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Deutsche Bank National Trust Co. v. Kollory


January 7, 2010


On appeal from the Superior Court of New Jersey, Chancery Division, Middlesex County, Docket No. F-10644-06.

Per curiam.


Submitted: October 21, 2009

Before Judges Cuff and C.L. Miniman.

Defendant Geeta P. Kollory appeals from a September 4, 2008, judgment determining that plaintiff Deutsche Bank National Trust Company, as Trustee, was entitled to have the sum of $171,941.67 plus interest from March 1, 2008, and counsel fees of $1,869.42, raised and paid out of the mortgaged premises; ordering the sale of said premises; and absolutely barring and foreclosing all equity of redemption in and to the mortgaged premises.*fn2 Defendant's notice of appeal did not include an appeal from any prior interlocutory orders.*fn3 We affirm.

On January 12, 2004, defendant tendered a note and mortgage on a residence in Colonia to secure the sum of $150,000 to Aames Funding Corporation, plaintiff's predecessor-in-interest. The note was due on February 1, 2034, and payments of $1046.83 per month were to commence on March 1, 2004. The mortgage was recorded on March 6, 2004, in the office of the Middlesex County Clerk.

Late payments resulted in a default in 2005 and a foreclosure action was instituted. Plaintiff and defendant negotiated a Default Forbearance Agreement with HomEq Servicing Corporation (HomEq), the mortgage servicer for plaintiff, pursuant to which the parties agreed that total arrears due as of December 1, 2005, were $19,232.16. Defendant agreed to make an initial payment of $11,000. She also agreed to pay $2120.37 commencing January 23, 2006, as her regular payment and a portion of the arrears. That sum was to be paid monthly through March 23, 2007, when her regular monthly payment would resume. The Agreement provided, "In the event any of the payments required hereunder are not received and posted by the date they are due, Borrower shall be in default under this Agreement and HomEq shall be entitled to proceed with foreclosure." A stipulation of dismissal dated February 1, 2006, was filed shortly thereafter.

Defendant defaulted on the loan shortly thereafter, prompting plaintiff to exercise its contractual right to accelerate the balance due on the note and mortgage. Specifically, the payment records of HomEq indicate that the February 23, 2006, payment was received four days late and the March 23, 2006, payment was seven days late.*fn4 On May 11, 2006, HomEq sent a notice of intention to foreclose on the mortgaged property to defendant. The letter indicated that three payments were outstanding and the total amount in arrears was $6,770.83.

On June 13, 2006, defendant responded with a letter to HomEq contending that the monthly payments of $2,120.37 had been sent each month since December 23, 2005. She claimed that the payments were current, with the next payment due on June 23, 2006. No proof of timely payment was attached. Despite this letter, on June 19, 2006, plaintiff filed a summons and complaint in foreclosure. On June 24, 2006, HomEq received a late payment of $2,120.36, which it declined to accept.

On August 15, 2006, HomEq and defendant entered into a second Default Forbearance Agreement, which held the foreclosure in abeyance. The parties agreed that the total arrears due as of August 1, 2006, were $11,852.03. Defendant agreed to make an initial payment of $3,895 on August 20, 2006, and thereafter make twenty-one monthly payments of $2,434.99 starting September 20, 2006. The Agreement contained identical default language. As a result of the forbearance agreement, defendant did not file an answer to plaintiff's complaint.

The payment due on September 20, 2006, was eight days late. On October 5, 2006, plaintiff notified defendant of its intention to file a request to enter default for defendant's failure to submit an answer to the June 2006 complaint. Defendant responded to plaintiff's letter stating:

At the time of filing an Answer*fn5 to your Complaint, an agreement came into effect . . . and continues . . . until today with varying monthly payments because of interest rate adjustments. Therefore, you have to withdraw any action pending if [you have] not already done so.

The letter noted that the payment agreement was being rearranged again "because of the ARM rate adjustment for October 2006, going forward," and asked plaintiff not to proceed in foreclosure.

Several late payments were received in the months that followed. Specifically, the payments due on October 20, November 20, and December 20, 2006, were all ten to nineteen days late. The payments due on January 20 and February 20, 2007, were about two weeks late and no payments were made for March and April 2007.*fn6 HomEq then rejected a late payment of $2588.95 on May 2, 2007; reinitiated legal proceedings against defendants; and obtained a default judgment of foreclosure on the mortgaged property on July 24, 2007, for failure to file an answer to the June 2006 complaint. Prior to securing the default judgment, HomEq issued a reinstatement quote on July 16, 2007, showing total arrears of $18,021.22 as of July 31, 2007. After the default judgment was procured, HomEq issued another reinstatement quote on August 3, 2007, indicating total arrears of $19,682.83 as of August 31, 2007.

A sheriff's sale was scheduled for September 2007. Defendant submitted a motion to vacate final judgment and file an answer, which was granted September 24, 2007. On October 11, 2007, defendant filed an answer, alleging various defenses and claims for violation of federal and state law. Plaintiff filed a motion for summary judgment dated November 13, 2007, and returnable December 21, 2007.

At the December 21, 2007, motion hearing, the judge instructed defendant to brief the late-payments issue, which was submitted on or about January 22, 2008. On January 25, 2008, defendant produced her accounting of the payments made, setting forth a surplus allegedly being carried forward as a credit on the account. According to defendant, this accounting established that her payments were current; thus, she was not in default. She showed three payments made in 2007 and noted, "Question if $4,112.16 of 3/3/07 is reconciled with positive balance carried forward, where is default?" This accounting ignored the fact that late charges were imposed; ignored the failure to make two monthly payments in 2007; and ignored the rejection of the May 3, 2007, payment. The judge found defendant was in default because the rejected May 2007 payment failed to bring the balance on the debt current. Therefore, he granted plaintiff's motion for summary judgment. An order memorializing this decision was entered on January 28, 2008.

Defendant filed a motion for leave to appeal this interlocutory order on March 4, 2008. A motion to stay the summary judgment was submitted on April 9, 2008. On July 23, 2008, we granted defendant's motion to file her appeal as within time but denied her motion for leave to appeal. A final judgment was subsequently entered on September 4, 2008. This appeal follows.

Defendant claims summary judgment was inappropriate because the evidence presented at trial raises "serious doubt" as to whether she defaulted on the loan. Specifically, she contends the court ignored evidence of a surplus in prior payments that should have been carried into 2007; the court's summary judgment order contradicts its earlier case management order and discovery schedule; and plaintiff failed to prove default. Defendant claims any default on her part was the result of plaintiff's conduct.

Rule 2:5-1(f)(3)(A) provides in pertinent part that in all civil actions the notice of appeal "shall designate the judgment, decision, action or rule, or part thereof appealed from." The comments to this rule note, "While the rule does not in terms so provide, it is clear that it is only the judgments or orders or parts thereof designated in the notice of appeal which are subject to the appeal process and review." Pressler, Current N.J. Court Rules, comment 6.1 on R. 2:5-1(f) (2010). We have generally enforced this rule.

For example, in Sikes v. Township of Rockaway, 269 N.J. Super. 463, 465 (App. Div.), aff'd o.b., 138 N.J. 41 (1994), the plaintiff argued that the trial judge erred by denying his request for special interrogatories asking the jury to return separate verdicts for medical expenses and lost wages. We held that the argument was not properly before us because "[p]laintiff's notice of appeal stated that he was appealing 'regarding credit to be received under the Tort Claims Act.'" Ibid. Additionally, he sent a letter to the Clerk of the Appellate Division "reiterating that 'the scope of plaintiff/appellant's appeal will only include the issues raised during the motion of July 10, 1992; that is, the credit, if any, to be given to the defendant/respondent under the Tort Claims Act.'" Id. at 465-66. We concluded that "the only issue before us [was] the proper method of calculating the credit to defendants for payments from collateral sources." Id. at 466.

In Campagna v. American Cyanamid Co., 337 N.J. Super. 530, 549 (App. Div.), certif. denied, 168 N.J. 294 (2001), the plaintiffs sought a direction to the trial judge "'that defendant failed to warn and that Orimune OPV was a defective product as a matter of law.'" We found this request to be essentially an appeal "from the motion judge's denial of their cross-motion for summary judgment." Id. at 550. We held,

On appeal, plaintiffs did not indicate in either their notice of appeal or in their amended notice of appeal that they were appealing from the order of March 4, 1999, that denied their cross-motion. The comment to the relevant court rule states that "it is clear that it is only the judgments or orders or parts thereof designated in the notice of appeal which are subject to the appeal process and review." This issue is not properly before us for review. [Ibid. (citations omitted).]

In Fusco v. Board of Education of Newark, 349 N.J. Super. 455, 460 (App. Div.), certif. denied, 174 N.J. 544 (2002), plaintiff "filed a notice of appeal 'of the order entered in this action on January 19, 2001 in favor of Board of Education of the City of Newark.'" That order was a denial of a motion for reconsideration. Ibid. In his appellate brief, the plaintiff raised five issues all relating to the order as to which he sought reconsideration. Ibid. The defendant urged that the sole issue on appeal was the judge's denial of the motion for reconsideration. Ibid. We concluded "that the arguments contained in the brief submitted by [the plaintiff's] counsel pertaining to the November 17, 2000 grant of summary judgment are not properly before us for review." Id. at 461. As a result, we refused to consider the grant of summary judgment and confined our review to denial of the motion for reconsideration. Id. at 461.

In 1266 Apartment Corp. v. New Horizon Deli, Inc., 368 N.J. Super. 456, 459 (App. Div. 2004), the defendant moved for a transfer of the eviction action from the Special Civil Part to the Law Division, which was denied, the case was tried, and a judgment of possession granted to the plaintiff. The "[d]efendant filed a notice of appeal that only sought relief from the judgment." Ibid. However, the defendant included in its arguments a contention that the judge erred in refusing to transfer the case. Ibid. We held,

The notice of appeal does not address the transfer decision. Since it is clear that it is only the judgment or orders designated in the notice of appeal which are subject to the appeal process and review, defendant has no right to our consideration of this issue. . . . [W]e are obliged to limit our consideration to the question of whether the trial judge erred in entering the judgment of possession. [Id. at 459-60 (citations omitted).]

On the other hand, in W.H. Industries, Inc. v. Fundicao Balancins, LTDA, 397 N.J. Super. 455, 458 (App. Div. 2008), we were again presented with arguments outside the scope of the notice of appeal. The notice of appeal stated that the plaintiff was appealing from the order of February 20, 2007, denying reconsideration of a November 17, 2006, order dismissing the complaint based on lack of personal jurisdiction, forum non conveniens, and comity. Ibid. We held that the "plaintiff is not entitled to review of the earlier order." Ibid. However, although "we [were] not required to do so," we exercised our discretion to review the earlier order, "particularly since defendant [had] not argued against our ruling on its validity." Id. at 459.

Finally, in North Jersey Neurosurgical Associates, P.A. v. Clarendon National Insurance Co., 401 N.J. Super. 186, 196 (App. Div. 2008), we noted that the defendant's notice of appeal referred only to the judgment of February 2, 2007, and made no mention of the earlier order of December 1, 2006, determining that foreign law applied and declaring that the defendant was liable to provide personal-injury protection benefits to the plaintiff's patient. The February 2, 2007, order did not address these issues. Ibid. However, we elected to reach the issue of the December 1, 2006, order because "it is clear from the excerpts of the argument of February 2, 2007, presented to us and the judge's written decision of that day that the motions were premised on the choice-of-law analysis." Ibid.

We are not persuaded that the mere failure of plaintiff here to raise an issue within the scope of the appeal compels our exercise of discretion to extend our appellate jurisdiction to encompass all of the issues raised by plaintiff on appeal. The final judgment included a determination of the amount due as of March 1, 2008,*fn7 which was necessarily predicated on defendant's default, and we consider only the issues raised with respect to that default. Ibid.

The following colloquy respecting the amount due took place:

THE COURT: Go slowly. First payment after August 20, '06, was? On what date?

MR. KOLLORY: August 30th, [$]3,895. . . . .

THE COURT: [$]3,895. Okay. Wait. Hang on one second. Okay. Next payment?

MR. KOLLORY: 9/28/06, [$]2,057.

THE COURT: [$]2,057, August 28th. Okay. Next payment?

MR. KOLLORY: 10/31--

THE COURT: 10/31?

MR. KOLLORY: --06, [$]3,895. . . . .


MR. KOLLORY: 11/30, [$]2,575.42. . . . .

MR. KOLLORY: Nothing in December. January 8, [$]2,576.

THE COURT: [$]2,576.

MR. KOLLORY: 2/5/07, [$]2,576. . . . .

THE COURT: There was a March 5 payment of [$]2,576, right?


The court then meticulously combed through each payment to determine if they were submitted in accordance with the requirements of the forbearance agreement.

THE COURT: [The first payment] was supposed to be received and posted by August 20, '06, correct? . . . .

MR. KOLLORY: It says that, but --. . . .

THE COURT: -- there was supposed to be a payment made by September 20, '06, of $2,434.99. The next payment you made was on September 28th, '06. . . .

MR. KOLLORY: Correct, Your Honor. . . . .

THE COURT: . . . So the next payment should have been October 20th. The next payment was made October 31st, by the end of the month, --


THE COURT: -- $3,895. So that's more than --

MR. KOLLORY: Correct. . . . .

THE COURT: Next payment should have been November 20. It was made November 30, 2005, [$2],542. . . .

MR. KOLLORY: Yes, Your Honor.

THE COURT: No payment made in December?


THE COURT: Okay. So next payment made January 8, '07. That's the December payment, right?

MR. KOLLORY: Simple -- yes. . . . .

THE COURT: . . . Now, next payment . . . should have been January 20. There was no January 20 payment, but there was a February 5, '07, payment, $2,576. So that would be what, an early February payment or a January payment?

MR. KOLLORY: That would be January. Yes.

THE COURT: It would be January. Okay.

Next payment, according to your testimony, was March 5, '07. Is that a late February payment or an early March payment?

MR. KOLLORY: It would be February.

THE COURT: February? Okay. So March 20 comes, no payment. April 20 comes, no payment. Payment tendered May 2nd, 2007, rejected [$]2,576, correct?


As this exchange demonstrates, defendant was clearly in default on her monthly payment obligation. She missed the months of March and April 2007, and failed to bring her balance up-to-date in May 2007 when she tendered only $2,576. At that point, defendant was in arrears by far more than the $2,576. As a result, plaintiff validly exercised its contractual right to accelerate the balance due upon the note and mortgage.

The August 2006 forbearance agreement clearly states that in the event any of the payments are not received and posted by their due date, defendant will be in default and plaintiff will be entitled to proceed with foreclosure. In the months that followed, defendant failed to submit a single payment on time. Indeed, some payments exceeded the amount due, some were less, and two were missed altogether. The judge constructed a chronology of payment, with which defendant agreed, thus finding defendant in default.

After carefully reviewing the record in the light of the written arguments advanced by the parties, we conclude that the issues presented by defendant are without sufficient merit to warrant extensive discussion in this opinion. R. 2:11-3(e)(1) (E).


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