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Old Republic Ins. Co. v. Currie

April 21, 1995

OLD REPUBLIC INSURANCE COMPANY, PLAINTIFF,
v.
ALLEN CURRIE, DEFENDANT.



Boyle, P.j.ch.

The opinion of the court was delivered by: Boyle

Civil Action

BOYLE, P.J.CH.

Question Presented:

This motion presents this court with the unique question as to whether a mortgagee's lien which is extinguished by a foreclosure sale may be subsequently revived upon the mortgagor's reacquisition of the foreclosed property. This court's research has disclosed no modern case law on the subject.

Facts:

Allen and Ruthie Currie were the owners of property at # 16 West End Avenue, Plainfield, New Jersey. On or about July 16, 1974, the Curries executed a home repair contract and mortgage of even date which was subsequently assigned to plaintiff, Old Republic Insurance Company ("Old Republic"). The Curries thereafter filed a petition in bankruptcy. On December 4, 1978, the U.S. Bankruptcy Court entered an order declaring the lien of plaintiff to the Plainfield property fixed in the amount of $6,476.

After the bankruptcy, Allen and Ruthie Currie lost the Plainfield property through a foreclosure. However, on January 19, 1981, defendant, Allen Currie, reacquired the property. Ruthie Currie was not named on this later deed. No payments have been made toward the satisfaction of this debt since the date of the bankruptcy order.

Sometime during the month of April 1984, plaintiff ran a search of the property which disclosed that the Secretary of the Department of Housing and Urban Development conveyed the property to an Allen Currie. Plaintiff claims that it was unable to ascertain whether this Allen Currie was the same Allen Currie who had been indebted to Old Republic because this time Ruth Currie was not on the deed. Plaintiff responded to this information by rerecording its mortgage. However, plaintiff made no further attempt to verify the identity of the new owner until May, 1993. At some point thereafter, plaintiff confirmed that Allen Currie had reacquired the property and commenced this action on August 10, 1994.

Plaintiff argues that, by operation of law, its mortgage is revived, and that it is entitled to simple interest on the $6,476, plus simple interest at the contract rate of 12.5% to the date of judgment, together with counsel fees and costs as allowed by the court rules.

Defendant's sole defense to this action is that the above bankruptcy proceeding extinguished defendant's indebtedness to plaintiff. However, there is no authority to support this proposition. Plaintiff asserts that defendant's answer has failed to interpose a validly recognized defense and therefore brings this motion to strike defendant's answer.

Ruling:

It is well recognized that, where the answer and any proffered defenses fail to challenge the essential elements of the mortgagee's right to foreclose, and fail to interpose a validly recognized defense, the mortgagee is entitled to a final judgment of foreclosure. See Somerset Trust Co. v. Sternberg, 238 N.J. Super. 279, 283, 569 A.2d 849 (Ch. Div. 1989).

Pursuant to R. 4:64-1(a)(2), an answer which does not contest the validity or priority of a mortgage is considered an uncontesting answer. Subsection (a)(3) further defines an uncontesting answer as one that pleads that "a party is without knowledge or information sufficient to form a belief as to the truth of the allegation" or one that leaves the plaintiff to his proofs. Moreover, R. 4:5-4 requires that all affirmative defenses be supported with specific facts. Consequently, a plaintiff may move to strike such an answer pursuant to R. 4:6-5 on the ground that ...


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