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OCEAN AVENUE PROPERTIES, L.L.C. v. NOIDEA ENTERPRISES, A-0215-13T4. (2015)

Court: Superior Court of New Jersey Number: innjco20150522349 Visitors: 6
Filed: May 22, 2015
Latest Update: May 22, 2015
Summary: NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION PER CURIAM . Defendant Serge Polajenko appeals a January 18, 2013 Chancery Division order granting plaintiff Ocean Avenue Properties, L.L.C. (Ocean) summary judgment in this tax sale foreclosure action and dismissing defendant's counterclaim. 1 Defendant also appeals the Chancery Division's February 15, 2013 order granting plaintiff $1567.50 in counsel fees. We affirm. I Defendant purchased and commenced residing upon a tr
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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Defendant Serge Polajenko appeals a January 18, 2013 Chancery Division order granting plaintiff Ocean Avenue Properties, L.L.C. (Ocean) summary judgment in this tax sale foreclosure action and dismissing defendant's counterclaim.1 Defendant also appeals the Chancery Division's February 15, 2013 order granting plaintiff $1567.50 in counsel fees. We affirm.

I

Defendant purchased and commenced residing upon a tract of land on Spruce Avenue in Egg Harbor Township in 1989. By 2002, several judgments had been entered against him. To avoid these judgments, defendant deliberately defaulted on the mortgage against his property, causing it to be foreclosed and the judgments extinguished. Wishing to remain on the premises, however, defendant and Carolyn Crawford agreed that Carolyn2 would buy the property at the sheriff's sale on the mortgage foreclosure action and allow defendant to live on the premises in exchange for paying the property taxes. Defendant and Carolyn also agreed that she would create a corporate entity, Farm Group, L.L.C. (Farm Group), in which defendant would be a "silent partner." Defendant claims the deed to the property on Spruce Avenue was to be transferred to this entity, but the deed was never transferred and remained in Carolyn's name.

In 2004, the Farm Group bought a tract of land on Ridge Avenue in the same municipality. Defendant agreed to pay the taxes for this property, as well. By 2007, defendant encountered financial difficulties and ceased paying the taxes on both properties, although he continued to live on the Spruce Avenue property until 2013. He never resumed paying the taxes on either property.

In December 2007, Carolyn confronted defendant, to no avail, about his failure to pay the taxes. Because of the costs associated with maintaining the properties, on July 1, 2008, Carolyn transferred the Spruce Avenue property to Noidea Enterprises, L.L.C., and the Ridge Avenue property to Noidea Group, L.L.C. Jonathan was the sole owner of the Noidea entities.

Neither Noidea entity paid the property taxes for the respective property it owned. On December 17, 2008, Ocean, another entity Jonathan exclusively owned, purchased the tax sale certificates for these properties. After waiting the requisite two years from the date it purchased the tax sale certificates, see N.J.S.A. 54:5-86, on February 9, 2012, Ocean filed a tax sale foreclosure complaint in the Chancery Division, General Equity Part. In addition to naming the Noidea entities, the complaint named defendant and Oleg Zeleniak, defendant's spouse, in order to foreclose any right to redeem they possessed. The complaint disclosed that Ocean shared a common principal with the Noidea entities.

Neither Carolyn nor Jonathan were made parties to this action, although the parties mention, without imparting many details, that defendant filed a complaint against Carolyn in the Law Division and that the matter was tried before a jury in 2013.3 During a case management conference before the Chancery Division judge, Ocean advised that it had no objection to either defendant or Zeleniak redeeming the tax sale certificates. On June 22, 2012, the court entered an order giving defendant and Zeleniak until October 1, 2012 to redeem the certificates. Neither did so, and thereafter Ocean filed a motion for summary judgment.

Defendant's principal argument in opposition to plaintiff's motion was that, as a partner in Farm Group, Carolyn conveyed his partnership interest in the properties to Jonathan without his consent. Defendant also argued that Jonathan, through Ocean and the Noidea entities, misused the tax sale foreclosure laws to divest him of his interest in the properties. The court found none of defendant's arguments persuasive, and specifically found that neither Ocean nor the Noidea entities had engaged in a fraudulent scheme to use the tax sale foreclosure process to divest defendant of his interest in the properties. The court granted plaintiff's motion, dismissed the counterclaim, and returned the matter to the Office of Foreclosure for further proceedings, see Rule 1:34-6.

II

On appeal defendant raises the following points for our consideration.

Point I — JONATHAN CRAWFORD'S ORCHESTRATION OF THE IMPROPER USE OF THE TAX FORECLOSURE PROCEDURE TO FORECLOSE THE INTEREST OF POLAJENKO AS AN OWNER IN THE PROPERTY WAS IMPROPER POINT II — PARTNERS OWE ONE ANOTHER THE DUTY OF UTMOST GOOD FAITH SUCH THAT THE TAX FORECLOSURE PROCEDURE SHOULD NOT BE ALLOWED TO BE USED TO PERPETUATE A FRAUD UPON A PARTNER THEREFORE THE TRIAL COURT SHOULD BE REVERSED POINT III — THE TRIAL COURT REFUSED TO LOOK BEYOND THE CORPORATE ENTITIES AND THE FRAUD ORCHESTRATED BY ONE PARTNER AND HER SON POINT IV — THE SANCTION FOR ATTORNEY'S FEES SHOULD BE REVERSED A. Plaintiff's Application for Sanctions Did Not Contain the Necessary Pre-requisites Under the Court Rules B. Plaintiff's Discovery Motion Was Denied Therefore the Sanction of Attorney's Fees Was Not Warranted and Should be Reversed

In the first argument point, defendant claims that Jonathan wrongfully used the tax sale law to divest him of his interest in the properties. Specifically, defendant claims that after Carolyn caused the properties to be transferred to the Noidea entities, Jonathan allowed these entities to default on their respective property tax obligations. He then used Ocean to acquire the tax sale certificates to the properties for the purpose of foreclosing upon the certificates, obtaining title to, and terminating defendant's claim in the properties.

We make no comment upon the propriety of Jonathan's actions of allowing the Noidea entities to default on their taxes and using another one of his entities to purchase the tax sales certificates for the properties. Not only is Jonathan not a party to this lawsuit, but also any finding concerning his or Ocean's actions would not address defendant's fundamental complaint: the conveyance of the two properties from Carolyn and Farm Group to third parties. How the Noidea entities lost the titles to these properties and how the titles came to be vested in Ocean is irrelevant. It was the transfer of these properties from Carolyn and Farm Group to other entities that is the gravamen of defendant's claim. Defendant would have the same complaint had Carolyn and the Farm Group conveyed the properties to entities that faithfully paid the taxes on and retained title to the properties.

In defendant's second argument point, he claims Carolyn breached her fiduciary duty to him as a co-partner when she transferred the properties to the Noidea entities without his knowledge and, further, failed to compensate him for his share of the properties. In his third argument point, defendant contends Jonathan breached a duty of loyalty to the Noidea entities by deliberately causing them to default on their property tax payments. Defendant also claims that, as for Ocean and both Noidea entities, Jonathan failed to file income tax returns and "corporate reports," hold corporate meetings, and create "corporate memoranda as to new business."

Defendant's second and third argument points pertain solely to Carolyn's and Jonathan's alleged wrongdoing. Carolyn and Jonathan are not parties to this action. Generally, a court does not have jurisdiction over an individual until named as a party in a lawsuit and served, see Bencivenga v. J.J.A.M.M., Inc., 258 N.J.Super. 399, 407 (App. Div.), certif. denied, 130 N.J. 598 (1992), and "[j]udgment[s] or orders normally do not bind non-parties," N. Haledon Fire Co. No. 1 v. Borough of N. Haledon, 425 N.J.Super. 615, 628 (App. Div. 2012) (citing In re Mallon, 232 N.J.Super. 249, 254 n.2 (App. Div.), certif. denied, 117 N.J. 166 (1989)). Therefore, we need not address the arguments raised in the second and third argument points.

We conclude defendant's argument on the award of counsel fees is without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.

FootNotes


1. The other defendants did not participate in this appeal and, thus, when we refer to "defendant," we refer to Serge Polajenko only.
2. In this opinion we also refer to Jonathan Crawford, Carolyn's son. Because Carolyn and Jonathan share the same surname, we use their first names to distinguish them. We do not intend any disrespect by such informality.
3. According to the jury verdict sheet, the jury found that defendant and Carolyn were partners and that she breached a duty owed to him. However, the jury did not award defendant any damages. The jury also found defendant agreed to pay for his use of the property but that he breached that agreement. The jury awarded Carolyn $49,000 in damages.
Source:  Leagle

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