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First Union National Bank v. Penn Salem Marina

February 17, 2006

FIRST UNION NATIONAL BANK, AS INDENTURE TRUSTEE, PLAINTIFF-RESPONDENT,
v.
PENN SALEM MARINA, INC., MARVIN K. HITCHNER, JR., DEFENDANTS-APPELLANTS, AND MARVIN K. HITCHNER, III, DEFENDANT.



On appeal from the Superior Court of New Jersey, Chancery Division, Salem County, F-2496-03.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued February 1, 2006

Before Judges Conley, Weissbard*fn1 and Winkelstein.

In this mortgage foreclosure action, we are called upon to decide whether the amount of a previously adjudicated Law Division judgment obtained on the note evidencing the underlying debt limits the amount of the foreclosure judgment. We conclude that it does not, and affirm the January 13, 2005 final judgment in foreclosure.

The material facts are not in dispute. On May 4, 2001, defendants Marvin Hitchner, Jr. (Hitchner) and Penn Salem Marina (collectively, defendants), executed and delivered to Interbay Funding a promissory note (the note) in the sum of $750,000. The note was secured by a mortgage executed that same date and guaranteed by defendant Marvin Hitchner, III.*fn2 The mortgage was a lien against defendants' commercial real property, a marina, in Pennsville. Interbay assigned the note and mortgage to plaintiff, First Union National Bank.

The note called for defendants to pay interest at the rate of 13.5 percent per year, with monthly installments commencing July 1, 2001, and the entire principal and all accrued and unpaid interest payable on June 1, 2016. Additional relevant portions of the note include:

4. DEFAULT AND ACCELERATION. If any payment required in this Note is not paid (a) prior to the fifth (5th) day after a Payment Date, . . . or (c) on the happening of any other default . . . or under the terms of . . . any of the Other Security Documents . . . at the option of Lender (i) the whole of the principal sum of this Note, (ii) interest, default interest, late charges and other sums, as provided in this Note, the Security Instrument or the Other Security Documents, (iii) all other monies agreed or provided to be paid by Borrower in this Note, the Security Instrument or the Other Security Documents, (iv) all sums advanced pursuant to the Security Instrument or the Other Security Documents, (iv) all sums advanced pursuant to the Security Instrument to protect and preserve the Property and any lien and security interest created thereby, and (v) all sums advanced and costs and expenses incurred by Lender in connection with the Debt (defined below) or any part thereof . . . shall without notice become immediately due and payable. (Emphasis added).

8. WAIVERS. [A]nd no . . . waiver of any provision of this Note, . . . or the Other Security Documents made by agreement between Lender or any other person or party shall release, modify, amend, waive, extend, change, discharge, terminate or affect the liability of Borrower, . . . under this Note, . . . or the Other Security Documents. No notice to or demand on Borrower shall be deemed to be a waiver of the obligation of Borrower or of the right of Lender to take further action . . . as provided for in this Note . . . or the Other Security Documents.

12. INCORPORATION BY REFERENCE. All of the terms, covenants and conditions contained in the Security Instrument and the Other Security Documents are hereby made part of this Note . . . .

The mortgage instrument, like the note, reflected a principal amount of $750,000, and secured the performance of the obligations under the note. Among its terms, it listed the mortgagee's remedies in the event the borrowers defaulted.

Section 9.1 REMEDIES. Upon the occurrence of any Event of Default, to the extent permitted by applicable law, Borrower agrees that Lender may take any action available at law, in equity, and as otherwise provided in this Security Instrument, without notice or demand, as it deems advisable to protect and enforce its rights against Borrower in and to the Property, including, but not limited to the following actions, each of which may be pursued concurrently or otherwise, at such time and in such order ...


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