On appeal from the Superior Court of New Jersey, Chancery Division, General Equity Part, Middlesex County, Docket No. F-15586-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Simonelli and King.
On this appeal, defendant-appellant raises a single point.
THE TRIAL COURT ERRED IN DENYING THE APPELLANT'S MOTION TO VACATE THE JUDGMENT OF FORECLOSURE BECAUSE THE JUDGMENT WAS OBTAINED WITHOUT NOTICE TO THE DEFENDANTS AND THE APPELLANT HAD A MERITORIOUS DEFENSE.
We find no merit in appellant's contention and affirm.
On September 27, 2004 defendant Jett Aguirre executed a mortgage to plaintiff in connection with purchase of property in Piscataway. Appellant Hwang was present at the closing and executed documents on behalf of the seller, including an affidavit of title acknowledging that there were no liens or encumbrances on the property.
The day after the closing Aguirre executed a mortgage to Hwang for $68,000 without the plaintiff's knowledge. Hwang recorded the mortgage on October 5, 2004. Plaintiff's mortgage was not recorded until November 17, 2004. Hwang claims that his mortgage had priority over plaintiff's mortgage. About a year later, Aguirre defaulted on the mortgage. On October 12, 2005 plaintiff filed a foreclosure complaint. Two days later, Aguirre filed a Chapter 13 bankruptcy petition. On March 7, 2006 plaintiff obtained relief from the automatic stay. Two weeks later, Hwang entered a Notice of Appearance in the bankruptcy action.
On March 28, 2006 Hwang was served with plaintiff's complaint. Default was entered against him on June 2, 2006, and his counsel received a copy of the default on June 9, 2006. Final judgment was entered on August 28, 2006. Final judgment was served upon Hwang on September 6, 2006. He filed his motion to vacate on October 13, 2006. The motion was denied on January 8, 2007.
Judge Chambers found that Hwang failed to demonstrate excusable neglect and a meritorious defense. We agree. Hwang gave no valid reason for failing to timely file an answer to the complaint, nor does he have a meritorious defense. His mortgage should not receive any priority.
We conclude that Hwang failed to establish a meritorious defense to the foreclosure action even when his mortgage was recorded prior in time to the mortgage of the plaintiff. We conclude it clear that Hwang had "actual notice" of the plaintiff's mortgage before he recorded his own. See Palamarg Realty Company v. Rehac., 80 N.J. 446, 454 (1979).