No.

A-2/3 September Term 2006

Supreme Court of New Jersey

Panetta v. Equity
190 N.J. 307 (N.J. 2007) • 920 A.2d 638
Decided May 1, 2007

No. A-2/3 September Term 2006. evidence that the parties intended its inclusion, a
riparian grant will not pass as appurtenant to
Argued January 3, 2007.
another distinct parcel.
Decided May 1, 2007.
I.
Appeal from the Superior Court, Chancery
Beginning in 1943, several generations of the
308 Division, Ocean County. *308
Francis family owned the property located at 633
Christopher J. LaMonica, argued the cause for Point Avenue, Brick Township, which consisted of
309 appellant Joseph Panetta. *309 George Dougherty, an upland lot designated as Block 934, Lot 23.01
Michael S. Morris and Anne Covey, pro se, argued and a riparian grant separately designated as Block
the cause for appellant Anne Covey ( Covey 934, Lot 23.03 on the municipal tax map. The
Associates and Katz Dougherty, attorneys). riparian grant was created in 1928 and was
recorded in Deed Book 781, page 481, in the
Michael J. Milstead, argued the cause for Ocean County Clerk's Office.
respondent ( Milstead Associates, attorneys).
As of 1992, the property was owned by Rowina
Michael J. Fasano, argued the cause for amicus Schoener Francis and her son George Francis. On
curiae New Jersey Land Title Association ( April 6th of that year, Rowina and George deeded
Lomurro, Davison, Eastman Munoz, attorneys). 310 the property to themselves and to *310 George's
Jeffrey A. Oshin; Joshua A. Burkhardt and Kurt R. wife Carolyn Francis. That deed specifically
Bachman, members of the Indiana bar, submitted a included and described the upland lot and the
brief on behalf of amicus curiae National riparian grant as tract one and tract two,
Auctioneers Association ( Hardin, Kundla, respectively.
McKeon Poletto, attorneys). Several years later, in 1995, George was operating
a business that was struggling financially. As a
Justice LONG delivered the opinion of the Court. result, he applied for a loan from Equity One, Inc.
The primary issue in this appeal is whether a (Equity One), using the property as security.
conveyance of real property that makes no During the application process, George, Carolyn,
mention of an abutting riparian grant can be and Rowina deeded their interest in the upland
construed under N.J.S.A. 46:3-16 to include that property to George and Carolyn. That deed, dated
grant as an appurtenance. Unlike a riparian right, March 22, 1995, did not mention the adjacent
which is a license or privilege, a riparian grant is a riparian grant (Lot 23.03) but only described the
conveyance in fee simple of real property. As property as Lot 23.01, Block 934 on the tax map
such, without specific mention in the deed or other

1
 Panetta v. Equity 190 N.J. 307 (N.J. 2007)

and also contained a metes and bounds description attorney review period. On July 23, 1997, Michael
of only the upland lot as provided by the title Morris, on behalf of Anne Covey, faxed an offer
company. of $240,000 to Equity One.

On March 23, 1995, Equity One agreed to lend On July 25, 1997, Equity One rejected all previous
George $220,000. As security for the loan, George offers and initiated a closed bidding process
and Carolyn executed a mortgage in favor of limited to the three prior bidders — Panetta,
Equity One on property that was described exactly McKenna, and Covey. The bid letter
as it had been in the 1995 deed — as Lot 23.01, communicated Equity One's offer, as "the owner
Block 934 on the tax map and also as 633 Point of 633 Point Avenue," to sell the property to the
Avenue. Although the mortgage documents highest bidder subject to a few terms, which
included the language "TOGETHER WITH all the included that "[n]o realtor commissions [would]
improvements now or hereafter erected on the be paid by seller." Panetta submitted a bid of
property, and all easements, appurtenances, and $255,000 with no other conditions or terms.
fixtures now or hereafter a part of the property," McKenna submitted a bid of $287,000, describing
no mention of the riparian grant (Lot 23.03) was the property as including both the upland lot and
contained therein. the riparian grant, and conditioned on the realtor's
commission being subtracted from the bid offer.
George thereafter defaulted on the loan. Equity
Covey submitted a bid of $280,000 with a
One foreclosed on the mortgage, and a sheriff's
statement that "[s]aid property according to the
sale occurred on June 24, 1997. The sheriff's deed
deed recorded in Ocean County lists; a riparian
contained the same description of the encumbered
grant which is incorporated in this bid as sale of
property as the 1995 deed, including a metes and
both the property and the riparian grant."
bounds description of the upland lot only. Equity
One was the successful bidder and thus acquired On July 29, 1997, Equity One informed Covey
title to the mortgaged property. that her bid was the highest. She promptly
forwarded a ten-percent deposit and a contract,
Subsequently, Equity One received separate offers
inclusive of the riparian grant. The contract was
to purchase the property from Joseph Panetta,
never signed by Equity One. Rather, the following
Dennis and Dorothy McKenna, and Anne Covey.
day, the attorney for Equity One, believing a
Panetta offered to buy the property for $220,000
mistake had been made regarding the real estate
and Equity One made a counteroffer of $235,000.
commission, advised all parties that Equity One
Panetta agreed to the increased purchase price, and
would reopen the process on an open competitive
on July 16, 1997, the attorney for Equity One
basis.
311 prepared a contract to that effect. *311 Panetta
signed the contract and forwarded a $10,000 Covey immediately filed suit against Equity One
deposit. However, the contact was never signed by for specific performance; breach of contract;
a corporate representative of Equity One. 312 breach of implied covenant of *312 good faith and
fair dealing; consumer fraud; fraud; and malicious
In the interim, Dennis and Dorothy McKenna
misrepresentation. Panetta and the McKennas filed
offered to purchase the property for $265,000 with
separate complaints and the McKenna's realtor
the assistance of their real estate agent. The agent
successfully moved to intervene. The complaints
forwarded a contract signed by the McKennas, as
were consolidated into a single action in the
well as an executed Right-to-Sell Listing
Chancery Division in which the parties stipulated
Agreement and Dual Agency Consent Agreement.
An officer of Equity One signed the contract, but
the attorney for Equity One canceled it within the

2
 Panetta v. Equity 190 N.J. 307 (N.J. 2007)

to the facts and agreed that the judge's findings [T]he property will be sold to the
could be based solely on the deposition testimony highest bidder, no minimum price

and documents that had been submitted. will limit bidding, the owner may
not withdraw property after the
At trial, the issues presented were: (1) whether the first bid is received, the owner
pre-bid communications between Panetta and may not reject any bids, and the
Equity One's attorney resulted in a valid and owner may not nullify the bidding
enforceable contract; (2) whether the July 25th bid by outbidding all other bidders. In
process letter was a solicitation of offers or an an auction without reserve, the

offer soliciting acceptance; (3) if the July 25th owner essentially becomes an
offeror, and each successively
letter represented an offer, whether the highest
higher bid creates a contingent
responsive bid constituted a valid acceptance; and
contract, the highest bid creating
(4) whether a valid and enforceable contract
an enforceable agreement.
resulted from the post-bid communications
between Covey and Equity One. The trial judge,
Judge Clyne, concluded that the communication [Black's Law Dictionary 140 (8th
between Panetta and Equity One's attorney did not ed. 2004) (emphasis added).]
result in an enforceable contract because it was not
With respect to post-bidding communications
signed by Equity One and because the parties
between Covey and Equity One, the judge found
intended to enter into a formal written contract
that the parties contemplated a formal written
before being bound.
contract that was never signed. He concluded that
The judge further determined that Equity One's Panetta had submitted the only conforming bid,
July 25th letter constituted an offer in a without- ordered specific performance in favor of Panetta,
reserve auction1 for which the highest responsive and deconsolidated the lawsuits.
bid would constitute a valid acceptance, resulting
Covey filed a motion for reconsideration asserting
in a binding contract. Next, the judge considered
that she was the highest conforming bidder
each bid. He found the McKenna bid non-
because the riparian grant followed the upland
conforming because, contrary to the bid letter, it
property as a matter of law under N.J.S.A. 46:3-
was conditioned on realtor commissions being
16, which provides:
paid from the bid amount and because it included
313 the riparian *313 grant, which was not part of Every deed conveying land shall, unless an
Equity One's offer. He also held that Covey's bid exception shall be made therein, be
was non-conforming because of the inclusion of construed to include all and singular the
the riparian grant. buildings, improvements, ways, woods,
1 A without-reserve auction is one in which: waters, watercourses, rights, liberties,
privileges, hereditaments and
appurtenances to the same belonging or in
anywise appertaining; and the reversion
and reversions, remainder and remainders,
rents, issues and profits thereof, and of
every part and parcel thereof.

The judge disagreed, concluding that Equity One

could only convey that which it owned and that
because it had only foreclosed on the upland

3
 Panetta v. Equity 190 N.J. 307 (N.J. 2007)

property, it did not own the riparian grant. In a published opinion, the Appellate Division
Accordingly, he denied Covey's motion for affirmed the dismissal of Covey's fraud and
reconsideration. Covey appealed. misrepresentation claims but reversed the
judgment of specific performance in favor of
In an unpublished opinion, the Appellate Division
Panetta. Panetta v. Equity One, 378 N.J.Super.
remanded the case to the trial judge, stating that on
298, 320, 875 A.2d 991 (App.Div. 2005). Noting
the record before it, it could not "determine
that N.J.S.A. 46:3-16 requires that deeds should be
whether the riparian rights were intended to be
construed broadly to include all appurtenances
separate and distinct and purposely not intended to
unless expressly excepted, the panel held that,
be included in the deed transfer on March 22,
although not mentioned or described, the riparian
1995, or whether the omission of the riparian
grant was included in the 1995 conveyance. Mat
rights was a scrivener's oversight." In addition, the
315-17, 875 A.2d 991.
panel noted that the parties' intent was "an
important factor in determining whether the In ruling, the panel declared the intent underlying
riparian grant followed the upland property"; that N.J.S.A. 46:3-16 to be the provision of "certainty
George, Carolyn, and Rowina Francis each had an and stability in land ownership" and "to prevent
interest in the case and should have been given an fraud by precluding a grantor from attempting to
opportunity to intervene; and that there was "an secretly retain, through ambiguous drafting, some
unresolved material factual dispute" warranting part of or interest in land." Id. at 311-12, 875 A.2d
remand to the trial judge for a plenary hearing to 991. Accordingly, the panel determined that "all
determine the ownership of the riparian grant. property interests that may arguably be contained
314 Thereafter, *314 George, Carolyn, and Rowina within or deemed appended to a parcel of real
were joined in the action and all parties again property" fall within the statute's "all-
consented to a decision based on the judge's encompassing scope" and that a riparian grant is
review of the written record. 315 appurtenant to the land to which it is *315 adjacent
as a matter of law. Id. at 312-13, 875 A.2d 991.
In his June 11, 2004, decision, Judge Clyne
Thus, "the riparian rights were conveyed
determined, as a matter of fact, that George
notwithstanding the absence of any express
Francis intentionally excluded the riparian grant in
mention of those rights in the 1995 deed, and
securing the mortgage and that Equity One was, in
notwithstanding the grants' actual intentions." Id.
fact, unaware of the grant. Had the situation been
at 317, 875 A.2d 991.
otherwise, the judge concluded, Equity One would
have required the grant to be included in the Ultimately, the Appellate Division concluded that
mortgage. The judge further held that neither although Equity One held legal title to the upland
N.J.S.A. 46:3-16 nor any other statute or case property and riparian grant, it did not follow that
requires that a riparian grant follow the upland an enforceable contract with Covey resulted. The
property as a matter of law. Therefore, he again panel reasoned that because of uncertainty
awarded specific performance to Panetta on the regarding the riparian grant, "it would be
ground that Panetta, whose bid was limited to the inequitable to compel Equity One to perform that
upland lot, had submitted the only conforming bid contract in light of the latter's understandable
and that an enforceable contract resulted. The confusion about what it was that it was attempting
judge also dismissed Covey's fraud claim against to sell." Id. at 320, 875 A.2d 991. Thus, the panel
Equity One and entered final judgment. Covey remanded the case for:
again appealed.

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 Panetta v. Equity 190 N.J. 307 (N.J. 2007)

(1) a dismissal of all claims that seek was not; and, finally, that he was the highest
specific performance or that rely upon a conforming bidder and should be awarded the
contention that the plaintiff possesses property.
enforceable contract rights; (2) the entry of
Covey argues that she is entitled to the property as
a declaratory judgment, in recordable
a result of her bid in the without-reserve auction;
form, that Equity One holds legal title to
that, as a matter of law, the riparian grant was
the entirety of 633 Point Avenue, including
included with the upland property under N.J.S.A.
the upland property as well as the riparian
46:3-13 and -16; that Equity One is a sophisticated
grant; (3) a dismissal of all other claims
commercial entity and, thus, the Appellate
not previously disposed of that cannot
Division's invalidation of her bid based on
stand in light of this decision, and (4) an
"confusion" was improper; that the Appellate
adjudication of any remaining claims not
Division's decision undermines confidence in
previously disposed of, but only
public auctions; and that Equity One's attempt to
"rescheduled," that are not dependent upon
redo the auction violated the Consumer Fraud Act,
any of the claims that were either
N.J.S.A. 56:8-1 to -20.
previously dismissed or which must be
dismissed in light of this decision. Equity One does not take a position on the
question of whether the riparian grant was
[ Ibid.]
conveyed with the upland property by operation of
Covey moved for reconsideration on the contract law but argues that the Appellate Division
issues, which the Appellate Division denied. correctly ordered a rebid based on confusion.
Panetta and Covey then each filed a petition for
The New Jersey Land Title Association submits
certification. Panetta challenged the Appellate
that the Appellate Division's decision could
Division's determination that the riparian grant
adversely affect the stability of titles to real
was included in the deed for the upland lot as a
property throughout New Jersey; that the panel
matter of law. Covey challenged the Appellate
confused riparian rights and riparian grants in
Division's decision to invalidate her contract on
interpreting N.J.S.A. 46:3-16; and that the intent
the grounds of "confusion." We granted both
of the parties governs what property is transferred
petitions. Panetta v. Equity One, Inc., 187 N.J. 80,
with a deed.
899 A.2d 303 (2006); Covey v. Equity One, Inc.,
187 N.J. 80, 899 A.2d 303 (2006). We also granted The National Auctioneers Association argues that
amicus curiae status to the New Jersey Land Title the bidding process here constituted a without-
Association and to the National Auctioneers reserve auction in which the highest bid created an
Association. enforceable contract that cannot be invalidated
because of the confusion of one party.
II.
Panetta argues that the riparian grant was not III.
conveyed with the upland property and that the At the heart of this case is the 1995 deed. Covey
316 Appellate Division erred in *316 construing argues that that deed transferred the riparian grant
N.J.S.A. 46:3-16 to that effect; that the tax map as a matter of law and that, when George and
designation is the critical point that obviates the 317 Carolyn secured the mortgage, the riparian *317
possibility of the riparian grant being considered grant was therefore also included. If Covey is
an appurtenance; that all property in foreclosure correct, only the contract issues remain to be
must be clearly identified and the riparian grant resolved. If Covey is incorrect and the riparian
grant did not pass as a matter of law under the

5
 Panetta v. Equity 190 N.J. 307 (N.J. 2007)

1995 deed, George and Carolyn only secured the similarly governed by N.J.S.A. 46:3-16. This case
mortgage with the upland lot, and that is all Equity centers on a riparian grant of real property
One could have acquired at the sheriff's sale. identified on the tax map as distinct from the
Under that scenario, only Panetta's bid was 318 upland lot. That *318 separate designation, which
conforming. We turn, then, to the applicable legal the Appellate Division viewed as inconsequential,
principles. is in fact critical.

A. B.
Under New Jersey law, deeds are "construed to Riparian means "[o]f, relating to, or located on the
include all the [grantor's] estate, right, title, banks of a river or stream (or occasionally another
interest, use, possession, property, claim and body of water, such as a lake)." Black's Law
demand" unless the grantor expressly limits the Dictionary 1352 (8th ed. 2004); 6 Waters and
conveyance. N.J.S.A. 46:3-13. Moreover, N.J.S.A. Water Rights 1290 (Robert E. Beck, ed., 1991,
46:3-16 provides as follows: repl. vol. 2005). Riparian doctrine declares that

Every deed conveying land shall, unless an [O]wners of lands along the banks of a
exception shall be made therein, be stream or waterbody have the right to
construed to include all and singular the reasonable use of the waters and a
buildings, improvements, ways, woods, correlative right protecting against
waters, watercourses, rights, liberties, unreasonable use by others that
privileges, hereditaments and substantially diminishes the quantity or
appurtenances to the same belonging or in quality of water. The right is viewed as a
anywise appertaining; and the reversion property interest or as appurtenant to the
and reversions, remainder and remainders, land and does not depend on prior use.
rents, issues and profits thereof, and of
[ Water and Water Rights, supra, at 1290
every part and parcel thereof.
(emphasis added); see also Black's Law
The Appellate Division broadly interpreted that Dictionary 1352 (8th ed. 2004) (defining
statute to sweep in "all property interests that may "riparian-rights doctrine" as "[t]he rule that
arguably be contained within or deemed appended owners of land bordering on a waterway
to a parcel of real property, whether tangible or have equal rights to use the water passing
intangible." Panetta, supra, 378 N.J.Super. at 312, through or by their property").]
875 A.2d 991 . In particular, the panel declared
In essence, a riparian right is a license or privilege
that the riparian grant was appurtenant to the
to access and make reasonable use of water. See
upland lot under N.J.S.A. 46:3-16 and that it
Black's Law Dictionary 1352 (8th ed. 2004); see
passed with the deed to the upland lot because that
also Grobart v. N. Jersey Dist. Water Supply
deed did not explicitly exclude it. Id. at 315, 875
Comm'n, 142 N.J.Eq. 60 , 66, 58 A.2d 796 (Ch.
A.2d 991.
1948) (holding riparian right is not ownership of
In ruling as it did, the Appellate Division failed to water, only right to use flow).
distinguish between a riparian right and a riparian
Riparian lands are lands lying along the banks of a
grant. A riparian right is the right of a riparian
stream or water body. Water and Water Rights,
landowner to make reasonable use of adjacent
supra, at 1290; Black's Law Dictionary 893-94
water and is facially included in N.J.S.A. 46:3-16.
(8th ed. 2004). "The State owns in fee simple all
A riparian grant is a separate estate in land.
lands that are flowed by the tide up to the high-
Contrary to the Appellate Division's view, riparian
water line or mark." O'Neill v. State Highway
rights and grants are not identical and are not

6
 Panetta v. Equity 190 N.J. 307 (N.J. 2007)

Dep't, 50 N.J. 307 , 323, 235 A.2d 1 (1967). A [T]he title under the New Jersey grants is
riparian grant, in turn, is the method by which the not only of a new estate, but in a new
State conveys riparian lands to its citizens. See subject divided from the upland or riparian
N.J.S.A. 12:3-7; N.J.S.A. 12:3-10; Dickinson v. property by a fixed and permanent
Fund for Support of Free Public Sch., 95 N.J. 65 , boundary. . . . [Such grants are] of the
79, 469 A.2d 1 (1983) (recognizing legislative estate in the land, and not of a mere
authorization for Tidelands Resource Council to franchise or incorporeal2 hereditament
convey and lease riparian lands). Like other [U]nder these grants the land conveyed is
conveyances, a riparian grant is not limited to an held by the grantees on the same terms on
upland owner but may, after being offered by the which all other lands are held by private
State to the upland owner, be granted to persons persons under absolute titles, and every
who are unconnected to the upland property. previous right of the State of New Jersey
319 N.J.S.A. 12:3-23. *319 In Hoboken v. therein, whether proprietary or sovereign,
Pennsylvania Railroad Co., the United States is transferred or extinguished, except such
Supreme Court explained the nature of a riparian sovereign right as the State may lawfully
grant: exercise over all other private property.

[T]he title and interest of the state in these 2 Incorporeal is synonymous with
shore lands [is] a distinct and separate "intangible" and means "[H]aving a
estate, to be dealt with and disposed of in conceptual existence but no physical

accordance with the terms of the statutes; existence." Black's Law Dictionary 782

first, by a sale and conveyance to the (8th ed. 2004).

riparian owner himself, or to his assignees; [ 124 U.S. 656, 690-91, 3 S.Ct. 643, 654-
and, second, in case of his neglect to take 55, 31 L.Ed. 543, 552 (1888).]
from the state its grant on the terms
offered, then to a stranger, who, In short, a riparian grant is the conveyance of real
succeeding to the state's title, would have property divided from the uplands by a fixed
no relation to the adjacent riparian owner, boundary, no different from any other conveyance
except that of a common boundary. of land. See Buzby v. Rose, 114 N.J.Eq. 580, 586,
169 A. 293 (Ch. 1933) (adjoining riparian tract is
.... "distinct and separate estate"); Moore v. Ventnor
Gardens, Inc., 105 N.J.Eq. 730, 735, 149 A. 536
(Ch. 1930) (observing that mortgage of land
abutting water does not include separate riparian
grant), aff'd o.b., 109 N.J.Eq. 132, 156 A. 419 (E.
A. 1931); see also 29 New Jersey Practice, Low of
Mortgages § 5.7, at 42 (Myron C. Weinstein) (2d
ed. Supp. 2005) (defining riparian grant as tract of
land entirely separate and distinct from uplands).

Covey's argument to the contrary is simply not

correct. She contends that a riparian grant is not
like other conveyances. In support, she cites the
following language from the original 1928 deed to
the Metedeconk Company, the predecessor in title
320 to the Francis family: *320

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 Panetta v. Equity 190 N.J. 307 (N.J. 2007)

And Also Provided, that if the said The owner. After the initial conveyance, a stranger to
Metedeconk Company is not the owner of the uplands may own the riparian grant. We
the land adjoining the land under water repeat, therefore, that a riparian grant is the
hereby granted, then and in that event this conveyance of real property divided from the
instrument and conveyance, so far as the uplands by a fixed boundary, no different from any
same binds the State, and all covenants 321 other conveyance of land. *321
herein on the part of the State, shall be
void as affecting any part or parts of said C.
land which joins land not owned by the Given the description of the riparian grant as an
said The Metedeconk Company. estate in land and "not a mere franchise or
incorporeal hereditament," the notion that it is, as
Covey argues that the deed language shows that a
a matter of law, appurtenant to the upland property
riparian grant is a lesser interest in property
is simply unavailing. An appurtenance "belongs or
because, if separated from the uplands, it reverts to
is attached to something else" and is generally of
the State. Covey misapprehends the import of that
an incorporeal nature. Black's Law Dictionary 111
language. Its purpose is not to proscribe severance
(8th ed. 2004).
of the riparian lands from the uplands, but to
condition the grant on compliance with the Lord Coke says (Coke Lit. 121, b.) a thing
statutory requirement that when riparian lands are corporeal cannot properly be appurtenant
sold by the State they must first be offered to the to a thing corporeal, nor a thing
upland owner. See N.J.S.A. 12:3-23. The clauses incorporeal to a thing incorporeal.
are placed into the deeds to cause reverters to the According to this rule, land cannot be
State in the event that the initial claim of upland appurtenant to land. . . . A mere easement
ownership turns out to be false. See Ocean City may, without express words, pass as an
Ass'n v. Shriver, 64 N.J.L. 550, 565-66, 46 A 690 incident to the principal object of the
(E. A. 1900) (holding riparian grant conditioned grant; but it would be absurd to allow the
on ownership of uplands by initial grantee and fee of one piece of land, not mentioned in
subject to invalidation if grantee is not owner); In the deed, to pass as appurtenant to another
re Tideland's License 96-0114-T, 326 N.J.Super. distinct parcel, which is expressly granted
209, 216, 740 A.2d 1125 (App.Div. 1999) (same); by precise and definite boundaries.
Hous. Auth. of Ail City v. State, 188 N.J.Super. 145
[ Harris v. Elliott, 10 Pet 25, 35 U.S. 25,
, 149-50, 456 A.2d 534 (Ch.Div. 1983) (stating
54, 9 L.Ed. 333, 344 (1836) (emphasis
grant contingent upon actual upland ownership).
added).]
Covey relies on language in Karam v. Department
Our case law has long recognized that rule. Thus,
of Environmental Protection to support her
for example, in Potter v. Hill, the Appellate
contrary view. 308 N.J.Super. 225, 239-40, 705
Division determined that "appurtenances"
A.2d 1221 (App.Div. 1998), aff'd o.b., 157 N.J.
generally refer to things of an incorporeal nature
187, 723 A.2d 943, cert. denied, 528 U.S. 814, 120
and declined to authorize conveyance of a
S.Ct. 51, 145 L.Ed.2d 45 (1999). To the extent that
cesspool on an "adjoining premises" (a corporeal
Karam can be read to suggest that a riparian grant
thing) as appurtenant to a deed which did not
cannot be severed from the upland property, it is
expressly mention it. 43 N.J.Super. 361, 364-66,
incorrect. As we have said, the requirement of
128 A.2d 705 (App.Div. 1957); see also 29 N.J.
upland ownership only inheres in the initial
Practice, supra, § 5.7 at 44 (Supp. 2005) (noting
transaction with the State, which is required by
that " N.J.S.A. 46:3-16 codifies the common law
statute first to offer the riparian grant to the upland
rule as to deeds — that incorporeal rights held as

8
 Panetta v. Equity 190 N.J. 307 (N.J. 2007)

appurtenant to land will pass upon a conveyance an ownership interest in a stranger's riparian lands
of the dominant tenement, although not mentioned as "appurtenant" to his own and would place in
in the deed of conveyance"). Contrariwise, "[a]n jeopardy the stability of titles to real property
abutting riparian tract separately assessed on the throughout the State.
tax rolls can hardly be considered an `incorporeal'
To be sure, as the Appellate Division recognized
right." 29 N.J. Practice, supra, § 5.7 at 44 (Supp.
on interlocutory review, if the deed had
2005).
inadvertently omitted the adjacent riparian grant,
Friedman v. Monaco Brown Corp. is similarly for example as the result of a scrivener's error, it
instructive. 258 N.J.Super. 539, 610 A.2d 885 could have been construed and reformed to
(App.Div. 1992). There, a tax sale certificate in a conform to the parties' actual intent. See, e.g.,
foreclosure on upland property did not expressly Vagnoni v. Gibbons, 251 N.J.Super. 402 , 405-06,
include an alluvion.3 Id. at 542, 610 A.2d 885. The 598 A.2d 530 (Ch.Div. 1991) (finding as fact
322 *322 Appellate Division held that the foreclosure parties intended to include riparian grant when re-
judgment extinguished the property owner's deeding property back to original owners after
interest in the accreted land because "the alluvion construction and reading ambiguous deed
is also part of the beachfront estate until such time accordingly). However, that notion has no
as it is severed by subdivision or is separately currency in this case. The trial judge specifically
recognized by the municipal taxing authority in its found that the parties did not intend the 1995 deed
assessments." Id. at 544, 610 A.2d 885 (emphasis or subsequent mortgage to include the riparian
added). Indeed, the Appellate Division concluded 323 *323 grant, and no party challenged that finding as
that the plaintiff's predecessor, whose property a basis for certification. Thus, for our purposes,
rights were foreclosed in the tax sale, could not there is no issue regarding the parties' intent. It is
have "separately conveyed" the additional alluvion as the trial judge held it to be — the parties did not
"because it had neither been subdivided nor in any intend to include the riparian grant in the 1995
way quantified by the action of municipal deed.4 In short, the riparian grant was not included
officers." Id. at 545, 610 A.2d 885 (emphasis in the 1995 deed as a matter of fact or of law.
added). Thus, although "riparian rights are part of Concomitantly, George and Carolyn secured the
the estate to which they attach," the alluvion, a mortgage only with the upland property.
corporeal thing, was only considered part of the 4 For completeness, we have reviewed the
upland parcel because it had not been "separately
record and have concluded that the trial
recognized by the municipal taxing authority" as judge's factual findings are fully supported
in the case of a separately-assessed riparian land by it.
grant. Id. at 544, 610 A.2d 885.
We note that separate aspects of the law governing
3 An alluvion is "an addition of land caused
mortgages lead to the same conclusion. Under
by the buildup of deposits from running
N.J.S.A. 25:1-11(a) a mortgage is limited to the
water, the added land then belonging to the
property described in the instrument:
owner of the property to which it is added."
Black's Law Dictionary 85 (8th ed. 2004). A transaction intended to transfer an
interest in real estate shall not be effective
Put another way, a riparian right and a riparian
to transfer ownership of the interest unless:
grant are conceptually distinct, and that distinction
is pivotal in an appurtenance analysis. A riparian
right not expressly mentioned in a deed can be
appurtenant, but a riparian grant cannot. A
contrary conclusion would allow a party to claim

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 Panetta v. Equity 190 N.J. 307 (N.J. 2007)

(1) a description of the real estate was contained in the 1995 deed — the upland lot.
sufficient to identify it, the nature of the Thus, more could not have been included in the
interest, the fact of the transfer and the sale.
identity of the transferor and the transferee
are established in a writing signed by or on IV.
behalf of the transferor; or Recapping, we are satisfied that a separately
assessed riparian grant is not appurtenant to
(2) the transferor has placed the transferee
abutting upland property as a matter of law and
in possession of the real estate as a result
that the Appellate Division erred in concluding
of the transact on and the transferee has
otherwise. As such, George and Carolyn received
paid all or part of the consideration for the
only the upland property in the 1995 deed and
transfer or his reasonably relied on the
could not have secured the Equity One mortgage
effectiveness of the transfer to the
with more than what was conveyed. Equity One,
transferee's detriment.
which prepared the loan documents, could have
[ N.J.S.A. 25:1-11(a) (emphasis added).] required George and Carolyn to obtain clear title
to the riparian grant and to include the grant in the
Generally, if property is not expressly included in mortgage security. It did not do so. It follows that
the instrument's description, it will not be covered Equity One only foreclosed on the upland property
by the mortgage. See 29 New Jersey Practice, and ultimately only obtained the upland lot in the
supra, § 3.16 at 124; see also Buzby, supra, 114 sheriff's sale. Thus, Panetta, who bid on the
N.J.Eq. at 585, 169 A.2d (noting lands uplands and did not attempt to include the riparian
subsequently acquired by riparian grant not grant, was the only responsive bidder at the
included in description of mortgage and not without-reserve auction. He has an enforceable
included in lien of mortgage); Moore, supra, 105 contract with Equity One and is entitled to specific
N.J.Eq. at 735, 149 A. 536 (holding lien of performance.
mortgage extended no further than land described
therein, not inclusive of abutting riparian tract); V.
Rutgers v. Kingsland, 7 N.J.Eq. 178, 190 (Ch. Our ruling makes it unnecessary for us to address
1848) (noting complainant can sell, by virtue of the remaining contract issues. However, we add
mortgage, only lands included within described these thoughts. An auction without reserve is a
boundaries), aff'd, 7 N.J.Eq. 658 (E. A. 1851). unique methodology in which "the owner
Here the mortgage did not reference the riparian essentially becomes an offeror, and each
324 grant either expressly or obliquely. *324 successively higher bid creates a contingent
Moreover, we note that prior to a foreclosure sale, contract, the highest bid creating an enforceable
325 *325 agreement." Black's Law Dictionary 140 (8th
a sheriff must give signed notice of the time and
the place of the sale by public advertisement and ed. 2004) (emphasis added); see also N.J.S.A.
that the notice must include an actual description 12A:2-328; Golfinopoulos v. Padula, 218
of the property including "either a diagram of the N.J.Super. 38 , 47, 526 A.2d 1107 (App.Div.)
premises or a concise statement indicating the certif. denied, 109 N.J. 45, 532 A.2d 1112 (1987).
municipality, the tax lot and block and where Under N.J.S.A. 12A:2-328(2), a sale takes place
appropriate, the street and street number, and the when the auctioneer announces the auction's
dimensions of the premises, as well as the number completion by "fall of the hammer or in any other
of feet to the nearest cross street." N.J.S.A. 2A:61- customary manner." See Lott v. Delmar, 2 N.J. 229
1 (emphasis added). Here, the only description of , 232, 6( 5 A.2d 25 (1949) (noting that when
the property in the sheriff's sale notice was what auctioneer's hammer falls, buyer and seller bear

10
 Panetta v. Equity 190 N.J. 307 (N.J. 2007)

same relation to each other as parties to violated the well-established legal principles
conventional contract for sale of goods); Harris v. governing auctions in which the parties bear the
Merlino, 137 N.J.L. 717 , 721, 61 A.2d 276 (E. A. same relationship to each other as the parties to a
1948). conventional contract. Lott, supra, 2 N.J. at 232,
66 A.2d 25.
Importantly, a seller in a without-reserve auction
5 Because Covey was not, in fact, the highest
may not withdraw the item being sold once a
conforming bid has been made. N.J.S.A. 12A:2- conforming bidder, she suffered no

328(3); 1 Williston on Contracts § 4:9 (Lord 4th "ascertainable loss," and her consumer
fraud claim must fail. See Thiede-mann v.
ed. 2006) (observing if auction is without reserve,
Mercedes-Benz USA. LLC, 183 N.J. 234,
"then the property may not be withdrawn after it
238, 872 A.2d 783 (2005).
has been put up and a bid has been made"); David
Carl Minneman, Auction Sales Under U.C.C. § 2- VI.
328, 44 A.L.R.4th 110 (1986); J.J. Marticelli,
The judgment of the Appellate Division is
Withdrawal of Property from Auction Sale, 37
reversed. The trial judge's order of specific
A.L.R.2d 1049 (1954).
326 performance to Panetta is reinstated. *326 For
Thus, had Covey's high bid in the without-reserve reversal and reinstatement — Chief Justice
auction been conforming (which it was not), ZAZZALI and Justices LONG, LaVECCHIA,
Equity One would have been without the power to ALBIN, WALLACE, RIVERASOTO and
force a new auction.5 It follows that the Appellate HOENS — 7.
Division's order that the property be rebid, based,
Opposed — None.
not on fraud, accident, or mistake, but on some
ephemeral notion of unilateral "confusion,"

11