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Wachovia Bank, N.A v. Gregory Wright A/K/A

May 12, 2011

WACHOVIA BANK, N.A., PLAINTIFF-RESPONDENT,
v.
GREGORY WRIGHT A/K/A GREG WRIGHT, MRS. GREGORY WRIGHT, HIS WIFE, AND LAKES AT LARCHMONT CONDOMINIUM ASSOCIATION, DEFENDANTS, AND MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Chancery Division, Burlington County, Docket No. F-41972-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted March 2, 2011

Before Judges Lihotz and J. N. Harris.

U.S. Bank National Association (US Bank), as successor in interest to defendant Mortgage Electronic Registration Systems, Inc. (MERS), appeals from a Chancery Division order denying its request to vacate the default judgment against it and foreclosing the interest of MERS in residential realty.*fn1 We affirm.

These facts are taken from the motion record. Defendant Gregory Wright purchased real property on Albridge Way in Mt. Laurel Township (the subject realty) on September 2, 2003. On December 2, 2005, Wright contracted with JP Morgan Chase, N.A. (Chase) for a mortgage and a line of credit secured by a second mortgage on the subject realty. On August 9, 2006, Wright refinanced the Chase debts and withdrew additional equitable value from the realty. He borrowed $210,000 from MERS through its agent, Accredited Home Lenders, Inc. (AHL). Inexplicably, the MERS mortgage was not recorded for over a year, until September 17, 2007.

On September 18, 2006, one month following the refinance with MERS, Wright executed a line of credit with plaintiff Wachovia Bank. N.A. (Wachovia) in the amount of $182,700, secured by a mortgage on the subject property. Wright's loan application did not list the MERS transaction. Wachovia recorded its mortgage on October 27, 2006. On June 4, 2007, Wright executed a home equity mortgage with Wachovia, also secured by the property and recorded on June 21, 2007.

Wright defaulted on his Wachovia debts prompting Wachovia to seek foreclosure. Wachovia filed this action on October 23, 2008. MERS was named as a defendant and was served by certified and first class mail at its Florida corporate offices. On November 14, 2008, MERS assigned the mortgage to US Bank as Trustee for an investment pool. The assignment was recorded on December 10, 2008. When MERS did not answer, Wachovia filed a request for default on December 22, 2008, followed by a request for entry of final judgment.

On August 19, 2009, US Bank entered an appearance in Wachovia's foreclosure action. US Bank moved to amend the action to list it as the proper party in interest rather than MERS and to vacate the default. On August 31, 2009, the final judgment was entered in favor of Wachovia foreclosing the interest of all others. US Bank's motion was heard on October 9, 2009. Judge Michael Hogan denied U.S. Bank's request to vacate the default judgment, finding MERS was properly served prior to assigning the instrument to US Bank and noting a meritorious defense to the relief sought had not been presented.

This appeal ensued. Thereafter, the court stayed a sheriff's sale pending appeal. We note Wachovia has chosen not to participate in this appeal.

"Although courts are empowered to confer absolution from judgments," relief from a final judgment under Rule 4:50-1 "is granted sparingly." DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 261 (2009) (internal quotation marks and citations omitted). "A motion under Rule 4:50-1 is addressed to the sound discretion of the trial court, which should be guided by equitable principles in determining whether relief should be granted or denied." Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994). See also Orner v. Liu, __ N.J. Super. __ (App. Div. 2011) (slip op. at 5). We will not disturb a trial court's determination to grant or deny an application to open a judgment "unless it represents a clear abuse of discretion." Little, supra, 135 N.J. at 283. In our review we do not "decide whether the trial court took the wisest course, or even the better course, since to do so would merely be to substitute our judgment for that of the lower court. The question is only whether the trial judge pursued a manifestly unjust course." Gittleman v. Cent. Jersey Bank & Trust Co., 103 N.J. Super. 175, 179 (App. Div. 1967), rev'd on other grounds, 52 N.J. 503 (1968).

"[T]he rule is a carefully crafted vehicle intended to underscore the need for repose while achieving a just result. It thus denominates with specificity the narrow band of triggering events that will warrant relief from judgment if justice is to be served." DEG, supra, 198 N.J. at 261.

Included among the bases for relief, the rule recites "the court may relieve a party or the party's legal representative from a final judgment or order for . . . mistake, inadvertence, surprise, or excusable neglect; . . . or . . . any other reason justifying relief from the operation of the judgment or order."

R. 4:50-1(a) and (f). US Bank relies upon this provision, asserting the failure to answer Wachovia's complaint was a matter of excusable neglect and Judge Hogan abused his discretion in denying its motion. To avail itself of relief under Rule 4:50-1(a), U.S. Bank must show that its neglect "was excusable under the circumstances and that [it had] a meritorious defense." Marder v. Realty Constr. Co., 84 N.J. Super. 313, 318 (App. Div.), aff'd, 43 N.J. 508 (1964). "Excusable neglect" under Rule 4:50-1(a) has been defined as carelessness ...


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