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Yardville National Bank v. Bell Roofing & Maintenance Services

January 16, 2008

YARDVILLE NATIONAL BANK, A NATIONAL BANKING ASSOCIATION, PLAINTIFF,
v.
BELL ROOFING & MAINTENANCE SERVICES AND RICHARD J. CALISTI AND LAURA M. CALISTI A/K/A LAURA M. MOSCA-CALISTI, HIS WIFE, DEFENDANTS, AND WASHINGTON MUTUAL BANK, FA, DEFENDANT-RESPONDENT.



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

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

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, 35 ...


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