'Sewer Service' Sinks Another Foreclosure; Sale Resulting In $120K Home Lost For $8K Voided; Crappy Affidavit Fails To Establish 'Diligent Search'

A ruling of a panel of the New Jersey appeals court affirmed a lower court ruling kiboshing a tax foreclosure sale by reason of a crappy attempt to serve process on a homeowner who was delinquent on his real estate tax bills. A 'butchered' summary of the case follows:

1. The process server made a lousy attempt at finding the homeowner to serve him personally with the notice of a foreclosure action for unpaid real estate taxes.



2. Instead, service of process was completed by an alternative method, in which the papers were served by mailing, both by certified and by regular mail.



3. The affidavit filed by the process server to justify the use of the alternative, or substituted, method of service only contained the notation "that despite diligent effort and inquiry personal service cannot be made."



4. The lower court ruled that this notation was not sufficient to justify use of the substituted method of service, stating that affidavits of diligent inquiry typically include the dates and times of attempted personal service and the circumstances of failure. Accordingly, it voided the judgment of foreclosure.



5. In a shameless attempt to salvage the situation, the foreclosing plaintiff filed a motion for reconsideration, submitting a new affidavit from the process server. The new affidavit stated the dates, times, and circumstances of the five failed attempts to serve the homeowner personally.



6. At oral argument, the lower court commented that the new affidavit would have been sufficient to show diligent effort, but that the original deficiency of service could not be corrected after the fact.



7. The lower court confirmed its earlier ruling voiding the foreclosure judgment, and the New Jersey appeals court affirmed.

For the ruling of the appeals court, see Arianna Holding Companu v. Cummings, No. A-1420-10T1, N.J. Super. App. Div., July 11, 2011) (unpublished) (if link expires, TRY HERE).

See Opportunity To Reclaim Homes For Foreclosed Owners Victimized By "Nail & Mail" Sewer Service? for another post on how a crappy effort by a process server to serve lawsuit paperwork on a defendant can 'submarine' a plaintiff's effort to obtain a judgment.

Go here for links to court rulings involving "nail & mail" method of process-serving and the due diligence required before using this method.

(1) The appeals court affirmed the lower court ruling essentially for the reasons stated orally by the trial judge at the time of oral argument on the motions in the lower court proceeding, but saw fit to add this additional tidbit (bold text is my emphasis):

• We reject plaintiff's argument that due process and the requirements of Rule 4:4-4(b)(1)(C) for substituted service by mail are satisfied if the facts later show that the defendant actually resided at the address to which process was mailed.
  
  "`[S]ubstantial deviation from service of process rules' typically makes a judgment void." M & D Assocs. v. Mandara, 366 N.J.Super. 341, 352-53 (App. Div.) (quoting Jameson v. Great Atlantic and Pacific Tea Co., 363 N.J.Super. 419, 425 (App. Div. 2003)), certif. denied, 180 N.J. 151 (2004).
  
  The court lacks jurisdiction to enter a judgment when there is violation of the rules pertaining to mailed service of process. Sobel v. Long Island Entertainment Products, Inc., 329 N.J.Super. 285, 293 (App. Div. 2000); see also Driscoll v. Burlington-Bristol Bridge Co., 8 N.J. 433, 493 ("The requirements of the rules with respect to service of process go to the jurisdiction of the court and must be strictly complied with. Any defects . . . are fatal and leave the court without jurisdiction and its judgment void."), cert. denied, 344 U.S. 838, 73 S.Ct. 25, 97 L. Ed. 652 (1952).
  
  Moreover, our courts have for many years strictly construed the procedural requirements for obtaining a judgment of foreclosure in tax sale cases. See, e.g., State v. Landis Twp., 50 N.J.L. 374, 379 (Sup. Ct. 1888).
  
  The purpose of the rule requiring an affidavit of diligent inquiry is to assure the court that it has personal jurisdiction to enter judgment and that the defendant's right to due process has not been violated. See M & D Assocs., supra, 366 N.J. Super. at 353-54. The court must carefully scrutinize the affidavit of diligent inquiry for sufficiency of its factual averments. Id. at 353.
  
  Permitting correction of defective service of process after the fact would weaken the purpose of the rule and risk violation of due process rights of foreclosure defendants. Here, Judge Buczynski scrutinized the affidavit of diligent inquiry, together with its attachments, and he found appropriately that the original document from Guaranteed Subpoena Services was not sufficient to show diligent effort to effectuate personal service.

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One of the cases cited above, M & D Assocs. v. Mandara, 366 N.J.Super. 341 (N.J. Super. App. Div.) deserves highlighting in that, in deciding a case in the context of a tax foreclosure, it noted that a review of the affidavit of service merits hightened scrutiny in certain situations:

• We are of the view that particularly in situations like the one involved in this case, where there is substituted service, as well as a tremendous disparity between the amount due on the tax certificates and the value of the property subject to foreclosure (here approximately $4,500 versus potentially $100,000 to $200,000 for the property), careful scrutiny of the affidavit of inquiry requires the Chancery Judge to demand more than cursory inquiries or recitals not only as a matter of due process, but also of fundamental fairness. See Bron v. Weintraub, supra (42 N.J. at 93-96, 199 A.2d 625).
  
  The Chancery Judge in such foreclosure cases should be alerted when the face of the documentation indicates that a significant windfall might result if adequate scrutiny of the affidavit of inquiry is not undertaken.
  
  Here, when on the surface M & D was to receive such a windfall, it was appropriate to require an expanded inquiry of any alleged diligent inquiry. This is especially so where M & D knew that one of the owners of the Property was not residing, and had not resided with the other owner and there was no evidence of communication between them.[5]
  
  Whether this situation might have required the hiring of an investigator rather than superficial checking of phone directories[6] and tax rolls is something we leave for future cases. In any event, we note defense counsel's argument that Carmelo's address can be found in the Division of Motor Vehicle records and at the Passaic County Voter Registration Board.[7]
  
  A diligent inquiry requires more than a search with election officials for the particular town where the property was located and where coincidentally one of the individuals on the deed resided. Moreover, a mere recital that a person does not appear in the voting records (apparently erroneous in this case), should not be based on hearsay statements, but requires a certification from a custodian of documents from the Board of Election.
  
  In this information age, adequate search instruments are available by computer or other means to make searches relatively simple and inexpensive. In sum, we are satisfied that there was not a sufficient diligent inquiry under the circumstances of this case, and that service by publication was improper and rendered the judgment void as to Carmelo Mandara.