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First Horizon Home Loan Corp. v. Brown


April 12, 2010


On appeal from the Superior Court of New Jersey, Chancery Division, Essex County, Docket No. F-19865-05.

Per curiam.


Submitted March 23, 2010

Before Judges Skillman and Gilroy.

Defendants Brenda Brown and William Brown appeal from the April 24, 2009 order that denied their motion for reconsideration of the February 9, 2009 order denying their motion seeking to vacate the September 4, 2007 judgment of foreclosure. We affirm.

On January 20, 2005, defendants executed a promissory note and mortgage in favor of plaintiff First Horizon Home Loan Corporation. The note was for a term of thirty years and required defendants to repay the principal, together with interest at an adjustable rate, by making monthly payments on the first day of each month commencing March 1, 2005. The mortgage encumbered property is in the Township of Montclair, Essex County. Both the note and mortgage contained a provision that permitted the note holder, on default, to accelerate the balance of principal and interest due under the note on a thirty-day notice to defendants.

On December 22, 2005, following defendants' default on the promissory note, plaintiff filed a complaint in foreclosure. On November 1, 2005, plaintiff assigned the loan documents to Mortgage Electronic Registration Systems, Inc. (MERS).*fn1

On March 2, 2006, plaintiff filed an amended complaint adding additional parties who may have had interests in the mortgaged property. On September 4, 2007, the court entered default judgment. On April 29, 2008, defendant Brenda Brown filed a Chapter 13 bankruptcy petition. The Bankruptcy Court dismissed the petition on December 18, 2008.

On January 7, 2009, defendants filed a motion seeking to vacate the judgment of foreclosure pursuant to Rule 4:50-1 contending that plaintiff, having previously assigned the loan documents to MERS, did not possess standing to prosecute the foreclosure action. Defendants contended that they only learned of that assignment on or about November 13, 2008, when Green Tree Servicing, Inc.,*fn2 filed a certification in support of its motion to vacate the automatic stay in the Chapter 13 bankruptcy proceeding. Plaintiff opposed the motion, contending that it was the beneficial owner of the mortgage note. In opposition to defendants' contention that plaintiff did not have standing to prosecute the foreclosure action, plaintiff asserted:

[T]he reason for this assignment is that the loan originator, plaintiff herein, prepared an assignment of mortgage in the event that the loan was sold and the servicing rights transferred. MERS never takes ownership interest in loans, but merely acts as the mortgagee of record in a nominee capacity for mortgage servicers in order to eliminate the need for assignments of mortgage and delays and confusion given frequent servicing changes. The service that MERS provides is akin to that of a registered agent. MERS alternatively keeps track of servicing transfers, except the service of process for MERS registered loans, and forwards such documents to the proper servicer.

On February 9, 2009, the trial court entered an order denying defendants' motion, determining that defendants "failed to show excusable neglect in not answering the complaint, and also failed to show existence of a meritorious defense." In rejecting defendants' argument that plaintiff lacked standing to prosecute the foreclosure action, the court stated: "Plaintiff has demonstrated that it was the beneficial owner with standing, and that MERS was a nominee. The lack of a complete assignment history in the complaint may not be asserted after-the-fact[,] as a reason to set aside an uncontested judgment."

On February 27, 2009, defendants filed a motion for reconsideration of the February 9, 2009 order, requesting that the court vacate the final judgment pursuant to Rule 4:50-1. The defendants contended that plaintiff lacked standing to prosecute the action and concealed the assignment of its interest in the loan documents to MERS. On April 24, 2009, the trial court entered an order supported by an oral decision denying defendants' motion. In denying the motion, the trial court reasoned:

The [c]court entered an order on February 9 of this year, which denied defendant's motion to vacate a default judgment and, in fact, to dismiss plaintiff's complaint. The main argument that is being made then and now is a lack of standing on the part of the plaintiff, and defendant goes so far as to allege that the plaintiff perpetrated a fraud by misstating that it held the mortgage and note when, in fact, there had been an assignment to [MERS] prior to filing the foreclosure complaint.

We're talking here about the same issues, the same arguments that were dealt with on the prior motion. I don't think that that is the proper way to go about bringing a [Rule] 4:50-1 motion. The [c]court did what it did in the order of February 9. I did my best in that order based on the record before me. I'm a human being. Sometimes, the Appellate Court finds reason to disagree with me. It's all part of our proffer, and I accept it, and that's why Ms. Brown had the right of appeal from that. She didn't take it. She, instead, is coming back to me to perhaps try to get me to feel differently.

That's not what the rules are there for, . . . unless there is really new evidence, [something] legitimately, that has come out since the last hearing, something that the [c]court really overlooked.

The only thing that Ms. Brown has, which is allegedly new, is an affidavit from the bankruptcy action wherein Green Tree stated that the mortgage was assigned to [MERS]. Also offered for the first time is the excuse that the defendant[s] did not know about the assignment until Green Tree allegedly brought it to their attention in the bankruptcy action.

This is not truly new as the rule defined it. New means something that could not have been brought to the attention of the [c]court on the first application. This could have been an affidavit that is dated back in November, I believe. All of this existed. The information about [MERS] existed, and . . . I've reviewed these attachments that Ms. Brown has brought, especially in her latest submission within the last couple of weeks. I don't think that submission was authorized, frankly, but I have fulfilled my obligation and considered it.

I saw evidence here and I still do that [plaintiff] has always been the beneficial owner and the holder of this particular loan, notwithstanding that it's a member of [MERS] and that it entered it in the [MERS] registry. I was satisfied with that and, whether that was right or wrong, I decided it and I see no reason now, there has been nothing presented to me to cause me to change my view in keeping with the [Rule] 4:50-1. So I'm going to deny this motion for reconsideration.

On appeal, defendants argue as they did in the trial court that plaintiff did not have standing to prosecute the foreclosure action, having previously assigned its interest in the loan documents to MERS, and MERS should have prosecuted the action under its own name. Defendants also contend that they were entitled to relief under Rule 4:50-1(f) because plaintiff "misrepresented the facts in its Complaint and in an application for Final Judgment to get around the court rules," and defendants were unaware of the assignment until it was brought to their attention by Green Tree Servicing in November 2008.

We have considered defendants' arguments in light of the record and applicable law and find the arguments are without sufficient merit to warrant a discussion in a written opinion.

R. 2:11-3(e)(1)(E). We affirm substantially for the reasons expressed by the trial court in its oral decision of April 24, 2009. R. 2:11-3(e)(1)(A). Nevertheless, we add the following comment.

Defendants argue that the trial court erred in denying their motion for reconsideration. We disagree.

If a party only appeals from "the order entered on a motion for reconsideration, it is only that proceeding and not the order that generated the reconsideration motion that may be reviewed" on appeal. Pressler, Current N.J. Court Rules, comment 6.1 on R. 2:5-1 (2010); see also Sikes v. Twp. of Rockaway, 269 N.J. Super. 463, 465-66 (App. Div.), aff'd. o.b., 138 N.J. 41 (1994). Here, defendants' notice of appeal only designates the April 24, 2009 order denying their motion for reconsideration as the order appealed from. Accordingly, we do not address the correctness of the trial court's decision underpinning the February 9, 2009 order denying defendants' motion to vacate the judgment.

Motions for reconsideration are governed by Rule 4:49-2. Reconsideration is a matter to be exercised in the trial court's sound discretion. Johnson v. Cyklop Strapping Corp., 220 N.J. Super. 250, 257 (App. Div. 1987), certif. denied, 110 N.J. 196 (1988). "A litigant should not seek reconsideration merely because of dissatisfaction with a decision of the [c]court." D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990). "Reconsideration should be utilized only for those cases . . . in which either 1) the [c]court has expressed its decision based upon a palpably incorrect or irrational basis, or 2) it is obvious that the [c]court either did not consider, or failed to appreciate the significance of probative, competent evidence." Ibid.

Moreover, a party cannot use the reconsideration process to do what should have been done in the original proceeding. Reconsideration is only to point out "the matters or controlling decisions which counsel believes the court has overlooked or as to which it has erred." R. 4:49-2. Reconsideration cannot be used to expand the record and reargue the trial. A motion for reconsideration is designed to seek review of an order based on evidence that had been presented to the court on the initial matter. R. 1:7-4. A motion for reconsideration is not the procedure for the introduction of new evidence in order to cure an inadequacy in the trial record. See Cummings v. Bahr, 295 N.J. Super. 374, 384 (App. Div. 1996).

The trial court properly applied the standard of review in deciding defendants' motion for reconsideration. Accordingly, we affirm.


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