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Manufacturers & Traders Trust Co. v. Green


January 4, 2008


On appeal from the Superior Court of New Jersey, Chancery Division, General Equity Part, Cape May County, Docket No. F-4429-01.

Per curiam.


Submitted December 3, 2007

Before Judges S. L. Reisner and Gilroy.

This is the second of four real property foreclosure appeals filed by defendant-mortgagors Audry E. Green and Shirley Green, husband and wife.*fn2 The four appeals filed under Docket Nos. A-7120-03T5, A-1124-04T2, A-1556-06T2, and A-2349-06T2 were submitted back to back for our consideration. In this matter, defendants appeal from the November 14, 2004, judgment of foreclosure entered in the Chancery Division, General Equity Part, Cape May County, under Docket No. F-4429-01, as amended by order of July 13, 2006, correcting the name of plaintiff to Manufacturers & Traders Trust Company, Trustee For Securitization Series 1997-3, Agreement dated June 1, 1997. We affirm.


On April 17, 1997, defendants executed a $62,000 promissory note and mortgage in favor of Parkway Mortgage, Inc. The note was for a term of twenty years and required defendants to repay the principal, together with interest at the rate of 10.99% per annum, by making monthly payments of $639.54, on the twenty-second day of each month, commencing May 22, 1997. Both the note and mortgage contained a provision that permitted the note holder, on default, to accelerate the entire balance of principal and interest due under the note on a thirty-day written notice to defendants. The mortgage encumbered property located at 414 West Main Street, Middle Township. On May 6, 1997, the mortgage was recorded in the Office of the Cape May County Clerk in Mortgage Book 2067, Page 204.

On the same day defendants executed the note and mortgage, Parkway assigned the loan documents to ContiMortgage Corporation. The original assignment was lost and never recorded. On May 15, 1997, ContiMortgage assigned the mortgage to ContiWest Corporation, a wholly owned subsidiary of ContiMortgage. This assignment was recorded on August 27, 1998, in Book 267 of Assignments, Page 953. On February 19, 2003, ContiWest assigned the note and mortgage to plaintiff. This assignment memorialized a prior assignment to plaintiff that was part of a June 1, 1997, securitization of the mortgage. The assignment was recorded in Book 298 of Assignments, Page 652. Fairbanks Capital Corporation began servicing the loan on behalf of plaintiff on August 1, 2000.

On January 24, 2001, believing that defendants had failed to make the December 22, 2000 payment, Fairbanks sent defendants a letter, advising that they were in default for failing to make the December 2000 and January 2001 payments. The notice advised defendants that they could reinstate the mortgage by paying all amounts due by February 24, 2001. On March 7, 2001, plaintiff filed its foreclosure complaint.

Defendants filed an answer denying they had defaulted on the note and mortgage. On April 23, 2001, plaintiff filed an amended complaint reciting that the mortgage had been assigned to ContiMortgage by an unrecorded assignment; was later assigned to ContiWest Corporation by the assignment recorded on August 27, 1998; and last assigned to plaintiff by ContiWest. On April 14, 2003, plaintiff filed a second amended complaint adding Parkway as a defendant, requesting that the court "issue its [o]rder establishing the assignment from [d]efendant Parkway to ContiMortgage and authorizing the filing of the [o]rder in the land records of Cape May County to establish the assignment." Default was entered against Parkway for failure to file an answer.

On May 27, 2003, plaintiff moved for summary judgment. On July 18, 2003, Judge Seltzer granted partial summary judgment, determining that the assignment from Parkway to ContiMortgage was valid, and directing the County Clerk to accept an exemplified copy of the court's order to establish the lost assignment from Parkway to ContiMortgage. A confirming order entered on August 18, 2003, provided in relevant part:

Defendants executed a $62,000 mortgage and promissory note to Parkway Mortgage on April 17, 1997 for the property located at 414 West Main Street, Middle Township, New Jersey. This mortgage is recorded at Book 2607, Page 204. On April, 17, 1997, this mortgage was assigned from Parkway Mortgage to ContiMortgage Corporation. The assignment from Parkway Mortgage to ContiMortgage Corporation has been lost, and while there are no signed copies of the assignment, Plaintiff has established that the assignment took place.

[t]he Clerk is hereby directed to accept and record an exemplified or certified copy of this Order to establish the lost Assignment, as if this Order were the original Assignment.

However, the judge denied that part of plaintiff's motion, which sought to declare defendants in default, strike defendants' answer, and transfer the matter to the Foreclosure Unit.

A bench trial was held before Judge Seltzer on January 6 and 7, 2004. On February 17, 2004, the judge issued a sixteen-page written opinion in which he determined that defendants had made all mortgage payments through January 2001, but had defaulted in making the February 2001 payment, justifying plaintiff accelerating the balance of principal and interest. In his opinion, the judge stated in relevant part:

Defendant [Ms. Green] tendered no other funds to plaintiff until April 2001. P-4 shows, consistent with defendant's testimony, that her next check was dated April 21, 2001. By the time that check was received[,] the plaintiff had elected to accelerate the balance due under the Note and Mortgage, having filed the Complaint on March 27, 2001. P-3 indicates that check was intended to make the March[] 2001 payment and that it was returned by letter dated May 4, 2001. There does not appear to have been any attempt to pay the installment due February 22, 2001. P-5 does show that a check was credited to this account on November 19, 2002. No explanation was given for this credit, either as to why defendant made the payment or why plaintiff accepted it when it had refused all other payments. I cannot conceive that this payment has any effect on defendant's default of almost two years standing. No one suggests that it does. Accordingly, I simply apply the payment to the amount due.

In short, I find that defendant had not paid her February 2001 payment and that plaintiff had the right to institute this foreclosure action. Accordingly, I strike the answer and all counterclaims (predicated on a belief that plaintiff improperly instituted this foreclosure action) and refer the matter to the Foreclosure Unit for further proceedings.

I add these comments and provisions. In doing so, I stress that the amount in dispute between plaintiff and defendant is only two months: Plaintiff, whose position I have rejected, believes defendant owes for each month from December 2000; defendant[,] whose position I have accepted, believes that [the account was current through] January 22, 2001. Defendant, however, does not dispute that she did not make the payment due February 22, 2001 and that this complaint was instituted more than 30 days thereafter. Nor does defendant dispute that the mortgage documents permit plaintiff to do so. Defendant, I also note, does not allege that she was led to believe that a payment in February would be unavailing. It is true that plaintiff delivered a Notice of Intent to Foreclose (P-17) but defendant's attempt to make a payment in April prohibits acceptance of any such argument were it to be made.

Because the trial judge concluded that plaintiff was unresponsive to defendants' inquiries regarding the status of the loan, he enjoined plaintiff from seeking entry of final judgment for two months, to provide defendants additional time to reinstate the mortgage. As to the amount necessary to cure the default and reinstate the mortgage, the judge stated:

The amount necessary to cure the default will be $23,226.05. I derive this figure by multiplying the monthly payment of $639.54 by the 36 months encompassed in 2001 (11 months), 2002 (12 months), 2003 (12 months), and 2004 (1 month) ($23,023.44) less the $639.54 paid in November 2002 plus the $539.54 defendant[s] attempted to pay in August 2000 which was refused by plaintiff plus the $639.54 due on January 22, 2004[,] less the $85.15 (contained in the September 2000 check #4450) overpaid as a result of plaintiff's demand for costs of (improperly placed) forced insurance less $351.78 representing the amount overpaid in the July 2000 check #4329.

I emphasize that defendant[s] do[] not appear to dispute this amount. It is a figure derived from accepting every claim made by defendant[s] and one (the reversal of the June 1999 payment) that [they] did not make. Given that I order defendant[s] to pay no more than [they] must admit is owed, there is no prejudice to limiting the time within which defendant[s] may cure the mortgage. In fact, although I would reject the claim, it might well be argued that I have incorrectly permitted cure of a non-residential mortgage, in which event [defendants] would be required to pay, not the amounts I have derived, but rather the entire principal balance of the mortgage. In addition to the calculated amount of $23,865.59, defendant[s] will be required to pay (a) $639.54 for each month on which a payment would be due, beginning February 22, 2004, until the default is cured and the mortgage is reinstated and (b) reimburse plaintiff for any taxes advanced by plaintiff. Defendant[s] would normally also be required to pay the Rule-authorized counsel fees and costs, but, given the problems with this account, I do not require the payment of counsel fees or late fees as a condition of cure.

A confirming order was entered on February 17, 2004.

Because defendants failed to pay the amount necessary to reinstate the mortgage, a final judgment of foreclosure was entered on November 14, 2004. However, because the judgment inadvertently designated ContiWest as plaintiff, and the appeal was prosecuted accordingly, this court entered an order on May 26, 2006, that dismissed the appeal without prejudice, pending plaintiff filing a motion in the Chancery Division for leave to correct the caption of the judgment. Plaintiff filed the motion on June 13, 2006. On July 13, 2006, an order was entered directing "that the judgment is amended to identify Manufacturers & Traders Trust Company, Trustee for Securitization Series 1997-3, Agreement dated June 1, 1997, as plaintiff, and hereafter, the caption shall read as set forth in this order." On November 13, 2006, we reinstated the appeal.


On appeal, defendants argue:









A trial court will grant summary judgment to the moving party "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c); see also Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995). "An issue of fact is genuine only if, considering the burden of persuasion at trial, the evidence submitted by the parties on the motion, together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact." R. 4:46-2(c). On appeal, "the propriety of the trial court's order is a legal, not a factual, question." Pressler, Current N.J. Court Rules, comment 3.2.1 on R. 2:10-2 (2008). "We employ the same standard that governs trial courts in reviewing summary judgment orders." Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998).

Reviewing courts "'do not disturb the factual findings and legal conclusions of the [motion] judge unless we are convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice . . . .'" Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974) (quoting Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div.), certif. denied, 40 N.J. 221 (1963)). However, "[a] [motion judge's] interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm., 140 N.J. 366, 378 (1995).

We have considered defendants' arguments in light of the record and applicable law, and we are not persuaded by any of them. We affirm the judgment substantially for the reasons expressed by Judge Seltzer in his written opinion of February 17, 2004. Nevertheless, we add the following comments.

Defendants argue that the trial judge erred in determining that plaintiff was the proper assignee of the mortgage. Defendants claim that the assignment of the mortgage from Parkway to ContiMortgage, as explained in the lost assignment affidavit executed by Terrell W. Smith, Fairbanks Executive Vice President, was invalid. Defendants assert that: 1) the assignment was completed prior to them executing the mortgage loan documents because they did not sign the mortgage loan documents until after 6:00 p.m. on the evening of April 17, 1997; 2) the "Notice Of Assignment, Sale Or Transfer Of Servicing Rights" which was attached to the Smith affidavit was not a "mortgage loan assignment"; and 3) although a notice in Parkway's closing packet stated that Parkway did not service mortgage loans but intended "to assign, sell, or transfer the servicing of . . . [the] loan to another party," Parkway never disclosed to them that their mortgage "has been sold/or will be sold to ContiMortgage, nor was it written in any of Borrower's mortgage documents." We reject these contentions.

In support of that part of its motion for summary judgment requesting that the trial court issue an order establishing the assignment from Parkway to ContiMortgage and authorizing the Cape May County Clerk to file the order in lieu of the lost assignment, plaintiff submitted an affidavit from Smith that provided in pertinent part:

2. Fairbanks . . . is the attorney-in-fact for ContiMortgage Corporat[ion] ("Conti") . . . .

3. ContiWest Corporation is a wholly owned subsidiary of Conti . . . .

4. On April 17, 1997, Audry E. Green and Shirley E. Green executed a certain Promissory Note in the amount of $62,000 payable to Parkway Mortgage[,] Inc. The Promissory Note was secured by a Mortgage of even date executed by Audry E. Green and Shirley Green upon certain real property therein described, said Mortgage having been recorded May 6, 1997 as Document No. R0008955 of the Official Records of the Cape May Recorder's Office, Cape May County, New Jersey.

5. Parkway Mortgage, Inc.[,] assigned the above described Mortgage and Note to Conti by an assignment executed on April 17, 1997. This assignment has not been recorded. After a diligent search of the files obtained from Conti, neither an executed original or a copy of the executed assignment can be located. An unexecuted copy of the assignment is attached as . . . .

6. There is no question that Parkway assigned the Mortgage and Note to Conti. This is evidence by the unexecuted assignment, a notice of assignment that was sent to Defendants on April 23, 2003 indicating that the note and mortgage had been assigned to Conti (a copy is attached), and that two other mortgages/notes executed by Defendants with Parkway on April 17, 1997 were assigned to Conti: the mortgages for 303 East Wildwood and 508 West Main Street.

7. As such, the original Assignment of Mortgage . . . described above has been lost, destroyed, mislaid or stolen and cannot be presented to the Court.

Although an assignment of a mortgage should be in writing, N.J.S.A. 46:9-9; N.J.S.A. 25:1-13(a), it need not be recorded to be effective. 29 New Jersey Practice, Law of Mortgages, §11.3 (Myron C. Weinstein) (2d ed. 2001); In re Kennedy Mortg. Co., 17 B.R. 957, 964 (Bankr. D.N.J. 1982). For an assignment to be effective, all that is required is for the assignment to identify the assignee, the assignor, and the property. N.J.S.A. 25:1-13(a).

The April 23, 1997, notice spoke in terms of "assignment, sale or transfer of servicing rights" and not in terms of mortgage assignment. However, other than urging that the closing took place at 6:00 p.m. on April 17, 1997, defendants presented no evidence to counter the validity of the Smith affidavit or to negate the assignment. There is no reason why the assignment could not have been made contemporaneously with the mortgage. Further, the 303 East Wildwood Avenue and 508 Main Street mortgages, which were executed by defendants in favor of Parkway on April 17, 1997, were also assigned to ContiMortgage on the same day. Moreover, language contained in the mortgage stated that it was subject to sale without notice to the borrower. We are satisfied that the Smith affidavit properly established the necessary factual basis for the court to have concluded that Parkway had assigned the note and mortgage to ContiMortgage on April 17, 1997, notwithstanding defendants' unsupported assertions and suspicions to the contrary.

Defendants argue that the trial judge erred in determining that the foreclosure complaint had been filed on March 27, 2001, when it was filed on March 7, 2001. Defendants contend that because the judge found them concurrent on their monthly payments through January 22, 2001, and that they were in default of the February 22, 2001 payment, the March 7, 2001, complaint was prematurely filed because the mortgage documents gave them a thirty-day grace period to cure before foreclosure proceedings could be commenced. Although we agree that the trial judge misspoke concerning the date the complaint was filed, we disagree that the mistake required dismissal of the action.

An amended complaint was filed on April 23, 2001, prior to defendants' May 8, 2001, answer. Although the judge concluded that defendants were not in default until February, 22, 2001, the amended complaint, filed over thirty days after that date, cured the problem complained of by defendants. An amendment of a complaint "should be allowed as of course if the litigation has just commenced and the complaint would otherwise be subject to dismissal for failure to state a claim." Pressler, Current N.J Court Rules, Comment 2.1 on R. 4:9-1 (2008); see also Draney v. Bachman, 138 N.J. Super. 503, 506 (Law Div. 1976) ("[A]n order amending . . . pleadings should be granted under circumstances where the new material could reasonably be the basis of a cause of action."). The amended complaint therefore cured the premature filing of the original complaint. Moreover, assuming a February 22, 2001, default, defendants' April 21, 2001, check, which was returned to them by Fairbanks, would have been too late. They still would have been in default of the March 22, 2001, payment and the amended complaint was filed thirty-two days after that date.

We conclude that the trial judge's determination that defendants had defaulted under the terms of the note and mortgage, justifying plaintiff to accelerate the balance of principal and interest due and institute foreclosure proceedings, was supported by substantial, credible evidence in the record. R. 2:11-3(e)(1)(A). To the extent not addressed here, defendants' remaining arguments, are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).


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