JUDICIAL DEVELOPMENTS

June 2007

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New Jersey Supreme Court Draws Hard Line between Riparian Rights and a Riparian Grant
Panetta v. Equity One, Inc.

George Francis, a businessman, took out a mortgage with Equity One on a property that he owned. The property had a riparian grant to adjacent land. When Equity One, the mortgagor, provided the loan to George Francis, however, Equity One failed to have included in the deeded interest the right to the riparian grant. After the bank foreclosed and put the property up to auction, there were several interested bidders and several required in their responsive bids that the riparian grant (which had initially belonged to George Francis) be included. A legal free-for-all ensued between the bidders, several of which had higher but non-complying bids, on two critical issues: (1) is a riparian grant inherent in the transfer of real property and (2) whether a higher but nonconforming bid for property is nonetheless sufficient to require that the auctioneer (Equity One) sell the property to the highest bidder.