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Us Bank National Association v. Tiffany H. Mahn and David Flemming

October 27, 2011


On appeal from the Superior Court of New Jersey, Chancery Division, Atlantic County, Docket No. F-17843-07.

Per curiam.


Argued September 28, 2011

Before Judges Axelrad and Ostrer.

Defendants-mortgagors, Tiffany Mahn and David Flemming, asked the trial court to void the sheriff's sale of their property because they allegedly did not receive notice of the sale, which had been repeatedly adjourned. Rather than resolve the disputed issue of whether defendants actually received notice, Judge William C. Todd, III ordered an extension of the redemption period. Defendants appeal, arguing that the court should have found a lack of notice, and declared the sale void. We disagree and affirm.


Defendants borrowed $350,000, secured by a mortgage on their primary residence in Galloway Township on August 31, 2006. They defaulted within the year, on March 1, 2007. Plaintiff, the assignee of the mortgage, filed a foreclosure complaint July 19, 2007, and default was entered after defendants failed to file a responsive pleading. Flemming filed a Chapter 13 bankruptcy petition, and the foreclosure action was stayed until relief from the stay was granted November 8, 2008. The court then entered default judgment on September 2, 2009, and issued a writ of execution. The judgment reflected an amount due of $392,538, plus interest from December 31, 2008 and counsel fees.

The first sheriff's sale was scheduled for October 29, 2009. Defendants do not dispute that the initial notice was sent by certified mail. The sale was then repeatedly adjourned. According to plaintiff, there were nine adjournments, each one lasting a little over a month, leading to a scheduled sheriff's sale on October 7, 2010. Plaintiff claimed that each adjournment was preceded by a letter notice sent regular mail to each defendant as well as to the two of them care of Gregg Charles Mele, LLC. Plaintiff provided copies of all adjournment and rescheduling notices it represented were sent.

There is no dispute that defendants were exploring loan modification. Flemming certified that a payment of $1860 was made against the balance due. But, the parties do not dispute that defendants were notified on October 7, 2010 that a modification would not be accepted. Plaintiff claimed that a notice was sent by regular mail, dated October 7, 2010, that the sale would be adjourned (a tenth and final time) to October 21, 2010. The sale proceeded that day.

However, both Mahn and Flemming claimed they did not receive notice that the sale would occur on October 21, 2010. Flemming claimed that he received a letter on or about October 14, 2010 inviting him and Mahn to reapply for a modification; however, he did not submit a copy of the letter to the trial court. Flemming certified that he learned that the sale occurred when he called a representative of the plaintiff on October 22 or 23, 2010, to inquire about making another payment and to apply for modification. Flemming and Mahn filed their motion to vacate the sale on November 16, 2010.

Following oral argument on December 3, 2010, Judge Todd denied defendants' request to vacate the sale, but extended the redemption period to December 31, 2010, memorialized in an order of December 6, 2010. The court recognized a disputed issue of fact existed regarding whether defendants received actual notice of the October 21, 2010 sale. Defendants' counsel opposed extension of the redemption period, arguing that if defendants had received notice, they would have sought additional adjournments and may have sought relief in Bankruptcy Court. Plaintiff's counsel responded that Flemming had previously filed a petition in Bankruptcy Court, plaintiff obtained relief from the stay, and defendants were simply seeking delay.

Judge Todd relied on United States v. Scurry, 193 N.J. 492 (2008), in which the Court approved extension of the redemption period as a remedy for a failure of notice. The court concluded that it did not need to resolve the factual issue of notice because even if defendants failed to receive notice, extension of the redemption period was an appropriate remedy.

I'm going to simply extend the time for redemption. . . . [T]hat result is consistent with Scurry. That's what the defendants would get if they were to prevail; in other words, there wouldn't be any particularly compelling reason even if I accepted everything they said for me to say, well, we're going to just start over and have another sale. We'd still get back to the redemption period.

[T]he rescheduling of a Sheriff's sale in this scenario is essentially an artifice, because all that would result from it on a practical level, putting aside the filing of a bankruptcy petition, which is something I ...

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