The opinion of the court was delivered by
The State of New Jersey, Department of Environmental Protection, appeals from a final judgment in this
Then, in an effort to establish a presumption of peaceable possession of the State's lands, the statutory prerequisite to a quiet title action, N.J.S.A. 2A:62-2, Phoenix, without notice to the State, presented the tax assessor for Little Egg Harbor Township with its newly drawn deeds and chains of title for the State's properties and asked to be allowed to pay taxes on them. Little Egg Harbor, also without notice to the State, and while continuing to accept the State's PILOT (payment in lieu of taxes) fees for the properties, redrew its tax map at Phoenix's behest, erasing the State's parcels and replacing them with a single lot and block designation listing Phoenix as the assessed owner. Phoenix then instituted this action in the Chancery Division seeking equitable relief in the form of the voiding of the State's recorded deeds.
Critically, Phoenix held no interest whatsoever in any of the State's seven properties when it began its quest to undermine the State's record title and divest it of ownership of all seven parcels. Those actions, which Phoenix readily owns, are anathema to the principles undergirding New Jersey's land title laws and brand it a "title raider," one "who seeks technical flaws in title in order to upset existing equities and clearly vested rights,"
Phoenix's nefarious actions permit it no relief in a court of equity. And allowing this judgment to stand risks destabilizing marketable titles in the Pinelands and does not "best support and maintain the integrity of the recording system,"
For ease of reference, we offer a guide to our opinion. We begin our discussion with a brief description of the Pinelands and the federal and State efforts to protect and preserve it, leading to the State's purchase of these seven parcels. We next detail Phoenix's efforts to locate and exploit defects in the State's titles, Phoenix's purchase of competing interests, and its successful effort to have the Little Egg Harbor tax map redrawn to erase the State's parcels and consolidate the lots under one lot and block listing itself as the assessed owner.
The Pinelands and the State's Purchase of the Properties
Congress established the 1,000,000-acre Pinelands National Reserve in the National Parks and Recreation Act of 1978, Pub. L. No. 95-625, 92 Stat. 3492 (codified at 16 U.S.C. § 471i), making the Pinelands the first natural resource to be protected under the "national reserve" program.
Declaring the protection and preservation of the Pinelands to be in the national interest, Congress in 1978 authorized federal funding to assist New Jersey in the development of a comprehensive plan for its management and for the acquisition of lands within the Pinelands National Reserve having "critical ecological values which are in immediate danger of being adversely affected or destroyed." 16 U.S.C. §§ 471i(b)(1) to (b)(3), (h)(1)(A). New Jersey enacted the Pinelands Protection Act, N.J.S.A. 13:18A-1 to -58, the following year, creating the Pinelands Commission to implement the law and assume primary responsibility for planning in the Pinelands, N.J.S.A. 13:18A-4.
In that Act, the Legislature singled out "a certain portion of the pinelands" it determined to be "especially vulnerable to the environmental degradation of surface and ground waters ... occasioned by ... improper development or use," which degradation "would result in a severe adverse impact upon the entire pinelands area." N.J.S.A. 13:18A-2. It established this "Preservation Area" within the Pinelands National Reserve with the goal of preserving "an extensive and contiguous area of land in its natural state, thereby ensuring the continuation of a pinelands environment which contains the unique and significant ecological and other resources representative of the pinelands area." N.J.S.A. 13:18A-9(c)(1);
In its 1980 Comprehensive Management Plan, the Pinelands Commission determined the State needed to acquire roughly 97,000 acres throughout the Pinelands in order to meet the Act's goals, complementing the 240,000 acres of conservation land the State already owned. New Jersey Pinelands Commission,
Acting on the Commission's recommendation, the Department in 1986 authorized State funds, including restricted bond funds, and federal monies for acquisition of 8,400 acres of ecologically significant land in connection with the "East Plains — Stafford Forge" project, including lands located in the Preservation Area within Little Egg Harbor Township. The seven parcels at issue here were all purchased by the State as part of that effort.
After identifying the block and lot designations of the properties it was interested in purchasing in the project area on municipal tax maps, the Department used the tax rolls to identify the owners of the land and sent them letters advising of the State's interest in acquiring their land for preservation in the Stafford Forge project. Interested landowners were invited to public meetings for information on the project and the steps necessary for the State to purchase qualifying properties.
The Department contracted with third-party surveyors, title companies and appraisers to review each parcel. The Department relied on the title companies to perform the searches and assure the State it was acquiring good title. It further engaged a surveyor to survey each parcel, and a surveyor's description was included in each deed.
For each parcel identified, the State obtained two independent appraisals of fair market value "as an entire taking." Department policy in the Preservation Area was to have the appraisals reflect pre-Pinelands-regulation land values, thereby disregarding any reduction in value occasioned by State and federal regulation.
Through depositions of several retired State employees who were involved in this process on behalf of the Department and the Attorney General's office, the parties established the Department was aware the Pinelands is a "very complicated area" in which to search title. In addition to the properties being mostly uninhabited, all of the properties at issue here were originally located in Burlington County prior to an 1891 adjustment in county boundary lines, which thereafter placed the properties in Ocean County.
Further, and perhaps most significant, the original warrants from which these properties derived contained thousands of acres which overlapped county lines, and the older deeds often contain vague, inaccurate, or incomplete property descriptions, often with multiple exceptions. The remoteness of the area and its limited development — attributes which make it unique and spurred the State and federal governments to take steps to preserve it intact for future generations — also resulted in relatively few land transactions since the first severances from the Proprietors,
As an example, our former colleague, Judge Wells, while sitting in chancery, described the Isaiah Adams tract, the genesis of four of the seven properties at issue here, as encompassing "8,525.80 acres in a 23-course description which expressly excluded 26 surveyed exceptions returned to others leaving a net acreage of 4,662.89" when it was surveyed by the Proprietors of West Jersey in 1859.
During the course of discovery, the State produced its acquisition files for each of the seven properties at issue and offered former employees involved in the transactions for deposition. Those individuals, however, could only offer general information about the process by which the State went about acquiring lands for preservation in the Pinelands. They had very little memory of the actual real estate transactions, all of which had taken place twenty-five to thirty years before.
The State's purchases of the seven properties at issue, which it funded through a seventy-five percent federal contribution,
Properties I, II and III all spring from an 1835 conveyance from the Proprietors of West Jersey to Gideon Cranmer.
Property I (Block 2, Lot 11)
The State purchased Property I, Block 2, Lot 11, a slightly over fifty-five-and-ahalf-acre parcel, part of a larger wooded tract, from Continental Searchers, Inc. by
Following Cranmer's death, James Bodine acquired the Cranmer tract at an Orphan's Court sale in 1860. Bodine and his wife, Cornelia, conveyed the tract to Job Corlis, a local farmer, several months later. Following Corlis' death, his heirs, who were still living in the area, conveyed the tract to Frederick Vail in 1914.
In 1979, Merring and American National conveyed the property to Betty Simon, Trustee UDT of Richard Simon. Simon conveyed the property, along with Lot 10, as well as additional lands, to Continental Searchers in 1988, the entity from which the State obtained title in 1989.
Property II (Block 4, Lot 8)
The State purchased Property II, Block 4, Lot 8, a nearly forty-two-acre tract, from Barnegat Rifle and Pistol Club, Inc. by deed recorded on April 9, 1990, for $68,000. As with Properties I and III, the State traces its title to Property II in an unbroken line through Vail, Corlis and Bodine back to the West Jersey Proprietors' 1835 conveyance to Cranmer.
Vail was listed as the assessed owner of Property II in 1963 when Lincoln Oil Corporation acquired a tax sale certificate for unpaid taxes on the property that it assigned to Warren W. Stevens in 1967, who subsequently filed a complaint to foreclose the certificate. Stevens acquired title to the property, along with four other lots in Little Egg Harbor, upon entry of final judgment in the tax sale foreclosure in 1969. Property II was conveyed three more times before the State acquired it from the Barnegat Rifle and Pistol Club in 1990.
Property III (Block 4, Lot 8A)
The State purchased Property III, Block 4, Lot 8A, an almost three-acre parcel, from Edith Warren Kueppers and Robert Kueppers, husband and wife, by deed recorded on May 8, 1990, for $11,525. As with Properties I and II, the State traces its title to Property III in an unbroken line through Vail, Corlis and Bodine back to the West Jersey Proprietors' 1835 deed to Cranmer.
Vail conveyed Property III to Charles Russell in 1915. Russell conveyed the property to Helen Horn Lindgren in 1935, who conveyed it to Edith Warren Kueppers in 1955. Kueppers and her husband Robert conveyed the property to the State in 1990.
Property IV (Block 3, Lot 18)
The State purchased Property IV, Block 3, Lot 18, an approximately seven-and-a-half-acre
Adams conveyed the entire 4,662.89-acre tract (8,525.80 acres less exceptions) to William Shepard in 1860, who conveyed it to Nathan H. Hall. Hall conveyed the entire tract back to Shepard in 1893. Shepard conveyed the entire tract to Henry Shaw, president of Central Trust & Title Co., who conveyed it several days later to his company. In September 1893, Central Trust & Title conveyed a 6/10ths interest in the entire 4,662.89 tract to Meyer Beyer by deed recorded in Ocean County. The following year Central Trust & Title, without mention of its prior conveyance to Beyer, conveyed "the easterly 2,797.74 acres of a tract of 4,662.89 returned to Isaiah Adams" to Beyer in a deed recorded in Burlington County over a year later in 1895. The State, like Phoenix, traces its title to Properties IV, V, VI and VII to the Meyer Beyer deed, which notably contains no metes and bounds description.
Meyer and Mathilda Beyer conveyed a fifty-acre tract, described by metes and bounds with reference to the Adams tract, to Sam and Paulina Halpern by deed recorded in Ocean County on June 18, 1894. This conveyance was one of several the Beyers made of lots, each one thirty chains wide, running down the easterly line of the Beyer tract. The parties refer to these several lots as "the corridor lots" from their appearance on a map.
Two months after acquiring the property from the Beyers, the Halperns conveyed it to Annie and Harris Saperstein. The Sapersteins conveyed the property to Hyman Rosensohn in 1896 by deed recorded in Ocean County. Rosensohn subsequently conveyed twenty-six acres to Bertha Boehm in 1897 by deed with a metes and bounds description, recorded in Burlington County that same year. That deed was recorded in Ocean County in November 1970. Boehm's interest in Property IV, which was described in a 1976 tax sale complaint as "being 7.71 acres, more or less, known as Lot 18, Block 3, as shown on Little Egg Harbor Tax Map, Sheet #2," was foreclosed by way of a 1978 tax sale judgment in favor of Elizabeth Anne Merring and American National Bank and Trust, co-executors of the Estate of Herbert L. Pickell. The State acquired the property from Pickell's estate in 1994.
The surveyor who appeared for the State at trial, Barry Jones, testified the State's survey and description from the 1994 deed from Pickell contained "an error in the beginning call coordinate values." Although the deed recites that it begins "at the northerly corner of Lot 18, Block 3," the coordinates did not match the call. Jones testified that plotting Lot 18 "in accordance with the deed for Lot 19, as the two parcels abut each other, and then go abut the county line," made clear the coordinates for the beginning call were incorrect. Allowing the call to control the point of beginning made "the bearings and distances match going around and up the county boundary line with ... this survey by the same surveyor [of] the adjoining lot" 19. Making the adjustment and overlaying the Little Egg Harbor tax map on an aerial photograph of the area, using three roads to "get it in the right place on the face of the earth," made clear it coincided with the location of Block 3, Lot 18 on the tax map.
Property V (Block 3, Lot 19)
Property V, Block 3, Lot 19, consists of less than one-half acre. It is located directly across Cervetto Road to the west of Block 4, Lot 13 (Property VII). It is one of the three tracts the State purchased by deed from Continental Searchers and the Estate of Wolf Herskowitz, recorded on July 8, 1994, for $95,388. As with Properties IV, VI and VII, the State traces its title to Property V through Meyer Beyer to the 1859 Adams grant.
The State's title expert, Joseph Grabas, asserted that Property V was created as a result of an error in the Little Egg Harbor tax map, which placed the easterly line of Block 3, Lot 19 west of its actual location, thereby creating a small triangular lot on the west side of Cervetto Road. Grabas claimed Property V is actually part of the 150-acre tract that includes Block 4, Lot 13 (Property VII). Phoenix's title expert at trial, Erwin Apell, agreed.
Meyer and Mathilda Beyer conveyed a 150-acre tract (50 chains x 30 chains), described by metes and bounds coinciding with the boundaries of Block 4, Lot 13 (Property V) and Block 3, Lot 19 (Property VII) to Isadore Milkenstein by way of deed recorded in Burlington County in 1894 and in Ocean County in 1971. Milkenstein conveyed the same tract to Wolf Herskowitz two months later by deed recorded in Burlington County in 1900 and in Ocean County in 1971 on the same date as the Beyer deed.
Little Egg Harbor records show Meyer Beyer as the assessed owner of Property V and Property VII until 1969, likely the result of the Milkenstein and Herskowitz deeds being originally recorded in Burlington instead of Ocean County. In 1969, Robert Kaufman, trustee of the K&D Land Trust, obtained two deeds from the heirs of Meyer Beyer in an apparent effort to acquire whatever interest remained vested in Beyer as a result of the 1893 deed transferring 6/10ths of the entire 4,662.89 tract to him, and the assessed owner changed to Robert Kaufman/K&D Land Trust.
In July 1983, Continental Searchers obtained a final Chancery Division judgment by consent against the Estate of Wolf Herskowitz vesting title in Continental Searchers of an undivided fifty percent interest in Property V (Block 3, Lot 19) and Property VII (Block 4, Lot 13), which was recorded in Ocean County. In 1993, Continental Searchers and the Estate of Wolf Herskowitz obtained a quitclaim deed from Robert Kaufman, individually and as trustee of K & D Land Trust, conveying their interests in the same lands described in the 1894 Milkenstein to Herskowitz deed, "known and designated" on the Little Egg Harbor tax map as "Lot 19 in Block 3 [Property V] and Lots 11 [Property VI] and 13 [Property VII] in Block 4." In 1994, the State took title to Property V by way of deed from Continental Searchers and the Estate of Herskowitz.
Property VI (Block 4, Lot 11)
Property VI, Block 4, Lot 11, is part of the land the State purchased from Continental Searchers and the Estate of Wolf Herskowitz by deed recorded July 8, 1994, consisting of a little over sixty-six acres. As with Properties IV, V and VII, the State traces its title to Property VI through Meyer Beyer to the 1859 Isaiah Adams grant. Property VI, however, does not appear to have been a part of the lands
Property VII (Block 4, Lot 13)
Property VII, Block 4, Lot 13, also part of the land the State purchased from Continental Searchers and the Estate of Wolf Herskowitz by deed recorded July 8, 1994, consists of almost fifty-three acres. As with Properties IV, V and VI, the State traces its title to Property VII through Meyer Beyer to the 1859 Adams grant. It is the same chain of title the State asserts to Property V (Block 3, Lot 19).
Phoenix's Efforts to Locate and Exploit Defects in the State's Titles
Phoenix acquired the sand and gravel mine adjacent to the State's properties out of the bankruptcy of its former owner, Herbert Pickell, in 1993. David C. Denise, president of Phoenix, testified at deposition that when Phoenix purchased the mine, the former owner, Pinelands Materials & Supplies, Inc., formerly known as Mt. Holly Concrete, was mining land to which it lacked clear title. In the mid to late 1990s, Phoenix began efforts "to clear up the titles to ... surrounding properties" and acquire an additional one or two thousand acres to expand the mine.
Denise approached General Land, a subsidiary of First American, the title insurer for three of the State's properties, about insuring the titles Phoenix hoped to acquire in order to expand its sand mine. Denise testified at deposition the only way General Land would consider writing the title insurance was if "they would have their fellow Gene, Mr. Sharkey, do the searching." Denise claimed Gene Sharkey, a searcher of many years' experience, was paid by both General Land and Phoenix to search the entire Isaiah Adams tract including its "26 or something exceptions and ... multiple chains of title through wild deeds and tax foreclosures." Denise explained that the Adams tract was the "subject of a very large case that the State prosecuted,
To that end, Phoenix employed Sharkey, as well as other title searchers and surveyors in a two-decade long quest to research the title to "[a]ll 8,000 acres" of the Isaiah Adams tract as well as the tract the West Jersey Proprietors conveyed to Gideon Cranmer in an effort Denise characterized as one to ascertain "[p]aramount title for adjacent lands." Asked at deposition as to whether anyone considered contacting the record owners of the properties Phoenix was interested in acquiring, those owners currently in title, Denise claimed Sharkey wasn't interested in the current record owners. According to Denise, Mr. Sharkey believed "that it was his job to cut through all that as he believed everybody was directed by
Accordingly, instead of starting with the record owners and searching backward for sixty years, as is customary,
When Phoenix's searchers established what they deemed was "the paramount title" to any parcel Phoenix was interested in acquiring, Phoenix would turn the information over to a self-trained genealogist, Jordan Auslander,
Once counsel for Phoenix contacted the identified heirs and negotiated the purchase of their interests, he drafted quitclaim deeds in favor of Denise. These deeds contained both the Little Egg Harbor tax map reference to the lot and block Phoenix was purporting to purchase as well as a description of the property copied from the original grants from the Proprietors or old deeds that could be traced thereto, "together with all of the right, title and interest of the grantor herein in and to any lands situate in the Counties of Ocean or Burlington to which the grantor may have an interest or claim by virtue of being one of the next of kin and heirs at law" to the ancestor in Phoenix's "paramount title." So, for example, the nine deeds Phoenix's counsel prepared to permit Denise to acquire what Phoenix asserted was "paramount title" to Properties I (Block 2, Lot 11), II (Block 4, Lot 8) and III (Block 4, Lot 8A) contained both a block and lot designation referencing the Little Egg Harbor tax map (although not to the same lot and block as Properties I, II and III)
Phoenix's genealogist initially performed only a strict descendance search for potential heirs. Phoenix did not ask its genealogist to search the probate records of any of the descendants he identified until after it instituted this action. Phoenix also admits its genealogist initially misidentified the
Phoenix continued its efforts to acquire quitclaim deeds from descendants of record owners its searchers deemed held "paramount title" to the State's seven Properties well after it instituted this suit, supplying additional deeds from purported heirs up until the time of trial. As Denise explained his and Sharkey's strategy, "[t]he paramount chain ruled. [Sharkey] was first to cross the post in New Jersey. You had the paramount chain and you were the first to file, you own the property."
Phoenix claims title to the seven Properties at issue by way of the following deeds to Denise, which Denise subsequently transferred to Phoenix by way of warranty deed and largely consolidated with its sand and gravel mine.
Property I (Block 2, Lot 11); Property II (Block 4, Lot 8); and Property III (Block 4, Lot 8A)
Phoenix claims to have obtained title to Properties I through III in 1999 and 2000 for $23,500 through a series of nine quitclaim deeds, representing 66.67 percent of the outstanding interests, from purported heirs or legatees of James Bodine, who died in 1874.
Bodine died without a will. The detailed inventory of his insolvent estate filed by his administrators does not list the property from Corlis as an asset of the estate, even though the deed had been recorded only months before, presumably by those same administrators. Besides a room-by-room accounting of Bodine's 10 room house, as well as his barns and outbuildings, businesses, partnerships and interests in boats, the inventory included seventeen other parcels of lands and was later amended to add two additional parcels. The property is also not included in the subsequent inventory of Bodine's wife's estate and was never conveyed by any of his immediate heirs.
Moreover, there are no further conveyances of that property for nearly one hundred years until 1972, when C. Roy Cox, a purported heir, conveyed the property to his children Benjamin S. Cox and Ellie Eichbaum. The property was never assessed to Bodine or any of his heirs after the deed to Corlis. Instead, the State's title expert asserted the Little Egg Harbor tax records from 1895, the earliest available, were consistent with the State's chain of title to Properties I, II and III.
The Corlis to Bodine deed does not appear within the State's chain of title, and there is no dispute that it was not in the State's possession when it negotiated the purchase of Properties I, II and III from the record owners. In the State's file produced in discovery, however, is a letter
In the letter, Eichbaum referred to Stout's "letter of November 29 and your recent telephone call." She expressed an interest in selling Block 3, Lot 15, not in issue in this case, "which we have paid taxes on all these years since 1974, to the state."
The attached correspondence, dated almost fifteen years earlier, between Eichbaum and her former lawyer and Eichbaum and the former township attorney for Little Egg Harbor, referred to a title search that showed "James Bodine was the last holder of a deed" to about one hundred acres scattered across several lots in blocks 2, 3, 4 and 7 and specifically referenced her claims to Block 2, Lot 11 (Property I); Block 4, Lot 8 (Property II); and Block 4, Lot 8A (Property III). Eichbaum did not assert any claim to those properties in her letter to Stout. Instead, she noted she and her family had abandoned that quest when their lawyer "just would not move further" in pressing their claim with the Township in 1974.
When deposed, Stout, then retired, testified he only vaguely recalled the letter and could not recall what, if anything, he did in response. Asked what he would have done, Stout testified he thought "we would have worked with the title company for them to do additional research to ensure that we were buying the land ... from the correct owner." Asked whether he recalled having the title company do further research, Stout could only say he vaguely remembered the issue and could not "recall what happened."
Property IV (Block 3, Lot 18) and Property V (Block 3, Lot 19)
Phoenix filed this action claiming to have obtained title to Properties IV and V, Block 3, Lots 18 and 19, as part of a larger purchase of land in Little Egg Harbor in Ocean County and Bass River in Burlington County from Robert Kaufman, both individually and as trustee of K & D Land Trust. Kaufman traced his title to Lots 18 and 19 to a tax foreclosure in Burlington County. Phoenix recorded quitclaim deeds ostensibly vesting title in Denise to Properties IV and V, conveyed the properties to Phoenix, consolidated Properties IV and V with Phoenix's sand mine, induced the Little Egg Harbor tax assessor to erase the State's parcels on the Township's tax map and sued to void the State's title to Properties IV and V, all on the basis of that chain of title through Kaufman.
After the State's title expert issued his report in discovery, however, opining that Kaufman could not have acquired title to property in Little Egg Harbor by foreclosing tax sale certificates issued by Bass River, Phoenix claimed a different basis
As already noted, the deed into Meyer Beyer conveying the easterly 2,798 acres of the original Isaiah Adams tract lacked any metes and bounds description. As Judge Wells noted in
Besides creating the "corridor lots" along the eastern boundary of his tract, Meyer Beyer divided what remained to the west of those lots into two large parcels, conveying the northern 1,200 acres to Adolf Guttman and the southern 1,000 acres to Anna B. Fischer. In the course of surveying the outbound boundaries of Phoenix's consolidated Lot 9.01 subsuming the State's parcels, Schweppenheiser concluded the easterly line of Adams was located further east than historically believed and as reflected on the Little Egg Harbor tax map.
Using the work of three previous surveyors of different parts of the Adams tract and the Watson exception thereto, and after engaging in a "certain amount of engineering," Schweppenheiser located what he believed to be the common easterly line of the Fischer and Guttman tracts, determining it was collinear with the western boundary of the corridor lots and parallel to the eastern line of Adams. By establishing the western boundary of the corridor lots with reference to the eleventh course of Adams, Schweppenheiser claimed he was able to conclude the easterly line of the Guttman and Fischer tracts was thirty chains (1,980 feet) west of the easterly line of Adams, thereby placing that line east of where it was understood to lie historically.
That mapping error is significant for the parties' competing claims of title to Property IV (Block 3, Lot 18) and, to a lesser extent, Property V (Block 3, Lot 19).
The State argued, however, that Phoenix could not establish its title to Properties
At trial, the State's title expert, Grabas, opined that Phoenix could not establish title to Lots 18 and 19 through Kudra. He asserted Phoenix's inability to produce the trust instrument through which Kudra took title "as a trustee according to a deed of trust given on even date herewith" in the 1974 deed from Burlington Company Investment Corporation created "a hole" in Phoenix's title that Phoenix could not fill by quitclaim deeds from Kudra's children.
Phoenix's expert agreed that Phoenix's inability to locate the trust instrument referenced in the deed meant there was "a hole" in Phoenix's title to Lots 18 and 19 created by Kudra having taken title in 1974 "as a trustee." He also agreed Kudra could not delegate his fiduciary powers as trustee, nor could they pass to Kudra's children through intestacy. Phoenix's expert also acknowledged there was no record of anyone having gone to court to have a successor trustee appointed. He nevertheless opined that Phoenix's title was sound, analogizing to defunct corporations, "you then do the next best thing, and that is to get the heirs of the last trustee or the heirs of the last board officer to convey."
Property VI (Block 4, Lot 11)
Phoenix claims to have obtained title to Property VI (Block 4, Lot 11) through George Orlov, who took title to the property in 1908 pursuant to a deed recorded in Burlington County "correspond[ing] roughly to Block 4, Lot 11" on the tax map of Little Egg Harbor, before it was altered at Phoenix's request. The Orlov deed, however, purports to transfer approximately one hundred acres in the Township of Bass River. The deed does not mention land in Little Egg Harbor and does not appear in the Ocean County land records, being recorded only in Burlington County. Further, neither Orlov nor any of his heirs appear as assessed owners of Property VI in the Ocean County tax records going back to 1895, those records being consistent with the State's chain of title out of Continental Searchers. The State's title expert opined Phoenix's chain of title was unsupported in the Ocean County land records prior to 1994 when the State acquired its deed from the record owners.
In a supplemental report, Phoenix's title expert stated that "[u]pon further research," the 1894 deed from Beyer to Kolmer and Herrman, from which Orlov's title allegedly derived, was recorded on July 6,
Phoenix tasked its genealogist with developing a "family tree" for George Orlov, which the genealogist deemed complete through Orlov's seven children and "reasonably believed to be complete" through Orlov's ten grandchildren. The genealogist identified twelve living heirs of George Orlov. Counsel for Phoenix arranged for Denise to take quitclaim deeds from ten of them in 2000 and 2001.
Property VII (Block 4, Lot 13)
Phoenix and the State both trace their title to Property VII, Block 4, Lot 13, to the same 1894 deed from Isadore Milkenstein to Wolf Herskowitz conveying a 150-acre rectangular tract, part of which lies in Bass River in Burlington County and part in Block 4, Lot 13 of Little Egg Harbor. The deed was initially recorded in Burlington County in 1900. It was not recorded in Ocean County until 1971. Phoenix claims its title to Block 4, Lot 13 derives from a deed Herskowitz gave to Samuel Schell in 1908. Although that deed states no fewer than four times that Herskowitz is conveying only ten acres to Schell, the description in the deed is the same one as in the deed into Herskowitz, which conveyed all 150 acres.
Based on the work of its genealogist, Phoenix initially obtained quitclaim deeds from two individuals eventually determined not to be heirs of the Samuel Schell of the 1908 deed. Phoenix thereafter obtained quitclaim deeds after the litigation was filed from two individuals it contends are the correct Schell heirs at a total cost of $20,000 for their 75.73 percent interest.
Although Gene Sharkey, who performed Phoenix's title searches and who died before trial, had opined that Schell received only ten acres from Herskowitz, and that the State had title to the remaining 140 acres, the expert who testified for Phoenix at trial, Erwin Apell, opined that the references to conveying only ten acres had "very little significance" because "it doesn't indicate where the ten acres is." Apell testified "under the rules of construction... if there are two types of descriptions, one being a metes and bounds and the other being an approximate acreage, that the metes and bounds would control."
The State's title expert opined the language of the deed from Herskowitz to
Phoenix's Efforts to Establish Peaceable Possession of the State's Properties
Neither Denise, Phoenix, nor any of the individuals from whom they obtained quitclaim deeds was ever in possession of any of the seven State Properties at issue here. In an attempt to establish the peaceable possession necessary for a quiet title action,
Dear Mr. Sorrentino:
That letter was not copied to the State. The only person copied was Denise. Pursuant to Phoenix's request, first in 2001 and again in 2005, in another letter not copied to the State, the Little Egg Harbor tax assessor changed the assessed owner of each of the State's seven Properties to Denise on the Township's assessment list and removed the legend "exempt — NJDEP" from each of the State's Properties on the Little Egg Harbor tax map based on Phoenix's claim that the State's title to those Properties was "inferior" to that Denise had recently acquired by way of quitclaim deeds from distant heirs of former record title owners.
After Denise conveyed the quitclaim interests he had acquired in the State's Properties to Phoenix by warranty deed, Phoenix executed the penultimate step in
The State deposed the surveyor, John Schweppenheiser, who prepared the boundary survey for the consolidated parcel relying on information supplied by Phoenix. Although undertaking no title research himself, Schweppenheiser testified "[t]here was not a chain of title that we were aware of that would validate [the State's] properties, so we kind of surveyed the boundary around them." Schweppenheiser acknowledged he saw the tax map listing the properties as owned by the Department of Environmental Protection but claimed he was not concerned because Phoenix had advised him it was "buying all those properties."
The State also deposed the Little Egg Harbor tax assessor, who testified he changed the township's tax records without any idea of whether the title information was accurate. He simply accepted the representation of Phoenix's counsel. Phoenix now admits, as it must, that it approached the tax assessor to change the assessed ownership of Properties IV (Block 3, Lot 18), V (Block 3, Lot 19) and VII (Block 4, Lot 13) without any color of title at all, having based its claim of ownership of Block 3, Lots 18 and 19 on tax certificates issued by Bass River and of Block 4, Lot 13 on quitclaim deeds from the wrong Schells.
The tax assessor further testified at deposition that he had been discussing the changes with Phoenix's counsel for over a year before he finally made them, and that the two talked about the properties "becoming taxable." When asked why he didn't notify the State of those discussions or of the Township relisting the State's properties under other ownership, the tax assessor testified that Phoenix's counsel indicated he was notifying the State. The tax assessor also confirmed he was aware the State would not receive any notice of the changes from the township because of its "tax-exempt owner status."
At his own deposition, counsel for Phoenix testified he never notified the State of the changes he sought to the Little Egg Harbor tax map on behalf of Denise and Phoenix. Denise at his deposition likewise testified he never made any attempt to contact the State about his interest in the State's properties. Asked why, he testified, "I don't know." It takes no imagination to guess the reason why Denise, Phoenix and their counsel chose not to advise the State that Denise and Phoenix had the State's properties erased from Little Egg Harbor's tax map. It wasn't enough to establish competing chains of title and work the changes to the tax map; to quiet the title Phoenix also needed to demonstrate that it or Denise had paid the taxes on the State's parcels for five years.
The State only learned of the changes Phoenix had worked to the tax rolls and map of Little Egg Harbor when a resident
Specifically, the resident wrote:
The resident enclosed copies of both the old and new tax maps and expressed the hope "that this open and host[ile] act will not necessitate the filing of an action of Ejectment with the Superior Court of New Jersey to [quiet] the adverse possession by the Phoenix Pinelands Corporation and restore historical title interest to those lands being possessed."
Following an investigation into the allegations of the letter, the State wrote to the individual responsible for maintaining the tax map in Little Egg Harbor, copying ten individuals, including the mayor of Little Egg Harbor, Phoenix, its surveyor, the administrator of the Green Acres program, and the Attorney General's Office, about the errors in the tax maps resulting from the township having "consolidated lots" so as "to eliminate lots previously indicated as State-owned" based on a survey and
Specifically, the State noted Little Egg Harbor had consolidated the following State lands into Block 3, Lot 9.01:
The writer noted he had plotted the description contained in the consolidated Phoenix deed and "confirmed that it creates a substantial deed overlap and creates a cloud on title of more than 100 acres of State-owned lands." Requesting "that you put the State-owned lots back on the tax map," the State noted it had continuously made PILOT payments since acquiring the Properties, that there was "no valid reason for the lots to have been consolidated," and that it would "have hoped that the Township" would have consulted the Department "before taking such action." The State also noted it would be notifying its title insurers of the claim by Phoenix.
Phoenix filed a two-count complaint for quiet title and
Judge Buczynski began his decision by noting that neither the Legislature nor "the chancellors who have ruled in the past could have quite contemplated the evolution of a case" like this one. He noted that "[q]uiet title actions are intended to clear title when there's a cloud on title for the person in possession." They are not intended "to create title out of whole cloth or shortcut rigorous requirements of the law in making determinations as to actual ownership."
The judge rejected Phoenix's contention it had established the requisite peaceable possession to permit it to quiet title against the State, notwithstanding its deeds and proof of tax payments.
Although finding the State was entitled to a presumption of peaceable possession of its Properties, Judge Buczynski nevertheless determined the State could not maintain a quiet title action against Phoenix, because Phoenix's action, including its
Judge Buczynski denied Phoenix's motion for partial summary judgment on Property VI. The judge found he could not make a determination as to title based on the information provided on the motion, but would require expert testimony, concluding "to the extent ... plaintiff is arguing... that they have paramount title to any" property, that "remained a question of fact" for ultimate determination.
Finally, Judge Buczynski "recognize[d] a very valid argument raised by the [State]" in response to Phoenix's
The judge also acknowledged Phoenix's argument that its "actions in acquiring the deeds [was] not heir hunting," and "that their heir hunting is nonetheless not prohibited anyway" because "if someone doesn't own title to a specific piece of property at all, [someone else] can still attempt to obtain clear title to that particular property." Judge Buczynski determined he would address those arguments in the context of further proceedings.
Following Judge Buczynski's retirement, a different judge heard the parties' cross-motions for summary judgment at the conclusion of discovery. Phoenix first argued the State could not be considered a bona fide purchaser for value because of its awareness of certain deeds through which Phoenix traced its title as a result of the State's involvement in prior quiet title actions in the Pinelands and was, at the very least, under a duty to make inquiry as to Eichbaum's claim before purchasing the three parcels making up the Bodine tract. Phoenix further argued that as the State could not trace its title to any of the seven Properties to the Council of Proprietors, and Phoenix could, it was entitled to summary judgment on its ejectment claim.
The State both opposed Phoenix's motion and argued its own entitlement to summary judgment. As to Phoenix's motion, the State argued Phoenix had failed to prove its title free from all reasonable doubt and thus was not entitled to eject the State from its lands. The State pointed out specific errors in Phoenix's genealogical research. It also noted Phoenix had not advised its genealogist it was seeking to acquire title based on his research, resulting in the genealogist undertaking only a straight descendancy search, ignoring wills and probate records through which title may have been directed. The State argued it was thus reasonable to suspect that Phoenix had not acquired the interests of all persons through which it claimed title. The State further argued there were material facts in dispute, and that the court needed to hear from the parties' title experts as they held different opinions as to what constituted a reasonable title search and what it would have disclosed of deeds in Phoenix's chain of title to Property VI when the State purchased it.
As to its own motion, the State argued it was entitled to summary judgment dismissing Phoenix's claims because the facts of Phoenix's "heir hunting are irrefutable and the law is clear." The State contended "public policy favors maintaining the integrity and stability of the recording system," and Phoenix's actions undermine that system. The State claimed it acted reasonably in identifying the record owners of the seven parcels and relying on its title searchers in acquiring their interests. The State argued it could not reasonably anticipate being subjected — thirty years later — to the "unconscionable efforts of a third-party interloper whose interest is not in protecting the interests, if any, the [State] may have legitimately missed but rather in furthering its own pecuniary gain." Pointing to the many years and vast amount of money Phoenix spent surreptitiously "searching for defects to exploit," all the while aware of the State's record ownership and without notice to the State of those efforts or of the changes Phoenix worked to the municipal tax map to erase
The new judge dismissed the State's heir hunting claims out of hand, characterizing them as a "contention that [the State] is entitled to a specific or some kind of special status for public policy reasons." The judge found "to apply such a rule would permit a presumption in favor of the State, ... prior to determination of title," which is "not supported by law." Indeed, the court found "the Constitution provides protections against that very thing," referencing "the due process and taking clauses."
The judge dismissed the State's "attempts to impute Phoenix's motives as somehow sinister for seeking only pecuniary gain." Although noting the "slightly different context," the judge quoted the Supreme Court's opinion in
In addition to rejecting the State's heir hunting claims, the judge also granted Phoenix summary judgment on Properties I (Block 2, Lot 11), II (Block 4, Lot 8), III (Block 4, Lot 8A), and VI (Block 4, Lot 11), rejecting the State's claim it was a bona fide purchaser for value without notice. As to Properties I through III (Block 2, Lot 11 and Block 4, Lots 8 and 8A), the judge noted there was no dispute that Bodine conveyed the property to Corlis in 1860. The dispute was over the validity of a deed from Corlis back to Bodine the following year, that was not recorded until after Bodine's death fourteen years later.
As to Property VI (Block 4, Lot 11), the judge rejected the opinion of the State's title expert that a reasonable search would not have revealed Phoenix's chain of title when the State purchased that parcel in 1994. The judge instead found that notwithstanding the 1908 Orlov deed on which Phoenix relied refers to the property being in Bass River, Burlington County and was not recorded in Ocean County, "the metes and bounds describes the Little Egg Harbor tract" and "explains why the reasonable search tracing the origins title should have included both [Burlington and Ocean] Counties, particularly in light of the DEP's prior experiences."
The judge declared Phoenix to be "the owner of fee simple title" to Properties I (Block 2, Lot 11), II (Block 4, Lot 8), III (Block 4, Lot 8A), and VI (Block 4, Lot 11), voided the State's deeds, ejected it from the premises and denied the State's motion to stay the judgment.
We granted the State's motion for leave to appeal the stay order and summarily reversed. We remanded the matter to the trial court to promptly issue a stay, thereby "preserving the status quo with respect to this environmentally sensitive Pinelands property, pending the conclusion of the trial court litigation." Although concluding "that the underlying litigation appear[ed] to present a significant legal issue," we nevertheless denied leave to appeal the summary judgment, noting that "novel issues are best decided on the basis of a complete factual record."
Following a three-day trial to determine, in the judge's words, "paramount claims in
The judge accepted the testimony of Phoenix's title expert that the "failure to locate trusts pertaining to deeds was not an uncommon issue. And that under those circumstances, it was common, in order to obtain title, that one would generally obtain deeds from the trustee's heirs, which is what Phoenix did." The judge pronounced himself
Phoenix having obtained quitclaim deeds from the Kudra heirs, the court ruled Phoenix "holds legal title to Lots 18 and 19."
The judge also found that Lots 18 and 19 "do not plot within the foundation deeds in the [State's] title." He concluded that Bertha Boehm, the State's predecessor in title to Lot 18 "never owned Lot 18," notwithstanding her deed, because the deed description does "not describe Lot 18." The judge also rejected the State's contention that Lot 19 was a part of the Milkenstein tract, as Phoenix's title expert also maintained in his initial report, instead concluding that Lots 18 and 19 are both located further west, outside the Meyer Beyer corridor, and were part of the Fischer tract based on the mapping error discovered by Schweppenheiser. Because the deed to Fischer predated the deed to Milkenstein, the judge concluded "the subsequent conveyance ... to Milkenstein as to Lot 19 ... is therefore a nullity."
The judge declared himself "satisfied that Lots 18 and 19 are in Ocean County and were encompassed in the Kudra deed as trustee," that they were conveyed to Phoenix as part of the Kudra settlement agreement and consolidated into Lot 9.01. The judge concluded "[a]s a result of the settlement and the subsequent execution of deeds by the heirs of Kudra," that Phoenix had equitable title to Lots 18 and 19, which "is sufficient to award judgment [in] ejectment and
The judge declined to consider the deed from Herskowitz to Perlman two years later conveying the same described 150 acres "excepting ten acres of said parcel... heretofore sold and conveyed ... to Sam Schelies" as further proof that Herskowitz had not conveyed the entire 150-acre parcel to Schell, because it "was not an actual conveyance" but only security for a loan. Specifically, the judge found "[t]he fact that the Perlman deed was a security interest may have some bearing on the value of the language of the deed." The judge observed that "had the Perlman deed actually been a conveyance for property, it's likely that the issue would have been resolved at the time and I think more weight could be given to the language." The judge further found the ambiguity in the deed "should be held against Herskowitz," and "creates an obligation of the subsequent grantees to address the conflict manifest in the deed." Having failed to do so, the judge found "the chain of title created by the conveyance and reconveyance of the Perlman deed is inferior to the Schell deed."
The judge thus found that Herskowitz effectively conveyed the entire 150 acres described in the metes and bounds description to Schell, notwithstanding "his probable intent to convey only ten acres." He also found the deed, recorded in 1910 in Burlington County, almost twenty years after Little Egg Harbor was made part of Ocean County, "was sufficient to provide notice of all subsequent grantees," and that "[t]o disregard the Schell deed would [be] to work an injustice on the system." Although Phoenix could locate no record of any further conveyance of any part of the 150 acres from Schell, nor the record of his death nor any will, and Phoenix's genealogist initially identified other individuals as heirs of Schell, the judge pronounced himself satisfied "that Phoenix sufficiently proved chain of title through the Schell heirs."
The judge also concluded the State's chain of title as to Property VII "lacked sufficient probable evidence." The judge was not satisfied the State had presented "sufficient proof" that "its grantors were, in fact, descendants of the heirs of Herskowitz." The judge noted the evidence presented by the State "relied on surnames and the recitals in the deeds." Although conceding such would be "sufficient in many cases, this is not sufficient in the case given over 63 years of a gap between conveyances out of Wolf Herskowitz, who was, at best, a remote grantor." The judge concluded "[t]his failure of proof is also sufficient to call into question [the State's] chain of title."
The judge accordingly entered final judgment in Phoenix's favor as to Properties IV (Block 3, Lot 18), V (Block 3, Lot 19) and VII (Block 4, Lot 13), declaring Phoenix the owner of fee simple title to those parcels, voided the State's deeds and ejected it from the premises. The judge thereafter entered default judgment as to those defendants in the caption who failed to appear in the action and dismissed without prejudice Phoenix's claims against its
The Parties' Arguments on Appeal
On appeal, the State renews the arguments it made to the trial court that Phoenix's campaign to undermine the State's recorded deeds to these "ecologically rare and irreplaceable lands" by exploiting defects in its chains of title discovered by going back to the original grants from the Council of Proprietors and searching forward, ignoring assessed owners and decades-old tax sale judgments and instead taking omnibus quitclaim deeds from the living heirs of long-dead record owners, surreptitiously wiping the State off the municipal tax map in the process, constitutes heir hunting, exceeds all bounds of reasonable commercial practice and is void as against public policy under well-established law. Phoenix counters that as the trial court found, the State "advocates for a `policy' that its public objectives relieve it of proving that it purchased the properties from the true owners."
The State responds by asserting the trial court accepted Phoenix's mischaracterization of the State's argument. It claims it is not seeking "some kind of special status for public policy reasons," as the trial court found, "but instead asks the court to examine whether Phoenix's attempt to usurp [the State's] title is permissible given past precedent and potential future consequences." Phoenix counters, arguing the prohibition against heir hunting "
Although we agree that Phoenix's actions here do not fit neatly into the category of heir hunting, because it did not deceive the heirs from whom it took quitclaim deeds and paid them, in most instances, more than nominal consideration, we have no hesitation in holding its conduct was unconscionable and clearly violated public policy, thereby barring it from any remedy in a court of equity.
We begin our analysis by noting our agreement with Judge Buczynski's assessment that neither the Legislature nor "the chancellors who have ruled in the past could have quite contemplated the evolution of a case" like this one. Phoenix's assault on the State's title here is nothing short of extraordinary. Fully aware of the State's properly recorded deeds and not having any interest of its own in any of the State's seven parcels, Denise and Phoenix spent the better part of two decades and over $1 million to undermine the State's titles based on the theory of its searcher, Gene Sharkey, "that it was his job to cut through" the established record titles "as he believed everybody was directed by
After "years and years" of searching "[a]ll 8,000 acres" of the Isaiah Adams tract including its "26 or something exceptions" as well as the still earlier Cranmer tract, under the banner that "[t]he paramount chain ruled," Denise claimed Sharkey "was first to cross the post in New Jersey." As Denise explained Sharkey's philosophy: "You had the paramount chain and you were the first to file, you own the property."
Sharkey died before he could be deposed in this case. Neither of the title experts who appeared for the parties did any searching of these titles. Both merely reviewed the work Sharkey performed, undertaking only isolated research tasks in advance of trial. Accordingly, there is
Armed with what Sharkey deemed the "paramount" title for each of the State's parcels, Denise and Phoenix deployed their self-trained genealogist to hunt down the heirs. Only those families who had been involved in prior title disputes in the Pinelands, the Eichbaum and Cox clan and the Kudras, had any idea they may have inherited an interest in these lands. In negotiating the purchase of those interests, Phoenix's lawyer testified at deposition he couldn't recall whether he mentioned to any of the heirs that the titles to these lands were then in the State, which had purchased them with federal and State funds for the purpose of preserving them intact for future generations.
Omnibus quitclaim deeds in hand, Denise and Phoenix recorded them in derogation of the State's record title. Then in the most astonishing move, they presented the tax assessor of Little Egg Harbor with their new deeds and searches, without any notice to the State, and asked that the tax bills be sent to them.
The tax assessor, without any idea of whether the deeds were valid but knowing the properties would "becom[e] taxable," made Denise the assessed owner of each of the State's seven Properties on the Township's assessment list and removed the legend "exempt — NJDEP" from each of the parcels on the Little Egg Harbor tax map. Indeed, because Denise at that time staked his title to Properties IV and V on tax sale certificates issued by Bass River and had taken quitclaim deeds to Property VII from the wrong heirs, he had himself made the assessed owner of three of the State's seven Properties with no colorable claim of title at all.
Phoenix then took its final steps to annex the State's lands, without filing a complaint in any court and without any notice to the State whatsoever. Telling its surveyor, Schweppenheiser, to ignore the interior borders of the State's parcels because it was "buying all those properties," Phoenix had him survey the outbound boundaries of the State's seven Properties and create a new survey map showing all but two of them as simply part of the same parcel as Phoenix's sand mine. Consolidating the State's parcels with its own in a deed designed for the purpose and armed with Schweppenheiser's new survey, Phoenix applied to Little Egg Harbor for a new lot and block designation. In 2005, Little Egg Harbor revised its tax map to erase the State's separate parcels, incorporating them into a new Block 3, Lot 9.01, assessed to Phoenix.
When the State deposed Schweppenheiser, it asked whether he would "have needed to denote that there was a potential discrepancy of ownership with some of those lots," had Phoenix advised him it had acquired hostile interests in the State's parcels without the State's knowledge and was surveying the outbound for a lot consolidation in anticipation of a quiet title
There is, of course, a very good reason such a scheme "would sound like fraud." As the State's expert surveyor, Barry Jones, testified in explaining why he also would not have performed the survey under those conditions, "You can't combine lands that are owned by two different entities. It has to be the same common owner... to combine them."
Although long quoted, the equitable maxim that "[a] suitor in equity must come into court with clean hands,"
"[W]hile `equity does not demand that its suitors shall have led blameless lives,'.... it does require that they shall have acted fairly and without fraud or deceit as to the controversy in issue."
The maxim is based on public policy,
The State argues Phoenix's "heir hunting" undermines that stability and is against public policy. Phoenix denies it was heir hunting. It claims it was simply "an adjacent owner of property looking to acquire more property for its business." Phoenix further claims "[t]he prohibition against heir-hunting is not some catch-all public policy doctrine" and "was never intended to protect `a competing claimant,' such as the [State], that seeks to divest the true owners of their title and constitutional rights." Phoenix claims it is the party upholding the recording system by insisting that property be acquired from "the true owners." We reject Phoenix's claims as without merit.
Chief Justice Weintraub attempted to capture the essence of public policy, "the ultimate source of justice," in
Critically, the Chief Justice underscored that when a party's course of conduct is "shocking to the average man's conception of justice, such course of conduct must be held to be obviously contrary to public policy, even though such policy has never been so written in the bond, whether it be Constitution, statute, or decree of court."
Few of our citizens, even those having read
Because there is no marketable title statute
The point is that the threat to the stability of the recording system posed by Phoenix's actions is real, not imagined, and not limited to land titles in the Pinelands. The State engaged reputable title companies to insure good title to each of the seven parcels and had each surveyed before purchasing. All the purchases were by bargain and sale deed with covenants against grantor's acts and title insurance was in place for all but Property I, for which Department records reflect a title commitment but not a title policy. The State recorded its deeds promptly after purchase. Yet none of those things deterred Phoenix or spared the State from having its holdings wiped off the face of the municipal tax map and having to defend this challenge to its title based on hundred-year-old deeds and an alleged historic mapping error.
New Jersey courts have long deplored the machinations of heir hunters and title raiders, who seek "technical flaws in title in order to upset existing equities and clearly vested rights."
The first reference to heir hunting in New Jersey was by Judge Jayne, who described it as a "racket" in which unscrupulous agents reviewed probate records for the purpose of "assisting" non-resident heirs in obtaining their inheritances.
Our Supreme Court extended the concept of heir hunting beyond probate proceedings in
Woodbridge initiated a second tax foreclosure, N.J.S.A. 54:5-86.2, and served notice
In a subsequent quiet title action by the homeowners, consolidated with Hudson and Altomare's suit for possession and mesne profits, the trial court ordered the homeowners to pay Hudson $19,555.11 to purchase the property on which their houses stood, that being the value of the land without improvements, plus mesne profits of $2,856.91.
Writing for the Court, Chief Justice Weintraub made clear
Acknowledging there was no precedent precisely on point, beyond "the established hostility toward so-called `heir-hunting'" expressed in
The Court held that Hudson and Altomare having acquired the interest of the Weintraub heirs "under `circumstances which render it unconscientious for the holder of the legal title to retain and enjoy the beneficial interest, equity impresses a constructive trust on the property thus acquired in favor of the one who is truly and equitably entitled to the same.'"
O & Y acquired the property at issue in that case, an approximately forty-four-acre parcel in Old Bridge, in four separate conveyances as part of a much larger 2,600-acre tract it purchased for development. In the course of searching title on a nearby property, Continental learned of a defect in O & Y's title, specifically, an heir omitted
Continental and O & Y filed cross-complaints to quiet title to the property. Relying on
The Supreme Court, although noting the quiet title judgment obtained by O & Y's predecessor in title would arguably be invulnerable to Continental's attack twenty-six years later, did not decide the case on that basis as neither we nor the trial court had addressed the issue.
Acknowledging that O & Y's predecessor's lawyer may have erred in omitting to foreclose all interests in the prior quiet title action twenty-six years before, the Court repeated what it said in
In addition to erroneously claiming the prohibition against heir hunting is limited to tax sale proceedings, Phoenix also claims the
Although the reported heir hunter cases have often, although not always,
The tax sale cases actually present competing public policy considerations. On the one hand is the need to encourage tax sale foreclosures in order to assist municipalities in their efforts to collect delinquent real property taxes.
The Court, however, has declined to permit tax sale certificate buyers to invoke
The Court in
This case, of course, is not a tax sale proceeding, and the heirs from whom Phoenix acquired quitclaim deeds were not desperate property owners facing tax foreclosure. Most, like the Orlov heirs had no idea their remote ancestor had ever held title to one of the State's seven Properties. Although Phoenix casts itself and the State as "competing claimants," nothing could be further from the truth. The State was not competing with Phoenix to obtain title to these Properties as the buyers of tax sale certificates compete with third-party investors. The State owned these Properties; it already had title.
Like the householders in
Likewise, the record title holders are not similarly situated to the "commercial investors," who purchase tax sale certificates in the general pursuit of "large profits upon small investments and who may fairly be treated as acting at their peril."
The public policy at issue in quiet title cases such as
There is no disputing that Phoenix, a stranger to the title having no interest of its own in any of these seven Properties, sought out "technical flaws" in the State's title "in order to upset existing equities and clearly vested rights."
Because Phoenix researched the State's titles, ignored its recorded deeds and surreptitiously acquired hostile interests from the heirs of long-dead record owners for its own purpose of undermining the State's title, thereby interfering with the State's vested rights to these seven Properties, its conduct is aptly characterized as heir hunting or title raiding, without regard to the amounts it paid the heirs to acquire those interests. We accordingly reject its argument that the
We also find it of no moment that Phoenix acquired those interests for the purpose of expanding its sand and gravel operation instead of for opportunistic resale to the owner as the heir hunters in
Likewise, we reject the trial court's finding that because Phoenix owned property near the State's parcels it had "a bona fide interest," in becoming the owner of the State's preserved lands, and thus its conduct "cannot be characterized as exploitive," (quoting
The trial court permitted Simon to intervene but denied her the right to redeem the plaintiff's certificate because she paid only "nominal consideration for the deed at a time when she knew plaintiff was about to commence foreclosure." In the trial court's view, that was a violation of the spirit, if not the letter, of N.J.S.A. 54:5-89.1, which forbids redemption by an unrelated party who acquired its interest for nominal consideration after the filing of the foreclosure complaint.
We found that regardless of whether Simon knew the plaintiff was about to file his complaint, "she was not an intruder looking for a way to exploit the work of others' by perusing the daily lis pendens filings," but instead was simply another investor attempting, like the plaintiff, to acquire the title to both lots.
We wrote in
Simply stated, the trial court was led into error by Phoenix's invocation of tax foreclosure concepts, inapplicable here, to excuse its nefarious conduct in working to undermine an adjoining landowner's title to its lands in order to annex that neighbor's property. Those inapposite arguments were intended to obscure what is otherwise clear — that Denise and Phoenix were legal strangers to the title having no interest in any of the State's seven parcels, who purchased the fractional interests
As we have stressed throughout this opinion, Phoenix held no interest in any of the State's seven Properties when it began its quest to undermine the State's title for the purpose of annexing the State's lands. That the State had properly recorded deeds to each of the seven parcels was no deterrent to Denise and Phoenix based on the theory of their searcher, Sharkey, "that it was his job to cut through" the established record titles "as he believed everybody was directed by
There are two chancery court opinions in
The defendants urged the court to dismiss the action on several different grounds, including that the injuries alleged in the complaint, if any existed, were only to the private interests of certain individuals and not to the public at large.
Judge Wood disagreed the complaint or the Attorney General's authority could be viewed so narrowly. He explained that
Burgess attempted to obtain title to the entire 4,662.89 acre Adams tract through use of "a `wild' or `thin air' deed," that is "a written instrument, in the form of a deed, acknowledged and recorded" but executed by the named grantor knowing he "has absolutely no title of any kind to the premises described therein."
Tuthill acknowledged he never had any interest in the Adams tract. He testified at trial that Burgess explained "that this was land that was lying for years on the tax rolls" assessed to "unknown owners" and on which nobody had paid taxes for "[p]erhaps a hundred years."
Tuthill explained that "the chain of title then becoming established," the grantee "would go before the courts [in a quiet title action] and have their blessing. Everybody... with an interest would be notified, served properly. They'd have their day in Court. If they wanted to come forth, they could do so."
The Attorney General urged that the Tuthill deed be stricken as a fraud on the recording system.
Two chains of title emanated out of the Tuthill deed. One chain consisting of the 3,400 acres of the southwest portion of the Adams tract, after having been "sanitized" through quiet title and tax sale actions, ended in 2,200 acres being vested in Great Notch Development Corporation and 1,200 acres being vested in Robert Kaufman. A second "unsanitized" chain for the remaining 1,200 acres, including those lands conveyed to Meyer Beyer, ended in K & D Land Trust.
Judge Wells declared the Tuthill deed, and the deeds given by his grantee, Pinelands Development Corporation, re-conveying the property were void and of no effect and had them stricken from the record.
Judge Wells thus concluded that Great Notch was "entitled to rely on the record," noting that holding "comports with the policy" of not disturbing titles to real estate.
Although Great Notch and Kaufman were not divested of title, the judge concluded that Burgess and Kirkman were unjustly enriched.
Indeed, mindful of the consistent direction of our Supreme Court that judges are to decide questions of title "in the way that will best support and maintain the integrity of the recording system,"
Plotting and re-surveying the original grants from the Proprietors, searching the titles forward from those grants, ignoring assessed owners and decades'-old tax sale judgments in the process, and taking omnibus quitclaim deeds from the living heirs of long-dead record owners in the hope of establishing "a paramount chain" of title for the purpose of ousting the record title holder in peaceful possession, as Phoenix did here, is simply anathema to the settled laws of conveyancing. New Jersey does not subscribe to the theory attributed to Sharkey and championed by Denise and Phoenix that the "first to cross the post" with
Again, we cannot stress enough that Phoenix possessed no interest whatsoever in any of the State's seven Properties when it began its quest to cloud and undermine the State's title for the purpose of annexing its lands. This is not, as Phoenix urged and the trial court accepted, simply "a dispute over paramount title" — as if the parties were arguing over ownership of the land along their adjoining boundary traced to a common grantor.
Phoenix is an interloper, a stranger to the State's titles, who launched an unprecedented attack on the State's ownership of its lands based on a novel theory born, apparently, from a misapprehension of the holding in
Permitting an attack like this one by a complete stranger to title would make it impossible for any property owner anywhere "to purchase and hold title to lands within the State with confidence."
If title can be acquired by an interloper with the time and money to search the grants from the Proprietors for defects based on such "very remote and improbable contingencies," no landowner could ever be sure his title was safe.
Our Supreme Court has provided clear direction in pronouncing that "[g]enerally speaking, and absent any unusual equity, a court should decide a question of title such as this in the way that will best support and maintain the integrity of the recording system."
Phoenix's claim that it is upholding the recording system by insisting that title be acquired from the "true owners" is nothing more than doublespeak. Phoenix is a title raider whose unconscionable conduct in attempting to annex the State's lands should have barred it from the equitable relief it needed from the chancery court to consummate its scheme. That the reported heir hunting cases do not provide "precedent precisely in point" is no barrier to our declaring Phoenix's actions against the public policy embodied in the State's recording laws.
The Court has instructed that "[i]n the exercise of their common-law jurisdiction, courts should seek to effectuate sound public policy and mold the law to embody the societal values that are exemplified by such public policy."
Having declared Phoenix's attempted annexation of the State's lands as violative of public policy, we turn to the issue of remedy. To the extent that Phoenix has acquired "title" to any of the State's seven parcels, we have no doubt it acquired it under "circumstances which render it unconscientious for the holder of the legal title to retain and enjoy the beneficial interest."
Because the most Phoenix can claim under the
The Law of Quia Timet and Ejectment
A claim for ejectment is similar in both aspects. The claim is typically "brought by one out of possession of land against one who either is in possession thereof or who makes claim thereto, if the land be vacant."
It remains, however, that the plaintiff in ejectment "has the burden of establishing his title, and if he fails to establish a good paper title the judgment must go against him."
We now apply those standards to the seven Properties at issue.
Property I (Block 2, Lot 11); Property II (Block 4, Lot 8); and Property III (Block 4, Lot 8A): the Bodine Tract
As previously noted, the State and Phoenix both trace their title to these
The trial court entered partial summary judgment to Phoenix on its
As already noted, Phoenix's failure to produce the original 1861 deed from Job and Eliza Corlis precluded the court from considering the genuineness of the grantors' signatures on the document, making the test proffered by Phoenix self-serving,
An 1820 supplement to the Conveyancing Act of 1799 made every deed executed after January 1, 1821,
The Court of Errors and Appeals explained the effect of a deed recorded after fifteen days on a subsequent purchaser in
The 1861 Corlis deed was not recorded within fifteen days, but fourteen years after its execution, presumably by Bodine's administrators who located it among his papers after his death.
We do not suggest by our comments that the 1861 Corlis deed was either forged or without priority over the 1914 deeds from the Corlis heirs to Vail when those deeds were recorded. Although the failure to record the 1861 Corlis deed within the fifteen days mandated by statute would have rendered it void had the Corlises conveyed to a third party without notice, even after its recording in 1875, per
Instead, our discussion underscores that attempting to interpret and give effect to deeds evidencing conveyances made over a hundred years ago is often very difficult, involving unfamiliar laws and customs of conveyancing in a world in which copy machines, global positioning systems and paved highways were non-existent. The point is that it may not be enough for the proponent of such an old deed seeking to upend a competing chain of title in place for over one hundred years to simply rely on a presumption of validity of recording and the absence of any proof of forgery, particularly where the proponent's burden is to establish his title "free from all reasonable doubt" and that it appear "clearly against conscience that [his opponent's] instrument should be permitted to remain uncanceled."
The trial court, relying on that presumption of validity and absence of proof of forgery, ruled for Phoenix reasoning that the Corlises, having conveyed the property back to Bodine, "had nothing to convey" or leave to their children, citing
As the report of the State's title expert expounded, Bodine, identified as a merchant, living in what is now Waretown, died intestate on March 8, 1874. The estate was inventoried and subsequently declared insolvent the following December. The 1861 Corlis to Bodine deed was recorded six months later in May 1875. Five months after that, the administrators listed seventeen lots for sale, including the Bodine homestead where his widow Cornelia lived, but did not include the Bodine tract as an asset of the estate in the real property inventory. Nor was the property included
Job Corlis, identified as a farmer in national censuses from 1850 through 1880, died intestate in August 1892, leaving his wife Eliza and three children. Eliza died five years later. No record of their estates has been discovered. Grabas documented with reference to the 1872 Beers Atlas that the Bodine tract in Warren Grove, then known as Corlisstown, was located close by Job Corlis' homestead. The tax records for Little Egg Harbor from 1895, the earliest date available, list Job Corlis; and from 1910 through 1917 he is described as the assessed owner of 300 acres of woodland in Warren Grove. Neither Bodine nor any of his heirs appears in the Little Egg Harbor tax records as the assessed owner of the Bodine tract. In 1914, Corlis' surviving children, their spouses and the children of a deceased daughter conveyed Properties I, II and III to Frederick Vail in two deeds, describing the approximately 80-acre tract in the same manner as the prior deeds. All three properties have been conveyed multiple times since, and there are tax sale judgments, which appear regular on their face, in the chains of title to two of them.
Having reviewed those facts, none of which is disputed, we cannot conclude that Phoenix carried its burden to establish its title to Properties I, II and III "free from all reasonable doubt," or that conscience requires the cancellation of the State's deeds.
Indeed, it is precisely those circumstances — the discovery of the 1861 deed after Bodine's death, presumably by his administrators, who recorded it during the probate of Bodine's estate, fourteen years after its making, yet did not include the property in the final accounting of the claims and assets of his insolvent estate and never conveyed it; the failure of Bodine's widow or any of their four children, or their children, to convey it; and that it was conveyed by the Corlis children more than fifteen years after the deaths of their parents, at a time when three of Bodine's four children were still living — that raise doubt as to the validity of the 1861 Corlis to Bodine deed.
Stated differently, simply too much time has passed to allow anyone to say with confidence whether the 1861 deed from Corlis to Bodine was effective to transfer the Bodine tract back to Bodine.
"Great delay is a great bar in equity."
The long delay by Denise and Phoenix and their predecessors in title in asserting a claim to the Bodine tract bars relief against the State in
Because Phoenix has not shown the title it acquired from the Bodine heirs to be "free from all reasonable doubt," much less that conscience requires the cancellation of the State's deeds under the circumstances,
Property IV (Block 3, Lot 18) and Property V (Block 3, Lot 19)
Properties IV and V were originally part of the 4,662.89-acre tract (8,525.80 acres less exceptions) the West
The State traces its title to Property IV to an 1894 deed by Beyer and his wife, Mathilda, to Sam and Paulina Halpern for a fifty-acre "corridor lot" running along the easterly line of the Adams tract. The Halperns conveyed the same land two months later to Annie and Harris Saperstein. In 1896, the Sapersteins conveyed the property to Hyman Rosensohn, who conveyed twenty-six acres to Bertha Boehm in 1897 by deed recorded in Burlington County, subsequently recorded in Ocean County in 1970. Boehm, or her heirs, apparently failed to pay taxes on the property, by then identified as Block 3, Lot 18, which resulted in a tax sale foreclosure judgment in 1978 in favor of Elizabeth Anne Merring and American National Bank and Trust, co-executors of the Estate of Herbert L. Pickell. The State acquired Block 3, Lot 18 from Pickell's estate in 1994. The State's chain of title to Property V is identical to that of its chain of title to Property VII, discussed
Phoenix induced the Little Egg Harbor tax assessor to change the assessed owner of Properties IV and V from the State to Phoenix, consolidated those parcels with other lands belonging to Phoenix, and filed this action to oust the State from possession of those properties based on a 2000 deed to Denise from Robert Kaufman, individually and as trustee of K&D Land Trust. As Phoenix's title expert, Apell, explained in his initial report in this action, Phoenix's claim to Properties IV and V was based on the historic mapping error its surveyor, Schweppenheiser, claims to have discovered whereby the easterly line of Adams was actually east of where it was believed to have been, thereby placing Properties IV and V not in the Beyer "corridor" but within the Fischer tract, which tract Kaufman allegedly acquired in a Bass River tax sale in 1971 and conveyed to Denise by deed in 2000. After the State's title expert pointed out that regardless of any mapping error, Kaufman could not have acquired title to lands lying in Little Egg Harbor based on tax sale certificates issued by Bass River, Phoenix developed a new basis for its claim to title to Properties IV and V.
Conceding "it was a mistake" for him to have "ascribe[d] title to [Properties IV and V] to the Bass River tax foreclosure," Apell claimed Phoenix's title actually rested on its acquisition of "all property owned by George Kudra and his company Kupire Corp., in Little Egg Harbor via a deed and a settlement agreement with ... Phoenix." Specifically, Phoenix now traces its title from Beyer's 1894 deed to Fischer through a series of a dozen mesne conveyances to a May 23, 1974 deed from Burlington Company Investment Corp. to "George Kudra, of 999 South Broad Street, [Trenton] as a trustee according to a deed of trust given on even date herewith," recorded in Ocean County on July 19, 1974. The deed states the land is located in Bass River in Burlington County, and the metes and bounds describe the Fischer tract, which, because it pre-dated Schweppenheiser's survey, was not then understood to include Property IV or V. Phoenix took title from Kupire, without a deed from Kudra to Kupire and without the deed of trust referenced in the 1974 deed into Kudra.
Block 3, Lot 9.01 on the 2005 Little Egg Harbor tax map is Phoenix's consolidated lot following its annexation of the State's lands.
That settlement agreement was signed on Kudra's side by his court appointed conservator, Steven P. Rotella; Kudra's wife, Kathryn M. Kudra, and four of the Kudras' six children, Kathleen Kudra, Ireen Kudra-Miller, Karyn Coyne, and Tara Kudra.
In 2015, ten years after that settlement and more than three years into this case, and following Phoenix's abandonment of its claim of title to Properties IV and V through Kaufman, it demanded the four surviving Kudra children sign quitclaim deeds conveying to Phoenix the lands described in Schweppenheiser's outbound survey of Block 3, Lot 9.01, formerly known as Block 3, Lots 8, 9, 11, 12, 13, 14, 15, 16, 17 and 18 [Property IV], and Block 4, Lots 5, 6, 7, 8 [Property II], 8.01 [Property III], 9, 10, 11 [Property VI], part of 12 and part of 14 and also including former Lot 19, Block 3 [Property V] on the Little Egg Harbor tax maps.
Kudra-Miller testified at deposition that she had never heard of the Fischer tract and believed her father's cranberry farm, which consisted of "thousands of acres" was located in Bass River in Burlington County, not in Little Egg Harbor in Ocean County. At trial, she testified she believed some of the farm may have been located in Little Egg Harbor based on some dealings her father had with Phoenix, but she "had no idea where." While she confirmed her father was the George Kudra in the 1974 deed from Burlington Company Investment Corp. based on the office address listed on the deed, she had no knowledge of the trust referenced therein. She testified she and her sister, Karyn Coyne, only
As already noted, the State's title expert testified that, leaving aside the absence of any deed into Kupire, Phoenix could not establish its title to Properties IV and V because its failure to locate the trust instrument through which Kudra took title created a hole in its chain that Kudra's daughters, Kudra-Miller and Coyne, could not fill as they were without authority to convey property their father had taken in his capacity as a trustee. Apell, Phoenix's expert, agreed there was a hole in Phoenix's chain "until we found the settlement agreement, which clearly indicates that Kudra and Kupire and his group and relatives entered into the settlement agreement," which "clearly indicated that Phoenix Pinelands was to get the Kupire property in Ocean County."
Pressed on how the settlement agreement cured the absence of the trust, Apell testified he had "seen many, many trusts and corporations that do not have information that's recited in the deed recorded somewhere." In such cases "[n]ormally what you do" in the case of a corporation is "you get all of the heirs of all the board members, if you can find them.... And the same thing would apply to a trust." Apell was forced to concede, however, that Kudra's "authority to convey this property would have been outlined in the trust agreement," and without it one cannot know whether Kudra actually had authority to convey it.
Agreeing with Apell, the trial judge found "as a trustee, Kudra heirs were beneficiaries of title and it had passed to them." He held that Phoenix obtaining title to Property IV and V from the heirs of Kudra "would be the appropriate course... consistent with
Having reviewed the record, we find the trial court clearly erred in finding Phoenix established legal or equitable title to Properties IV and V. This was not a quiet title action in which Phoenix could sit back and rely on the weakness in the State's title it claimed existed as a result of the historic mapping error alleged by Schweppenheiser.
Phoenix conceded there was a link missing in its chain of title from Kudra, who took the 1974 deed from Burlington Company Investment Corp. "as a trustee according to a deed of trust given on even date herewith." Phoenix relies on the 2005 deed to Denise from Kupire to support its claim to title. But there is no recorded deed from Kudra to Kupire. Moreover, without the deed of trust, there is no way of knowing, as Phoenix's expert was forced to concede, whether the trust granted Kudra the power to convey the property to Kupire, or anyone else. While Phoenix's expert analogized the situation to one involving a defunct corporation, where statute permitted surviving directors to act as trustees to convey corporate property in the process of winding up its affairs,
In asserting the court should overlook the hole in its chain of title, Phoenix overlooks it created the gap by its own acts. Denise ostensibly took title from Kupire, which never appears to have held title to Properties IV or V. Neither the settlement agreement nor the 2005 deed from Kupire to Denise represented otherwise. Indeed, the settlement agreement did not involve Properties IV or V in any fashion. Phoenix presented absolutely no proof at trial that Kupire possessed title to Properties IV and V in 2005 or at any other time. Certainly a reasonable title search in 2005 would have readily revealed Kupire had no title to either Property when it issued its quitclaim deed to Denise.
As the settlement agreement did not address Properties IV or V, it is difficult to understand why the trial court found it conferred equitable title on Denise. Our courts have long held that on execution of "an executory agreement for the sale of lands, the purchaser becomes the equitable owner of the lands."
Although Apell testified the settlement agreement "indicated that Phoenix Pinelands was to get the Kupire property in Ocean County," Phoenix now claims the settlement agreement also entitled it to any lands the Kudras owned in Little Egg Harbor. But the Kudras and Pine Island only agreed to "a release of all claims, encumbrances and rights they may hold or be entitled to assert against the Excluded Property," defined, not as all lands in Little Egg Harbor, but as "[a]ll right, title and interest of Kupire Corporation" in any lands in Little Egg Harbor, and to "execute such other and further documents as Phoenix may reasonably require in connection with conveyance of the Excluded Property." The "Excluded Property" is plainly limited to Kupire's property in Little Egg Harbor. Further, Phoenix and
Moreover, even if, as Phoenix asserts, the settlement agreement also evidenced an agreement by the Kudras to release any rights they had to any property in Little Egg Harbor, not just to any claims or rights they might have to Kupire's property there, Phoenix would have to establish the Kudras possessed title to Properties IV and V with the power to convey it in order to establish a claim of equitable title. "Specific performance of a contract to convey realty ... will not be granted where the vendor shows a complete failure of title."
Significantly, when Phoenix took its deed from Kupire in 2005, Kudra was still living and available to produce the trust under which he took title to the property in 1974 or explain its terms and identify its beneficiaries. Relief could have been sought from the chancery court at that time, if necessary, to establish Kudra's right to convey or otherwise relinquish title to the property.
Because Phoenix has failed to establish its title to Properties IV and V, the State remains in possession, free from any claim by Denise or Phoenix.
First, Phoenix does not dispute that the State presented an unbroken chain of title to Properties IV and V back to the Proprietors. Phoenix's attack on the State's title, and the trial judge's rationale for declaring the State lacked title to Property IV and Property V, the latter of which we will address further in our discussion of Property VII, rested entirely on the mapping error allegedly discovered by Schweppenheiser nearly ten years after the State purchased Properties IV and V.
The State purchased Property IV, a seven-and-a-half-acre parcel, in 1994 from the executors of the Estate of Herbert Pickell, who had obtained the Property in a 1978 tax sale judgment foreclosing the right of redemption of the assessed owner, Bertha Boehm, and all those claiming under her, for failure to pay the taxes on the parcel designated as Block 3, Lot 18 on the Little Egg Harbor tax map. Phoenix claims the interests of its predecessors in title were not extinguished by that foreclosure because the certificate holder, Pickell, failed to name as defendants those persons in the Fischer chain that the mapping error might suggest had an interest in the property.
Further, in asserting the Pickell foreclosure failed to cut-off the interests of those in the Fischer chain of title, Phoenix did not address, and the trial court did not consider, the effect of an after-discovered error in a municipal tax map on a tax title, which is considered "a new and independent grant from the sovereign" that is "established upon the assessment," and thus "[i]n the quantity and character of the property conveyed ... embraces nothing more or different than did the basic assessment."
Second, in declining to consider the issue, we are also mindful of the implications
Having considered all these matters, we think it best we withhold any endorsement of Schweppenheiser's mapping error that it might be litigated in the future, if necessary, by parties having a real interest in the controversy.
Property VI (Block 4, Lot 11)
Property VI was originally part of the 4,662.89 acre Adams tract, and a part of the easterly 2,797.74 acre portion conveyed to Meyer Beyer in 1894. The Property is also one of the several "corridor lots" the Beyers created along the easterly line of the Adams tract, although not one affected by the alleged mapping error discovered by Schweppenheiser. The State purchased Properties V, VI and VII in 1994 for $95,388 by one deed from Continental Searchers and the Estate of Wolf Herskowitz, describing each of the three tracts by metes and bounds as well as Block and Lot designations. Specifically, Tract I of that deed describes Property V, Block 3, Lot 19 on Little Egg Harbor's tax map before its alteration at Phoenix's behest, a lot of less than half an acre. Tract II is Property VI, a sixty-six acre lot designated as Block 4, Lot 11 on that tax map; and Tract III, an almost fifty-three acre lot, is Property VII, designated as Block 4, Lot 13. In addition to the deed, the State received an affidavit of title from Williams Gibbs, the trustee of the Herskowitz Estate, attesting to the Estate's ownership of all three tracts.
Continental Searchers, Inc. obtained its interest in Properties V, VI and VII by way of a 1983 final judgment by consent against the Herskowitz Estate awarding Continental Searchers fifty percent of the same property described in the Beyer to Milkenstein and Milkenstein to Herskowitz deeds to be held as tenants in common. Ten years later, Continental Searchers and the Estate of Herskowitz took a quitclaim deed from Robert Kaufman, individually and as Trustee of K&D Land Trust for the same property described in the Continental Searchers 1983 final judgment, only excepting that portion designated as Block 4, Lot 12 in Little Egg Harbor.
After suit was filed, however, the State was forced to concede that notwithstanding the explicit conveyance of Block 4, Lot 11 (Property VI) in both the Kaufman and Continental Searchers/Estate of Herskowitz deeds, neither grantor could establish title to Property VI, and thus the State's title to that Property could not be traced further than those two deeds. Simply stated, the metes and bounds descriptions in the Beyer to Milkenstein and Milkenstein to Herskowitz deeds, while sound as to Properties VII and V,
Phoenix traces its title to an 1894 deed for a 100-acre "corridor lot" from the Beyers to Berman Herrman and Leon Kolmer, recorded in Burlington County after Little Egg Harbor's transfer to Ocean County. In 1908, Herrman, Kolmer and their wives conveyed the same property to George Orlov in a deed likewise mis-recorded in Burlington County. Six months later, in a deed also mis-recorded in Burlington County in February 1911, Orlov and his wife conveyed "the most northerly strip" of the same parcel to Alexander Assuschkovitz divided into 114 lots, twenty-five feet wide by 100 feet deep. The location of the lots is not otherwise identified. Orlov apparently made no further conveyances of the property.
In 2000, well aware of the State's recorded deed to Block 4, Lot 11 (Property VI), Denise began a search for Orlov heirs, none of whom knew of the property, and negotiated to purchase their fractional interests. Phoenix represents Denise paid $65,943 for 97.5 percent of the outstanding interests of the heirs in ten deeds, the last received in 2012, after the filing of this action.
The dispute on summary judgment was whether a reasonable search would have alerted the State to the Herrman and Kolmer chain of title. Although initially agreeing with the State that Phoenix's chain of title was non-existent in Ocean County, Apell in a supplemental report noted "[u]pon further research," that the 1894 deed from Beyers to Herrman and Kolmer was recorded in Ocean County on July 6, 1971. Apell contended that "title searching custom would require a diligent title search be conducted going back to the Board of Proprietors in the records of both Ocean County and Burlington County with respect to the properties at issue located within the Isaiah Adams tract," and that doing so "would have revealed the title from which Phoenix's chain of title devolves." Grabas acknowledged a search that complete would have revealed the deeds Phoenix relied on but disputed that such a search was reasonable or customary, especially as the State's chain of title was complete in Ocean County for one hundred years when it purchased Property VI. He maintained a search to the Proprietors required complicated title research that is very difficult and prohibitively expensive.
The judge found the State "had notice of Phoenix's title through the Burlington recording," thus presumably accepting Phoenix's position that a reasonable search would have required searching the records in both Burlington and Ocean Counties back to the Council of Proprietors. As the Supreme Court observed in
We do not believe the question of what would be a reasonable search in this instance should have been decided on summary judgment. The State denied Phoenix's contention that a reasonable search required searching both counties after their separation in 1891. That position is in accord with the general rule that a mis-recorded document does not provide record notice.
The snippets of expert testimony referenced on the motion and included in the appendix are simply insufficient to allow an understanding of the search a competent searcher would deem reasonable in these circumstances. We are not provided, for example, with the experts' opinions as to whether a competent searcher undertaking a reasonable search of the title to Property VI in 1994 needed to have searched for, or would be on notice of, the 1894 Beyers to Herrman and Kolmer deed that Phoenix's expert found "[u]pon further research" was recorded in Ocean County in 1971.
We note, again, that the record makes clear that neither title expert in this case actually searched these titles. Both only reviewed the title work Sharkey compiled over more than a decade of researching these titles and those of the rest of the Adams tract. Judge Wells deemed the Adams tract, and particularly the 2,797.7-acre easterly portion conveyed to Beyer as "a title nightmare."
In that regard, we note the self-serving nature of the assertion of Phoenix's expert that "title searching custom would require a diligent title search be conducted going back to the Board of Proprietors in the records of both Ocean County and Burlington County with respect to the properties at issue located within the Isaiah Adams tract." Denise testified at deposition that he'd spent over $1 million searching these titles over the better part of twenty years. Judging from what the State paid for the properties, that would represent several times their market value. We would be loath to endorse a standard that many might deem commercially unreasonable or one that could possibly render vast swathes of the Pinelands either unmarketable or available only to those willing to spend more on searches than on the land.
Instead of basing our decision on whether a reasonable search undertaken at the time the State purchased Property VI would have revealed the roots of Phoenix's title, which we believe the record inadequate to determine, we focus on the absence of any root of title to the Property in the State's chain. A simple comparison of the property descriptions in the two deeds the State took in 1994 from Continental Searchers and the Herskowitz Estate and Kaufman with the Beyer to Milkenstein and Milkenstein to Herskowitz deeds would reveal the Beyers did not convey Block 4, Lot 11 (Property VI) to Milkenstein and he did not convey Property VI to Herskowitz.
We are satisfied the State has no title to Property VI and Phoenix established its title to that parcel free from any reasonable doubt. But Phoenix "having acquired [that] title under `circumstances which render it unconscientious for the holder of the legal title to retain and enjoy the beneficial interest, equity impresses a constructive trust on the property thus acquired in favor of the one who is truly and equitably entitled to the same.'"
Property VII (Block 4, Lot 13)
Resolving the parties' dispute over title to Property VII involves simply a legal question of the interpretation of the 1910 deed from Wolf Herskowitz to Samuel Schell, which we review de novo.
Both the State and Phoenix trace their titles to Property VII, a fifty-three-acre tract formerly known as Block 4, Lot 13 on the Little Egg Harbor tax map before Phoenix's changes, to the larger 150-acre tract located in both Bass River and Little Egg Harbor that the Beyers conveyed to Isadore Milkenstein in 1894 and Milkenstein and his wife Rosa conveyed two months later to Wolf Herskowitz. They are not only in accord on those deeds, but also agree that Herskowitz and his wife Sarah delivered a deed to Samuel Schell, dated November 1, 1908, and recorded on February 28, 1910 in Burlington County. What they disagree on is whether Herskowitz deeded the entire 150-acre parcel to Schell or only ten acres of it.
The Herskowitz to Schell deed begins by identifying the parties and the one dollar consideration, and then states it conveys "[a]ll ten acres of the 150 acres of land, situated, lying and being in the Township of Bass River, in the County of Burlington, in the State of New Jersey." The deed next immediately reiterates that the conveyance "[c]ontain[s] 10 acres of land." It goes on to explain the land conveyed is "a portion of" the 4,662.89-acre tract returned to Isaiah Adams, "more particularly described" in the survey recorded in the Surveyor General's Office in Burlington County. The deed further states the "[t]ract of ten acres includes usual allowances for highways [b]ounded and contained as follows," and then provides: "To wit: A part of this ground are the ten acres beginning at a point South 28.40 west 28 chains and 40 links
The State and Phoenix also agree that in April 1910, two months after the Schell deed was recorded, Herskowitz conveyed Property VII to his brother-in-law, Abraham Perlman, as collateral for a debt. That deed was immediately recorded in Burlington County and states that it conveys the entire 150 acres, using the same description as in the Milkenstein to Herskowitz and Herskowitz to Schell deeds, "excepting ten acres of said parcel heretofore sold and conveyed by the parties of the first part to Sam Schelies." Perlman and his wife, Pauline, the following year conveyed the 150 acres back to Herskowitz, again "excepting ten acres of said parcel or tract of land, heretofore sold and conveyed by the parties of the first part to Sam Schelies." The Perlman to Herskowitz deed is dated October 5, 1911, and was recorded in Burlington County on January 4, 1912.
Both parties' experts agreed at trial that there is no way to locate the ten acres conveyed to Schell within the larger 150-acre Milkenstein tract and thus no way of knowing whether it is contained somewhere within the fifty-three acres of Property VII.
In interpreting the deed, the trial judge looked for guidance to
The recital in the
The chancellor in
He found, however, that although the operative part of the brothers' agreement might be considered clear if standing alone, it could only be deemed ambiguous in context because so "totally foreign to the recitals."
Despite looking to
Acknowledging the Perlman deed, "arguably resolv[ed] the issue of what was probably intended to be conveyed to Schell," the court declined to give that deed any significant weight in divining the intent in the Herskowitz to Schell conveyance, because "the Perlman deed was not an actual conveyance" but only "a security interest offered as a mortgage to secure a loan from Perlman to Herskowitz."
Having reviewed the record, it is clear to us the unambiguous intent of the Herskowitz to Schell deed, subsequently reflected in the Herskowitz to Perlman deed, was to convey only ten acres to Schell, not the entire 150-acre tract, and that plainly expressed intent is controlling.
Applying those principles to this legal question, we cannot find Herskowitz deeded the entire 150-acre tract to Schell, instead of the ten acres the deed repeatedly states is all that was conveyed. The cases relied on by Apell and Phoenix, including
Here, the "contrary intent" to convey only ten acres of the 150 acres particularly described is plainly manifested in the instrument. Herskowitz deeded to Schell only ten acres of the 150-acre Milkenstein tract described in the deed; the deed says so four times. Even Sharkey agreed.
Accordingly, the trial court erred in relying on Apell's testimony that the metes and bounds description prevailed "over the more general reference to the number of acres conveyed" in the Schell deed. Although in the order of importance in conflicting deed elements, area is generally deemed less important than those parts of a metes and bounds description such as monuments, distance and direction, the Supreme Court has explained those "preferences" are only guides "and will yield to the manifest intent of the grantor if this can be ascertained."
As Phoenix has only proved its title to ten, indeterminate acres of the 150-acre Milkenstein tract in Bass River and Little Egg Harbor, which its own experts concede cannot be located on the ground, it
Because we are satisfied the State established an unbroken chain of title to Property VII, which is the same chain of title it possesses to Property V, the little lot located directly across Cervetto Road to the west of Property VII, we are also satisfied the State established its title to Property V, notwithstanding the mapping error Phoenix alleges affects that Property. Both parties' title experts opined Property V was actually part of the 150-acre Milkenstein tract that includes Property VII, meaning, as Phoenix's expert opined, "the owner of the Milkenstein tract would own both Block 4, Lot 13 [Property VII] and Block 3, Lot 19 [Property V]." Because, as Phoenix's expert explained, "[t]he Milkenstein Tract devolved as an entire tract," the State has established clear title to both Properties V and VII.
To sum up, we reverse the judgment for Phoenix divesting the State of its title to these seven Properties in the Preservation Area of the Pinelands National Reserve. We declare Denise and Phoenix's surreptitious two decade-long quest to undermine and cloud the State's title to those Properties and establish its own competing chains of title, erasing the State's parcels from the municipal tax map in the process, anathema to the principles undergirding New Jersey's land title laws and an undue interference with the State's rights to these lands, thus precluding Phoenix from all equitable relief.
We further find Phoenix did not establish title to six of the seven parcels under its theories of
We accordingly remand for entry of judgment in recordable form, declaring Denise and Phoenix have no interest in any of these seven Properties, which shall be particularly described based on the plottings performed by the State's survey expert, Barry Jones, in this matter, upon the State's tender of payment for Property VI, and adjudging the State the owner of each parcel in fee simple; the judgment to be prepared by the State. We do not retain jurisdiction.
Reversed and remanded.
The trial court permitted the heirs to redeem, and we affirmed, rejecting Wattles argument that
The Supreme Court agreed the heirs could redeem, but imposed a constructive trust in favor of Wattles on National's interest in accordance with
The case thus does not stand for the proposition that equitable title is sufficient to establish title in ejectment — but actually just the opposite. The railroad was ousted from the land to which it claimed equitable title, a decision affirmed by the State's then-highest court,