Opinion
DOCKET NO. A-2974-14T3
07-06-2016
JN PROPERTIES, Plaintiff-Respondent, v. BARBARA S. O'ROURKE-VAN RYE; KEN VAN RYE, HUSBAND OF BARBARA S. O'ROURKE-VAN RYE; MARK O'ROURKE; COMMONWEALTH LAND TITLE INSURANCE COMPANY; JOSEPH TROTTA, ROSE TROTTA; and FRANK TROTTA, Defendants, and MASTERCOM PROPERTIES, INC., Defendant-Appellant.
Leonard S. Miller argued the cause for appellant. Christine Ranieri Smith argued the cause for respondent (Winne, Banta, Basralian & Kahn, P.C., attorneys; Ms. Smith, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Yannotti and Guadagno. On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. F-030495-12. Leonard S. Miller argued the cause for appellant. Christine Ranieri Smith argued the cause for respondent (Winne, Banta, Basralian & Kahn, P.C., attorneys; Ms. Smith, of counsel and on the brief). PER CURIAM
Defendant Mastercom Properties, Inc. (Mastercom) appeals from orders of the Chancery Division, which denied its motion to restore its answer to a complaint filed by plaintiff JN Properties (JN), and ultimately resulted in the entry of a judgment of foreclosure of commercial property known as Block 606, Lot 13, located at 511-519 River Drive, Elmwood Park (Property), and vesting of title with plaintiff. On appeal, defendant claims that JN should be required to honor a 1986 lease agreement for parking spaces at the Property negotiated with prior owners because the lease runs with the land and is "akin" to an easement. We are not persuaded by defendant's argument, and affirm.
Defendant's initial notice of appeal indicates it appealed from a final judgment of foreclosure entered on January 14, 2015. An amended notice of appeal indicates that defendant also seeks to appeal from a January 27, 2014 order. We can find no order entered on this date, and assume defendant is referring to the January 23, 2014 order denying its motion for reconsideration of a December 6, 2013 order.
On November 25, 1986, Michael E. Spinato and Kenneth Van Rye sold 9-11 Summit Avenue, premises adjacent to the Property, to the principals of Mastercom for $370,000. The contract for sale contained a clause permitting the parties to enter into a separate lease agreement whereby the sellers would lease an adjoining parcel, located at 511-519 River Drive, to the buyers for parking.
In December 1986, Spinato and Van Rye leased the parking area of the Property, including fourteen parking spaces, to Mastercom for $75 per month. The term of the lease ran from January 1, 1987 through December 31, 2037.
The lease identifies the parking area as "an area to the rear of 519-525 River Drive." --------
Spinato and Van Rye deeded the Property to defendant Barbara O'Rourke-Van Rye. O'Rourke failed to pay taxes on the Property for the year 2006. Pursuant to N.J.S.A. 54:5-19, Elmwood Park conducted a public auction and offered a tax sale certificate for the $9,691.52 delinquency. JN purchased the tax lien for $10,915.33, subject to redemption with interest at 18%.
O'Rourke again failed to pay taxes on the property for the year 2009, and on March 24, 2010, JN purchased a second tax lien for $3,805.91, also subject to redemption with interest at 18%.
On December 19, 2012, JN filed a foreclosure complaint against O'Rourke seeking title to the Property. An amended complaint filed on April 30, 2013, added Mastercom as a defendant. After Mastercom filed an answer, JN moved to strike it pursuant to Rule 4:46 for failure to raise a genuine issue as to any material fact. The unopposed motion was granted on August 9, 2013, and default was entered against Mastercom. The matter was then transferred to the foreclosure unit as an uncontested case.
Mastercom moved to restore its answer and argued that the lease should be construed as an easement. In a thorough written decision filed December 6, 2013, Judge Robert P. Contillo found that nothing in the language of the lease supported Mastercom's position that it possesses an easement in the property other than the phrase "runs with the land and may be assigned by the tenants."
Relying on A.J. & J.O. Pilar, Inc. v. Lister Corp., 22 N.J. 75, 82 (1956), Judge Contillo found that the essential requirements for the creation of an easement were not met. Because JN's tax lien had priority over Mastercom's lease, JN was under no obligation to honor the lease agreement. The court denied Mastercom's motion to restore its answer, but noted that Mastercom was an "occupant" under N.J.S.A. 54:5-54 and, as such, could stop the foreclosure by tendering the redemption monies in full to the tax collector.
Mastercom filed a motion for reconsideration, which was denied on January 23, 2014. A final order of foreclosure was entered on January 14, 2015. JN moved to enforce litigant's rights to have Mastercom remove its vehicles and be restrained from using the parking lot. Mastercom cross-moved for a stay, which was denied.
Mastercom now appeals the order denying its motion to restore its answer, the order denying its motion for reconsideration, and the final order of foreclosure. Mastercom maintains that the December 1986 lease agreement "is akin to and/or equivalent to an easement in a tax foreclosure case."
"[W]hether a particular agreement is a lease depends upon the intention of the parties as revealed by the language employed in establishing their relationship[.]" Thiokol Chem. Corp. v. Morris Cty. Bd. of Taxation, 41 N.J. 405, 417 (1964). An examination of the document reveals it was drawn on a standard New Jersey general lease form; it begins with the preamble "This Lease Agreement" and employs the traditional terms utilized in a lease, such as "landlord," "rent," and "tenant." See id. at 416 (lease usually studded with terms such as "lease," "let," "demise," and "grant"). Nowhere in the document can the term "easement" be found.
Mastercom attaches great significance to the term "runs with the land" and argues that leases do not contain such language and the term is "easement language." However, the term appears in a rider to the lease, which permits assignment of the lease:
3. It is understood and agreed that this lease for the parking premises and exclusive parking berths for the tenants shall run with the land and may be assigned by the tenants to any other entity who may be the transferee or grantee of premises owned by the tenants at 9-11 Summit Avenue, Elmwood Park, New Jersey. The lease may be assigned to any subsequent purchaser from tenants of the premises 9-11 Summit Avenue, Elmwood Park, New Jersey and further may be assigned and used by any of the tenants of the building at 9-11 Summit Avenue, Elmwood Park, New Jersey subject to the approval of the tenants hereunder.Clearly, the "run with the land" language refers to the assignment of the lease to any subsequent purchaser and does not suggest the parties intended to create an easement.
There are four types of easements: easement by necessity; quasi-easement by implication; express easement; and easement by prescription. Leach v. Anderl, 218 N.J. Super. 18, 24-25 (App. Div. 1987). Mastercom contends that the parties intended the lease to convey an easement. An express easement is created by grant, and "the language of such a grant is controlling." Id. at 28. As we have noted, nothing in the language of the lease suggests that the parties intended to create an easement.
Nor has Mastercom established an easement by implication. A finding of an easement by implication is based on the severance of once-unified property, where a part of the land had, prior to severance, been used to benefit another part. Cale v. Wanamaker, 121 N.J. Super. 142, 146 (Ch. Div. 1972). The use must be apparent, continuous, permanent, and reasonably necessary for the enjoyment of the dominant land. Leach, supra, 218 N.J. Super. at 26. These elements must be found to have been in existence at the time of the severance of the land. Cale, supra, 121 N.J. Super. at 146. Mastercom has presented no facts to support the existence of such an easement.
N.J.S.A. 54:5-9 provides that a municipal lien shall be "paramount to all prior or subsequent alienations and descents of such lands or encumbrances thereon, except subsequent municipal liens." A tax lien has "super priority" over other liens. In re Pryor, 366 N.J. Super. 545, 553-54 (App. Div.) certif. denied, 181 N.J. 545 (2004). Therefore, plaintiff's tax lien has priority over Mastercom's lease.
Recently, our Supreme Court reaffirmed that the purchaser of a tax sale certificate may become the owner of the property in fee simple by virtue of foreclosure. In re Princeton Office Park L.P. v. Plymouth Park Tax Servs., LLC, 218 N.J. 52, 63-64 (2014). As Judge Contillo noted, before entry of the judgment of foreclosure, Mastercom had the right to redeem the tax liens and thereby continue using the parking spaces it has rented for decades.
We are satisfied that Judge Contillo's decision that Mastercom does not possess an easement finds ample support in the record.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION