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Yardville National Bank v. Bell Roofing & Maintenance Services


January 16, 2008


On appeal from Superior Court of New Jersey, Chancery Division, Cape May County, Docket No. F-1085-06.

Per curiam.


Argued October 31, 2007

Before Judges Cuff, Lisa and Lihotz.

This appeal concerns a foreclosure action initiated by Yardville National Bank (Yardville). After entry of a final judgment of foreclosure and writ of execution, the realty was advertised for sale subject to the mortgage lien of defendant Washington Mutual Bank, FA (Washington). At Sheriff's sale, appellant Paula J. Mraz, who was not a party to the underlying foreclosure action, purchased the property, with notice of Washington's surviving lien. Post purchase, Mraz filed a motion to intervene in the foreclosure action and to modify the final judgment of foreclosure, arguing that Washington's lien was not superior to Yardville's, and strict foreclosure eliminated Washington's interest. Mraz appeals from the denial of her application. Mraz maintains she had a right to intervene as a party in interest and should have been permitted to show Washington's lien was inferior to Yardville's. We affirm.

Defendants Richard C. Calisti and Laura M. Calisti, also known as Laura M. Mosca-Calisti, owned realty located at 4100 Shore Drive, Lower Township, Cape May County (the property). During 2001 and 2002, the Calistis executed a series of mortgages to Yardville as security for monies loaned by Yardville to Bell Roofing & Maintenance Services. The mortgages were secured by the property. In 2003, the Calistis and Yardville executed a mortgage modification agreement increasing the indebtedness. The Calistis also executed a $467,000 mortgage in favor of Washington, recorded on November 4, 2002.

After default, Yardville initiated a foreclosure action. The complaint included Washington as a defendant and alleged that Washington's mortgage was subordinate to Yardville's mortgages. In its contesting answer, Washington disputed Yardville's alleged lien priority.

On April 18, 2006, Yardville and Washington filed a stipulation to dismiss Washington, without prejudice, as a party to the foreclosure action, pursuant to Rule 4:37-1. The Calistis neither consented to the entry nor executed the stipulation of dismissal. The court issued a final judgment of foreclosure and a writ of execution on July 21, 2006. A subordination agreement between Washington and Yardville was executed in November 2006.

The Cape May County Sheriff advertised the property for Sheriff's sale. The notice of sale advised potential bidders that the sale would be "SUBJECT TO THE FOLLOWING LIENS: Mortgage held by Washington Mutual Bank, FA. [i]n the approximate amount of $467,000.00." On the date of sale, the Sheriff announced that the sale of the realty was subject to Washington's mortgage in the approximate amount of $467,000. Mraz believed she could demonstrate that Washington's lien was subordinate to Yardville's. She submitted a $241,000 bid, which was the highest offered at the sale. Mraz deposited $56,000 with the Sheriff, leaving a balance due of $185,000. She received an affidavit of consideration stating the property remained subject to Washington's mortgage.

Mraz filed an application that requested an extension of time to settle with the Sheriff and an order declaring that Washington remained a defendant in the foreclosure action, subject to the judgment of foreclosure. Thereafter, Mraz paid the balance due the Sheriff and received a Sheriff's deed identifying she owned a seventy percent interest in the property and another party held a thirty percent interest.

Mraz provided a supplemental legal memorandum arguing that strict foreclosure extinguished Washington's lien. Also, at argument Mraz orally moved to vacate the Sheriff's sale. The motion judge determined the request for extension was moot, declined to consider the oral request to vacate the Sheriff's sale, and denied Mraz's motion, which essentially sought intervention in the foreclosure action, explaining:

I'm not at all convinced that Washington Mutual's interest can be wiped out, but I am convinced that if it's subject to the types of claims that [Mraz's counsel is] articulating, it can only be addressed in a new lawsuit. So I'm going to deny that application, although I acknowledge that if [Mraz's counsel] wants to file that kind of application, he can.

I don't intend[,] by denying this application[,] to bar the movant from making an application to vacate the Sheriff's sale . . . .

The grant or denial of a motion to intervene lies within the sound discretion of the trial court and should not be disturbed on appeal absent a clear showing that the trial court's discretion has been misapplied. Am. Civil Liberties Union of N.J., Inc. v. County of Hudson, 352 N.J. Super. 44, 65 (App. Div.), certif. denied, 174 N.J. 190 (2002).

The denial of Mraz's intervention request on procedural grounds refers to her failure to comply with the mandatory requisites established in Rule 4:33-3. The Rule states: "A person desiring to intervene shall file and serve on all parties a motion to intervene stating the grounds therefor and accompanied by a pleading setting forth the claim or defense for which intervention is sought." Mraz filed no pleading. She submitted only a request to "declare Washington [] a defendant at the Sheriff's sale" and a "memorandum in support of [] petition for strict foreclosure." In these documents, she failed to articulate the legal basis for post-judgment intervention.

Generally, courts afford "reasonable opportunities to cure procedural defects in [] motions to intervene." Am. Civil Liberties Union of N.J., supra, 352 N.J. Super. at 66. However, the burden is greater when one seeks to intervene after entry of final judgment. Hanover v. Morristown, 121 N.J. Super. 536, 538 (App. Div. 1972), certif. denied, 62 N.J. 427 (1973).

Mraz's motion failed to minimally comply with the Rule's procedural prerequisites. Conspicuously absent from her uncertified statement is the legal basis for intervention. This defect remains unaltered despite Mraz's contention on appeal that she is "a real party in interest," who seeks to thwart Washington's attempt to wrongfully establish a priority lien position on the property. See R. 4:26-1 ("[e]very action may be prosecuted in the name of the real party in interest").

"Standing is a threshold justiciability determination of whether [a party] is entitled to initiate and maintain an action on the matter before the court." Spinnaker Condo. Corp. v. Zoning Bd. of Sea Isle City, 357 N.J. Super. 105, 110 (App. Div.), certif. denied, 176 N.J. 280 (2003). Mraz was not a party to the foreclosure action and had no legal claim against any party in that action. Mraz's interest in the subject realty did not exist upon entry of the final judgment of foreclosure and only arose after acceptance of her successful bid at Sheriff's sale. See Morsemere Fed. Sav. & Loan Ass'n v. Nicolaou, 206 N.J. Super. 637, 641 (App. Div. 1986) (post-judgment lien claimant cannot be made a party to a foreclosure suit after entry of the final decree). Because Mraz failed to demonstrate a basis to allow intervention as of right, Rule 4:33-1, she has no standing to collaterally attack that judgment. Wilkes v. Brennan, 139 N.J. Eq. 445, 447 (Ch. 1947); Lintott v. McCluskey, 105 N.J. Eq. 354, 361 (Ch. 1929).

Similarly, Mraz's assertions that the Calistis were prejudiced because they did not consent to Washington's dismissal from the foreclosure or that the stipulation of dismissal was improper are not hers to advance. Generally, a litigant does not have standing to assert the rights of a third party. Jersey Shore Med. Ctr.-Fitkin Hosp. v. Estate of Baum, 84 N.J. 137, 144 (1980); Spinnaker Condo. Corp., supra, 357 N.J. Super. at 111.

Mraz was aware of the priority claim advanced by Washington in its contested answer and the stipulation of dismissal. She admits she submitted her bid with full knowledge that Washington's lien had not been foreclosed. She presents no basis to determine that the motion judge improperly denied her motion to intervene to allow her to reopen the foreclosure judgment. We find no abuse of discretion by the motion judge in denying Mraz's application.

We need not address Mraz's substantive requests advancing strict foreclosure. We do note Mraz's contention that Washington's answer to Yardville's foreclosure complaint was a "noncontesting" answer under Rule 4:64-1(c) is unfounded. Even the limited record provided on appeal reflects a priority of liens dispute between Yardville and Washington. We discern no impropriety in the parties' decision to resolve that dispute by entry of a stipulation of dismissal.



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