WELLS FARGO BANK, N.A. VS. GEORGE TORNEY(F-30500-14, CAMDEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R.1:36-3.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1939-15T3

WELLS FARGO BANK, N.A.,

Plaintiff-Respondent,

v.

GEORGE TORNEY,

Defendant.
______________________________

Submitted February 9, 2017 – Decided June 9, 2017

Before Judges Lihotz and Whipple.

On appeal from Superior Court of New Jersey,
Chancery Division, Camden County, Docket No.
F-30500-14.

The Law Offices of Charles M. Izzo, attorney
for appellant Edward Shuman (Charles Michael
Izzo, on the brief).

Reed Smith L.L.P., attorneys for respondent
(Henry F. Reichner, of counsel and on the
brief).

PER CURIAM
 Edward Shuman,1 the winning bidder at a Sheriff's Sale,

appeals from a November 30, 2015 order vacating the sale. Shuman

filed the motion to vacate the sale and sought the return of his

$10,000 deposit. The court vacated the Sheriff Sale but only

returned $7500 to Shuman. Shuman argues he is entitled to the

return of his full deposit. We affirm.

Plaintiff Wells Fargo Bank, N.A. (Wells Fargo) commenced a

foreclosure action against George Torney on July 25, 2014, after

Torney defaulted on his mortgage. Final judgment was entered on

July 27, 2015. Thereafter, Wells Fargo submitted its Sheriff Sale

package to the Camden County Sheriff.

The Wells Fargo package included a Short Form property

description, pursuant to N.J.S.A. 2A:61-1, in order for the Sheriff

to advertise the sale. The property description specifically

disclosed it was subject to a $94,000 first mortgage and "[a]ll

interested parties are to conduct and rely upon their own

independent investigation to ascertain whether or not any

outstanding interest remain of record and/or have priority over

the lien being foreclosed and, if so the correct amount due

thereon." The conditions of sale attached to the Short Form also

1
We note at the hearing, Edward Shuman was sworn in as Edward
Schuman; however, in his certification and papers on appeal, his
last name is spelled Shuman. We therefore have used Shuman
throughout this opinion.

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declared the property was subject to a prior mortgage. The prior

mortgage was also disclosed on the Affidavit of Consideration.

Wells Fargo advertised the sale for four consecutive weeks.

Shuman learned of the sale through the Sheriff's website,

which did not disclose the property was subject to a prior

mortgage. At the sale, the foreclosure attorney's representative

made general announcements but did not announce the property was

subject to a prior mortgage. On the printed condition of sale,

the box next to "subject to a first mortgage" was not checked.

Shuman was the winning bidder at $49,000. He tendered a $10,000

deposit for the property to the Sheriff following the sale.

According to Shuman, it was not until later the same day when

he inquired about tax liens that he learned the property was

subject to a prior mortgage. Shuman contacted Wells Fargo and

requested the sale be vacated and his deposit returned. After

Wells Fargo refused, Shuman moved before the Chancery Division to

vacate the sheriff sale and for return of his deposit as a third-

party bidder on October 20, 2015.

At oral argument, counsel for Wells Fargo argued Shuman was

not a first time purchaser at a Sheriff's Sale and was required

to do his own independent investigation prior to the sale. Shuman

should have read the advertisement and sale package submitted to

the Camden County Sheriff, which clearly stated the property was

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subject to a prior mortgage. Shuman argued he was unaware of the

prior mortgage because the condition of sale read at the sale did

not disclose the mortgage, and Wells Fargo did not fully comply

with the statutory public advertisement requirement, and he was

entitled to relief.

The judge agreed and granted Shuman's motion to vacate the

sheriff sale, but the judge found Shuman himself had fallen short

in his obligation, as a bidder, to conduct diligent inquiry. Thus,

while vacating the sale, the judge only ordered $7500 returned to

Shuman, retaining $2500 for Wells Fargo to relist the property and

pay taxes and interest on the property until another sheriff sale

was held. Shuman appealed.

Shuman argues the trial judge abused her discretion by not

refunding the full $10,000 deposit, and the remaining $2500 should

be returned to him. We disagree.

We review an order granting or denying a motion to vacate a

sheriff sale under an abuse of discretion standard. United States

v. Scurry, 193 N.J. 492, 502-03 (2008). An abuse of discretion

occurs "when a decision is 'made without a rational explanation,

inexplicably departed from established policies, or rested on an

impermissible basis.'" U.S. Nat'l Bank Ass'n v. Guillaume, 209

N.J. 449, 467-68 (2012) (quoting Iliadis v. Wal-Mart Stores, Inc.,

191 N.J. 88, 123 (2010)).

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 Pursuant to N.J.S.A. 2A:61-1, advertisements of sale must

"give notice of the time and place of the sale by public

advertisement . . . at least [three] weeks before the time

appointed for the sale." The advertisement must be posted in the

sheriff's office and at the property to be sold. N.J.S.A. 2A:61-

1. Here, the advertisement was published in the newspaper and the

Sheriff's Office, and disclosed the existence of the prior

mortgage, thereby satisfying the posting requirement of N.J.S.A.

2A:61-1. Shuman only viewed a listing on the Sheriff's website,

which did not provide any additional information besides the date,

time, and price of the sale; Shuman did not check the full printed

advertisement.

Shuman argues the conditions of sale read at the Sheriff Sale

were deficient because there was no mention of a prior mortgage,

and the trial judge should have granted full relief pursuant to

N.J.S.A. 2A:61-16, which states,

Any purchaser of real estate at any public
sale, held by any officer or person mentioned
in [N.J.S.A.] 2A:61-1 . . . shall be entitled
to be relieved from his bid if, before
delivery of the deed, he shall satisfy the
court by whose authority such sale was made
of the existence of any substantial defect in
or cloud upon the title of the real estate
sold, which would render such title
unmarketable, or of the existence of any lien
or encumbrance thereon, unless a reasonable
description of the estate or interest to be
sold, and of the defects in title and liens

5 A-1939-15T3
 or encumbrances thereon, with the approximate
amount of such liens and encumbrances, if any,
be inserted in the notices and advertisements
required by law, and in the conditions of
sale; but, if the court shall direct any lien
or encumbrance not described, and which is due
and payable, to be paid out of the proceeds
of sale, the purchaser shall not then be
relieved by reason of such lien or
encumbrance.

The statute allows "a court to relieve a purchaser at public sale

from his bid upon equitable grounds." Powell v. Giddens, 231 N.J.

Super. 49, 53 (App. Div. 1989).

While N.J.S.A. 2A:61-16 was designed to "shift the burden of

unearthing the existence and approximate amount of superior liens

from bidders to the selling mortgagee," Summit Bank v. Thiel, 325

N.J. Super. 532, 538 (App. Div. 1998), aff’d, 162 N.J. 51 (1999),

the bidder has a duty to make an independent investigation into

the property prior to the sale. The advertisement specifically

disclosed the property was subject to a mortgage, and had Shuman

made any inquiry about the property, he would have learned of the

prior mortgage. While Wells Fargo's announced conditions of sale

should have contained the same disclosure, Shuman should have made

an independent inquiry about the property prior to the sale.

"Courts of equity are not restricted to issue only known

remedies." Banach v. Cannon, 356 N.J. Super. 342, 361 (Ch. Div.

2002). Rather,

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 [e]quitable remedies are distinguished for
their flexibility, their unlimited variety,
their adaptability to circumstances, and the
natural rules which govern their use. There
is in fact no limit to their variety and
application; the court of equity has the power
of devising its remedy and shaping it so as
to fit the changing circumstances of every
case and the complex relations of all the
parties.

[Sears, Roebuck & Co. v. Camp, 124 N.J. Eq.
403, 411-12 (E. & A. 1938) (citation
omitted).]

The record demonstrates both parties shoulder responsibility:

Wells Fargo should have ensured the conditions of sale announced

at the sale stated the property was subject to a prior mortgage,

and Shuman should have conducted an independent inquiry prior to

the bidding. The judge balanced the equities and fashioned a

remedy. We discern no abuse of discretion for the trial judge to

vacate the sheriff sale and only return $7500 of Shuman's deposit.

Affirmed.

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