Board seeking site plan and variance approval under the

Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -171. The Board heard

defendants' application on December 7, 2021, and January 18, 2022. On

February 15, after hearing from defendant's expert planner, considering the

expert's plans, and reviewing other evidence, the Board granted defendants' final

site plan approval and use variance application, pursuant to N.J.S.A. 40:55D-

70(d)(1). The Board permitted defendants "to convert the[ir] existing two-

family dwelling to a three-family dwelling."

A-1036-23

8

In January 2022, Derek Leary, a licensed construction official and

building inspector, allegedly inspected defendants' property for FIG and

determined it was abandoned. He completed a pre-printed, two-page form

certifying that the "[p]roperty [wa]s abandoned pursuant to N.J.S.A. 55:19-81

because the [p]roperty ha[d] not been legally occupied for at least six . . . months

preceding the date of" the report. Leary checked off boxes on the pre-printed

form, attesting that the property: was "in need of rehabilitation"; "ha[d] been

found to be unfit for human habitation, occupancy[,] or use"; had a "materially

increase[d] . . . risk of fire" because of its "condition and vacancy"; "[wa]s

subject to unauthorized entry leading to potential health and safety hazards[,

and] the owner ha[d] failed to take reasonable and necessary measures to secure

the property"; had a "presence of vermin or the accumulation of debris, uncut

vegetation or physical deterioration of the structure"; and had a "dilapidated

appearance or other condition" that "materially affect[ed] the welfare . . . of the

residents" in "the area." He stated that there were "no utilities" at the property,

though it was later determined the property had utility boxes. Leary also listed

that the "soffit, fascia, gutters, [and] window" required repair. He attached to

his certification multiple photographs showing: a boarded-up residence, no

utility boxes, missing gutters, missing windows, a dilapidated roof, no

A-1036-23

9

vegetation, and a damaged entrance stairway. However, the photographs were

not of defendants' residence but of a different property.

FIG served defendants with pre-foreclosure notices by regular and

certified mail.2 On May 6, FIG requested that the Irvington tax collector certify

the property was abandoned, which went unanswered. On June 22, FIG filed an

in rem tax foreclosure complaint. FIG alleged it was "an abandoned property

certificate holder as defined in N.J.S.A. []54:5-104.30(h)" and was "eligible" to

seek an immediate tax sale certificate foreclosure pursuant to N.J.S.A. 54:5 -

86(b) because defendants had not redeemed the tax sale certificates.

On September 14, FIG filed a motion to declare the property abandoned.

In support of its application, FIG attached Leary's abandoned property

certification, and a representative of FIG later certified that the pictures attached

to Leary's report were "of the [p]roperty." On October 7, the first judge

presiding over this matter issued an order accompanied by a written decision

finding the property was "an abandoned property pursuant to N.J.S.A. 55:19-81

and N.J.S.A. 54:5-86(b)." The first judge relied on Leary's report and stated he

2

At oral argument before us, defendants' counsel acknowledged it was

undisputed that FIG complied with service requirements throughout the

litigation.

A-1036-23

10

reviewed the attached "photographs depict[ing] a wood boarded front and front

roofing torn and exposed."

On October 19, the Irvington tax collector executed an affidavit of non-

redemption pursuant to N.J.S.A. 54:5-86. He attested that "no part of the

amounts alleged to be due in the [c]omplaint filed in this action on account of

the tax lien certificates and subsequent tax liens affecting the property ha[d]

been paid."

On November 7, a second judge entered default final judgment for

$4,246.67. The same day, the second judge also granted Mary Rose's motion to

be substituted for FIG by virtue of the tax sale certificate assignments. On

December 12, Mary Rose executed a quit claim deed, transferring the property

to Blackball for the purchase price of $140,000. The deed specifically

referenced that the "land and premises [were] acquired by Mary Rose . . . , by

[f]inal [j]udgment entered by the Superior Court of New Jersey, Chancery

Division on November 7, 2022, at [d]ocket [n]umber F-6378-22." Further, the

deed provided that Mary Rose "ma[de] no promises as to ownership or title, but

simply transfer[red] whatever interest the Grantor ha[d] to the Grantee."

On February 2, 2023, defendants moved under Rule 4:50-1(a), (d), and (f)

to vacate the final judgment. They challenged "the accelerated in rem

A-1036-23

11

foreclosure process utilized by . . . [p]laintiff . . . [as] predicated upon an

improper designation of the [p]roperty as vacant." Defendants argued that

because the first judge erroneously entered the order finding the property

abandoned, based on patently incorrect information, the final judgment must be

vacated. Blackball thereafter cross-moved to intervene in the tax sale

foreclosure as an interested party, having purchased the property from Mary

Rose. Blackball represented that it was a bona fide purchaser of the property

for value.

On April 3, the first judge issued a comprehensive, sixteen-page written

decision granting Blackball's cross-motion to intervene and denying defendants'

motion to vacate the final judgment without prejudice. The first judge set a

ninety-day discovery schedule because he determined defendant had made a

prima facie showing that jurisdiction to enter the judgment was "reasonably in

question." He recited that under Rule 4:50-1(d), "a judgment may be set aside

as void if the rendering court lacked subject matter jurisdiction ," citing Ganz v.

Rust, 299 N.J. Super. 324, 327 (App. Div. 1997). The first judge also noted that

"a judgment is void if there has been a failure to comply with a requirement

which is a condition precedent to the exercise of jurisdiction by the court ,"

quoting James v. Francesco, 61 N.J. 480, 485 (1972). He found that "if the

A-1036-23

12

abandonment order was wrong or entered in error, the court prematurely

exercised subject matter jurisdiction." The first judge noted it was undisputed

that Leary's certification included photographs of the wrong property, which he

had "relied upon . . . in determining the property was abandoned." The first

judge stated, "It is inescapable that wrong photos provided, at least in part, the

foundation for the [first judge's] conclusion."

In addressing Mary Rose's argument that defendants did not rebut Leary's

abandoned property certification and Blackball's argument that defendants did

not meaningfully contest the statutory elements of abandonment, the first judge

found the "arguments [we]re without merit" and highlighted that chancery

judges are charged to fashion equitable remedies when warranted. He

determined defendants had "contradicted the Leary certification" because: it

was unclear whether Leary "ever inspected the property"; "there [w]as no basis

for the conclusion that the property was not legally occupied for the six months

preceding inspection"; Leary "made no effort to investigate the work undertaken

at the property"; Leary "drew conclusions that could not have been supported by

an 'inspection of the exterior of the property'"; "the property [wa]s reasonably

maintained and structurally intact and apparently fit for habitation"; "there [wa]s

no debris or vermin"; Leary's "handwritten notes regarding the 'gutter and fascia'

A-1036-23

13

'[we]re wrong'"; and "the correct picture of the property 'show[ed] electrical

meters on the side of the property'" evidencing a utility connection. Further, the

first judge found that the additional evidence, including "photos and videos" and

a description of the property, Blackball submitted to support abandonment was

"unsupported by a 'report and sworn statement by an individual holding

appropriate licensure or professional qualifications'" pursuant to N.J.S.A. 54:5-

86(b) and N.J.S.A. 55:19-81(b).

In addressing defendants' motion to vacate the final judgment under Rule

4:50-1(f), the first judge found defendants: established there was "minimal

delay in 'making the application' to vacate," which weighed "in favor of vacating

the default final judgment"; satisfactorily explained the reason for delay; could

not "avoid blame for their failures to respond"; and had not established there

was no prejudice, highlighting that Blackball allegedly was a bona fide

purchaser and discovery was required. Relevantly, the first judge held "[t]he

parties w[ere to] return for further motion practice or [a] plenary hearing" to

address "the issue of abandonment" and "whether Blackball was a bona fide

purchaser for value." (Emphasis added). In ordering discovery and further

proceedings, the first judge observed "the unique circumstances of th[e] case."

A-1036-23

14

On August 11, after the parties completed limited discovery, and the

ninety-day discovery period expired, Blackball moved to compel discovery and

requested an extension of the discovery period. Blackball and defendants had

unsuccessfully attempted to settle the matter. Although the motion was

unopposed, a third judge denied the motion. She stated, "The motion to vacate

[the] final judgment, which was conditionally denied by [the first judge] on

April 3, 2023, hereby remains in effect without conditions and this court

confirms that [the] final judgment shall not be vacated." Defendants' counsel

argued defendants only speak Spanish, which presented issues with completing

the answers to interrogatories, but defendants served responses. The third judge

found counsels' stipulated agreement to continue discovery did not "mean that

[they] get it." She stated that the "idea that [she] would compel responses at

th[at] point seem[ed] pretty futile," and she was "at a loss as to why [she] would

allow anything else to happen." The third judge noted that the case proceeded

"in an unusual way" but reasoned defendants failed to move "to continue

discovery" and found no "exceptional circumstances" or "good cause."

On October 17, defendants moved for reconsideration of the first judge's

order denying their motion to vacate and the third judge's order denying

Blackball's motion to extend discovery. Regarding the motion to vacate the final

A-1036-23

15

judgment, defendants argued the first judge's decision demonstrated that he only

partially denied their motion to vacate the final judgment, which reserved on

whether he correctly deemed the property abandoned and Blackball's bona fide

purchaser status. Defendants argued FIG wrongly proceeded with an expedited

abandoned property tax sale foreclosure because Leary's certification included

incorrect property photographs and information. They highlighted the first

judge's decision opened the matter for discovery and later substantive

proceedings.

Defendants also argued the third judge should have considered their

discovered public records illustrating Blackball was a sophisticated tax lien

foreclosure property purchaser. They posited that the documents showed

Blackball was not a bona fide purchaser, as it had constructive notice of Mary

Rose's defective abandoned property foreclosure. They referenced forty-five

instances where Blackball or affiliated entities filed tax lien foreclosure

documents for other properties to support Blackball's: familiarity with tax sale

foreclosures; understanding of the unique process; and knowledge of property

owners' interests. Defendants argued Blackball regularly purchased tax-

foreclosed properties within sixty days of a final judgment to act as a clearing

house for properties under the shield of being a bona fide purchaser and that

A-1036-23

16

defendants' loss of equity would be unjust. Further, defendants highlighted

Blackball had constructive notice of the foreclosure docket filings, including the

records showing that the first judge certified the property as abandoned based

on incorrect information, and the Board's resolution granting defendants final

site plan and (d)(1) variance approval was public record. Defendants

represented they stored thousands of dollars of construction materials at the

residence because they were awaiting permits, which was "sufficient to place

Blackball on notice" that the property was not abandoned.

Defendants averred Blackball's sophistication in tax sale foreclosures

afforded it constructive knowledge of readily accessible relevant records, which

demonstrated the tax sale foreclosure was for approximately $8,000 in 2022,

defendants had purchased the property in 2020 for $163,000, and the property

was in the process of development. Defendants argued reconsideration was

warranted because the failure to vacate the final judgment would result in a

significant loss of equity, including defendants' "life savings," which they

invested to develop the property.

Regarding reconsideration of the third judge's denial of further discovery,

defendants represented discovery was propounded on June 23, 2023, before the

ninety-day discovery period had expired. They emphasized the parties

A-1036-23

17

consented to extend discovery, and the first judge had clearly established that

the case should proceed on the merits after he made a preliminary finding that

the equities balanced in defendants' favor.

In opposition, Blackball's managing member's certification acknowledged

his experience in tax sale foreclosures through "various businesses" and the

purchase of "properties that have been tax-foreclosed." He represented that

Blackball was a bona fide purchaser from Mary Rose. He averred the property

was abandoned, providing different photographs, this time of the correct house,

showing the residence in a state of "disrepair."

On November 15, 2023, the third judge denied defendants' motion for

reconsideration. The third judge found that further discovery was unwarranted,

as the ordered discovery period expired, and counsel's consent to Blackball's

motion to compel and extend discovery was irrelevant. The third judge reasoned

that defendants failed to separately move to reopen discovery. In denying

defendants' motion, the third judge declined to consider the public records

defendants proffered to show Blackball's tax foreclosure knowledge and

constructive notice that the property was not abandoned, finding defendants

could have previously discovered and presented the public records.

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18

On appeal, defendants contend: vacation of the final judgment is

warranted pursuant to Rule 4:50-1 (d) or (f) and based on Tyler v. Hennepin

County, 598 U.S. 631 (2023) and Roberto,3 as the forfeiture of their equity is

extreme, and they are entitled to pipeline retroactivity; the judges erred in failing

to vacate the final judgment under Rule 4:50-1(d) and (f) because Leary's

certification was patently flawed; and the final judgment should be vacated

because they made a "prima facie" showing that Blackball is not a bona fide

purchaser for value without notice, as the first judge found.

III.

We review a motion to vacate a final judgment under Rule 4:50-1 for an

abuse of discretion. Roberto, 259 N.J. at 436. "A court abuses its discretion

'when a decision is made without a rational explanation, inexplicably departed

from established policies, or rested on an impermissible basis.'" Parke Bank v.

Voorhees Diner Corp., 480 N.J. Super. 254, 262 (App. Div. 2024) (quoting

Mims v. City of Gloucester, 479 N.J. Super. 1, 5 (App. Div. 2024)).

"Rule 4:50-1 provides for relief from a judgment [or order] in six

enumerated circumstances." D.M.C. v. K.H.G., 471 N.J. Super. 10, 26 (App.

3

We requested that the parties submit supplemental briefing after our Supreme

Court decided Roberto and have incorporated those arguments in this opinion.

A-1036-23

19

Div. 2022) (quoting In re Est. of Schifftner, 385 N.J. Super. 37, 41 (App. Div.

2006)). "[T]he rule is a carefully crafted vehicle intended to underscore the need

for repose while achieving a just result." Ibid. (quoting DEG, LLC v. Township

of Fairfield, 198 N.J. 242, 261 (2009)). Rule 4:50-1 states:

On motion, with briefs, and upon such terms as are just,

the court may relieve a party or the party's legal

representative from a final judgment or order for the

following reasons: (a) mistake, inadvertence, surprise,

or excusable neglect; (b) newly discovered evidence

which would probably alter the judgment or order and

which by due diligence could not have been discovered

in time to move for a new trial under [Rule] 4:49; (c)

fraud (whether heretofore denominated intrinsic or

extrinsic), misrepresentation, or other misconduct of an

adverse party; (d) the judgment or order is void; (e) the

judgment or order has been satisfied, released or

discharged, or a prior judgment or order upon which it

is based has been reversed or otherwise vacated, or it is

no longer equitable that the judgment or order should

have prospective application; or (f) any other reason

justifying relief from the operation of the judgment or

order.

Rule 4:50-2 provides that "[t]he motion shall be made within a reasonable time,

and for reasons (a), (b) and (c) of R[ule] 4:50-1 not more than one year after the

judgment, order or proceeding was entered or taken." N.J.S.A. 54:5-87 (2023)

limited vacating a "judgment after three months from the date thereof, and then

only upon the grounds of lack of jurisdiction or fraud in the conduct of the suit."

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20

See also N.J.S.A. 54:5-104.67 (providing similar three-month limitation to

reopening a judgment for an in rem tax foreclosure).

"If a judgment is void and, therefore, unenforceable, it is a particularly

worthy candidate for relief [under] []R[ule] 4:50-1(d)[,] provided that the time

lapse is not unreasonable and an innocent third party's rights have not

intervened." Bank v. Kim, 361 N.J. Super. 331, 336 (App. Div. 2003). "A Rule

4:50-1(d) motion, based on a claim that the judgment is void, does not require a

showing of excusable neglect but must be filed within a reasonable time after

entry of the judgment." Deutsche Bank Nat'l Tr. Co. v. Russo, 429 N.J. Super.

91, 98 (App. Div. 2012).

Rule 4:50-1(f) is a "catch-all" provision incapable of categorization.

DEG, LLC, 198 N.J. at 269-70. It allows for relief in "exceptional situations"

where hardship has been shown and, as such, its "boundaries 'are as expansive

as the need to achieve equity and justice.'" Roberto, 259 N.J. at 436 (quoting

Hous. Auth. of Morristown v. Little, 135 N.J. 274, 290 (1994)); see also U.S.

Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 484 (2012) (finding a party must

demonstrate exceptional circumstances to obtain relief under Rule 4:50-1(f)).

We have further recognized "important factors" to be considered in deciding

whether relief in such circumstances should be granted, including "(1) the extent

A-1036-23

21

of the delay in making the application; (2) the underlying reason or cause; (3)

the fault or blamelessness of the litigant; and (4) the prejudice that would accrue

to the other party." Parker v. Marcus, 281 N.J. Super. 589, 593 (App. Div.

1995).

IV.

A.

We first address defendants' contentions that the third judge erred in

denying reconsideration of their motion to vacate the final judgment and

Blackball's motion to compel and extend discovery. Specifically, defendants

argue the third judge erroneously denied vacating the final judgment, as

defendants established Mary Rose wrongfully obtained the judgment based on a

flawed abandonment determination, which permitted the accelerated in rem tax

foreclosure. Defendants contend the third judge "effectively terminat[ed their]

motion to vacate without [a] . . . hearing," disregarding that the first judge had

found defendants made a prima facie showing to vacate the final judgment and

that Blackball's motion to compel and extend discovery was unopposed.

In denying defendants' motion for reconsideration, the third judge initially

found there was no "motion . . . to keep this case going to continue discovery."

She reasoned that defendants had failed "to take advantage of the discovery

A-1036-23

22

period provided to them" and never reopened discovery. We disagree with the

third judge's constricted view. Notably, Blackball's counsel certified that the

parties agreed to extend discovery and specifically requested to "extend the

discovery period so that this matter can be resolved in accordance with the way

[the first judge] envisioned." (Emphasis added). A review of his certification

and the motion exhibits reveal the parties' consented to extend discovery,

defendants had answered interrogatories and filed discovery requests before the

ninety-day discovery period expired, and Blackball and defendant had

unsuccessfully attempted a "settlement." While Blackball filed its motion after

the discovery period expired, the third judge erred in not applying the good cause

standard and not permitting discovery, as there was no set return date or plenary

hearing date scheduled, and Blackball's request to extend discovery was with

consent.

We conclude the unique procedural posture of the case supported

permitting further discovery, because at a minimum, defendants made a prima

facie showing that the property was not appropriately deemed abandoned. The

first judge had denied defendants' application without prejudice, specifically

ordering discovery and further substantive proceedings. He identified the issues

warranting later review. He expressed legitimate concerns surrounding Mary

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Rose proceeding with an in rem tax foreclosure based on incorrect abandoned

property information and Blackball's bona fide purchaser status. While the first

judge denied defendants' motion to vacate without prejudice, he had essentially

granted in part defendants' motion to vacate by ordering discovery and further

court proceedings. Problematically, based on the posture of the action, there

was no: plenary hearing scheduled; future case management conference set; and

motion filing deadlines. The parties reasonably believed they could consent to

continue discovery and thereafter move to return before the court. Stated

another way, the parties clearly shared the belief that the first judge intended the

parties to conclude discovery and to thereafter move for further proceedings

with the court. We discern that the assignment of a new judge to the matter and

different interpretations of the order for future proceedings compounded the

confusion.

Moreover, the third judge acknowledged the case proceeded "in an

unusual way." We also note the third judge cited no authority for the proposition

that counsel could not consent to continue discovery when there was no return

date established. But cf. Leitner v. Toms River Reg'l Schs., 392 N.J. Super. 80,

93 (App. Div. 2007) (refusing to extend a discovery end date for a docketed,

track-assigned case was an abuse of discretion under Rule 4:24-1 "given the

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purpose and goals of Best Practices, the lack of prejudice to [opposing party],

the extreme prejudice to the . . . plaintiffs, the lack of a trial date[,] and the need

for" resolving disputes "on the merits whenever possible"). For these reasons,

we reverse and remand for the parties to expeditiously complete discovery .

We further address defendants' contention that they have since

"establish[ed] an independent basis" to warrant vacating the final judgment

under Rule 4:50-1(d) and (f). Defendants alternatively posit they are entitled to

a plenary hearing based on the fact that Leary presented inaccurate information,

and Blackball's bona fide purchaser status is questionable.

A judge reviewing a Rule 4:50 motion should consider equitable

principles and that a request to vacate a default judgment "be viewed with great

liberality," with "every reasonable ground for indulgence . . . tolerated to the

end that a just result is reached." Hous. Auth. of Morristown, 135 N.J. at 283-

84 (quoting Marder v. Realty Constr. Co., 84 N.J. Super. 313, 318-19 (App. Div.

1964), aff'd, 43 N.J. 508 (1964)). When reviewing a Rule 4:50-1 motion "[i]n

the tax sale certificate foreclosure context[,] considerations of public policy and

equity are also taken into account." M & D Assocs. v. Mandara, 366 N.J. Super.

341, 350 (App. Div. 2004).

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Notably, FIG did not obtain a certification from an Irvington tax official

declaring the property abandoned; thus, under N.J.S.A. 54:5-86(b), it was

required to obtain a court order declaring the property abandoned. FIG was

required to provide the court with accurate "evidence that the property [wa]s

abandoned, accompanied by a report and sworn statement by an individual

holding appropriate licensure or professional qualifications." Ibid. The first

judge acknowledged ordering the property abandoned based on Leary's incorrect

photographs and information, which was critical to the tax foreclosure

proceeding in an expedited fashion. We agree with the first judge that

defendants substantiated a sufficient initial showing of errors to question

whether the property was abandoned, including Leary's incorrect photographs

depicting a torn roof, lack of proof that the property was abandoned for six

months, and statement that there were no utilities. Again, we note Leary's report

is a pre-printed, two-page check-the-box form with scant required details.

Therefore, we discern sufficient cause existed for a plenary hearing after the

completion of discovery.

It also bears noting that FIG purchased the tax sale certificate in December

2021. Had FIG pursued a tax sale foreclosure under N.J.S.A. 54:5-86(a), the

action could not have been instituted until after December 2023. Stated another

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way, the first judge's determination that the property was abandoned allowed

FIG to institute its in rem tax foreclosure prosecution under N.J.S.A. 54:5-86(b)

almost eighteen months earlier than it would have been able to under N.J.S.A.

54:5-86(a). This afforded defendants significantly less time to redeem,

presenting significant undue prejudice to defendants if plaintiff secured the

order of abandonment in error.

We further discern no reason why defendants are precluded from

introducing evidence of Blackball's sophistication with tax sale foreclosures,

including public records of its purchases of properties shortly after the entry of

a final judgment. The third judge referenced no authority in support of her

determination that defendants were required to procure records against a non-

party purchaser prior to filing its motion to vacate the final judgment.

Importantly, the first judge specifically directed discovery on Blackball's bona

fide purchaser status after permitting its intervention. We agree with the first

judge that such information is highly relevant. Blackball's experience and

knowledge of tax sale foreclosures, in conjunction with Mary Rose's expeditious

property sale, are relevant to a determination of whether Blackball was a bona

fide purchaser with constructive notice of the issues surrounding defendants'

property abandonment and defendants' interests.

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A bona fide purchaser for value is one who takes title to property without

notice of a prior interest "and has paid a valuable consideration therefor[e]."

Monsanto Emps. Fed. Credit Union v. Harbison, 209 N.J. Super. 539, 542 (App.

Div. 1986) (quoting Venetsky v. W. Essex Bldg. Supply Co., 28 N.J. Super. 178,

187 (App. Div. 1953)). "The statutes have been consistently interpreted to mean

that the subsequent purchaser will be bound only by those instruments which

can be discovered by a 'reasonable' search of the particular chain of title."

Palamarg Realty Co. v. Rehac, 80 N.J. 446, 456 (1979). "A purchaser may well

be held bound to examine or neglect at his [or her] peril, the record of the

conveyances under which he [or she] claims . . . ." Phx. Pinelands Corp. v.

Davidoff, 467 N.J. Super. 532, 587 (App. Div. 2021) (quoting Glorieux v.

Lighthipe, 88 N.J.L. 199, 203 (E. & A. 1915)). "In the context of the race notice

statute, constructive notice arises from the obligation of a claimant of a property

interest to make reasonable and diligent inquiry as to existing claims or rights

in and to real estate." Cox v. R.K.A., Corp., 164 N.J. 487, 496 (2000) (quoting

Friendship Manor, Inc. v. Greiman, 244 N.J. Super. 104, 108 (App. Div. 1990)).

A prospective purchaser's obligation "to make a reasonable and diligent inquiry

in connection with claims or rights in and to real estate[,] or be charged with

facts as such an inquiry would uncover," is only imposed where facts are brought

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to the claimant's attention, "sufficient to apprise him of the existence of an

outstanding title or claim, or the surrounding circumstances are suspicious and

the party purposefully or knowingly avoids further inquiry." Scult v. Bergen

Valley Builders, Inc., 76 N.J. Super. 124, 135 (Ch. Div. 1962) (emphasis

omitted), aff'd, 82 N.J. Super. 378 (App. Div. 1964).

We disagree with the third judge's view that "[t]here was nothing open"

and "the sophistication of the intervenor [Blackball] . . . was fully available

to . . . defendants at the time that it was presented to" the first judge. Her

findings ignore that the first judge ordered discovery, left it to the parties'

discretion to move for further proceedings, and that Blackball was not a party

until the first judge contemporaneously granted its motion to intervene.

Importantly, a "[c]hancery judge has broad discretionary power to adapt

equitable remedies to the particular circumstances of a given case." Marioni v.

Roxy Garments Delivery Co., 417 N.J. Super. 269, 275 (App. Div. 2010). As

our Supreme Court has explained, equitable remedies "are distinguished by their

. . . adaptability to circumstances." Salorio v. Glaser, 93 N.J. 447, 469 (1983).

The first judge's decision fairly opened the matter for further proceedings.

Inescapably, a "defect in the judgment is not waivable because it goes to the

authority of the court to render the final judgment and is consequently more akin

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to a non-waivable lack of subject matter jurisdiction." Bascom Corp. v. Chase

Manhattan Bank, 363 N.J. Super. 334, 341 (App. Div. 2003). Therefore, we

remand for a plenary hearing to address Mary Rose's final judgment based on

defendants' alleged property abandonment and to determine whether Blackball

was a bona fide purchaser. 4

B.

We next address defendants' argument that the final judgment should be

vacated pursuant to the retroactive application of the United States Supreme

Court's decision in Tyler, because this matter was in the "pipeline" and subject

to review as "filed within the three . . . month limitation contained in N.J.S.A.

54:5-87." See Roberto, 259 N.J. at 440 (recognizing that Tyler "applies to cases

4

We note, in tax sale foreclosure cases where vacating the final judgment is

warranted, and a bona fide purchaser has acquired the property, our Supreme

Court has charged chancery judges to balance the equities in determining the

appropriate relief. Sonderman v. Remington Const. Co., 127 N.J. 96, 109 (1992)

(achieving an equitable "result without violating the integrity of the recording

system or the need for a liberal construction of the [TSL]").

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on direct review in state court"). 5 Defendants argue that before the United States

Supreme Court decided Tyler in May 2023, they had timely moved to vacate the

final judgment, challenging the validity of Mary Rose's tax sale under N.J.S.A.

54:5-86(b) and arguing that substantial equity existed in the property.

Undisputedly, defendants had timely moved to vacate under Rule 4:50-2 and

N.J.S.A. 54:5-87. Also, it is undisputed that Mary Rose and Blackball were on

notice that defendants specifically alleged: FIG wrongly obtained the final

judgment based on Leary's misrepresented information, and significant equity

existed in the property. Accordingly, because the first judge ordered discovery

and further proceedings, they argue their matter was under review. The third

judge did not address the parties' arguments regarding Tyler, stating pipeline

retroactive application might "apply if in fact the motion to vacate is granted."

5

We note in Roberto, our Supreme Court did not "determine whether full

retroactivity is warranted in other cases." 259 N.J. at 442 n.3. The Court

"decline[d] to address or adopt the appellate court's analysis of" pipeline

retroactivity. Ibid. The Court also did not decide "a related question" that had

not been raised below about "whether a party may file a claim for just

compensation alone when a foreclosure has been finalized and a taking of equity

has already occurred, but the taking is within the relevant statute of limitations."

Ibid. Further, our Supreme Court "[s]pecifically . . . ma[de] no finding about

whether . . . [its] ruling extends to in rem foreclosures of abandoned property."

Id. at 449 n.4 (emphasis added).

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See Rule 1:7-4 (requiring trial courts to make sufficient "find[ings] [of] . . .

fact[] and state . . . [their] conclusions of law").

While we agree with defendants' argument that the matter was open for

further judicial review, that conclusion alone does not resolve the question of

Tyler's application. Generally, a tax sale foreclosure matter that is pending on

direct appeal or opened based on a successful application is subject to the

retroactive application of Tyler. When the United States Supreme Court

"applies a rule of federal law to the parties before it, that rule is the controlling

interpretation of federal law and must be given full retroactive effect in all cases

still open on direct review and as to all events, regardless of whether such events

predate or postdate . . . [its] announcement of the rule." Roberto, 259 N.J. at

440 (quoting Harper v. Va. Dep't of Tax'n, 509 U.S. 86, 97 (1993)). We are

satisfied that the unique facts in the present matter qualified this tax sale

foreclosure as pending further review before the court.

However, the United States Supreme Court in Tyler recognized that a

distinction exists in the application of the Takings Clause of the Fifth

Amendment to abandoned property in the tax foreclosure context. 598 U.S. at

646. It has long been "recognized that States have the power to permit unused

or abandoned interests in property to revert to another after the passage of time."

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Texaco, Inc. v. Short, 454 U.S. 516, 526 (1982). "In ruling that private property

may be deemed to be abandoned and to lapse upon the failure of its owner to

take reasonable actions imposed by law, [the United States Supreme] Court has

never required the State to compensate the owner for the consequences of his

own neglect." Id. at 530. Relevantly, regarding abandoned property in the

context of a tax sale foreclosure, the United States Supreme Court in Tyler

highlighted that there would be "no taking" because "after abandonment, the

former owner retain[s] no interest for which he may claim compensation." 598

U.S. at 646 (quoting Texaco, 454 U.S. at 526). Additionally, the United States

Supreme Court has elucidated that "[i]t is the owner's failure to make any use of

the property—and not the action of the State—that causes the lapse of the

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property right; there is no 'taking' that requires compensation." Texaco, 454

U.S. at 530; see also Tyler, 598 U.S. at 647. 6

Neither the parties nor the third judge addressed the distinction that Tyler's

holding drew regarding the application of the Takings Clause to abandoned

property. As we have concluded a full plenary hearing is necessary to address

whether the property was correctly deemed abandoned and Blackball's bona fide

purchaser status, on remand, if warranted, the judge shall additionally provide

findings on the issue of Tyler's application to abandoned property after the

plenary hearing.

C.

In sum, we conclude the parties shall be provided the opportunity to

complete discovery, and a plenary hearing shall be afforded regarding whether

6

We note the New Jersey Legislature recently recognized the distinction

regarding abandoned property in N.J.S.A. 54:5-104.64(a), which provides, "In

an action commenced by any person or a municipality holding a tax sale

certificate for an abandoned property pursuant to [N.J.S.A. 54:5-86(b)], the

judgment shall give full and complete relief . . . to bar claims to surplus

equity, . . . except as set forth in [N.J.S.A. 54:5-104.64(d)] . . . . ," which

provides that "[i]n an action brought by a municipality, in order to preserve any

equity that may exist in the property being foreclosed, the owner, . . . shall have

the right to demand, . . . before . . . final judgment is entered, that the municipal

tax sale certificate be foreclosed with a judicial sale." If the property owner

does "not demand a judicial sale, . . . the municipality may proceed in rem

without a judicial sale, . . . . [and] [t]he amount received . . . shall be conclusively

presumed to be . . . fair market value." N.J.S.A. 54:5-104.64(d).

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the property was deemed abandoned based on Leary's flawed submissions and

Blackball's bona fide purchaser status. The judge on remand must first address

whether the final judgment should be vacated under Rule 4:50-1(d), which does

not require a showing of excusable neglect or a meritorious defense, and Rule

4:50-1(f). Thereafter, the judge shall address Blackball's bona fide purchaser

status. We understand the extent of any court-afforded relief to defendants

depends on the outcome of each issue. We express no opinion as to the ultimate

outcome other than discerning genuine factual disputes clearly exist. Further,

on remand, if warranted after the plenary hearing, the court shall address the

application of Tyler and Texaco to abandoned property. We therefore reverse

and remand for further proceedings consistent with our opinion.

To the extent that we have not addressed the parties' remaining

contentions, it is because they lack sufficient merit to be discussed in a written

opinion. R. 2:11-3(e)(1)(E).

Reversed and remanded. We do not retain jurisdiction.

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