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M & D Associates v. Mandara

February 06, 2004

M & D ASSOCIATES, PLAINTIFF-RESPONDENT,
v.
PHILIP MANDARA AND CARMELO MANDARA, DEFENDANTS-APPELLANTS, AND MARYANN MANDARA, THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE UNDER THAT CERTAIN POOLING AND SERVICING AGREEMENT DATED AS OF APRIL 1, 1995 FOR RTC MORTGAGE, PASS-THROUGH CERTIFICATES, SERIES 1995-1, MRS. PHILIP MANDARA, WIFE OF PHILIP MANDARA, AND MRS. CARMELO MANDARA, WIFE OF CARMELO MANDARA, DEFENDANTS.



On appeal from Superior Court of New Jersey, Chancery Division, Passaic County, Docket No. F-13666-99.

Before Judges Petrella and Fuentes.

The opinion of the court was delivered by: Petrella, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued December 15, 2003

In this appeal, defendants Philip Mandara and Carmelo Mandara challenge the denial of their motion to vacate a foreclosure judgment in connection with tax sale certificates held by plaintiff M & D Associates (M&D).

Defendants argue that the motion judge erred because substantial defects in service of process rendered the judgment void under R. 4:50-1(d), and exceptional circumstances were present which warranted relief under R. 4:50-1(f). Specifically, they contend that the one-year time limitation does not bar the relief requested by defendants on the basis of R. 4:50-1(d) and that equitable considerations justify relief under R. 4:50-1(f).

On December 17, 1984, Philip Mandara and Carmelo Mandara, brothers, bought a two-family house for $80,000 at 62-66 Maitland Avenue in Paterson (Property) and executed a mortgage to Prospect Park Savings and Loan Association to secure a $70,000 loan. The deed specified the grantees as"Philip Mandara, unmarried, and Carmelo Mandara, married but acting alone." In the 1990's, the mortgage was assigned to First National Bank of Chicago (FNBC),"as Trustee under that certain Pooling and Servicing Agreement dated as of April 1, 1995 for RTC Mortgage Pass-Through Certificates, Series 1995-1." The mortgage was later transferred to Bank of America, but it is unclear whether this assignment occurred before or after the filing of the complaint. The Mandara brothers assert that they satisfied all their mortgage payments, including property taxes.

Meanwhile, on March 15, 1994, M&D purchased from the City of Paterson a tax sale certificate for the Property for an unpaid 1993 sewer usage charge in the amount of $97.06. On November 18, 1994, Robert U. Del Vecchio Pension Trust (Trust) purchased a second tax sale certificate, later assigned to M&D, that included unpaid 1993 and 1994 sewer usage charges of $178.20.*fn1 On December 5, 1995, a third tax sale certificate was purchased by the City of Paterson for $137.23 for unpaid sewer usage charges. This certificate was sold to M&D in June 1997 for $2,194.93. M&D subsequently obtained a fourth tax certificate in July 1997 for $53.50, apparently for unpaid property taxes.

M&D instituted an action on August 19, 1999 in the Chancery Division to foreclose on the tax sale certificates. The Paterson tax office records, the Bank of America's file, and the Mandaras' 2001 IRS mortgage interest statement listed only Philip's address, 238 Madison Avenue in Paterson. A sheriff's deputy served process on Philip Mandara at this address by leaving the summons and complaint with his then seventeen-year old stepdaughter, Maria Miranda.*fn2 At the Madison Avenue address, Philip Mandara had received certified mailings in May 1999, which M&D claims contained a pre-action notice of foreclosure. M&D also made unsuccessful certified mailings to that address for Carmelo.

Personal service had also been attempted at the same address for Carmelo Mandara, but was unsuccessful. The return of service noted that Maria Miranda told the sheriff's deputy that Carmelo never lived there. M&D's attorney sent a letter to Philip Mandara dated October 22, 1999, requesting Carmelo Mandara's address for the purposes of the foreclosure action. M&D stated that it did not receive a response to its letter.

Because personal service upon Carmelo was never completed, M&D attempted service by publication. On October 27, 1999, publication of a summons to Carmelo appeared in a newspaper in Passaic County. On February 16, 2000, M&D filed an affidavit of inquiry purporting to demonstrate its diligent efforts to locate Carmelo Mandara and in support of the service by publication.

Besides his attempts at personal service and the letter to Philip Mandara, M&D's attorney stated in that affidavit that he contacted the Passaic County Voter Registration Board, checked the telephone book, and reviewed the records of the tax office. First National Bank of Chicago, the mortgagee bank, was allegedly served by certified mail on its alleged successor in Chicago, Bank One.

After the defendants failed to file any answer, M&D obtained an order setting amount, time and place of redemption on February 16, 2000. This order determined the redemption amount as $4,088.28 and fixed April 19, 2000 as the last date for redemption. M&D gave notice of the order to redeem by ordinary mail to Philip Mandara and Bank One on February 23, 2000. Pursuant to the order, M&D also published a notice to redeem to Carmelo Mandara. On April 27, 2000, M&D obtained a final judgment of foreclosure against all the defendants after no party sought redemption.

On February 21, 2003, Philip and Carmelo Mandara filed a motion to vacate the final judgment. The Mandaras assert that the value of ...


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