ACT PROPERTY LLC SERIES 116 FAIRVIEW AVE. VS. 22 ALPHA MANAGEMENT, LLC (F-018617-16, CAMDEN COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: July 16, 2018
• Docket: A-4061-16T1
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-4061-16T1

ACT PROPERTY LLC SERIES 116 FAIRVIEW AVE.,

Plaintiff-Respondent,

v.

22 ALPHA MANAGEMENT, LLC, a/k/a ALPHA 22 ASSOCIATES,

Defendant-Appellant,

and

THE STATE OF NEW JERSEY,

Defendant.

____________________________

Argued March 12, 2018 – Decided July 16, 2018

Before Judges Accurso and O'Connor.

On appeal from Superior Court of New Jersey, Chancery Division, Camden County, Docket No. F-018617-16.

Howard N. Sobel argued the cause for appellant (Law Offices of Howard N. Sobel, PC, attorneys; Howard N. Sobel and Margaret D. Nikolis, on the briefs). Robert W. Keyser argued the cause for respondent (Taylor and Keyser, attorneys; Robert W. Keyser and Jeffrey B. Datz, on the brief).

PER CURIAM

In this tax sale foreclosure action, defendant 22 Alpha

Management, LLC appeals from an April 13, 2017 order denying its

motion to void the final judgment on the ground it had not been

served with the complaint in accordance with the Rules of Court.1

After reviewing the record and applicable legal principles, we

reverse and remand for further proceedings.

I

We glean the following from the motion record. In July

2013, defendant purchased property from Alpha 22 Associates.

Voorhees Township tax records state the physical location of the

subject property is 116 Fairview Avenue, Voorhees, and that

defendant is located at One Alpha Avenue, Suite 20, Voorhees.

In July 2014, plaintiff's predecessor in interest

(predecessor) purchased a tax sale certificate for unpaid

property taxes and county municipal sewer charges assessed

against the subject property. On July 5, 2016, the predecessor

1 The State of New Jersey was included as a party defendant in the event defendant 22 Alpha Management, LLC owed the State franchise taxes. The State did not enter an appearance. Unless otherwise stated, the reference to "defendant" in this opinion refers solely to 22 Alpha Management, LLC. 2 A-4061-16T1 filed a complaint in foreclosure against defendant and the State

of New Jersey. The predecessor sought to foreclose on the tax

sale certificate in the amount of $30,386.95, plus any taxes and

statutory interest that would subsequently accrue.

On July 22, 2016, the predecessor’s attorney filed a

certification of mailing, which stated that on July 15, 2015,

the summons and complaint were sent by regular and certified

mail to Steve Chase Brigham, identified by the attorney as

defendant's principal, to an address in Greenwich, Connecticut.

The attorney also certified the regular mail was not returned,

and the certified mail return receipt (the "green card") was

returned and signed by "Lee." Counsel did not volunteer how he

learned of Brigham and why counsel believed Brigham was

defendant's principal.

A photocopy of the green card reveals the envelope

containing the summons and complaint was addressed to "22 Alpha

Management, L.L.C.; c/o Steven Chase Brigham, Principal; 15 East

Putnam Avenue, Apartment One; Greenwich, Connecticut 06830

5424." The green card also reveals "Lee" checked off a box on

the green card next to which appears the term "Agent."

On August 1, 2016, the predecessor’s attorney filed a

certification of diligent inquiry because the predecessor had

3 A-4061-16T1 served defendant by substituted service, see Rule 4:4-5(b). The

highlights of that certification are as follows.

The attorney claimed diligent inquiry revealed Brigham's

address to be the aforementioned one in Connecticut; a search of

the State of New Jersey Division of Revenue and Enterprise

Services records showed 22 Alpha Management, L.L.C. was not

registered to do business in New Jersey; and "various business

searches and a comprehensive business report" obtained on

defendant indicated its last known address was One Alpha Avenue,

Suite 20, Voorhees.

Counsel further certified that, in May 2016, he sent a

letter to defendant at One Alpha Avenue, Suite 20, Voorhees, by

regular and certified mail. The letter sent by certified mail

was returned with a notation from the Post Office that stated

"undeliverable as addressed[;]" the letter sent by regular mail

was returned by the Post Office with the notation "[u]nable to

forward."

Counsel certified he sent two letters of inquiry to the

Postmaster of Voorhees. One asked the Post Office to furnish

the "new address" for defendant at One Alpha Avenue, Suite 20,

Voorhees, and the other letter requested the new address for

defendant at 116 Fairview Avenue, Voorhees. Both letters were

4 A-4061-16T1 returned by the Post Office with the notation, "[f]orward

expired."

Despite the latter information from the Post Office, we

note a "Comprehensive Business Report" attached to the

certification of diligent inquiry states 22 Alpha Management,

LLC is located at 116 Fairview Avenue, Voorhees, yet another

page in the report states defendant is located at 22 Alpha

Avenue, Voorhees. The motion record reveals the subject

property is on a corner and the building on the property has two

entrances; one door has the address 116 Fairview Avenue and the

other 22 Alpha Avenue.

The attorney also certified he obtained a skip trace report

on Brigham, which the attorney claimed confirmed Brigham had a

residence at 15 East Putnam Avenue, Apartment One, in Greenwich.

Counsel did not explain how the report confirmed Brigham in fact

had a residence at this location. Finally, counsel certified he

sent a letter of inquiry to the Post Office in Greenwich asking

it to furnish the "new address" for Brigham in Greenwich. The

Post Office returned counsel's letter with the notation, "good

as addressed."

We note the skip trace report on Brigham shows a person by

the name of Steven Chase Brigham also has the following

addresses in Voorhees: One Alpha Avenue, Suite 20; One Alpha 5 A-4061-16T1 Avenue, Suite 27; 1094 Corbridge Court, Unit 1094; and 125 West

Evesham Road. Counsel did not state whether he had sent a copy

of the summons and complaint or any other correspondence to

defendant “in care of" Brigham at any of the aforementioned four

addresses, or to 116 Fairview Avenue and 22 Alpha Avenue.

Although the attorney discovered sending mail to only defendant

at One Alpha Avenue and 116 Fairview Avenue was unproductive,

there was no indication sending correspondence to defendant in

the care of Brigham to the other addresses would have been

similarly futile.

In August 2016, default was entered against defendants. In

October 2016, the tax sale certificate was assigned to plaintiff

Act Property LLC Series 116 Fairview Avenue and, in November

2016, such entity was substituted as plaintiff. The attorney

for the predecessor and plaintiff are the same. On January 6,

2017, final judgment was entered against both defendants.

According to a certification of mail executed by plaintiff's

counsel, the final judgment was served upon defendant by sending

a copy by regular mail to Brigham’s address in Connecticut.

On March 16, 2017, defendant filed a motion to set aside

the judgment and permit redemption pursuant to Rule 4:50-1(d).

Defendant premised its argument on the ground the judgment was

void because defendant had not been served with the summons and 6 A-4061-16T1 complaint. In a certification filed in support of the motion,

Brigham claimed he did not know about the foreclosure action

until January 20, 2017, when one of his staff members was served

with the final judgment by a process server at 22 Alpha Avenue,

Voorhees.

In the certification, Brigham admitted he maintains a

mailbox at a UPS Store located at 15 Putnam Avenue, Greenwich,

but certified he does not live or have an apartment there and

thus his address did not include "Apartment One." He claimed he

never received any communication from plaintiff at the Greenwich

address. Brigham also stated he was willing to pay the full

amount owed for taxes and other municipal charges on the subject

property. Finally, he mentioned he did not have an attorney

when he acquired the property in 2013 and did not know he had to

register defendant with the State. However, he registered

defendant with the State of New Jersey five days after

defendant's staff was served with the final judgment.

It is not disputed plaintiff did not attempt to personally

serve the summons and complaint upon defendant, and that Brigham

lives at the Corbridge Court address in Voorhees. As previously

stated, it is not known how plaintiff discovered Brigham's name

and his association with defendant.

7 A-4061-16T1 The trial court denied defendant's motion, finding

plaintiff had made diligent inquiry to locate and serve

defendant, an effort the court determined was made more

complicated by the fact defendant failed to register with the

State of New Jersey and identify who and where its agent to

receive process was located. Although the court found the

Greenwich address was not Brigham's residence but a UPS Store

where he maintained a mailbox, the court determined plaintiff

was justified in serving defendant at such address by regular

and certified mail.

II

On appeal, defendant contends the trial court erred when it

denied its motion. Defendant argues the judgment is void

because it was not served with the complaint. If argues that,

to the extent plaintiff contends it was justified in serving

defendant by mail, plaintiff failed to make a diligent inquiry

to effectuate personal service and, thus, substituted service by

mail was ineffective.

Rule 4:50-1(d) provides the court may relieve a party from

a final judgment if it is void. "The decision whether to grant

such a motion is left to the sound discretion of the trial

court[.]" U.S. Bank Nat'l Ass'n v. Curcio, 444 N.J. Super. 94,

105 (App. Div. 2016) (alteration in original) (quoting Mancini 8 A-4061-16T1 v. EDS ex rel. N.J. Auto. Full Ins. Underwriting Ass'n, 132 N.J.

330, 334 (1993)). However, "[a] default judgment will be

considered void when a substantial deviation from service of

process rules has occurred, casting reasonable doubt on proper

notice." Jameson v. Great Atl. & Pac. Tea Co., 363 N.J. Super.

419, 425 (App. Div. 2003) (citing Sobel v. Long Island Entm't

Prod., Inc., 329 N.J. Super. 285, 293-94 (App. Div. 2000)).

Rule 4:4-4(a)(6) states the primary method of obtaining in

personam jurisdiction over a corporation in this State is to

personally serve a copy of the summons and complaint:

on any officer, director, trustee or managing or general agent, or any person authorized by appointment or by law to receive service of process on behalf of the corporation, or on a person at the registered office of the corporation in charge thereof, or, if service cannot be made on any of those persons, then on a person at the principal place of business of the corporation in this State in charge thereof, or if there is no place of business in this State, then on any employee of the corporation within this State acting in the discharge of his or her duties . . . ;

[Rule 4:4-4(a)(6).]

If after diligent inquiry a defendant cannot be located and

personally served in New Jersey, Rule 4:4-5(a) provides an

alternate method of service in actions affecting specific

9 A-4061-16T1 property or any interest therein. Rule 4:4-5(a) states in

pertinent part:

(a) Whenever, in actions affecting specific property, or any interest therein, or any res within the jurisdiction of the court, . . . it shall appear by affidavit of the plaintiff's attorney . . . that a defendant cannot, after diligent inquiry as required by this rule, be served within the State, service may, consistent with due process of law, be made by any of the following . . . methods:

(1) personal service outside this State as prescribed by R. 4:4- 4(b)(1)(A) and (B); or

(2) service by mail as prescribed by R. 4:4-4(b)(1)(C); or

(3) by publication. . . . ; or

(4) as may be provided by court order.

(b) Contents of Affidavit of Inquiry. . . . The affidavit of inquiry shall be made by the inquirer fully specifying the inquiry made, of what persons and in what manner, so that by the facts stated therein it may appear that diligent inquiry has been made for the purpose of effecting actual notice.

Here, plaintiff contends it properly served defendant

pursuant to Rule 4:4-5(a)(2) by mailing the summons and

complaint to Brigham's Connecticut address, because such rule

provides a party may be served by mail as long as the serving

party adheres to Rule 4:4-4(b)(1)(C). Plaintiff asserts it

complied with the latter rule, which states in relevant part: 10 A-4061-16T1 If it appears by affidavit satisfying the requirements of R. 4:4-5(b) that despite diligent effort and inquiry personal service cannot be made in accordance with [Rule 4:4- 4(a)], then, consistent with due process of law, in personam jurisdiction may be obtained over any defendant as follows:

. . . .

(C) mailing a copy of the summons and complaint by registered or certified mail, return receipt requested, and, simultaneously, by ordinary mail to:

(3) a corporation, partnership or unincorporated association that is subject to suit under a recognized name, addressed to a registered agent for service, or to its principal place of business, or to its registered office. . . .

[Rule 4:4-4(b)(1)(C).]

In order for the kind of service plaintiff endeavored to

effectuate here to be effective, plaintiff first had to attempt

personal service in accordance with Rule 4:4-4(a)(6). Only

after a diligent attempt to personally serve a corporation in

accordance with this rule fails may alternate modes of service

be used. R. 4:4-4(a).

Plaintiff contends it (1) was unable to serve the agent

defendant designated to accept service of process because

defendant never registered with the State; (2) could not locate 11 A-4061-16T1 defendant despite diligent efforts; and (3) could not find

Brigham, defendant's principal, in the State of New Jersey.

Therefore, plaintiff argues, it was justified in resorting to

serving defendant by mailing a copy of the summons and complaint

to Brigham in Connecticut. In our view, as evidenced by

plaintiff's counsel's own certification of inquiry, plaintiff

failed to make a diligent attempt to serve defendant in

accordance with Rule 4:4-4(a)(6).

Defendant's failure to register with the State of New

Jersey does not necessarily justify resorting to substituted

service. Rule 4:4-4(a)(6) does not require that a party serve a

registered agent of a corporation. The rule identifies a number

of individuals qualified to accept service on behalf of a

corporation who may not also be registered agents. These

individuals include the person in charge at the corporation's

principal place of business or, if there is no place of business

in this State, an employee of the corporation who is within this

State and acting in the discharge of his or her duties. R. 4:4-

4(a)(6).

Here, the subject certification of inquiry fails to address

what efforts were undertaken to locate defendant's principal

place of business in New Jersey and the person in charge, as

well as an employee in New Jersey acting in the discharge of his 12 A-4061-16T1 or her duties. The certification informs the Post Office

indicated One Alpha Avenue and 116 Fairview Avenue in Voorhees

were no longer viable addresses for defendant. However, an

investigative report attached to the certification stated

defendant was located at 116 Fairview Avenue and another page in

the report stated it was located at 22 Alpha Avenue, Voorhees.

In the certification, counsel did not expound upon the

efforts plaintiff expended, if any, to reconcile the

inconsistency between the information provided by the Post

Office and the investigative report. Plaintiff did not explore

whether defendant was located at either one or both of these

addresses by sending out an employee or agent to physically

inspect 116 Fairview Avenue and 22 Alpha Avenue, especially

given the former address is the physical location of the subject

property.

In addition, although plaintiff believed Brigham was

defendant's principal, there was no attempt to contact the

Brigham who maintained addresses in Voorhees, the very

municipality in which the subject property was and defendant

ostensibly located. Had plaintiff done so, it would have

discovered the same Brigham associated with defendant resided at

the Corbridge Court address in Voorhees. Plaintiff ignored

obvious clues that almost certainly would have led to 13 A-4061-16T1 discovering where defendant was located in New Jersey, instead

resorting to substituted service.

The requirement a plaintiff file an affidavit2 of diligent

inquiry to justify a factual basis for using an alternate mode

of service is not a mere formality. As we held in M & D

Associates v. Mandara, 366 N.J. Super. 341, 353 (App. Div.

2004), diligent inquiry is a predicate to determining whether

the requirements of due process have been satisfied. In

ascertaining the sufficiency of service outside of this State,

the court must carefully scrutinize the affidavit required to

ascertain whether plaintiff undertook a diligent inquiry. Ibid.

Doing so here would have revealed defendant, whom plaintiff did

not allege was trying to evade service, was readily available

for personal service within the State, thus making alternative

service impermissible. See N.J. Tpk. Auth. v. Tootle, 59 N.J.

308, 313 (1971).

In addition, even if substituted service by mail were

appropriate, Rule 4:4-4(b)(1)(C) requires that a copy of the

summons and complaint be mailed to the corporation's principal

place of business, registered agent for service, or registered

office. While the latter two choices did not exist, plaintiff

2 A certification may be executed in lieu of an affidavit. See R. 1:4-4(b).

14 A-4061-16T1 failed to ascertain and mail the summons and complaint to

defendant's principal place of business.

Given the deficiencies in the certification of inquiry and

the service of process of the summons and complaint, the April

13, 2017 order denying defendant's motion to set the final

judgment aside is reversed and the matter remanded for further

proceedings.

Reversed and remanded for further proceedings consistent

with this opinion. We do not retain jurisdiction.

15 A-4061-16T1