Winberry Realty Partnership v. Borough of Rutherford, ___ N.J. ___ (2021). [Disclosure: I am one of the counsel for the successful plaintiffs in this case.] This case has a long history, having been filed in 2012 and having gone to the Appellate Division twice before the ruling on which the Supreme Court opined today.
This Civil Rights Act case, which centers on qualified immunity, involved two separate grants of certification. On November 4, 2019, the Court granted plaintiffs’ petition for certification to review that portion of the unpublished decision of the Appellate Division that had upheld summary judgment on qualified immunity in favor of the defendant Borough. Thereafter, defendant Caryn Miller, the Tax Collector of the Borough, belatedly filed a cross-petition for certification from that portion of the Appellate Division’s decision that had reversed the Law Division’s grant of summary judgment in favor of her. The Court granted that petition as well, on February 20, 2020. In part as a result of that sequence of events, this was one of the Court’s oldest undecided cases until today.
Today, in a unanimous opinion by Justice Albin, the Supreme Court affirmed in part and reversed in part the Appellate Division’s rulings. The bottom line is that plaintiffs prevailed on both parts of the case. The Court affirmed the Appellate Division’s decision to reverse summary judgment in favor of Miller, but reversed the Appellate Division’s ruling that had upheld summary judgment on qualified immunity in favor of the Borough.
The case arose out of plaintiffs’ non-payment of real estate taxes on property they owned in Rutherford. As a result of that non-payment, a tax sale certificate was sold. The purchaser of the tax sale certificate eventually sought to foreclose. Plaintiffs attempted to pay the outstanding amount, including interest, in order to redeem the property before a final judgment of foreclosure was entered.
The deposition testimony of plaintiff John Winberry established the following facts, as described by Justice Albin. “According to the deposition testimony of John Winberry, on the afternoon of July 23, 2008, he had the funds to pay off the estimated amount necessary to redeem the tax sale certificate held by American Tax [the buyer of the tax sale certificate]. When he called the Tax Collector and asked her for the precise redemption amount, she responded, ‘I don’t have the time to give you the total amount. Can’t do it today.’ When Winberry asked for the per diem interest rate so that he could calculate the interest accrued since the June 19 redemption date, the Tax Collector stated, ‘I don’t have time for that.’ Winberry then offered to pay an amount well over the redemption amount that he estimated was necessary to redeem the tax sale certificate. The Tax Collector replied, ‘No…. [Y]ou’ve had years to pay this,’and ‘I can’t accept your check anymore.’ The Tax Collector told Winberry that she did not have ‘authority to accept’ payment because the court-ordered redemption date had passed, and she would not accept a check from him.”
In fact, however, it was not too late to redeem. The Tax Sale Law and an order of the Chancery Division gave plaintiffs until the end of the day on which a final judgment of foreclosure was entered, a date that had not yet arrived. Moreover, Miller later testified at deposition that it would have taken her only “a matter of minutes” to get the answers to Winberry’s questions. Moreover, she did not recall that she had told Winberry that she required a written redemption request, a policy that she had unilaterally adopted even though the Tax Sale Law, N.J.S.A. 54:5-1 et seq., contained no such requirement at the time of Winberry’s inquiry to Miller (a 2010 amendment added that requirement). Nor did she recall that she had contacted American Tax to verify the amount due, another policy that she claimed she adopted but did not recall telling Winberry about.
As it happened, final judgment of foreclosure was entered the next day. Plaintiffs had to expend large sums of money to rescue the property, which they eventually did. They then filed suit against the Borough and Miller under the federal Civil Rights Act, 42 U.S.C. 1983, and the New Jersey Civil Rights Act, N.J.S.A. 10:6-1 to -2 (“CRA”) (along with other claims not germane to today’s decision).
Justice Albin rightly noted that the Justices “need not spend much time,” for today’s purposes, on the lengthy procedural history of the case. This post thus will not do that either. As relevant to today’s decision, the Law Division granted summary judgment on qualified immunity to both Miller and the Borough, based on qualified immunity. The Appellate Division reversed as to Miller but affirmed as to the Borough.
Justice Albin applied the classic standard of review of summary judgment rulings: “At this procedural stage, ‘we are required not only to view the evidence in the light most favorable to [plaintiffs], but also to draw all reasonable inferences in [plaintiffs’] favor that are supported by the summary judgment record.’ Baskin v. Martinez, 243 N.J. 112, 129 (2020) (citing Gormley v. Wood-El, 218 N.J. 72, 86 (2014)). In canvassing the record, including the deposition testimony, answers to interrogatories, and pleadings, we now give plaintiffs the benefit of their ‘best case. See ibid. (quoting Gormley, 218 N.J. at 86).”
Under that standard, and the applicable law, plaintiffs had the right to prevail. The elements of a case under either Civil Rights Act, Justice Albin said, were (1) whether “the right of redemption– in essence, the right to remain in one’s home– is a substantive right conferred by the Tax Sale Law or the Constitution,” (2) whether the Tax Collector deprived plaintiffs of that right, and (3) whether that was done under color of state law. Only the second element was contested here.
Justice Albin said that “[o]ne of the essential duties of a municipal tax collector is to communicate to a property owner the amount of taxes owed to the municipality, and, in the case of an outstanding tax sale certificate, the amount necessary to redeem the certificate. See N.J.S.A. 54:5-54. Obviously, a property owner cannot redeem a tax sale certificate if the tax collector cannot or will not tell him the redemption amount.” For purposes of qualified immunity, “the ultimate question” was whether “the law clearly established that when Winberry called and requested the amount necessary to redeem the tax sale certificate, the Tax Collector was obligated to provide that information promptly and to accept a redemption payment.” The answer was “yes”:
“[V]iewing the summary judgment record in the light most favorable to plaintiffs, the Tax Collector left Winberry, a property owner desperate to save his family’s home, with no means to exercise his clearly established statutory right to redeem the tax sale certificate. The Tax Collector, in essence, held the keys to plaintiffs’ home. She withheld, or made no effort to secure, the information necessary for plaintiffs to vindicate their substantive right to reclaim their home under the Tax Sale Law. Additionally, she flatly refused to accept the redemption payment at a point when the right to redeem the tax sale certificate had not been cut off. Under those circumstances, and under the governing standard of review, we determine that the Tax Collector did not act in an objectively reasonable manner and therefore is not entitled to qualified immunity.”
Justice Albin was careful to note, however, that “we do not suggest that a tax collector should not communicate with the tax sale certificate holder to ensure the correctness of the redemption figure. Indeed, prudence dictates that the tax collector contact the tax certificate holder to determine any additional interest or costs due to redeem the tax sale certificate since the redemption date set by the chancery court’s order.” But “the certificate holder should know the amounts due and make that information immediately available to the tax collector upon request. An inexcusable delay in providing information to a property owner attempting to redeem the certificate in accordance with the dictates of the Tax Sale Law cannot justify the denial of the property owner’s right of redemption” (footnotes omitted).
Having affirmed the result as against Miller, Justice Albin turned to the case against the Borough. He observed that “a municipality can be held liable only if it causes harm through the implementation of official municipal policy.” After carefully canvassing cases in New Jersey and elsewhere, Justice Albin concluded that Miller “was clearly a final policymaker for the Borough of Rutherford when she denied plaintiffs the opportunity to redeem the tax sale 34certificate on July 23, before the entry of a foreclosure judgment on their property the next day.”
According to the Borough’s website, Miller was the “Department Head” of the Borough’s Department of the Tax Collector. She “set the policy for the redemption of tax sale certificates. No other municipal official or body was empowered to set or veto the tax collector’s redemption procedures.” Thus, “[b]ecause Miller spoke as a final policymaker for the Borough on matters of redemption, Miller’s policy was the Borough’s policy. On that basis, the Borough may be held liable for Miller’s violation of the Tax Sale Law under the CRA or for a violation of an applicable federal constitutional right under §1983.” The Court remanded the case for further proceedings.