Two by Judge Fisher

Ippolito v. Ippolito, ___ N.J. Super. ___ (App. Div. 2020); Garden State Investment v. Township of Brick, ___ N.J. Super. ___ (App. Div. 2020). Each of the last two days saw published opinions by Judge Fisher. Each one was short, and each involved the type of equitable issues for which Judge Fisher is perhaps best known.

Ippolito v. Ippolito may be the name of the first case, but the case, an outgrowth of a “lengthy and hotly-contested matrimonial action,” is in fact about the effort of one of the parties’ law firms to get paid. One of the husband’s former attorneys asserted an attorney’s lien on an escrow account that held the proceeds of a sale of one of the marital homes. The wife claimed those monies too, and the Family Part awarded the fund to the wife, except for $20,000, which was given to the law firm. The firm and the wife each sought review by the Appellate Division, which took up the case and gave the entire sum to the wife.

Judge Fisher offered two reasons for that result. “First, N.J.S.A. 2A:13-5 allows for the attachment of an attorney’s lien only on ‘a verdict, report, decision, award, judgment or final order in his client’s favor.'” But the husband had not won any of those things in the underlying divorce judgment.

The Family Part had recognized the husband’s theoretical right to equitable distribution. But because the husband had engaged in “extreme and purposeful misconduct, repeatedly violated court orders, failed to provide full discovery of significant marital assets, and interfered with the sale of marital assets,” all for the purpose of “punish[ing the wife] for going forward with the divorce and, if possible, to leave her and the children of the marriage bankrupt,” the Family Part gave the wife all the assets, including the disputed fund. Since there was no ruling in favor of the husband to which the attorney’s lien could attach, the firm was not entitled to any part of the fund.

Second, and independent of the first reason, the Family Part correctly concluded that the wife and children had “a higher priority to that fund” than did the law firm or the husband, “whose recalcitrant and malicious conduct created the circumstance by which his share of equitable distribution was turned over to” the wife. Judge Fisher noted that any ruling in favor of or monetary award to the law firm was ultimately a benefit to the husband, in that it “decreases [the husband’s existing obligation to” the law firm. Weighing the ‘competing equities,” the balance tilted toward the wife.

The Appellate Division voided the award to the law firm for an additional reason. The Family Part judge offered only a brief justification for that part of its ruling, and that justification “seems untethered to his analysis of the equities and linked only to a feeling of sympathy for [the husband’s] prior attorney that should have played no role in his considerations.” Accordingly, the wife got the entire fund.

Garden State Investment v. Township of Brick involved tax sale certificates. Plaintiffs, who had “extensive experience” in buying tax sale certificates, bought certificates on vacant properties in Brick, paid taxes on those properties, and awaited the day when they could foreclose on and acquire them.

Plaintiffs did some diligence before buying the certificates, but plaintiffs did not obtain title searches until they were ready to foreclose. At that point, plaintiffs learned that the properties were “encumbered by a conservation easement.” Plaintiffs then sued the Township to rescind their purchases and get back the taxes that they had paid on the properties. On cross-motions for summary judgment, the Chancery Division ruled for the Township. Plaintiffs appealed, but the Appellate Division affirmed.

There were no disputed facts, and only one of plaintiffs’ legal arguments was worthy of discussion in Judge Fisher’s opinion. That was plaintiffs’ contention that Township of Middletown v. Simon, 193 N.J. 228 (2008), in which tax certificate purchasers, in “unusual circumstances,” were granted reimbursement of taxes that they had paid on properties that had been dedicated to the public as a park, required the same relief for plaintiffs here.

The Chancery Division found Middletown inapplicable, a conclusion that Judge Fisher affirmed. There, the municipality knew of the dedication and “played an active role in seeking to deprive Simon of his investment.” Middletown thus had been unjustly enriched, and the municipality was actually “amenable to granting” the buyers the relief that they sought.

None of that was so here. Brick’s “tax assessor was unaware of the conservation easement.” And, unlike Middletown, Brick “took none of the affirmative steps Middletown took to pull the rug out from the investor.”

But what followed was the key. “Plaintiffs and the township were laboring under the same misunderstanding about the property. And both sides had the same ability to learn more. The township, however, had no reason to be curious about the lots or inquire further, while plaintiffs had every reason to uncover all material circumstances about their investments. Plaintiffs’ failure to act more diligently in ascertaining any defects in or limitations on their investments bars their claim for equitable relief, particularly against the township, which acted passively and innocently throughout.” Judge Fisher closed with the maxim that “equity favors the vigilant.”