December 12, 2008
DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR CARRINGTON MORTGAGE LOAN TRUST SERIES 2005-NCI ASSET BACKED PASS THROUGH CERTIFICATES, PLAINTIFF-RESPONDENT,
WANDA L. POWELL, DEFENDANT-APPELLANT.
NICHOLAS WHITTED, INTERVENOR-APPELLANT.*FN1
On appeal from the Superior Court of New Jersey, Chancery Division, Essex County, F-1880-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 15, 2008
Before Judges Gilroy and Chambers.
In this mortgage foreclosure case, defendant Wanda L. Powell and intervenor Nicholas Whitted appeal the denial of the motion to vacate a sheriff's sale.
Powell was the owner of property located at 3 Bland Court, Bloomfield, New Jersey. The property was burdened by a mortgage. When Powell defaulted on the mortgage payments, this mortgage foreclosure case was commenced, and a default final judgment of foreclosure was entered against her on January 10, 2007. Plaintiff Deutsch Bank National Trust Company as trustee for Carrington Mortgage Loan Trust Series 2005-NCI Asset Backed Pass Through Certificates is the assignee of the mortgage.
The property was sold at a sheriff's sale on August 7, 2007. Powell's motion to vacate the sheriff's sale was denied by the trial court on September 28, 2007, and the period of redemption was extended to October 18, 2007. This appeal followed. The abuse of discretion standard applies to our review. United States v. Scurry, 193 N.J. 492, 502-03 (2008).
Appellants allege three errors by the trial court in declining to vacate the sheriff's sale: (1) that the sale was stayed under federal bankruptcy law; (2) that Powell was denied the two adjournments allowed by N.J.S.A. 2A:17-36; and (3) that Powell did not have proper notice of the sale.
We reject the bankruptcy argument, because at the time of the sheriff's sale on August 7, 2007, no bankruptcy stay was in effect with respect to Powell. In April 2007, Powell had filed a Voluntary Petition for Relief under Chapter 13 with the United States Bankruptcy Court. Upon that filing, the automatic bankruptcy stay under 11 U.S.C.A. § 362 went into effect. On June 29, 2007, the Chapter 13 Petition was dismissed without prejudice, and the stay ended. See 11 U.S.C.A. § 362(c)(2)(B) (providing that the automatic stay ends when the case is dismissed). On July 12, 2007, Powell filed an application to reinstate her case, and that application was denied by the United States Bankruptcy Court on August 22, 2007. We note that the sheriff's sale took place while this application was pending before the bankruptcy court. However, the mere filing of that application did not reinstate the stay. Cf. In re Hill, 305 B.R. 100, 107-08 (Bankr. M.D. Fla. 2003) (holding that when the dismissal of a bankruptcy case is vacated, the automatic stay is not revived retroactively to the date of the dismissal). As a result, the stay was not in effect when the sheriff's sale took place.
We also reject appellants' argument that Powell was denied the two adjournments allowed under N.J.S.A. 2A:17-36. That statute allows the sheriff to grant two adjournments of the sheriff's sale, each adjournment not to exceed fourteen days.
N.J.S.A. 2A:17-36. Powell submitted a stay application to the trial court on August 7, 2007, the date of the sheriff's sale. Form language in that application acknowledges that "[t]here have been two adjournments made through the Sheriff's Department to stay sale." The application is signed by Powell. Thus, she acknowledges that the sheriff's sale had already been adjourned twice. Plaintiff's counsel advised the trial court that a sheriff's sale was originally scheduled for July 10, 2007; it was adjourned to July 24, 2007; and then adjourned again to August 7, 2007.*fn2 As a result, the sheriff granted the two statutory adjournments.
Appellants appear to be arguing that Powell is entitled to two adjournments for each sheriff's sale, so that despite the preceding adjournments, she was still entitled under the statute to an adjournment of the August 7, 2007, sheriff's sale. We reject this argument, for the following reasons expressed by the trial court:
The defendant misinterprets the clear language of the statute to mean that the sheriff must grant two adjournments for every sale date. The statutory language, however, clearly indicates that the sheriff may grant two adjournments in total, for the sale of the property. Indeed, under defendant's interpretation every sale date would have to be adjourned therefore, there could never be a sale.
Appellants' final contention is that Powell did not receive proper notice of the sheriff's sale. Rule 4:65-2 requires that notice of a sheriff's sale be posted by the sheriff in the sheriff's office and also on the property being sold. See also N.J.S.A. 2A:61-1 (requiring posting on the premises of the property being sold at least three weeks prior to the sale). In addition, the party who obtained the order for the sale, must serve the owner of the property with notice of the sale at least ten days in advance of the sale by registered or certified mail, return receipt requested. R. 4:65-2. Powell argues that she did not receive the notice. This record contains no proof that such notice was given to Powell for the initial sale of July 10, 2007, nor for any other sale date. Defense counsel and the trial judge, in maintaining that Powell received notice of the sale, rely on the fact that she applied for a stay of the sale on August 7, 2007, and thus by that date she was aware of the sale. However, the rule requires ten days notice, and the record contains no proof that the requirements of the rule were met. Faced with a circumstance where the notice provisions have not been met, the court may either set the sale aside or allow a period of redemption. Orange Land Co. v. Bender, 96 N.J. Super. 158, 164 (App. Div. 1967); see United States v. Scurry, supra, 193 N.J. at 506 (allowing plaintiff a reasonable period of time to redeem her property, which had been sold at a sheriff's sale, because she had not received the required ten days of notice of the sale). Here, the court granted defendant an additional twenty days to redeem the property. Accordingly, we find no error here.