1. real estate

NOT TO BE PUBLISHED WITHOUT
THE APPROVAL OF THE COMMITTEE ON OPINIONS
SUPERIOR COURT OF NEW JERSEY
GENERATION MORTGAGE
COMPANY,
Plaintiff
CHANCERY DIVISION
BERGEN COUNTY
v.
DOCKET No. BER-F-347-14
SUSAN TASSY, INDIVIDUALLY
AND AS EXECUTRIX OF THE
ESTATE OF LASZLO TASSY, ET
AL.
CIVIL ACTION
OPINION
Defendants.
Argued: October 10, 2014
Decided: October 16, 2014
Honorable Peter E. Doyne, A.J.S.C.
Kiera McFadden-Roan, Esq., appearing on behalf of the plaintiff, Generation
Mortgage Company (Parker McCay, P.A.).
Salvador Sanchez, Esq., appearing on behalf of the defendant, Susan Tassy
(Denbeaux & Denbeaux).
James M. Foerst, Esq., appearing on behalf of the defendant, Lidia Tassy (Spector
Foerst & Associates). JoAnn Neylan, Esq., on the brief.
Introduction
Before the court is a motion filed on behalf of the defendant, Susan Tassy
(“Susan”), seeking an order discharging the defendant, Lidia Tassy’s (“Lidia” when
referenced individually, or “Defendants” when referenced collectively with Susan) lis
pendens on 239 Summit Avenue, Bogota, New Jersey (“subject property”), to record a
copy of the deed transferring the subject property from Laszlo Tassy (“Laszlo”) to Susan
and to vacate the currently recorded deed.1 Plaintiff Generation Mortgage Company
(“GMC” or the “Plaintiff”) joined Susan in the motion.
Susan’s motion is granted.
Facts and Procedural Posture
Laszlo and Irene Ujhazy acquired the subject property in 1971, as tenants in
common.2 Laszlo owned seventy-five percent and the remaining twenty-five percent
interest in the subject property belonged to Ujhazy. Apparently, upon Ujhazy’s death in
1979, her interest passed to her heirs, Antal Ujhazy, Irene Himsel and Helen Sloan, with
each such individual acquiring an 8.333% interest in the subject property.3
Laszlo married Lidia, his former nurse, on October 6, 2000. The subject property
was their marital home. On June 17, 2005, Laszlo and Lidia entered into a property
settlement agreement (“settlement agreement”). The relevant part of the settlement
agreement is entitled equitable distribution of the marital home. It set forth Lidia waived
her interest in the marital home, in return for $65,000, to be paid from Laszlo’s $100,000
life insurance policy upon his death. The marital home referenced in the property
settlement agreement is the subject property of this litigation. The agreement further stated
if Lidia is unable to collect the $65,000 from Laszlo’s life insurance policy, Lidia has the
right to make a claim against Laszlo’s estate for the entire amount.4 The remaining $35,000
from Laszlo’s life insurance policy was payable to Susan.
Lidia is Laszlo’s former wife. As the court understands, Susan Laszlo’s is Laszlo’s daughter from a prior
relationship, making Lidia Susan’s ex-step mother.
2
Certain facts presented herein were gleaned from the prior application before the court.
3
Susan certified these are her step-siblings.
4
Sometime thereafter, Laszlo and Lidia were divorced, but no information has been provided as to when and
by whom the order of divorce was executed.
1
2
Sometime in 2005, Laszlo suffered a stroke. Susan and her husband, Robert Pallata,
moved into the subject property to assist with Laszlo’s disability. In 2008, Laszlo began
planning his estate with the assistance of Susan. Susan certifies Laszlo intended for her to
be the sole owner of the subject property and to accomplish that goal, Laszlo needed to
purchase Antal Ujhazy, Irene Himsel and Helen Sloan’s interests in the property. Susan
further certified Laszlo required a loan to fund his acquisition. It is unclear when Laszlo
began the loan process, however, as the purpose of the loan was to help pay for the
acquisition of the outstanding interests in the subject property, it is likely Laszlo began his
loan process in early 2008. Sometime thereafter, Laszlo entered into loan counseling
sessions with Amston Mortgage, a subsidiary of GMC. Susan certifies during these
counseling sessions, Amston Mortgage’s representative, Sally Griffiths, suggested that a
life estate be a part of an anticipated deed transferring the property to Susan.
On February 17, 2008, Laszlo acquired, by deed, all of Antal Ujhazy, Irene Himsel
and Helen Sloan’s individual 8.333% interests in the subject property for $90,000, thereby
making Laszlo the owner of the subject property in fee simple. The deed was recorded in
the Office of the Clerk of Bergen County on May 9, 2008, in Book 9539, Page 310. Laszlo
and Susan executed a deed on April 21, 2008 which transferred the subject property to
Susan, while reserving a life estate for himself (“life estate deed”). Susan certifies
sometime after executing the life estate deed, they faxed a copy of the deed to the “fax
number on the enclosed document. . . . [Susan then] gave the original to [her] Dad. He was
to submit it with other paperwork for the upcoming mortgage signing in May 2008.” The
life estate deed was not recorded.
A. Mortgage(s)
3
On May 24, 2008 Laszlo executed a note (“note”) in the sum of $544,185 to GMC.
Laszlo used the proceeds of the loan transaction to pay off a $82,982.62 debt to Atlantic
Federal Credit Union and taxes totaling $1735.38. Additionally, Laszlo received a
$100,000 advance from GMC at closing.5 Plaintiff’s counsel asserted this Federal Credit
Union debt was secured by a mortgage on the subject property given by Laszlo to Atlantic
Federal Credit Union.
To secure payment on the note, Laszlo, by virtue of a life estate and Susan as owner,
executed, simultaneously with the note, a mortgage (“mortgage”) in favor of GMC. As per
Susan’s certification Laszlo was to deliver the life estate deed to GMC at the note’s closing.
Susan’s attorney, Salvador Sanchez, Esq. (“Sanchez”), has set forth Laszlo transferred the
original, notarized, life estate deed to GMC for recordation. However, both the mortgage
and life estate deed remain unrecorded. To further secure repayment of the note, Laszlo as
life tenant and Susan as owner, executed a second mortgage on May 24, 2008, in favor of
the Secretary of Housing and Urban Development. This mortgage also remains unrecorded.
A title commitment dated April 3, 2008, was issued by Stewart Insurance Company.
It is not set forth why another title insurance company, Equititle LLC (“Equititle”) and not
Stewart Insurance Company or GMC was responsible for recording the mortgage, as it has
been asserted. Nonetheless it is not disputed that despite Plaintiff paying Equititle, LLC
$550.00 to record the mortgage dated May 24, 2008, Equititle, LLC failed to do so.6
Susan’s certifications as to the timeline of events leading up to and surrounding the purchase of the
outstanding interests, execution of the note and the mortgage seemingly conflict with the timeline contained
in the record. Laszlo purchased the outstanding interests in the subject property in February, which is
approximately three months prior to his execution of the note. As such, Laszlo would have paid, or at least
contracted to pay, Antal Ujhazy, Irene Himsel and Helen Sloan $30,000 each prior to taking out the loan.
6
At oral argument for the prior motion to reform and record the mortgage nunc pro tunc, GMC’s counsel
advised relief was not being sought from Equititle as, to the best of counsel’s knowledge, it is no longer a
going concern.
5
4
Sometime thereafter, Susan called GMC, Amston mortgage and Equititle to inquire if the
mortgage and life estate deed were recorded pursuant to the mortgage agreement. Susan
certifies Equititle eventually informed her the deed and mortgage were lost and they were
working with GMC to remedy the issue.
B. Declaration of Default
Plaintiff asserts the death of Laszlo on November 7, 2011 put the note in default.7
C. The 2012 Deed
After her father’s death, Susan, as executrix of the estate of Laszlo and the sole
beneficiary, deeded the subject property to herself on February 14, 2012 (“2012 deed”).
Later that day, the 2012 deed was recorded in the Office of the Clerk of Bergen County, in
Book 0958, Page 380.
D. Lidia’s Judgment and Lis Pendens
Pursuant to the 2005 settlement agreement, Lidia filed a claim for $65,000 with
Laszlo’s life insurance company, William Penn Life Insurance Company, but was informed
on September 20, 2012, Laszlo’s policy had lapsed in October of 2011.8 Consistent with
the 2005 settlement agreement, Lidia brought an action against the estate of Laszlo and
Susan as executrix of the estate of Laszlo, on January 16, 2013. In addition, the action
named Susan, individually, as a defendant. Lidia’s complaint included four counts, all
7
Paragraph seven, section A of the note permitted Plaintiff to accelerate the loan and demand the full balance
upon Laszlo’s death. However, it should be noted, no proofs have been offered as to what transpired upon
Laszlo’s death.
8
Will Penn Life Insurance Company mailed two notices to the subject property pertaining to the pending
termination of Laszlo’s policy. The first notice was mailed on July 29, 2011, and indicated a deficiency and
the beginning of a contractual grace period. Thereafter, the policy was cancelled by a letter dated September
28, 2011. That letter also advised Laszlo of his ability to reinstate the policy if full payment was received by
October 16, 2011. Lidia’s counsel asserts Susan knew or should have known of the impending cancellation
due to the above notices and the record reflects Susan was residing at the subject property during the time
period the letters were sent.
5
seeking damages in the amount of $65,000, as she had not received the insurance payout
she had contracted for in the settlement agreement. As such, Lidia’s complaint was
assigned to the law division. Docket Number BER-L-488-13.
During the pendency of the litigation, on March 19, 2013, Lidia’s counsel filed a
notice of lis pendens for the subject property. The notice specified BER-L-488-13 was
pending and the action was “[t]o recover possession of the lands and premises hereinafter
described . . . [as] 239 Summit Avenue, Bogota, New Jersey.” By way of default, judgment
was entered against the estate of Laszlo and Susan, individually and as executrix, in the
amount of $74,157.63 on August 9, 2013.9 Lidia’s judgment was docketed on March 12,
2014.
Subsequently, Susan attempted to refinance the note with GMC. However, the
negotiations were unsuccessful as Federal regulations governing reverse-mortgages
prevented refinancing due to Lidia’s lis pendens placed on the subject property.
E. Pleadings
On January 6, 2014, Plaintiff filed a foreclosure complaint against the estate of
Laszlo and Susan, individually and as executrix of the estate of Laszlo. The third count of
the complaint pled the mortgage should be recorded. Susan, individually and as executrix
of the estate of Laszlo, had an answer filed on her behalf in the foreclosure matter on
February 28, 2014. Plaintiff’s counsel filed an amended complaint on April 23, 2014 to
join Lidia as a defendant. Lidia’s answer was filed on June 27, 2014 and Lidia’s amended
answer was filed on August 7, 2014.
F. Motion to Deem Mortgage Recorded Nunc Pro Tunc
9
It is unclear how Lidia obtained a judgment in excess of $65,000 pursuant to the settlement agreement.
6
On July 30, 2014, Plaintiff’s counsel filed a motion seeking reformation and to
deem GMC’s mortgage recorded nunc pro tunc. Lidia’s counsel filed opposition to
Plaintiff’s motion to on August 14, 2014. Included in Lidia’s submission was a brief in
opposition to Plaintiff’s motion and the certification of James M. Foerst, Esq. (“Foerst”), a
partner at Lidia’s counsel’s firm. Counsel for Susan submitted an unauthorized sur reply
on September 11, 2014 and presented the life estate deed to the court for first time. At oral
argument on September 12, 2014, all applications before the court were denied.
G. Motion to Discharge Lis Pendens, Record a Copy of the Deed and Vacate the
Deed Currently Recorded
On September 25, 2014, Susan’s counsel filed this motion to discharge Lidia’s lis
pendens, record a copy of the life estate deed and vacate the currently recorded deed.
Included in the submission was a brief in support of the motion, the certification of Susan
and the certification of her attorney, Sanchez. GMC joined Susan in the motion by way of
a letter from counsel filed on October 1, 2014. Lidia’s opposition was received on October
2, 2014.10 Included in Lidia’s submission was a brief in opposition and the certification of
her attorney, JoAnn Neylan, Esq. (“Neylan”).
Law
A. Lis pendens
Filing a lis pendens provides all potential purchasers and lien holders constructive
notice there is ongoing litigation affecting the real estate, and those subsequent interest
takers take subordinate to the plaintiff’s interest post litigation. N.J.S.A. 2A:15-7(a);
Manzo v. Shawmut Bank, N.A., 291 N.J. Super. 194, 199 (App. Div. 1996). If the plaintiff
10
It appears this opposition was not filed on JEFIS. In the interests of justice, the court has reviewed it and
considered the same as if filed.
7
prevails in the action, the plaintiff would have priority over purchasers subsequent to the
filing of the lis pendens. N.J.S.A. 2A:15-7(a); Manzo, supra, 291 N.J. Super. at 199–200.
In sum, “the primary purpose of the notice of lis pendens is to preserve the property which
is the subject matter of the lawsuit from actions of the property owner so that full judicial
relief can be granted, if the plaintiff prevails.” Manzo, supra, 291 N.J. Super. at 200.
A lis pendens may be filed in an action affecting real estate and, in the State of New
Jersey, is governed by statute. N.J.S.A. 2A:15-6 to 15-17; Wendy’s of S. Jersey, Inc. v.
Blanchard Mgmt. Corp. of N.J., 170 N.J. Super. 491, 495 (Ch. Div. 1979). N.J.S.A. 2A:
15-6 provides the statutory basis for filing a lis pendens and in relevant part provides:
In every action, instituted in any court of this State having
civil jurisdiction . . . the object of which is to enforce a lien
upon real estate or to affect the title to real estate or a lien or
encumbrance thereon, plaintiff or his attorney shall, after the
filing of the complaint, file in the office of the county clerk
or register of deeds and mortgages, as the case may be, of
the county in which the affected real estate is situate, a
written notice of the pendency of the action, which shall set
forth the title and the general object thereof, with a
description of the affected real estate.
No notice of lis pendens shall be filed under this article in an
action to recover a judgment for money or damages only.
[Ibid. (emphasis added).]
N.J.S.A. 2A:15-10 provides a lis pendens may be discharged for:
(1) plaintiff's failure to prosecute the action diligently,
N.J.S.A. 2A:15-10; (2) the passage of three years from the
date of filing, N.J.S.A. 2A:15-11; (3) final judgment in favor
of defendant, N.J.S.A. 2A:15-14; (4) defendant's posting a
bond sufficient to secure plaintiff's claim, N.J.S.A. 2A:1515; or (5) complete and final satisfaction of the claim against
defendant, or by settlement or abandonment of the action.
N.J.S.A. 2A:15-17.
8
[United Sav. & Loan Asso. v. Scruggs, 181 N.J. Super. 52,
54-55 (Ch. Div. 1981).]
Furthermore, courts have determined if “the complaint unequivocally recited a cause of
action which, under the statute, would not permit the filing of a notice of lis pendens, it [is]
appropriate for defendant[] to move directly for a discharge of notice.” Polk v. Schwartz,
166 N.J. Super. 292, 299-300 (App. Div. 1979).11 In pertinent part, the lis pendens statute
“provides that it may not be filed in an action to recover a judgment for money or damages
only.” Cole, Schotz, Bernstein, Meisel & Forman, P.A. v. Owens, 292 N.J. Super. 453, 461
(App. Div. 1996) (citing N.J.S.A. 2A:15-6).
B. Recording a Copy of
Mortgage
the Mortgage and Vacating the Recorded
It is well settled:
[O]wnership of real property is transferred by deed. N.J.S.A.
46:3-13. Transfer of a real property interest by deed is
complete upon execution and delivery of the deed by the
grantor, and acceptance of the deed by the grantee. In re
Estate of Lillis, 123 N.J. Super. 280, 285 (App. Div. 1973).
In other words, a deed transfers a property interest "upon
delivery." Tobar Constr. Co. v. R.C.P. Assocs., 293 N.J.
Super. 409, 413 (App. Div. 1996). However, "[w]hether
delivery and acceptance have taken place . . . is a matter of
intention." Dautel Builders v. Borough of Franklin, 11 N.J.
Tax 353, 357 (1990). "If there is physical delivery without
the requisite intent that the deed be presently effective as a
conveyance of the grantor's title, there is, in legal
contemplation, no delivery." Ibid. (citation omitted).
Delivery can be shown by "[a]nything that clearly manifests
the grantor's intention that the deed become immediately
11
In the alternative :
The adversely affected party would be entitled to have the notice of lis
pendens discharged if on motion he could demonstrate and obtain a
determination by partial summary judgment to the effect that plaintiff in
fact and in law had no right to a lien or to a claim affecting the title to
the realty in question but only, if at all, some different claim or right
against the defendant, as for damages.
[O'Boyle v. Fairway Products, Inc., 169 N.J. Super. 165, 167 (App. Div.
1979).]
9
operative and that the grantee become the owner of the estate
purportedly conveyed." Ibid. (citation omitted). The deed
does not need to be recorded, therefore, in order to pass title.
Tobar Constr. Co., supra, 293 N.J. Super. at 413.
[H.K. v. State, 184 N.J. 367, 382 (2005).]
The recording of a deed does not affect a deed’s validity or the transfer of
ownership, rather, recording protects future creditors. Id. at 382–83. The statute plainly
states “an unrecorded deed is ‘void and of no effect against subsequent judgment creditors
without notice . . . but any such deed or instrument shall be valid and operative, although
not recorded, except as against such subsequent judgment creditors, purchasers and
mortgagees.’” H.K., supra, 184 N.J. at 383 (quoting N.J.S.A. 46:22-1). Therefore, “an
unrecorded deed ‘is perfectly efficacious in passing title from grantor to grantee, subject to
all subsequent recorded liens against the grantor and subject to potential divestment by a
subsequent bona fide grantee without notice.’” Ibid. (quoting Siligato v. State, 268 N.J.
Super. 21, 28 (App. Div. 1993)).
Sitting in equity, “the chancery court . . . has the power of devising the remedy and
shaping it in order to fit the circumstances of the case and the complexities involved
therein.” Musto v. Vidas, 281 N.J. Super. 548, 562 (App. Div. 1995) (citiations omitted).
“Courts of equity [have] jurisdiction to grant relief in cases involving the loss or theft of
various instruments.” Santos v. First Nat'l State Bank, 186 N.J. Super. 52, 63 n.9 (App.
Div. 1982) (citing Moore v. Durnan, 69 N.J. Eq. 828 (E.&A. 1905); Verdi v. Price, 129
N.J. Eq. 355, 356 (E.&A.1941)). Pursuant to N.J.S.A. 2A:47-1, “[t]he existence of any lost
or destroyed deed or other instrument relating to title or real or personal property may be
established by judgment in the superior court in an action brought in a summary manner or
otherwise.” The party seeking to establish a lost instrument bears the burden of proving
10
the document existed, was properly executed and delivered, so as to become a valid
instrument. Swaine v. Maryott, 28 N.J. Eq. 589, 589 (1877).
C. Duty of Candor
All attorneys admitted to practice in the state of New Jersey are bound by the Rules
of Professional Conduct. In particular, the Rules of Professional Conduct instruct “[a]
lawyer shall not knowingly fail to disclose to the tribunal a material fact knowing that the
omission is reasonably certain to mislead the tribunal.” RPC 3.3(a)(5). The burden this
rule places on lawyers was detailed by the New Jersey Supreme Court, determining RPC
3.3(a)(5):
[C]ompel[s] a lawyer to act affirmatively against his or her
client's interests even when the primary responsibility for
informing the court does not (or may not) lie with the lawyer.
At their core, the rules impose a duty to disclose in order to
prevent errors in decision making by a tribunal that is
unaware of adverse legal authority or that has been misled
because it lacks information about material facts.
[In re Seelig, 180 N.J. 234, 253 (2004).]
Analysis
A. Lis Pendens
As previously outlined, the purpose of notice of a lis pendens is to maintain the
status quo and impedes the owner’s right to transfer the property. Cole, Schotz, supra, 292
N.J. Super. at 461. To remove this restraint on alienation, in addition to the statutes
enumerated causes, New Jersey’s courts have found a lis pendens should be discharged if
it was clearly not permitted to be filed in first place. Ibid. To determine if a notice was
erroneously so filed, courts consider whether the complaint sets forth more than a claim
for money damages, and consider whether a claim is stated for which the equitable relief
11
protected by the lis pendens may be granted. Polk, supra, 166 N.J. Super. at 299-300
(determining the plaintiff’s complaint was not just for money damages as the fifth count,
if true, “set forth a sufficient cause of action for the imposition of a constructive trust,”
which is equitable relief preserved by lis pendens). As such, “[a] lis pendens should be
discharged if the plaintiff has no right to a lien or a claim affecting the realty in question
but only to some different claim or right against the defendant.” Cole, Schotz, supra, 292
N.J. Super. at 461–62 (citing O'Boyle, 169 N.J. Super. at 167).
Susan’s counsel asserts the lis pendens should be discharged because it was
improperly filed. To support this position, counsel relies upon a matrimonial case, Di Iorio
v. Di Iorio, 254 N.J. Super. 172, 174 (Law. Div. 1991), where the court determined “a lis
pendens is not appropriate if only money or damages are being sought. Real property must
be affected.”12 Initially, counsel asserts the settlement agreement specifically limited
Lidia’s remedy to a general monetary claim against the estate if she did not receive $65,000
from Laszlo’s life insurance. As a result of said agreement, it was improper to file a notice
of lis pendens during the pendency of Lidia’s action to collect the $65,000. Counsel
asserted a second argument in Susan’s reply, arguing Lidia’s judgment against the estate
of Laszlo and Susan, both individually and as executrix, was always an insufficient basis
for filing a lis pendens on the subject property. First, counsel posited upon the execution
of the life estate deed, the property immediately transferred to Susan and was never an asset
of Laszlo’s estate due to his interest being limited to a life estate. In the alternative, the
While the court appreciates counsel’s notation that this trial court decision is not binding, counsel’s reliance
on the case is nonetheless somewhat misplaced. Although the quoted sentence is clearly applicable, this case
addressed the specific issue of whether filing a complaint in a matrimonial action is a sufficient basis to file
notice of lis pendens on both real property subject to equitable distribution and real property not subject to
it. Id. at 87. Although Lidia agreed to the $65,000 claim in lieu of equitable distribution, this is not a family
action nor is the subject property currently subject to equitable distribution. See ibid.
12
12
subject property was transferred to Susan in 2012 and was no longer in Laszlo’s estate
when Lidia filed her complaint on January 16, 2013. Therefore, as Susan was not a party
to the settlement agreement and the subject property was not in the estate, it was impossible
for Lidia have a valid claim for recovering the subject property as Lidia had delineated in
the notice of lis pendens. Plaintiff’s counsel joined Susan in the motion.
Lidia’s counsel argues what is understood as the filing of the lis pendens was proper
because the property is the only opportunity Lidia has to satisfy her docketed judgment, as
Laszlo’s estate is judgment proof. In response to Susan’s first contention and pursuant to
O’Boyle, it is urged a discharge of a lis pendens is only proper if the movant shows there
was no right in fact and in law to a lien or claim against the subject property. O’Boyle,
supra, 169 N.J. Super. at 167. Lidia’s counsel asserts Lidia has a right to make a claim
against the estate in law and fact, by operation of the settlement agreement and by virtue
of the subject property being the only asset in Laszlo’s estate.13
Lidia’s counsel further asserts the judgment obtained by Lidia was not simply
monetary, instead, the judgment represents the monetary amount Lidia has a right to claim
against both Laszlo’s estate and Susan individually.14 Accordingly, counsel asserts the
subject property entered Laszlo’s estate at his death and the settlement agreement merely
limited Lidia’s relief to $65,000, and did not restrict Lidia’s remedy exclusively to money.
Not being limited to a monetary recovery, Lidia’s counsel seeks to have the docketed
judgment, along with the lis pendens, be considered as notice that Lidia now owns a
$65,000 share in the subject property.
13
Counsel did not assert what facts supported which allegation or even how the property is or was an asset
of the estate.
14
While there may be some credence to this argument, Lidia has not, to the best of this court’s knowledge,
pursued this theory and filed any other claims against Susan or Laszlo’s estate.
13
This matter hinges upon whether Lidia had a basis to file the lis pendens in March
of 2013 or maintain the same after judgment was entered. As a basic premise, a lis pendens
may only be filed after the filing of the underlying complaint, “the object of which is to
enforce a lien upon real estate or to affect the title to real estate or a lien or encumbrance
thereon.” N.J.S.A. 2A:15-6. Lidia’s January, 2013, complaint simply asserts she is seeking
the $65,000 as the relief pursuant to her settlement agreement with Laszlo.15 Despite the
statute’s conspicuous prohibition against filing a notice of lis pendens “in an action to
recover a judgment for money or damages only” and courts repeatedly upholding the same,
Lidia had continued to assert equitable principals precluded the plain application of the
statute in these circumstances. N.J.S.A. 2A:15-10; see e.g., Cole, Schotz, supra, 292 N.J.
Super. at 461 (finding an action to recover attorney’s fees is an action to recover a money
judgment, which is an insufficient basis to file a lis pendens).
In support of this position, Lidia relies upon the O’Boyle, where the court found
discharge is proper only if the movant shows there was no right in fact and in law to a lien
or claim against the subject property. O’Boyle, supra, 169 N.J. Super. at 167. This test was
subsequently restated as “[a] lis pendens should be discharged if the plaintiff has no right
to a lien or a claim affecting the realty in question but only to some different claim or right
against the defendant.” Cole, Shotz, supra, 292 N.J. Super. at 461–62. Here, it is clear
Susan has established Lidia had no right to make a claim or lien against the subject
property, rather, Lidia simply had a monetary claim, and now a monetary judgment, against
the estate of Laszlo. Therefore, it is proper to discharge and vacate the lis pendens.
Lidia’s fourth count may have asserted an equitable lien existed, however, there was no claim for equitable
relief. In fact, at oral argument, Lidia’s counsel agreed there has never been a claim of a fraudulent
conveyance. The August 9, 2013, judgment in and of itself, does not entitle Susan to any interest in, or to
compel the sale of, any specific asset of Laszlo or Susan, including the subject property.
15
14
Lidia had no right in law to make a claim or file a lien against the subject property.
The settlement agreement specifically gave Lidia the limited remedy of having a claim
against the estate. The parties have not proffered, nor has the court found a case finding a
party to a settlement agreement who elects to receive a claim against the estate in lieu of
equitable distribution of a property, may then disregard that very agreement and make a
claim against the property in which they had agreed to waive their interest. Therefore, Lidia
does not have a right in law to make claim against the subject property. Pursuant to the
settlement agreement, Lidia only had the right at law to make a general claim against
Laszlo’s estate.16
Susan’s counsel correctly posits the property was not in Laszlo’s estate at the time
Lidia filed her complaint, consequently, Lidia simply had no right to make a claim against
the subject property. Whether the life estate deed or 2012 deed is found valid, the property
was not part of Laszlo’s estate in 2013. Under the life estate deed, Laszlo relinquished his
life estate at death, returning full ownership of the subject property to Susan. By way of
the 2012 deed, Susan, as executrix and Laszlo’s sole beneficiary, became owner of the
subject property well before Lidia filed her complaint. In either situation, the property
passed to Susan and does not revert to the estate under any circumstance. As such, Lidia
has no right to a lien on the subject property, rather, only holds a monetary claim against
the estate of Laszlo and Susan personally.17 Cole, Shotz, supra, 292 N.J. Super. at 461–62
(citing O’Boyle, supra, 169 N.J. Super. at 167). After extensive oral argument and after
N.J.S.A. 2A:15-10 provides a lis pendens is proper “to enforce a lien upon real estate or to affect the title
to real estate or a lien or encumbrance thereon.” Lidia does not have a claim affecting title, however, she may
have a claim to an encumbrance on the subject property. However, as this argument was never made, the
court will not address it.
17
Susan’s counsel indicated they are well advised a motion to vacate the Lidia’s final judgment should be
filed forthwith, as it is unclear under what theory Lidia used to obtain the judgment against Susan personally.
16
15
inquiry by the court, Lidia’s counsel agreed to discharge the lis pendens and that is so
ordered.18
B. Recording a Copy of a Mortgage and Vacating a Currently Recorded Mortgage
Given the same, the issue then presented is whether uncontroverted proofs showing
a deed was duly executed and delivered, is sufficient evidence to determine the deed is
valid and order the same to be recorded. The legislature has empowered judges to
determine “[t]he existence of any lost or destroyed deed or other instrument relating to title
or real or personal property.” N.J.S.A. 2A:47-1; see Santos, supra, 186 N.J. Super. at 63
n.9 (noting courts of equity have “jurisdiction to grant relief in cases involving loss . . . of
[] instruments.”). In addition, sitting in chancery empowers a court to devise the
appropriate remedy to fit the unique circumstances. Musto, supra, 21 N.J. Super. at 562.
The relevant facts are as follows – Laszlo and Susan executed the life estate deed
on April 21, 2008. However, after being informed the life estate deed was lost by Plaintiff’s
title company, Susan, individually and as executrix, executed and recorded the 2012 deed.
Susan has produced a photocopy of the life estate deed, which reflects it was executed and
notarized. Susan’s counsel asserts Laszlo delivered the life estate deed to Plaintiff with the
intent it be recorded. In addition, Plaintiff’s mortgage documents reflect that Laszlo, Susan
and Plaintiff believed the life estate deed was effective, evidenced by the documents
repeatedly referring to Laszlo as a life tenant and Susan as remainderman. The record
reflects these assertions are uncontroverted.19
In fact, Lidia’s counsel conceded that at the very least, once the monetary judgment was obtained, the lis
pendens should have been discharged.
19
Lidia’s counsel has not proffered any proofs to controvert the life estate deed existed, was properly
executed and delivered. In fact, Lidia’s counsel did not request additional discovery on the issue.
18
16
Nevertheless, at oral argument, Lidia’s counsel firmly opposed the validity of the
life estate deed, asserting the life estate deed was not sufficiently proven to be executed
and the creation of the 2012 deed casts doubt upon the validity of the life estate deed.20 At
oral argument, Foerst initially urged Laszlo might have wanted to rescind the mortgage,
but withdrew the argument when it was clear Laszlo could not have returned the money
already used to pay the Atlantic Federal Credit Union debt. In addition, Foerst eventually
the life estate deed was both executed and notarized.
Lidia’s counsel’s assertion an unrecorded paper copy of a deed holds no legal
weight is simply wrong. As discussed earlier, the validity of a deed is not effected by
recording or failing to record. A deed is valid and transfers ownership “upon execution and
delivery of the deed by the grantor, and acceptance of the deed by the grantee.” H.K., supra,
184 N.J. at 31 (citing In re Estate of Lillis, supra, 123 N.J. Super. at 285). As it is undisputed
the life estate deed was duly executed and all of the mortgage’s documents subsequently
executed by Laszlo and Susan reflected the validity and existence of said deed, the life
estate deed has been valid and in effect since 2008. Therefore, it is the order of the court
the life estate deed be recorded in the records of the county clerk and the 2012 deed be
vacated. See N.J.S.A. 2A:47-1.
C. Duty of Candor
All attorneys admitted to practice in the state of New Jersey are bound by the Rules
of Professional Conduct. As such, all attorneys must comply with the duty of candor. RPC
3.3(a)(5). The duty not only prohibits attorneys from making false representations to the
20
In other words, if Susan believed the life estate deed was valid, then why would she have executed the
2012 deed, an understandable position.
17
court, but affirmatively “imposes a duty to disclose in order to prevent errors in decision
making by a [court] that . . . has been misled because it lacks information about material
facts.” In re Seelig, supra, 180 N.J. at 253.
This duty is not new and is part of the foundation of our judicial system. It is
troubling to read Lidia’s counsel’s assertion there is “no Court Rule or legal precedent
which tends to show Lidia Tassy’s counsel had any obligation to produce the [life estate
deed].” In fact, the duty of candor expressly prohibits lawyers from “knowingly fail[ing]
to disclose to the tribunal a material fact knowing that the omission is reasonably certain
to mislead the tribunal.” RPC 3.3(a)(5).
Although the prior motion was to record mortgages nunc pro tunc, the court had
been compelled to conclude there was only a proposed deed creating a life estate and
GMC’s mortgage documents were simply incorrect. Minds can differ whether the factual
record underlying the mortgages and when Susan became owner of the subject property
were collateral or material to the motion. However, Foerst’s assertion in Lidia’s August
22, 2014 reply to Plaintiff’s motion to record the mortgages nunc pro tunc was seemingly
misleading. Foerst had certified “[u]pon Defendant Lidia Tassy’s knowledge and belief,
no deed of the subject property was ever executed, or recorded, which would have legally
transferred title from Laszlo Tassy to Susan Tassy, while reserving a life estate for Laszlo
Tassy.”
At oral argument and for the first time, counsel explained his position fully. In short,
although the life estate deed had been received by Foerst’s firm and placed in Lidia’s BerL-488-13 file, apparently, no one in the firm was aware of the deed. Foerst asserted there
was no attempt to conceal the life estate deed, rather, no attorney in the firm had realized
18
the importance of the deed to this litigation. For the purposes of this application, that
explanation is accepted. Clearly, had the firm been aware of the life estate deed, it would
have been obligated to disclose the same.
Conclusion
The lis pendens is discharged and the life estate deed shall be recorded and the
subsequent deed shall be removed as a recorded deed. The court is nonetheless aware of
Lidia’s potential inability to have an adequate remedy at law. Therefore, equity requires
this court to sua sponte relieve Lidia of the entire controversy doctrine, R. 4:30A, should
Lidia choose to file a fraudulent conveyance claim against the estate of Laszlo and Susan,
premised upon the transfer of the property to Susan.
Movant’s counsel shall prepare and submit the appropriate order.
19