NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-0105-22
TWIN BORO LUMBER & SUPPLY CO.,
Plaintiff-Appellant,
v.
JAMES K. BOGIE,
Defendant-Respondent,
and
COMPLETE CONSTRUCTION COMPANY, a/k/a COMPLETE CONSTRUCTION CO., INC., and JAMES K. BOGIE, INC., d/b/a COMPLETE CONSTRUCTION CO. 1
Defendants.
Argued December 5, 2023 – Decided January 11, 2024
Before Judges Rose and Perez Friscia.
1 Improperly pled as James K. Bogie, Inc. On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-4507-10.
Andrew R. Turner argued the cause for appellant.
John F. Wiley, Jr., argued the cause for respondent (Wiley Lavender Maknoor, attorneys; Pankaj Maknoor, on the brief.)
PER CURIAM
Plaintiff Twin Boro Lumber & Supply Co. appeals from an October 6,
2022 Law Division order discharging its judgment against defendant, James K.
Bogie, pursuant to N.J.S.A. 2A:16-49.1. We affirm.
The facts are straightforward and largely undisputed. Plaintiff supplied
lumber to businesses in the construction trade. In April 2010, Bogie personally
guaranteed payment of all goods purchased by his company, defendant
Complete Construction Company (collectively, defendants), from plaintiff.
Thereafter, the account became delinquent. In November 2010, plaintiff
filed a complaint against defendants demanding $57,656.06 plus interest and
costs. Default judgment was entered against defendants in January 2011 for
failure to timely answer the complaint. In March 2011, a Union County sheriff's
officer attempted a levy on Bogie's personal property, but service was returned
unsatisfied. The following month, final judgment in the amount of $57,656.06
plus $240.00 in costs was recorded as a lien on Bogie's real property.
A-0105-22 2 Four years later in June 2015, Bogie filed a voluntary Chapter 7 petition
in bankruptcy in the District of New Jersey. See 11 U.S.C. § 727. Relevant
here, Bogie's petition listed plaintiff as a creditor holding an unsecured
nonpriority claim. Bogie also listed his fee simple interest in real property
located in Clark. In its merits brief, plaintiff acknowledges it received notice of
the bankruptcy filing; there is no indication in the record that plaintiff objected
to Bogie's petition. In October 2015, the bankruptcy court discharged plaintiff's
judgment.
In September 2022, the motion judge granted Bogie's application to vacate
final judgment by default pursuant to Rule 4:50-1 and N.J.S.A. 2A:16-49.1.
After plaintiff filed its notice of appeal, the judge held a conference with the
parties, expressing an interest in conducting oral argument. We granted
plaintiff's ensuing motion for a temporary remand and the judge promptly held
oral argument.2 Shortly thereafter, the judge issued the October 6, 2022 order
under review, accompanied by a thorough statement of reasons. The judge
squarely addressed the issues raised in view of the governing law and discharged
plaintiff's judgment lien pursuant to N.J.S.A. 2A:15-49.1.
2 Before the trial court, defendant withdrew his request to consider his application under Rule 4:50-1. A-0105-22 3 On appeal, plaintiff argues the motion judge impermissibly "shift[ed] the
burden of proof for removal of a lien following bankruptcy" to the judgment
creditor. Plaintiff further contends the judge erroneously concluded its
judgment lien "impaired" Bogie's exemption, see 11 U.S.C. § 522(f), because
Bogie failed to provide competent proof of his real property's value.
We have considered plaintiff's contentions in view of the applicable legal
principles and conclude they lack sufficient merit to warrant extensive
discussion in a written opinion, R. 2:11-3(e)(1)(E), beyond the comments that
follow. We affirm substantially for the reasons stated in the motion judge's
cogent statement of reasons.
N.J.S.A. 2A:16-49.1 provides that one year or more after a bankruptcy
discharge, a debtor may apply to a court where a judgment has been docketed
for an order canceling and discharging the judgment. The judgment should be
canceled and discharged "[i]f it appears . . . [the debtor] has been discharged
from the payment of that judgment or the debt upon which such judgment was
recovered." Ibid. However,
[w]here the judgment was a lien on real property owned by the [debtor] prior to the time he was adjudged a bankrupt, and not subject to be discharged or released under the provisions of the Bankruptcy Act, the lien thereof upon said real estate shall not be affected by
A-0105-22 4 said order and may be enforced, but in all other respects the judgment shall be of no force or validity . . . .
[Ibid. (emphasis added).]
It is well settled that "[t]o establish a lien against a judgment debtor's real
property, a creditor need only enter a judgment in the records of the Superior
Court; a levy and execution on real property owned by the judgment debtor are
not required." New Brunswick Sav. Bank v. Markouski, 123 N.J. 402, 411
(1991). "A holder of a docketed judgment has a lien on all real property held by
the judgment debtor in the state." Id. at 412 (citing N.J.S.A. 2A:16-1, 2A:17-
17); see also Chemical Bank v. James, 354 N.J. Super. 1, 8 (App. Div. 2002).
However, a judgment lien against a debtor's real property must be "perfected
. . . by levying against it prior to the filing of the bankruptcy petition." New
Century Fin. Servs. v. Staples, 379 N.J. Super. 489, 497 (App. Div. 2005).
Thus, when a debtor attempts to discharge a valid and perfected judgment
lien on real property under N.J.S.A. 2A:16-49.1, "the threshold and controlling
issue is whether the judgment [lien] was subject to discharge or release in
bankruptcy." Gaskill v. Citi Mortg., Inc., 428 N.J. Super. 234, 241 (App. Div.
2012), aff'd 221 N.J. 501 (2015). The statute applies if "the debtor could have
obtained a discharge of the lien through the bankruptcy proceedings[;] the debtor
need not have actually obtained a discharge of the lien." Ibid.
A-0105-22 5 In Chemical Bank, we held abandonment of real property by a bankruptcy
trustee, and consequent survival of liens against real property, did not alter the
fact that a judgment lien against the property could have been discharged during
the bankruptcy proceeding. 354 N.J. Super. at 9, 11. A judgment lien becomes
non-dischargeable only if it is levied upon either before bankruptcy filing or
after the bankruptcy trustee's abandonment of the property. Id. at 9, 11-12; see
also Gaskill, 428 N.J. Super. at 243; Party Parrot, Inc. v. Birthdays & Holidays,
Inc., 289 N.J. Super. 167, 171-72, 175 (App. Div. 1996). As we explained in
Party Parrot:
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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-0105-22
TWIN BORO LUMBER & SUPPLY CO.,
Plaintiff-Appellant,
v.
JAMES K. BOGIE,
Defendant-Respondent,
and
COMPLETE CONSTRUCTION COMPANY, a/k/a COMPLETE CONSTRUCTION CO., INC., and JAMES K. BOGIE, INC., d/b/a COMPLETE CONSTRUCTION CO. 1
Defendants.
Argued December 5, 2023 – Decided January 11, 2024
Before Judges Rose and Perez Friscia.
1 Improperly pled as James K. Bogie, Inc. On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-4507-10.
Andrew R. Turner argued the cause for appellant.
John F. Wiley, Jr., argued the cause for respondent (Wiley Lavender Maknoor, attorneys; Pankaj Maknoor, on the brief.)
PER CURIAM
Plaintiff Twin Boro Lumber & Supply Co. appeals from an October 6,
2022 Law Division order discharging its judgment against defendant, James K.
Bogie, pursuant to N.J.S.A. 2A:16-49.1. We affirm.
The facts are straightforward and largely undisputed. Plaintiff supplied
lumber to businesses in the construction trade. In April 2010, Bogie personally
guaranteed payment of all goods purchased by his company, defendant
Complete Construction Company (collectively, defendants), from plaintiff.
Thereafter, the account became delinquent. In November 2010, plaintiff
filed a complaint against defendants demanding $57,656.06 plus interest and
costs. Default judgment was entered against defendants in January 2011 for
failure to timely answer the complaint. In March 2011, a Union County sheriff's
officer attempted a levy on Bogie's personal property, but service was returned
unsatisfied. The following month, final judgment in the amount of $57,656.06
plus $240.00 in costs was recorded as a lien on Bogie's real property.
A-0105-22 2 Four years later in June 2015, Bogie filed a voluntary Chapter 7 petition
in bankruptcy in the District of New Jersey. See 11 U.S.C. § 727. Relevant
here, Bogie's petition listed plaintiff as a creditor holding an unsecured
nonpriority claim. Bogie also listed his fee simple interest in real property
located in Clark. In its merits brief, plaintiff acknowledges it received notice of
the bankruptcy filing; there is no indication in the record that plaintiff objected
to Bogie's petition. In October 2015, the bankruptcy court discharged plaintiff's
judgment.
In September 2022, the motion judge granted Bogie's application to vacate
final judgment by default pursuant to Rule 4:50-1 and N.J.S.A. 2A:16-49.1.
After plaintiff filed its notice of appeal, the judge held a conference with the
parties, expressing an interest in conducting oral argument. We granted
plaintiff's ensuing motion for a temporary remand and the judge promptly held
oral argument.2 Shortly thereafter, the judge issued the October 6, 2022 order
under review, accompanied by a thorough statement of reasons. The judge
squarely addressed the issues raised in view of the governing law and discharged
plaintiff's judgment lien pursuant to N.J.S.A. 2A:15-49.1.
2 Before the trial court, defendant withdrew his request to consider his application under Rule 4:50-1. A-0105-22 3 On appeal, plaintiff argues the motion judge impermissibly "shift[ed] the
burden of proof for removal of a lien following bankruptcy" to the judgment
creditor. Plaintiff further contends the judge erroneously concluded its
judgment lien "impaired" Bogie's exemption, see 11 U.S.C. § 522(f), because
Bogie failed to provide competent proof of his real property's value.
We have considered plaintiff's contentions in view of the applicable legal
principles and conclude they lack sufficient merit to warrant extensive
discussion in a written opinion, R. 2:11-3(e)(1)(E), beyond the comments that
follow. We affirm substantially for the reasons stated in the motion judge's
cogent statement of reasons.
N.J.S.A. 2A:16-49.1 provides that one year or more after a bankruptcy
discharge, a debtor may apply to a court where a judgment has been docketed
for an order canceling and discharging the judgment. The judgment should be
canceled and discharged "[i]f it appears . . . [the debtor] has been discharged
from the payment of that judgment or the debt upon which such judgment was
recovered." Ibid. However,
[w]here the judgment was a lien on real property owned by the [debtor] prior to the time he was adjudged a bankrupt, and not subject to be discharged or released under the provisions of the Bankruptcy Act, the lien thereof upon said real estate shall not be affected by
A-0105-22 4 said order and may be enforced, but in all other respects the judgment shall be of no force or validity . . . .
[Ibid. (emphasis added).]
It is well settled that "[t]o establish a lien against a judgment debtor's real
property, a creditor need only enter a judgment in the records of the Superior
Court; a levy and execution on real property owned by the judgment debtor are
not required." New Brunswick Sav. Bank v. Markouski, 123 N.J. 402, 411
(1991). "A holder of a docketed judgment has a lien on all real property held by
the judgment debtor in the state." Id. at 412 (citing N.J.S.A. 2A:16-1, 2A:17-
17); see also Chemical Bank v. James, 354 N.J. Super. 1, 8 (App. Div. 2002).
However, a judgment lien against a debtor's real property must be "perfected
. . . by levying against it prior to the filing of the bankruptcy petition." New
Century Fin. Servs. v. Staples, 379 N.J. Super. 489, 497 (App. Div. 2005).
Thus, when a debtor attempts to discharge a valid and perfected judgment
lien on real property under N.J.S.A. 2A:16-49.1, "the threshold and controlling
issue is whether the judgment [lien] was subject to discharge or release in
bankruptcy." Gaskill v. Citi Mortg., Inc., 428 N.J. Super. 234, 241 (App. Div.
2012), aff'd 221 N.J. 501 (2015). The statute applies if "the debtor could have
obtained a discharge of the lien through the bankruptcy proceedings[;] the debtor
need not have actually obtained a discharge of the lien." Ibid.
A-0105-22 5 In Chemical Bank, we held abandonment of real property by a bankruptcy
trustee, and consequent survival of liens against real property, did not alter the
fact that a judgment lien against the property could have been discharged during
the bankruptcy proceeding. 354 N.J. Super. at 9, 11. A judgment lien becomes
non-dischargeable only if it is levied upon either before bankruptcy filing or
after the bankruptcy trustee's abandonment of the property. Id. at 9, 11-12; see
also Gaskill, 428 N.J. Super. at 243; Party Parrot, Inc. v. Birthdays & Holidays,
Inc., 289 N.J. Super. 167, 171-72, 175 (App. Div. 1996). As we explained in
Party Parrot:
A lien on the real estate enforced by levy, as opposed to the underlying judgment or indebtedness by [the] defendants for a deficiency, is not subject to discharge or complete avoidance under the provisions of the Bankruptcy Code. If unperfected, however, [the] plaintiff's lien was subject to avoidance under the Code and therefore may now be discharged of record.
[Id. at 171.]
The statute has been described as a housekeeping measure to assure that
judgments discharged in bankruptcy do not remain of record, cloud title, or
require payment in the future. Id. at 173. The statute's purpose is aligned with
"the intention of the Bankruptcy Act, i.e.[,] to give the bankrupt a fresh start in
life." Assocs. Com. Corp. v. Langston, 236 N.J. Super. 236, 240 (App. Div.
A-0105-22 6 1989). Otherwise, "[i]f judgments that have been discharged in bankruptcy are
allowed to remain of record, the practical effect may be to require payment at
sometime in the future, thereby negating the intended benefits of the bankruptcy
proceedings." Ibid. (quoting Sponsor's Statement to N.J.S.A. 2A:16-49.1 (July
10, 1967)).
In the present matter, although plaintiff obtained a valid judgment lien
against Bogie, plaintiff failed to levy on the debtor's real property. See Gaskill,
429 N.J. Super. at 239. Accordingly, plaintiff failed to perfect its judgment lien.
Because Bogie complied with the requirements set forth in N.J.S.A. 2A:16-49.1,
the motion judge correctly concluded plaintiff's judgment lien was dischargeable
under the statute and granted the motion.
Nor do we discern any error in the judge's crediting the value of Bogie's
residential real property as declared in his bankruptcy petition, which was
accepted by the bankruptcy court, as the basis for her conclusion that "plaintiff's
judgment lien impair[ed] defendant's exemption" and the "entirety of the lien
was subject to avoidance under 11 U.S.C. § 522(f)(2)." Plaintiff was noticed
that Bogie listed its judgment lien in his bankruptcy proceeding but filed no
objection. We therefore discern no reason to disturb the motion judge's decision.
Affirmed.
A-0105-22 7