                                 NOT FOR PUBLICATION WITHOUT THE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-3057-18T3

GRAND MADISON LLC,

          Plaintiff-Appellant,

v.

BERNADETTE ROTONDA,
FRANKLIN SOCIETY FEDERAL
SAVINGS & LOAN ASSOCIATION,
n/k/a HSBC BANK, NA,
MIDLAND FUNDING LLC, and
STATE OF NEW JERSEY,

          Defendants,

and

HUNTINGTON ASSOCIATES, LLC,

     Intervenor-Respondent.
________________________________

                   Argued February 26, 2020 – Decided April 13, 2020

                   Before Judges Koblitz, Whipple and Gooden Brown.

                   On appeal from the Superior Court of New Jersey,
                   Chancery Division, Essex County, Docket No. F-
                   003270-18.
             Keith Alan Bonchi argued the cause for appellant
             (Goldenberg, Mackler, Sayegh, Mintz, Pfeffer, Bonchi
             & Gill, attorneys; Keith Alan Bonchi, of counsel and on
             the briefs; Elliot J. Almanza, on the briefs).

             Michael S. Burns argued the cause for intervenor-
             respondent (Burns & Isen, LLC, attorneys; Michael S.
             Burns, on the brief).

PER CURIAM

      In this tax lien foreclosure action, plaintiff Grand Madison LLC appeals

from the January 16, 2019 Chancery Division order staying the entry of final

judgment, permitting intervention and redemption by intervenor Huntington

Associates, LLC (Huntington), and denying plaintiff's cross-motion for a

constructive trust. Guided by Simon v. Cronecker, 189 N.J. 304 (2007) and

FWDSL & Associates, LP v. Berezansky, 452 N.J. Super. 408 (App. Div. 2017),

we affirm.

      We glean these facts from the record. As a result of the accrual of unpaid

real estate taxes, on July 6, 2011, Robert Rothman purchased tax sale certificate

no. 11-05417, encumbering property owned by Bernadette Rotonda. For the

next seven years, Rothman paid the delinquent taxes and allowed Rotonda to

continue to reside on the property. However, on February 14, 2018, Rothman

filed a tax foreclosure complaint pursuant to N.J.S.A. 54:5-86 to -87 of the Tax



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                                       2
Sale Law, N.J.S.A. 54:5-1 to -137,1 which proceeded as an uncontested

foreclosure. An Order Setting Time, Place and Amount of Redemption was

entered on May 30, 2018, fixing the redemption amount at $104,605.06, and the

last day to redeem as July 27, 2018. On August 27, 2018, Rothman assigned the

certificate to Grand Madison, an entity he controlled. On the same date, Grand

Madison moved to substitute in as plaintiff and for final judgment.

      On August 31, 2018, prior to the entry of final judgment, Huntington

entered into a "profit-sharing" sales agreement with Rotonda to purchase the

property (the agreement). According to the agreement, because the property was

"subject to a tax lien foreclosure action" and Rotonda did "not have the funds

needed to redeem the tax lien," Huntington agreed "to provide the necessary

funds to redeem the tax lien and repair the [p]roperty to increase its resale


1
  The Tax Sale Law provides a mechanism for individuals or entities to purchase
tax liens from municipalities and initiate foreclosure actions against property
owners who are delinquent in paying their property taxes. The foreclosure
process begins when a property owner fails to pay the property taxes, as the
unpaid balance becomes a municipal lien on the property. N.J.S.A. 54:5-6.
"When unpaid taxes . . . remains in arrears on the [eleventh] day of the eleventh
month in the fiscal year when the taxes . . . became in arrears, the collector . . .
shall enforce the lien by selling the property . . . ." N.J.S.A. 54:5-19. Upon
completion of the sale, a certificate of tax sale is issued to the purchaser,
N.J.S.A. 54:5-46, conveying the property to the purchaser, "subject to a person
with an interest in the property having the right to redeem the certificate, as
prescribed by statute." Cronecker, 189 N.J. at 318 (citing N.J.S.A. 54:5-31 to -
32, -46).
                                                                            A-3057-18T3
                                         3
value." In consideration, Huntington would pay $10,000 to Rotonda as "[i]nitial

[c]losing [p]roceeds" upon Rotonda transferring title to the property to

Huntington (the initial sale). Then, "[u]pon completion of the [r]epair [w]ork,"

Huntington would sell the property at "fair market value" (the resale).

      Pursuant to the agreement, once the property was resold, Huntington

would "receive one hundred percent of the net proceeds obtained in connection

with a sales price of . . . up to $225,000 . . . and then [Huntington] and [Rotonda]

[would] each receive fifty percent . . . of any excess proceeds" above the

$225,000 threshold. Additionally, Huntington agreed to pay $115,000 for the

outstanding tax lien certificate, and to satisfy $4000 in personal judgments

against Rotonda.      Further, an amendment to the agreement executed on

September 11, 2018, specified that Rotonda would "be permitted to continue to

reside on the property rent-free . . . for sixty . . . days after the [i]nitial [s]ale."

However, the entire agreement was contingent upon Huntington succeeding in

its motion to intervene in the foreclosure action. Otherwise, the agreement

would "be deemed null and void."

      Armed with the agreement, on September 12, 2018, Huntington moved to

stay entry of final judgment, intervene in the foreclosure action, and redeem the

tax sale certificate. In support, Huntington's attorney and member certified that


                                                                               A-3057-18T3
                                           4
based on the recent sale of comparable property, the property was "worth no

more than $145,000," and "likely significantly less since it [was] in worse

condition." However, "a real estate broker" "verbally advised . . . that the

renovated [p]roperty will likely sell in the range of $250,000." 2 The attorney

averred that the agreement was entered "[a]fter arms-length negotiations" with

Rotonda, and the terms "represent[ed] more than 'substantial consideration'"

regardless of "the ultimate sales price of the renovated property."

      Rotonda supported Huntington's motion and certified she understood she

was only "guaranteed $10,000 and . . . may or may not get more depending on

what the property sells for." She also understood that "Huntington is a real estate

investor and is doing this deal to make money." However, she believed that

"Huntington has been upfront and honest," and "put no pressure on [her]

whatsoever." She explained that once her live-in "boyfriend of over [twenty-

five] years" "became disabled and lost his job," they "were unable to keep up

with the taxes or . . . maintain the property." She acknowledged that Huntington

was "putting significant time, effort and expense into this deal," and "[w]ithout

Huntington's involvement, there [was] no doubt that [she] would have lost the


2
  In a later certification, the attorney averred that based on his visual inspection
of the property, "a full and complete renovation" would "cost in the range of
$50,000 to $75,000."
                                                                            A-3057-18T3
                                         5
property through the foreclosure action." She felt "the amount offered by

Huntington [was] real and substantial money for the property" and was "a very

big benefit to [her]."

      Grand Madison opposed Huntington's motion and filed a cross-motion for

a constructive trust. In opposing Huntington's motion to intervene, Rothman

asserted the "purported profit[-]sharing agreement [was] misleading, deceptive

and against public policy." To support his application for a constructive trust to

allow him to acquire Huntington's contractual rights under the agreement,

Rothman certified he was "prepared to write a check to [Rotonda] for the sum

of $20,000[] or double what Huntington [was] offering to her." He would also

"allow . . . Rotonda to stay in the property for six months . . . at no cost and the

reduced rate of $825[] per month for an additional six months."

      "In the alternative," Rothman would "allow [Rotonda] an additional six

months" to "list the property with a realtor, sell it, redeem [the tax] lien and keep

100% of the net proceeds," rather than "hav[ing] to pay it over to a predatory

title raider such as Huntington." Rothman submitted that if the motion judge

was inclined to deny his cross-motion, then he "request[ed] discovery" in order

"to develop a full record of what was told to . . . Rotonda in order for her to

agree to give almost all of her equity over to [a] title[]raider." In a responding


                                                                             A-3057-18T3
                                         6
certification, Rotonda rejected Rothman's offer, stating that although it s terms

were more favorable than Huntington's, "[she] was aware . . . when [she] signed

the agreement" that Rothman "[might] try to make an offer,"3 despite the fact

that Rothman "never contacted [her] over the last [seven] years to offer [her]

anything."

      On October 12, 2018, the motion judge conducted oral argument on both

motions. The judge posited that under Cronecker and its progeny, "the real issue

. . . [was] whether or not [Huntington's] offer amounts to more than nominal

consideration." According to the judge, to make that determination, he needed

to evaluate "the amount received, versus the fair market value, versus the equity

in the property[,] and . . . the [windfall] profit to the purchaser." Because he

was missing "admissible . . . evidence, under [Rule] 1:6-6, that would support

the conclusion[] that th[e] property [was] worth no more than [$145,000]," as

claimed by Huntington, the judge gave both parties ten days to "supplement the

record."

      Thereafter, the parties each submitted appraisal reports for the property

from real estate professionals, each using the sales comparison approach.


3
  The agreement specified that "[b]y signing," Rotonda "waive[d her] right to
accept any other offers, agreements or arrangements related to the sale of the
[p]roperty."
                                                                         A-3057-18T3
                                       7
Huntington's appraiser determined that the property was valued "as is" at

"$145,000."    Although Huntington's appraiser subsequently corrected the

appraisal to indicate that instead of a single lot, the property actually consisted

of "two lots," with "the dwelling . . . located on one" and "a non-buildable side

yard" on the other, the appraised value remained unchanged. In contrast, Grand

Madison's appraiser established a value of "$210,000." Additionally, Grand

Madison submitted the municipal assessment for the property, indicating an

assessed value of "$148,100 for the land and $81,300 for the improvements,"

for a total of "$229,400."

      After reviewing the appraisals, on January 16, 2019, the judge granted

Huntington's motion.     In an oral decision, preliminarily, the judge found

Huntington's motion to intervene "timely because it was filed before the entry

of the final judgment." Next, while acknowledging Grand Madison's argument

that the consideration was "illusory" or merely "contingent," the judge noted

that in addition to the $10,000 guaranteed payment, Rotonda was receiving

"benefit[s]" under the agreement such as "stay[ing] in the house for [sixty] days"

after closing rent free, and "the satisfaction of [her] personal judgments" as well




                                                                           A-3057-18T3
                                        8
as "[fifty] percent of the profit over [the] $225,000" threshold "after Huntington

completes what it describe[d] as significant and costly renovations." 4

      In examining the appraisals, the judge determined that notwithstanding

Grand Madison's contention that "Huntington has not provided a competent

valuation of the property," he now "ha[d] competent proof" based on the

appraisals "submitted from licensed appraisers." The judge reasoned that the

$65,000 difference between Huntington's $145,000 appraisal and Grand

Madison's $210,000 appraisal was "not a significant amount" when assessing

whether the consideration was nominal.

      Noting that "appraisals of property . . . are imprecise" and subject to "a lot

of variables," the judge elaborated:

            if Huntington's right, you have . . . a property that's
            worth $145,000 with about $120,000 in liens and
            judgments. . . . [U]sing that number, . . . it results in
            . . . there being $25,000 in equity. And if [calculated]
            . . . on a percentage basis, . . . then . . . Rotonda would
            be getting [forty] percent of the equity . . . by way of
            the cash payment. And then obviously additional
            payment through . . . profit that came from the sale, if
            there was profit.

                   ....



4
   The judge noted "the parties concede[d] . . . the property [was] in poor
condition and in need of substantial repair."
                                                                            A-3057-18T3
                                         9
                  And . . . if Grand Madison's right, then we [have]
            a $210,000 property with $120,000 in expenses. And
            so we [have] $90,000 in equity that arguably . . . would
            belong to . . . Rotonda. And . . . what's she getting out
            of the deal? She's getting [$]10,000. So what is that?
            About . . . [eleven] percent of the equity is all she's
            going to get.

      Applying N.J.S.A. 54:5-89.1, Cronecker and Berezansky, the judge

concluded the agreement with Huntington was enforceable because "the

consideration . . . [was] more than small or trifling" and "provide[d] some

meaningful monetary relief to [Rotonda,]" who continuously indicated "she

[chose] to sell to [Huntington]" and "not to deal with [Grand Madison]." The

judge distinguished the "ratio[s]" present "in Cronecker and some of the other

cases" and determined that, "[h]ere, . . . the tolerances [were] much less," "[t]he

numbers [were] much closer," "the range [was] not that big," and "[t]he

differences [were] not that great between [$145,000] and [$210,000]."

      The judge explained that under either appraisal,

                   $10,000 is more than nominal in this case. . . .
            [A]long with, of course, the potential profit and . . . the
            free rent, . . . this offer is [not] so extremely one-sided
            in favor of Huntington that it would be, could be, [and]
            should be deemed unconscionable under the
            circumstances.

                   ....



                                                                           A-3057-18T3
                                       10
                   Clearly, there's a benefit to . . . Rotonda. She gets
            money that she . . . loses if the foreclosure continues.
            And she loses whatever equity . . . she has in the
            property, whatever that equity is. Here, . . . she does
            get a benefit under the circumstances.

      The judge ordered Grand Madison "to accept" Huntington's "tender [of]

the amount necessary to redeem the tax sale certificate" "through and with the

Belleville tax collector," and directed that "upon redemption, . . . the tax lien

foreclosure action would be dismissed" and the "[lis] pendens would be

discharged." Additionally, the judge denied Grand Madison's application for a

"constructive trust" and "discovery" on "Rotonda's motivation," on the ground

"that those issues [were] moot." The judge entered a conforming order and this

appeal followed.

      On appeal, Grand Madison raises the following points for our

consideration:

            POINT ONE

            THE CONTRACT BETWEEN [ROTONDA] AND
            HUNTINGTON IS NOT A PERMISSIBLE PROFIT-
            SHARING AGREEMENT, BUT INSTEAD A
            PREDATORY      ARRANGEMENT        THAT
            CONTRAVENES     THE    PRINCIPLES   OF
            CRONECKER AND THE PURPOSE OF N.J.S.A.
            54:5-89.1.




                                                                           A-3057-18T3
                                        11
                  A.   THIS CASE IS SIGNIFICANTLY
                  DISTINGUISHABLE     FROM    THE
                  BEREZANSKY DECISION.

                  B.  THE BEREZANSKY DECISION IS
                  FATALLY FLAWED IN ANOTHER
                  WAY.

            POINT TWO

            THE TRIAL COURT ERRED IN CONCLUDING
            THAT THE DISPARITY IN VALUES BETWEEN
            THE TWO APPRAISALS WAS INSIGNIFICANT
            [BECAUSE] $10,000 PLUS $4,000 OF DEBT RELIEF
            IS "NOMINAL CONSIDERATION" FOR A
            PROPERTY VALUED AT $210,000 WITH $90,000
            OF EQUITY.

                  A.  HUNTINGTON'S APPRAISAL IS
                  DEFECTIVE AND INCREDIBLE.

                  B.  THE    SO-CALLED   "PROFIT
                  SHARING" AND [SIXTY] DAYS OF
                  RENT-FREE USE AND OCCUPANCY
                  ARE    ILLUSORY    AND    NOT
                  CONSIDERATION.

      As framed by Grand Madison's arguments, our review focuses on whether

the proposed purchase price for the property contained in the agreement

provided more than nominal consideration. In that regard, we will not disturb

the findings and conclusions of the judge if they are supported by substantial,

credible evidence in the record. Rova Farms Resort, Inc. v. Inv'rs Ins. Co. of

Am., 65 N.J. 474, 483-84 (1974). However, "[a] trial court's interpretation of

                                                                       A-3057-18T3
                                     12
the law and the legal consequences that flow from established facts are not

entitled to any special deference." Manalapan Realty L.P. v. Twp. Comm. of

Manalapan, 140 N.J. 366, 378 (1995).

        "N.J.S.A. 54:5-89.15 bars a party from intervening in a tax foreclosure

action when claiming a right in the property that was acquired 'for a nominal

consideration.'" Berezansky, 452 N.J. Super. at 412 (quoting N.J.S.A. 54:5-


5
    N.J.S.A. 54:5-89.1 provides in pertinent part:

              In any action to foreclose the right of redemption in any
              property sold for unpaid taxes . . . , all persons claiming
              an interest in or an encumbrance or lien upon such
              property, by or through any conveyance, mortgage,
              assignment, lien or any instrument which, by any
              provision of law, could be recorded, registered, entered
              or filed in any public office in this State, and which
              shall not be so recorded, registered, entered or filed at
              the time of the filing of the complaint in such action
              shall be bound by the proceedings in the action so far
              as such property is concerned, in the same manner as if
              he had been made a party to and appeared in such
              action, and the judgment therein had been made against
              him as one of the defendants therein; but such person,
              upon causing such conveyance, mortgage, assignment,
              lien, claim or other instrument to be recorded,
              registered, entered or filed as provided by law, may
              apply to be made a party to such action. No person,
              however, shall be admitted as a party to such action, nor
              shall he have the right to redeem the lands from the tax
              sale whenever it shall appear that he has acquired such
              interest in the lands for a nominal consideration after
              the filing of the complaint . . . ."
                                                                            A-3057-18T3
                                         13
89.1). In Cronecker, our Supreme Court weighed the equities posed by the

respective interests of the property owner, the tax sale certificate holder, and the

third-party investor and concluded, "the Legislature intended to extend judicial

scrutiny to financial arrangements between third-party investors and property

owners [made] during the post-foreclosure complaint period" by enacting

N.J.S.A. 54:5-89.1 "to ensure that the third-party investors do not exploit

vulnerable owners by offering only nominal consideration for their property

interests." 189 N.J. at 328.

      In defining "more than nominal consideration" in the context of N.J.S.A.

54:5-89.1, the Cronecker Court

            adopt[ed] a more flexible, under-all-the-circumstances
            approach that will keep the focus on the benefit to the
            property owner facing forfeiture of his land. Strict
            mathematical equations cannot address the varying
            circumstances that may bear on a fair determination of
            the issue. The court may consider a number of factors,
            including but not limited to the amount received by the
            owner in comparison to the property's fair market value
            and to his equity in the property. The court also may
            give some weight to a windfall profit to be made by the
            third-party. A court should rightly be reluctant to
            strike-down a third-party financing arrangement that
            will provide some meaningful monetary relief to the
            property owner. In the end, more than nominal
            consideration under N.J.S.A. 54:5-89.1 means
            consideration that is not insubstantial under all the
            circumstances; it is an amount, given the nature of the
            transaction, that is not unconscionable.

                                                                            A-3057-18T3
                                        14
            [Id. at 334-35.]

      In Berezansky, we interpreted the Cronecker Court's definition of "more

than nominal consideration" "to require not only a traditional examination of

whether the consideration is more than 'small' or 'trifling,' but also an

examination of that question from the property owner's standpoint." 452 N.J.

Super. at 414 (quoting Cronecker, 189 N.J. at 332) (citation omitted). To that

end, in Berezansky, we "compar[ed] the benefits conveyed by the financial

arrangement between Bandi [Property Group, the third party investor,] and

[Richard and Donna] Berezansky[, the property owners,] and the catastrophic

financial impact facing the Berezanskys if their agreement with Bandi [was] not

given effect." Ibid.

      There, the "plaintiff FWDSL & Associates purchased a tax sale certificate

on . . . [the] Berezansky's Manville home," and "filed a foreclosure complaint

. . . against the Berezanskys, as well as the State of New Jersey, which possessed

a $70,000 judgment against Richard." Id. at 410. "[P]rior to the expiration of

the time for redemption," Bandi, "claiming it held title and was a party to a

profit-sharing agreement with the Berezanskys—moved to intervene and

redeem." Ibid. Under the profit-sharing agreement, Bandi would satisfy all

liens and judgments affecting title, consisting of the State's $70,000 judgment

                                                                          A-3057-18T3
                                       15
as well as $43,000 in tax liens, pay the Berezanskys $10,000, give the

Berezansky's a rent-free use and occupancy period in the property, improve the

property to maximize resale value, and, once the property was sold and certain

expenses deducted, divide the net proceeds thirty-five percent to Bandi and

sixty-five percent to the Berezanskys. 6 Id. at 411.

      In upholding the agreement, we held

            Bandi's financial obligations are not insubstantial and
            certainly represent more than nominal consideration.
            Even though the tax payments, the repairs, and the
            satisfaction of the $70,000 judgment will be returned to
            Bandi following the property's sale, their payment prior
            to the sale constitutes a benefit that exceeds the nominal
            threshold; indeed, should the property never sell for a
            profit, the Berezanskys would obtain a considerable
            benefit from being relieved of the $70,000 judgment.
            And—not to be ignored—the Berezanskys secured a
            right to recover sixty-five percent of the net proceeds
            that would not be available if the Bandi agreement were
            found ineffectual or unlawful. We are satisfied that the
            form of the Bandi-Berezansky financial arrangement
            was not barred by N.J.S.A. 54:5-89.1 as that statute has
            been interpreted and enforced by our Supreme Court,
            and that Bandi gave more than nominal consideration
            in obtaining title and the right to redeem.

            [Id. at 415 (footnote omitted).]



6
  Although no appraisals were discussed, "Bandi claimed it learned from public
records that: the 'equalized assessed value of the [p]roperty [was] $314,792.13.'"
Id. at 411 (first alteration in original).
                                                                          A-3057-18T3
                                       16
      Likewise, here, we discern no basis to set aside the judge's finding that

the payments Huntington proposed under the agreement provided Rotonda more

than nominal consideration. Although the appraised value of the property was

disputed, it is but one of "a number of factors" reviewed when analyzing all of

the circumstances under Cronecker's "under-all-the-circumstances approach."

Id. at 334-35. Further, as we did in Berezansky, we reject Grand Madison's

"argument that our jurisprudence calls for a blanket rejection of all profit -

sharing agreements in this context." 452 N.J. Super. at 413. Indeed, "[t]here is

nothing contained in the Cronecker decision that limits the form such financial

assistance must take or that which it may not take." Id. at 412 (citing Cronecker,

189 N.J. at 330-31).

      Similarly, as we noted in Berezansky, even if "part[s] of the consideration

may appear illusory—the initial $10,000 payment and the use-and-occupancy

agreement are certainly real and more than a trifle," and the $10,000 "payment

alone," "constitutes more than 'nominal consideration' for entry into the profit-

sharing agreement." Id. at 414. We are satisfied that in granting Huntington's

motion to intervene and redeem, the judge considered all applicable

circumstances in his analysis, and reached a conclusion that is supported by the

record and legally sound. Moreover, the judge correctly denied the cross-motion


                                                                          A-3057-18T3
                                       17
to impose a constructive trust to allow Grand Madison to succeed to

Huntington's contractual rights because, as the Cronecker Court noted, as a

commercial investor itself,

            Plaintiff[] . . . controlled [its] own fate[]. Before filing
            the foreclosure complaint[], plaintiff[] could have beat
            [the third party investor] to the punch and offered to
            purchase title to the property directly from the owner[].
            Instead, plaintiff[], at [its] own peril, chanced that [it]
            could acquire the property through foreclosure without
            any further financial commitment.

            [Id. at 329-30 (footnote omitted).]

      Affirmed.




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                                       18
