On appeal from the Superior Court of New Jersey, Chancery Division, Passaic County, Docket No. C-10-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Axelrad and J. N. Harris.
Defendants, Home Realty Corp. and Roland David, appeal from a July 1, 2010 order of the Chancery Division, following a sixday bench trial, entering final judgment in favor of plaintiff, HSBC Bank USA (Bank), granting the Bank's mortgage a lien priority over defendants' mortgages by authority of the doctrine of equitable subrogation. We affirm substantially for the reasons articulated by Judge Margaret Mary McVeigh in her comprehensive written opinion of July 1, 2010.
The following facts and evidence were adduced at trial. The Bank presented the testimony of Nancy Bruno, the seller of
36 Woods Avenue, Little Falls, New Jersey to Sonja Jasnic;*fn1
Tamara Savery, an employee of Wells Fargo Bank, the servicing agent for the Bank; and Philip Blanch, Esquire, the settlement agent on Bruno's purchase of the subject property and the Jasnic purchase. David, Home Realty Corp.'s sole shareholder, testified on behalf of defendants. According to recorded documents, Sonja Jasnic purchased the subject property from Bruno on September 30, 2002 for the stated consideration of $300,000, which deed was recorded on November 7, 2002.*fn2 Sonja Jasnic's purchase was secured by a $240,000 mortgage to FGC Commercial Mortgage Finance d/b/a Fremont Mortgage (FGC).
The Bank is the holder of a mortgage loan in the face amount of $290,000 made by the Jasnics to FGC on July 19, 2005, in connection with their refinance of the subject property.*fn3 The mortgage was recorded on August 26, 2005. It was assigned to the Bank by document recorded on May 10, 2007.
The only loan Sonja Jasnic listed on her loan application for the July 2005 refinance was the FGC mortgage (serviced by Litton Loan). However, the title insurance policy obtained by the lender in connection with the refinance reflected the following open mortgages:
* Sonja Jasnic to FGC, dated September 30, 2002, to secure the sum of $240,000, recorded November 7, 2002, and assigned to Fremont Investment & Loan, recorded November 7, 2002.
* Bruno to David, dated January 22, 2001, to secure the sum of $37,000, recorded July 3, 2002.*fn4
* Sonja Jasnic to Bruno, dated September 18, 2002, to secure the sum of $45,000, recorded November 7, 2002, and assigned to Home Realty Corp., recorded May 19, 2003.
* Mike Jasnic and Sonja Jasnic, dated October 1, 2002, to David, to secure the sum of $12,200, ...