NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2013-12T1
NEW JERSEY REALTY CONCEPTS, LLC, THOMAS DINARDO, JOSEPH F. BELASCO, JR., APPROVED FOR PUBLICATION
Plaintiffs, March 19, 2014
APPELLATE DIVISION v.
JOHN MAVROUDIS, MICHAEL MAVROUDIS, INDUSTRIAL CONDOMINIUM ASSOCIATES, LLC, RIO VISTA PROPERTIES LLC, LAW FIRM OF MAVROUDIS & RIZZO, RIO VISTA CONSTRUCTION COMPANY LLC, RIO VISTA MANAGEMENT LLC, RIO VISTA NORTHVALE, LLC, RIO VISTA PROPERTIES 690 LLC, RIO VISTA MEDICAL LLC, RIO VISTA REALTY LLC, RIO VISTA RENTALS LLC, RIO VISTA SNOW LLC, JM MAVROUDIS MANAGEMENT CO., ANNE MAVROUDIS, NEW JERSEY HEALTH CARE CENTER LLC, 680 MEDICAL GROUP LLC, ASC PARTICIPANTS LLC, IMAGING CENTER OF ORADELL LLC, PRESCRIPTION DISPENSARY OF ORADELL LLC, LAB TECHNOLOGIES OF ORADELL LLC, AND URGENT CARE CENTER OF ORADELL LLC,
Defendants.
___________________________________________
Argued November 12, 2013 – Decided March 19, 2014
Before Judges Yannotti, Ashrafi and Leone.
On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-230-11. Darryl T. Garvin argued the cause for appellant William Earnshaw D/B/A Accent on Design.
Stephen P. Sinisi argued the cause for respondent Special Fiscal Agent (Law Offices of Stephen P. Sinisi, Esq., LLC, attorneys; Mr. Sinisi and Robert L. Falkenstern, on the brief).
The opinion of the court was delivered by
LEONE, J.S.C., t/a
Appellant William Earnshaw appeals the orders of the
Chancery Division quashing and vacating his writ of execution
and notice of levy to execute a judgment issued by the Law
Division. We reverse and remand.
I.
Earnshaw does business as Accent on Design. Pursuant to a
contract with Rio Vista Properties, LLC (Rio), Earnshaw designed
and installed custom cabinets and countertops for most of the
offices in a medical office building (the Property) in Oradell.
Rio failed to pay invoices from Earnshaw. Believing Rio to be
the sole owner of the Property, Earnshaw filed suit against Rio
and John Mavroudis, a managing agent for the Property. In
November 2011, the Law Division granted Earnshaw partial summary
judgment for contract damages. On February 17, 2012, the Law
Division entered a final judgment against Rio in the amount of
$100,918.
2 A-2013-12T1 In fact, the Property was owned 60% by Rio and 40% by New
Jersey Realty Concepts, LLC (NJRC), as tenants in common. Rio
and NJRC leased the building to medical tenants whose rents were
collected by Mavroudis.
Alleging misappropriation of funds, NJRC and others sued
Rio, John Mavroudis, his partner Michael Mavroudis, and others
in the Chancery Division. On January 9, 2012, the Chancery
Division judge removed John and Michael Mavroudis (Mavroudis
Defendants) as managing agents for the Property. The judge
appointed respondent Steven Sinisi as the Special Fiscal Agent
(SFA), giving him managerial authority over the Property.
Earnshaw, now aware of the Property's ownership and
management situation, forwarded the February 17, 2012 judgment
to the SFA. After the parties negotiated unsuccessfully,
Earnshaw recorded the judgment as a lien. The Law Division
issued a writ of execution for $100,918. To obtain the 60% of
the rents believed due to Rio, the Sheriff issued a notice of
levy and executed the writ on the tenants. The Sheriff
apparently collected the judgment amount, which is being held in
escrow.
On June 5, 2012, the SFA filed a motion in the Chancery
action. After hearing argument from the SFA and Earnshaw, the
Chancery judge issued an order on June 28, 2012, quashing and
3 A-2013-12T1 vacating the Law Division's writ and the Sheriff's notice of
levy, and requiring the Sheriff to transfer to the SFA the rents
collected from the Property. Earnshaw sought reconsideration,
which the judge denied on August 29, 2012. On November 30,
2012, the judge denied a stay, and certified as final the June
28 and August 29 orders. Earnshaw appealed those orders on
January 10, 2012.1
II.
Earnshaw argues that the Chancery judge improperly quashed
and vacated the Law Division's writ and levy. In a rider to the
August 29, 2012 order denying reconsideration, the judge gave
two reasons why the levy was improper. First, the judge ruled
that the rents collected by the SFA were in custodia legis.
Second, the judge ruled that it was improper for Earnshaw to
levy upon the 60% of the rents due to Rio.
We address each rationale in turn, hewing to our standard
of review. We recognize that the Chancery Division has
discretion in appointing a receiver or special fiscal agent.
See Ravin, Sarasohn, Cook, Baumgarten, Fisch & Rosen, P.C. v.
1 It is unclear whether the orders were properly certified under R. 4:42-2. Given the full briefing of the issues and the passage of time, we grant leave to appeal those orders nunc pro tunc under Rule 2:5-6 to avoid any uncertainty. See Taylor by Wurgaft v. Gen. Elec. Co., 208 N.J. Super. 207, 211 (App. Div.), certif. denied, 104 N.J. 379 (1986).
4 A-2013-12T1 Lowenstein Sandler, P.C., 365 N.J. Super. 241, 249 (App. Div.
2003); see also Roach v. Margulies, 42 N.J. Super. 243, 246
(App. Div. 1956). However, "[a] trial court's interpretation of
the law and the legal consequences that flow from established
facts are not entitled to any special deference." Manalapan
Realty, L.P. v. Twp. Comm., 140 N.J. 366, 378 (1995). Because
this appeal poses issues of law, we review the matter de novo.
See, e.g., Cameron v. Ewing, 424 N.J. Super. 396, 401 (App. Div.
2012).2
III.
As the judge noted, "'[i]t is a general rule that money or
other property in the hands of an officer of a court is regarded
as being in custodia legis, and in consequence ordinarily cannot
be reached by execution in the absence of legislative
authority.'" Naglieri v. Trabattoni, 20 N.J. Super. 173, 176
(App. Div. 1952) (quoting Fredd v. Darnell, 107 N.J. Eq. 249,
253 (Ch. 1930)); see Culp v. Culp, 242 N.J. Super. 567, 572 (Ch.
Div. 1990). The question here is whether the rents due to Rio
were in custodia legis.
2 Because "'the substantive issues . . . and the basis for the motion judge's ruling on the [motion to quash] and reconsideration motion[] was the same,'" we consider the merits of Earnshaw's appeal. See Potomac Aviation, LLC v. Port Auth. of N.Y. & N.J., 413 N.J. Super. 212, 222 (App. Div. 2010) (quoting Fusco v. Bd. of Educ. of Newark, 349 N.J. Super. 455, 461 (App. Div.), certif. denied, 174 N.J. 544 (2002)).
5 A-2013-12T1 "Property is considered to be in custodia legis when it is
'in the custody of the law.'" Wilzig v. Sisselman, 209 N.J.
Super. 25, 31 (App. Div.), certif. denied, 104 N.J. 417 (1986).
Thus, under our law, when a complaint is filed for the dissolution of an entity and a receiver is appointed thereunder, "such receiver becomes vested with title to the property . . . from the date of the filing of the bill." The property of the entity is thereafter in custodia legis and the receiver's possession is considered to be that of the appointing court. Implicit in any order establishing a custodia legis status, through the appointment of a receiver, is the fact that the property becomes inalienable without the knowledge and consent of the court.
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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2013-12T1
NEW JERSEY REALTY CONCEPTS, LLC, THOMAS DINARDO, JOSEPH F. BELASCO, JR., APPROVED FOR PUBLICATION
Plaintiffs, March 19, 2014
APPELLATE DIVISION v.
JOHN MAVROUDIS, MICHAEL MAVROUDIS, INDUSTRIAL CONDOMINIUM ASSOCIATES, LLC, RIO VISTA PROPERTIES LLC, LAW FIRM OF MAVROUDIS & RIZZO, RIO VISTA CONSTRUCTION COMPANY LLC, RIO VISTA MANAGEMENT LLC, RIO VISTA NORTHVALE, LLC, RIO VISTA PROPERTIES 690 LLC, RIO VISTA MEDICAL LLC, RIO VISTA REALTY LLC, RIO VISTA RENTALS LLC, RIO VISTA SNOW LLC, JM MAVROUDIS MANAGEMENT CO., ANNE MAVROUDIS, NEW JERSEY HEALTH CARE CENTER LLC, 680 MEDICAL GROUP LLC, ASC PARTICIPANTS LLC, IMAGING CENTER OF ORADELL LLC, PRESCRIPTION DISPENSARY OF ORADELL LLC, LAB TECHNOLOGIES OF ORADELL LLC, AND URGENT CARE CENTER OF ORADELL LLC,
Defendants.
___________________________________________
Argued November 12, 2013 – Decided March 19, 2014
Before Judges Yannotti, Ashrafi and Leone.
On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-230-11. Darryl T. Garvin argued the cause for appellant William Earnshaw D/B/A Accent on Design.
Stephen P. Sinisi argued the cause for respondent Special Fiscal Agent (Law Offices of Stephen P. Sinisi, Esq., LLC, attorneys; Mr. Sinisi and Robert L. Falkenstern, on the brief).
The opinion of the court was delivered by
LEONE, J.S.C., t/a
Appellant William Earnshaw appeals the orders of the
Chancery Division quashing and vacating his writ of execution
and notice of levy to execute a judgment issued by the Law
Division. We reverse and remand.
I.
Earnshaw does business as Accent on Design. Pursuant to a
contract with Rio Vista Properties, LLC (Rio), Earnshaw designed
and installed custom cabinets and countertops for most of the
offices in a medical office building (the Property) in Oradell.
Rio failed to pay invoices from Earnshaw. Believing Rio to be
the sole owner of the Property, Earnshaw filed suit against Rio
and John Mavroudis, a managing agent for the Property. In
November 2011, the Law Division granted Earnshaw partial summary
judgment for contract damages. On February 17, 2012, the Law
Division entered a final judgment against Rio in the amount of
$100,918.
2 A-2013-12T1 In fact, the Property was owned 60% by Rio and 40% by New
Jersey Realty Concepts, LLC (NJRC), as tenants in common. Rio
and NJRC leased the building to medical tenants whose rents were
collected by Mavroudis.
Alleging misappropriation of funds, NJRC and others sued
Rio, John Mavroudis, his partner Michael Mavroudis, and others
in the Chancery Division. On January 9, 2012, the Chancery
Division judge removed John and Michael Mavroudis (Mavroudis
Defendants) as managing agents for the Property. The judge
appointed respondent Steven Sinisi as the Special Fiscal Agent
(SFA), giving him managerial authority over the Property.
Earnshaw, now aware of the Property's ownership and
management situation, forwarded the February 17, 2012 judgment
to the SFA. After the parties negotiated unsuccessfully,
Earnshaw recorded the judgment as a lien. The Law Division
issued a writ of execution for $100,918. To obtain the 60% of
the rents believed due to Rio, the Sheriff issued a notice of
levy and executed the writ on the tenants. The Sheriff
apparently collected the judgment amount, which is being held in
escrow.
On June 5, 2012, the SFA filed a motion in the Chancery
action. After hearing argument from the SFA and Earnshaw, the
Chancery judge issued an order on June 28, 2012, quashing and
3 A-2013-12T1 vacating the Law Division's writ and the Sheriff's notice of
levy, and requiring the Sheriff to transfer to the SFA the rents
collected from the Property. Earnshaw sought reconsideration,
which the judge denied on August 29, 2012. On November 30,
2012, the judge denied a stay, and certified as final the June
28 and August 29 orders. Earnshaw appealed those orders on
January 10, 2012.1
II.
Earnshaw argues that the Chancery judge improperly quashed
and vacated the Law Division's writ and levy. In a rider to the
August 29, 2012 order denying reconsideration, the judge gave
two reasons why the levy was improper. First, the judge ruled
that the rents collected by the SFA were in custodia legis.
Second, the judge ruled that it was improper for Earnshaw to
levy upon the 60% of the rents due to Rio.
We address each rationale in turn, hewing to our standard
of review. We recognize that the Chancery Division has
discretion in appointing a receiver or special fiscal agent.
See Ravin, Sarasohn, Cook, Baumgarten, Fisch & Rosen, P.C. v.
1 It is unclear whether the orders were properly certified under R. 4:42-2. Given the full briefing of the issues and the passage of time, we grant leave to appeal those orders nunc pro tunc under Rule 2:5-6 to avoid any uncertainty. See Taylor by Wurgaft v. Gen. Elec. Co., 208 N.J. Super. 207, 211 (App. Div.), certif. denied, 104 N.J. 379 (1986).
4 A-2013-12T1 Lowenstein Sandler, P.C., 365 N.J. Super. 241, 249 (App. Div.
2003); see also Roach v. Margulies, 42 N.J. Super. 243, 246
(App. Div. 1956). However, "[a] trial court's interpretation of
the law and the legal consequences that flow from established
facts are not entitled to any special deference." Manalapan
Realty, L.P. v. Twp. Comm., 140 N.J. 366, 378 (1995). Because
this appeal poses issues of law, we review the matter de novo.
See, e.g., Cameron v. Ewing, 424 N.J. Super. 396, 401 (App. Div.
2012).2
III.
As the judge noted, "'[i]t is a general rule that money or
other property in the hands of an officer of a court is regarded
as being in custodia legis, and in consequence ordinarily cannot
be reached by execution in the absence of legislative
authority.'" Naglieri v. Trabattoni, 20 N.J. Super. 173, 176
(App. Div. 1952) (quoting Fredd v. Darnell, 107 N.J. Eq. 249,
253 (Ch. 1930)); see Culp v. Culp, 242 N.J. Super. 567, 572 (Ch.
Div. 1990). The question here is whether the rents due to Rio
were in custodia legis.
2 Because "'the substantive issues . . . and the basis for the motion judge's ruling on the [motion to quash] and reconsideration motion[] was the same,'" we consider the merits of Earnshaw's appeal. See Potomac Aviation, LLC v. Port Auth. of N.Y. & N.J., 413 N.J. Super. 212, 222 (App. Div. 2010) (quoting Fusco v. Bd. of Educ. of Newark, 349 N.J. Super. 455, 461 (App. Div.), certif. denied, 174 N.J. 544 (2002)).
5 A-2013-12T1 "Property is considered to be in custodia legis when it is
'in the custody of the law.'" Wilzig v. Sisselman, 209 N.J.
Super. 25, 31 (App. Div.), certif. denied, 104 N.J. 417 (1986).
Thus, under our law, when a complaint is filed for the dissolution of an entity and a receiver is appointed thereunder, "such receiver becomes vested with title to the property . . . from the date of the filing of the bill." The property of the entity is thereafter in custodia legis and the receiver's possession is considered to be that of the appointing court. Implicit in any order establishing a custodia legis status, through the appointment of a receiver, is the fact that the property becomes inalienable without the knowledge and consent of the court.
[Ibid. (citations omitted).]
"Accordingly, the mere appointment of a receiver operates
to place property in custodia legis and automatically prohibits
its sale in the absence of approval of the court." Id. at 32.
Indeed, "[t]he word 'receiver' normally connotes a person or
entity who takes title to property in custodia legis." In re
Farnkopf, 363 N.J. Super. 382, 394 n.9 (App. Div. 2003); see
Wilzig, supra, 209 N.J. Super. at 32 (noting that "case law
links the custodial status of the property with the function of
the receiver").3
3 There are several types of receivers. For example, a statutory receiver serves to "liquidate the corporation"; a custodial receiver serves "to maintain the status quo for a definite (continued)
6 A-2013-12T1 "'It is well recognized that a court of equity has inherent
power in a proper case to appoint a receiver for a corporation
on the ground of gross or fraudulent mismanagement by corporate
officers or gross abuse of trust or general dereliction of
duty.'" Ravin, supra, 365 N.J. Super. at 249 (quoting Roach,
supra, 42 N.J. Super. at 245). However, the appointment of a
receiver is "'an extraordinary remedy,'" ibid., and can have the
effect of "injuring the business in its relations with the
public and its" customers, Roach, supra, 42 N.J. Super. at 246.
Accordingly, the Chancery Division may not appoint a
receiver without meeting certain procedural requirements. For
example, "an order appointing a statutory receiver for a
corporation shall give the stockholders and creditors leave
. . . to show cause why the receiver shall not be continued."
R. 4:53-1. The receiver must file an inventory and periodic
accounts, which must be audited and approved by the court. R.
4:53-7. A court may appoint a receiver "only for the short
period of time required to protect assets pending a final
(continued) period of time, usually only during the pendency of the litigation"; and a rent receiver serves "to protect the mortgagee's interests by imposing a court-supervised, disinterested person to collect the rents and pay expenses pending the ultimate disposition of the mortgaged premises." Kaufman v. 53 Duncan Investors, L.P., 368 N.J. Super. 501, 506 (App. Div. 2004).
7 A-2013-12T1 resolution of litigation or a dissolution of the business
enterprise." Kassover v. Kassover, 312 N.J. Super. 96, 100
(App. Div. 1998).
It is undisputed that the Chancery Division here did not
appoint a receiver, but instead took the less "drastic action"
and "less onerous expedient" of appointing a special fiscal
agent. See Roach, supra, 42 N.J. Super. at 245. "[T]he
appointment of a 'special fiscal agent' to oversee the
disbursements of a solvent corporation [is] a 'pendente lite
device . . . contrived to avoid more stringent measures'" such
as appointment of a receiver. Kassover, supra, 312 N.J. Super.
at 100 (quoting Roach, supra, 42 N.J. Super. at 246). Here, as
in Roach, "in an effort to refrain from hindering the corporate
business operations and at the same time to afford some
protection to plaintiff, the fiscal agent with circumscribed
powers was appointed." See Roach, supra, 42 N.J. Super. at 246.
The January 9, 2012 order transferred from the Mavroudis
Defendants to the SFA "managerial authority over the business
operations and financial affairs" of the Property, "including
(but not limited to) collection of rent, additional rent or
other revenues, payment of bills or other expenditures within
the ordinary course of business," hiring of employees, entering
into contracts, buying supplies, and making transactions. The
8 A-2013-12T1 order stated that the SFA would report to the court only "from
time to time, as he shall deem fit." No time limit was placed
on the SFA's appointment.
The order did not purport to place property in custodia
legis. Cf. Hyman v. Muller, 1 N.J. 124, 127 (1948) (noting that
the order appointing a receiver provided the assets he received
were thereafter to "'be considered as in custodia legis'"). Nor
did the order require the inventory and periodic accounts needed
for the court to monitor property in the court's custody. The
order did not require the court's approval for the sale of
property. Nor did it include the other procedural protections
attending a receivership, such as notice to creditors with an
opportunity to object. Thus, there is nothing in the order
endowing the SFA with the powers of a receiver, including a
receiver's quintessential protection of property in custodia
legis.
In the rider to the August 29, 2012 order, the judge stated
that because the judge appointed the SFA, the SFA acts as a
judicial officer and therefore holds the property in custodia
legis. The judge explained that "[e]quitable remedies are
distinguished for their flexibility, their unlimited variety,
[and] their adaptability to circumstances." Roach, supra, 42
N.J. Super. at 246 (citation and quotation marks omitted).
9 A-2013-12T1 However, the equitable remedy chosen by the judge – the
appointment of a special fiscal agent – is differentiated from a
receiver who holds the property in custodia legis precisely
because an SFA has "circumscribed powers," provides only "some
protection," and is a less "drastic action" than appointing a
receiver. See id. at 245-46. Notably, neither the parties nor
we have found any authority stating that a special fiscal agent
holds property in custodia legis. Thus, we find the rents due
to Rio were not held in custodia legis.
In any event, "'the test of immunity of property in
custodia legis may in general be said to be whether substantial
confusion or embarrassment to the initial jurisdiction would
result from the enforcement of process against the property by
another tribunal.'" Naglieri, supra, 20 N.J. Super. at 176
(quoting Fredd, supra, 107 N.J. Eq. at 253); accord Culp, supra,
242 N.J. Super. at 572-73. Here, the judge stated that the SFA
was appointed because there were allegations that the Mavroudis
Defendants were misappropriating funds. As in Roach, a SFA was
appointed to ensure some protection to the parties from further
misappropriation. Allowing the collection of debt through
execution of judgment does not thwart the goal of preventing
managerial misappropriation.
10 A-2013-12T1 The judge also stated that "allowing Earnshaw the
opportunity to be prioritized as a creditor of Rio via the levy"
would "deprive the SFA of utilizing his Court-appointed power to
decide the order that the creditors should be paid in," and
would "deprive this Court of jurisdiction over the corporation
and lead to the Court's substantial embarrassment."
However, nothing in the judge's January 9, 2012 order gives
the SFA the power to decide that creditors shall be paid
contrary to the priorities established by law. The order simply
gives the SFA the authority for "payment of bills and other
expenditures within the ordinary course of business." We see
nothing indicating that paying Earnshaw's invoices, or obeying a
court-ordered writ of execution, falls outside the SFA's
authority or the ordinary course of business. Payment of those
bills has not been shown to deprive the court of jurisdiction or
cause substantial embarrassment. Thus, even if the rents were
in custodia legis, they could still be levied upon by Earnshaw.
IV.
The judge's rider to the August 29, 2012 order also stated
that the writ and levy were quashed because Earnshaw improperly
sought to levy upon the 60% of the rents due to Rio. This was
not a proper basis to quash or vacate the writ of lien, even
assuming that the SFA could bring such a challenge to the levy
11 A-2013-12T1 before the Chancery judge, rather than the Law Division which
issued the writ of execution.
The judge believed that Rio would not have possession of
the rents until after the SFA made the Property profitable, at
which point Rio would receive surplus funds that Earnshaw could
levy upon. Indeed, in a rider to the June 28, 2012 order
quashing the writ and levy, the judge instructed the SFA not to
distribute any funds to Rio, and to file a report with the court
detailing whether he had any "surplus funds." However, neither
the judge nor the SFA anticipated there would ever be surplus
funds.
In any event, when the writ was executed, nothing in the
judge's January 9, 2012 order prohibited the SFA from
distributing any funds to Rio. The order transferred from the
Mavroudis Defendants to the SFA the managerial authority to
collect rents and pay bills, but it did not bar the SFA from
paying to Rio or NJRC any monies due them as the owners of the
Property.
Moreover, the debts represented by the rental payments were
the property of Rio and NJRC, with 60% belonging to Rio and 40%
to NJRC. We note "the oft-stated general rule that a test of
liability to garnishment or execution 'is whether it is the
subject of assignment.'" Cameron, supra, 424 N.J. Super. at 406
12 A-2013-12T1 (citation omitted). Here, the right to receive rents was
capable of assignment by Rio, and thus was open to execution.
See Gonzalez v. Wilshire Credit Corp., 207 N.J. 557, 565 n.2
(2011) (noting that "'[t]he interest of a tenant in common may,
absent some contractual undertaking, be transferred without the
consent of the [other co-tenant].'" (citation omitted)); see
also Bauer v. Migliaccio, 235 N.J. Super. 127, 138 (Ch. Div.
1989).
The judge presumed that Earnshaw's writ of execution could
reach only "surplus funds," that is, the amount of the rents
remaining after payment of other creditors. However, "[a]
judgment creditor is entitled to obtain execution against a
debtor's 'debts' as well as earned income, trust fund income,
and profits." Cameron, supra, 424 N.J. Super. at 403 (quoting
N.J.S.A. 2A:17-50). The rents here are debts owed to Rio and
NJRC. "After a levy upon a debt due or accruing to the judgment
debtor from a third person, . . . the court may . . . direct the
debt, to an amount not exceeding the sum sufficient to satisfy
the execution, to be paid to the officer holding the
execution[.]" N.J.S.A. 2A:17-63.
The judge stated that Rio "does not have the necessary
possession of the funds in the form of the rents to allow levy,"
because "[t]here is great uncertainty that Rio will ever receive
13 A-2013-12T1 rental income from the property since a foreclosure action
against the property has been initiated." Although the bank
holding the mortgage on the Property had commenced foreclosure
proceedings, foreclosure had not yet occurred when Earnshaw
obtained the writ and levy. Moreover, the bank had deferred
enforcement of an assignment of rents provision of the mortgage,
and had made no application for a rent receiver. Therefore, the
rents were still Rio's property at the time Earnshaw's writ was
executed.
The judge cited Cameron for the proposition that "'[a] debt
which is uncertain and contingent, in the sense that it may
never become payable, is not subject to levy and sale.'"
Cameron, supra, 424 N.J. Super. at 406 (quoting Cohen v. Cohen,
126 N.J.L. 605, 610 (Sup. Ct. 1941)). "However, debts may be
subject to execution 'if liquidated and certain in their
existence[.]'" Ibid. (citation omitted). Here, like the
reverse mortgage payments in Cameron, the tenants' "payment
obligation is certain and currently payable." Ibid.; cf. Cohen,
supra, 126 N.J.L. at 610 (holding a widow's right to collect a
death benefit under her husband's life insurance policy if she
were alive on a date in the future was too uncertain to be
subject to levy).
14 A-2013-12T1 Our ruling is "consistent with the general policy favoring
enforcement of judgments." See Cameron, supra, 424 N.J. Super.
at 406. "'It is the general policy of the law to lend the
creditor all reasonable assistance for the enforcement of his
claim, especially against a debtor who, though possessed of the
means to pay, seeks to evade his obligation.'" Ibid. (citation
omitted). Here, Earnshaw had obtained a judgment from the Law
Division. He had a right to enforcement of his claim against
Rio's rental income, despite the SFA's preference to pay other
creditors who had not yet attained the priority of a judgment.
See R. 1:13-8.
Accordingly, we reverse and remand with instructions to
release the escrowed funds to satisfy Earnshaw's judgment in
accordance with this opinion. We do not retain jurisdiction.
15 A-2013-12T1