January 4, 2008
THE CHASE MANHATTAN BANK, AS TRUSTEE OF IMC HOME EQUITY LOAN TRUST 1997-5 UNDER THE POOLING AND SERVICING AGREEMENT DATED AS OF SEPTEMBER 1, 1997, PLAINTIFF-RESPONDENT,
AUDRY E. GREEN AND SHIRLEY GREEN, DEFENDANTS-APPELLANTS, AND SHIRLEY FREEMAN, TENANT, DEFENDANT.
On appeal from the Superior Court of New Jersey, Chancery Division, General Equity Part, Cape May County, Docket No. F-0862-02.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted December 3, 2007
Before Judges S. L. Reisner and Gilroy.
This is the third of four real property foreclosure appeals filed by defendant-mortgagors Audry E. Green and Shirley Green, husband and wife.*fn1 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 September 29, 2006, judgment of foreclosure entered in the Chancery Division, General Equity Part, Cape May County, under Docket No. F-862-02, as amended by order of December 19, 2006.
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 on 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 at 508 Main Street, Middle Township. On May 6, 1997, the mortgage was recorded in the Office of the Cape May County Clerk in Book 2607 of Mortgages, Page 198.
On the same day that defendants executed the note and mortgage, Parkway assigned the loan documents to ContiMortgage Corporation. The assignment was recorded on August 27, 1998, in Book 267 of Assignments, Page 951. Although the assignment references the same loan number as the mortgage (3970374) and refers to the 508 Main Street property, it indicates that the assigned mortgage had been recorded in Book 2607 of Assignments, Page 204. The mortgage actually recorded in Book 2607 of Assignments, Page 204, was the mortgage affecting property at 414 West Main Street, also executed by defendants on April 17, 1997.
On May 8, 1997, defendants received a letter from IMC Mortgage Company (IMC) stating that on May 1, 1997, it had purchased their mortgage from Parkway. However, the reverse side of the letter contained a notification entitled, "Notice of Assignment, Sale or Transfer of Service and Rights," which provided in pertinent part:
You are hereby notified that the servicing of your mortgage loan, that is, the right to collect payments from you, is being assigned, sold or transferred from the Present Servicer [Parkway] to the New Servicer named above [IMC]. The Assignment, sale or transfer of the servicing of the mortgage loan does not affect any term or condition of the mortgage instruments, other than terms directly related to the servicing of your loan.
On November 16, 1999, defendants received a letter from CitiFinancial Mortgage Company (Citi), advising that "Citi has purchased the mortgage loan operations of IMC . . . . Effective December 6, 1998, Citi . . . will be the servicer for . . .[the] mortgage loan."
On February 19, 2003, ContiMortgage executed an assignment of the mortgage in favor of plaintiff, confirming an assignment that had occurred by securitization in September 1997. The assignment was recorded in Book 298 of Assignments, Page 636. This assignment also reflected that the assigned mortgage had been recorded in Book 2607 of Mortgages, Page 204. On October 21, 2004, a corrective assignment of mortgage was executed by ContiMortgage in favor of plaintiff, addressing the error: "The filed assignment reflects the mortgage recorded in Book 2607, Page 204; the mortgage assigned is actually recorded in Book 2607, Page 198." Fairbanks Capital Corporation commenced servicing the loan on June 2, 2001.
Believing that defendants had last made a payment on December 7, 2001, which had been credited to the September 1, 2001, payment, Fairbanks notified defendants that they were in default as of October 22, 2001. Plaintiff filed its foreclosure complaint on January 11, 2002. On May 27, 2003, plaintiff moved for summary judgment. On August 18, 2003, Judge Seltzer granted partial summary judgment, correcting the land records in the Office of the Clerk of Cape May County to reflect the correct page number of the assignment in the chain of title from Parkway to ContiMortgage. The order provided in relevant part:
There is an assignment for the mortgage on 508 Main Street, Middle Township, New Jersey from Parkway that is recorded at Assignment Book 267, pp. 951-952. The assignment from Parkway Mortgage to [ContiMortgage] contains a handwritten reference that the mortgage being assigned is located at Book 2607, Page 204. This reference is actually to a mortgage for 414 West Main Street, Middle Township, New Jersey. The mortgage for the 508 Main Street property is actually recorded at Book 2607, Page 198, and it is the mortgage that should be referred to in the Assignment recorded at Assignment Book 267, pp. 951-952.
[T]he Clerk is directed to correct the scrivener's error in the land records, or, alternatively, is directed to record this Order, with appropriate references entered in the records . . . .
The judge, however, denied that part of the motion, which sought to declare defendants in default, strike their answer, and refer the matter to the Foreclosure Unit.
A consolidated trial was conducted in this matter and in the matter under Docket No. F-4429-01, on January 6 and 7, 2004.
On February 17, 2004, Judge Seltzer issued a sixteen-page, written opinion, determining that defendants had defaulted on the note and mortgage, justifying plaintiff accelerating the mortgage principal and interest. Although plaintiff had contended that defendants were only current through September 2, 2001, and in default as of October 2001, the judge, after reviewing defendants' payment history, found defendants were current through October 2001, and in default as of November 22, 2001. "Given the lapse of more than thirty days from October 22, 2001, to December 11, 2001, plaintiff was entitled to declare a default and to accelerate the mortgage. In short, I find that defendants had not paid [their] November 22, 2001 payment and that plaintiff had the right to institute this foreclosure action." Because plaintiff had not adequately responded to defendants' inquiries regarding the status of the loan, the judge determined that "plaintiff should be estopped from refusing defendant[s] the right to cure" for a reasonable period of time. While referring the case to the Foreclosure Unit, the judge exercised his discretion and enjoined plaintiff "from making application for entry of final judgment until April 19, 2004."
A confirming order was entered on February 17, 2004, which provided in relevant part that: 1) "[t]he pleadings of defendants . . . be and the same are hereby stricken and the matter is referred to the Foreclosure Unit to be treated as an uncontested proceeding"; 2) "[p]laintiff is enjoined from making application for the entry of final judgment until April 19, 2004"; and 3) "[d]efendants may cure any default and reinstate this mortgage at any time prior to the entry of final judgment by paying to plaintiff . . . $17,402.70", together with all monthly payments from February 22, 2004, and any monies advanced by plaintiff for taxes. The order further provided that "defendants are not required to pay any contractual late fees or Rule-authorized counsel fees or costs as a condition of cure." Defendants failed to pay the necessary monies to reinstate the mortgage loan.
An amended complaint was filed on May 21, 2004, to reflect that the mortgage had been assigned to plaintiff by ContiMortgage, via a "written assignment to be recorded." The complaint and amended complaint were corrected by an order dated March 4, 2005, that provided:
1. Paragraph 2-d of the Complaint in Foreclosure and Amendment to Complaint is hereby amended to read as follows: 2-d. Said obligation and mortgage were assigned to CONTIMORTGAGE CORPORATION by written assignment dated April 17, 1997 and recorded in the Office of the Clerk/Register of Cape May County on August 27, 1998 in Assignment Book 267, Page 951.
2. Paragraph 2 of the Complaint in Foreclosure and the Amendment to Complaint is hereby amended to include the following sub-paragraph: 2-e. Said obligation and mortgage were further assigned to . . . [plaintiff], by written assignment dated February 19, 2003 and recorded in the Office of the Clerk/Register of Cape May County on April 15, 2003 in Assignment Book A298, Page 636.
A Corrective Assignment of Mortgage was recorded in the Office of the Clerk/Register of Cape May County on November 24, 2004 in Book A304, Page 692, the purpose of which is to correct the Assignment of Mortgage filed in Book A298, Page 636 which Assignment incorrectly reflects that the original Mortgage was recorded in Book 2607, page 204 when the mortgage was actually recorded in Book 2607, Page 198.
Because defendants failed to pay the necessary monies to reinstate the mortgage, plaintiff applied for final judgment of foreclosure in early 2005. Defendants, however, filed for bankruptcy on February 14, 2005. Nevertheless, the Foreclosure Unit issued a final judgment on March 4, 2005. Because of the bankruptcy, plaintiff never pursued a sheriff's sale, and the March 4, 2005, judgment was vacated by order dated September 29, 2006. By order of the Bankruptcy Court dated August 29, 2005, the automatic stay was vacated. Plaintiff's application to certify the trial court's February 17, 2004, order as final was denied by order of May 5, 2006.
On August 1, 2006, plaintiff moved for entry of final judgment. Defendants objected. However, a final judgment of foreclosure was entered by the Foreclosure Unit on September 29, 2006. After a hearing on October 12, 2006, an order was entered that dismissed defendants' objection and authorized the Foreclosure Unit to proceed with the entry of final judgment. At this hearing, plaintiff's counsel stated that to preserve defendants' right of appeal, he would request the Foreclosure Unit to vacate the September 29, 2006, final judgment and enter a new judgment. A second final judgment of foreclosure was entered on December 19, 2006.
On appeal, defendants argue:
THE TRIAL COURT ERRED IN GRANTING PLAINTIFF PARTIAL SUMMARY JUDGMENT, DETERMINING PLAINTIFF WAS THE PROPER ASSIGNEE OF THE MORTGAGE.
THE TRIAL COURT ERRED BY NOT DESIGNATING THE NAME OF THE PLAINTIFF IN THE CAPTION OF THE AUGUST 18, 2003, ORDER GRANTING PARTIAL SUMMARY JUDGMENT.
THE TRIAL COURT'S DETERMINATION THAT DEFENDANTS HAD DEFAULTED ON THE NOTE AND MORTGAGE, JUSTIFYING THE ACCELERATION OF THE AMOUNT DUE AND FORECLOSURE OF THE MORTGAGE, WAS NOT SUPPORTED BY SUBSTANTIAL, CREDIBLE EVIDENCE.
THE TRIAL COURT ERRED IN CONSOLIDATING THIS ACTION WITH TWO OTHER REAL PROPERTY FORECLOSURE ACTIONS.
THE TRIAL COURT DID NOT HAVE JURISDICTION OVER THE MATTER, BECAUSE THE FORECLOSURE ACTION SHOLD HAVE BEEN TRANSFERRED TO THE FEDERAL COURT. (NOT RAISED BELOW).*fn2
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 trial 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] trial [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 the arguments. 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 claim that Parkway did not assign the mortgage to ContiMortgage but had assigned the mortgage to IMC. In support of this contention, defendants included in their appendix: 1) a May 8, 1997, notice from IMC to defendants advising them that on May 1, 1997, IMC had purchased their mortgage from Parkway; 2) a "NOTICE OF ASSIGNMENT, SALE OR TRANSFER OF SERVICING RIGHTS" indicating that the then-present servicer, Parkway, would stop accepting payments on June 21, 1997, and that IMC would begin acceptance as of that date; 3) a May 25, 1997, $639.54 cashed check from defendants' account made payable to IMC (the first mortgage payment); 4) a June 17, 1997, $639.54 cashed check from defendants' account made payable to IMC (the second mortgage payment); 5) a 1999 Mortgage Interest Statement naming IMC as the "recipient/lender"; 6) a November 16, 1999, notice that Citi had purchased the mortgage loan operations of IMC effective December 6, 1999; and 7) a series of monthly payment checks payable to IMC from July 2, 1997, to November 1999.*fn3
While defendants go to great lengths in their attempt to show that Parkway had assigned the mortgage to IMC, we are satisfied that what was assigned to IMC by ContiMortgage was the servicing rights, not the actual mortgage. The reverse side of the May 8, 1997, letter that defendant received from IMC stated in relevant part: "You are hereby notified that the servicing of your mortgage loan, that is, the right to collect payments from you, is being assigned, sold or transferred, from the present servicer [Parkway] to the new servicer named above [IMC]." (Emphasis added). The servicing rights were then passed on from IMC to Citi. The notice to defendants provided that "[e]ffective December 6, 1999 CitiFinancial Mortgage Company will be the servicer for your mortgage loan." (emphasis added). Those rights were subsequently assigned to Fairbanks. Fairbanks's May 16, 2001, notice to defendants informed them that "the servicing of . . . [their] mortgage loan, that is the right to collect payments from . . . [them], is being assigned, sold or transferred from CitiFinancial Mortgage Company to Fairbanks Capital Corp. effective June 2, 2001." (emphasis added).
Contrary to defendants' contentions, we are satisfied that the trial judge properly determined that plaintiff is the proper assignee to prosecute the foreclosure action. 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).
On April 17, 1997, Parkway assigned a mortgage pertaining to "508 Main Street" to ContiMortgage. While that document reflected the same loan number as the mortgage, 3970374, it mistakenly referred to the mortgage as being recorded in Book 2607 of Assignments, Page 204, the book and page number upon which the 414 West Main Street mortgage was recorded. This error was subsequently corrected by court order. A subsequent assignment of the mortgage dated February 13, 2003, reflected that ContiMortgage had previously assigned it to "The Chase Manhattan Bank, as Trustee of IMC Home Equity Loan Trust 1997-5 under the pooling and servicing agreement dated as of September 1, 1997." A corrective assignment of the mortgage executed on October 21, 2004, reflected the same assignor and assignee, but corrected the book and page number where the mortgage was originally recorded.
Defendants argue next that the trial judge incorrectly determined that they were in default under the note and mortgage. Defendants contend that Fairbanks created the default "by not posting mortgage payments timely and correctly and placing Forced Placed Insurance when in fact . . . [they] had insurance coverage for 508 Main Street and 414 West Main Street."
Specifically, defendants assert that: 1) their June 1, 2001, payment in the sum of $720 had been placed in a suspense account and was not credited; 2) two $531.69 mortgage payments for 19 Lena Street were incorrectly placed in the 508 Main Street account; and 3) an August 16, 2001, check that had "508 Main Street" written in the "memo section" was wrongfully returned to them with "414 Main Street" written in its place and with the 414 Main Street account number having been placed on the check.
Plaintiff's proofs showed that defendants were current through September 2001, and in default as of October, 2001, However, the judge found that defendants were current through October and in default as of November. In reaching this determination the judge had, in effect, addressed defendants arguments now raised on appeal by determining that: 1) the $720 June payment should have been credited in satisfaction of the June payment obligation; 2) the two $531.39 payments should have been credited to the Lena Street account; and 3) the August 16, 2001, check, which allegedly had been "changed" by plaintiff to reflect 414 Main Street, should have been credited to the 508 Main Street account in satisfaction of defendants' July 2001 obligation. Giving defendants credit for two additional October checks and an additional November check, the judge correctly concluded that defendants were last current in October 2001, in default as of November 2001, and that plaintiff was therefore entitled to commence foreclosure proceedings in January 2002.
We are satisfied that Judge Seltzer properly granted summary judgment, determining that plaintiff is the proper assignee of the mortgage to prosecute the action. Moreover, his conclusions that defendants defaulted in making the November 22, 2001, payment, and that plaintiff was entitled to accelerate the entire balance of principal and interest due and proceed with the foreclosure action, are supported by credible, substantial 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).