March 1, 2012
JPMC SPECIALTY MORTGAGE, L.L.C.,
ARUP DAS, DEFENDANT-APPELLANT, AND MRS. ARUP DAS, HIS WIFE, DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR ARGENT SECURITIES, INC., ASSET-BACK PASS-THROUGH CERTIFICATES, SERIES 2006-M1, UNDER THE POOLING AND SERVICING AGREEMENT DATED JUNE 1, 2006, DEFENDANTS.
On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, F-29473-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued February 7, 2012 -
Before Judges Reisner and Hayden.
Defendant Arup Das appeals from a February 8, 2011 order denying a motion to vacate default and for leave to file an answer to the foreclosure complaint filed by plaintiff JPMC Specialty Mortgage, L.L.C.*fn1 For the reasons set forth below, we remand this case to the trial court for limited discovery and a plenary hearing on defendant's claim that he was not properly served with the foreclosure complaint.
In April 2006, defendant took out a $321,000 loan, secured by a mortgage on a residential property he owned in Ridgefield Park. According to his certification, he lived in the house until January 2008, when he took a job in India. He defaulted on the loan in February 2009. The foreclosure suit was filed in June 2009. Claiming that it could not locate defendant for service of process, plaintiff sought and obtained leave to make service by publication.
Default was entered in November 2009. According to his certification, defendant was unaware of the lawsuit until December 2009, when he briefly returned to the Ridgefield Park house from India and found a copy of the complaint and notice of default. He attested that he did not have time to attend to the matter at that time due to the press of his overseas business.
In July 2010, defendant filed for bankruptcy, before the final foreclosure judgment was entered. However, plaintiff obtained an order lifting the automatic stay.
Thereafter, defendant filed a motion in the foreclosure action to vacate the default. In support of that motion, he submitted a certification attesting that when he began having trouble making his mortgage payments in "the last few months of 2008," he contacted the bank from India. According to defendant, he "spoke to the bank in December 2008, or January 2009 from India regarding a later payment. At that time I sent to the bank about 3 months worth of payments that were past due." He also attested that "[h]aving made contact with the bank from overseas, they knew how to contact me and knew that due to work opportunities I was overseas." Defendant attested that he was "never served with a complaint of foreclosure."
In opposing defendant's motion, plaintiff filed a certification of its attorney but did not file a certification from any employee of the mortgage company, or from anyone else with personal knowledge of plaintiff's records. The attorney's certification did not address defendant's sworn allegation that the "bank" knew that he was in India and knew how to reach him. Although plaintiff's attorney apparently hired a process server and a private investigator to locate defendant, there is no indication that either of them actually contacted the mortgage company to see if its employees had contact information for defendant at a location other than the Ridgefield Park house.
In denying defendant's motion, the motion judge reasoned that he had failed to demonstrate excusable neglect, and therefore the judge did not reach the issue of whether defendant could demonstrate a meritorious defense to the foreclosure complaint. See R. 4:43-3; R. 4:50-1(a). However, the judge also did not address defendant's claim that he was not properly served with the foreclosure complaint, an allegation that, if true, would render the judgment void. See R. 4:50-1(d).
We agree with the judge that defendant did not demonstrate excusable neglect. He knew at least by December 2009 that plaintiff had filed a foreclosure complaint and had obtained entry of default. Yet defendant took no action until seven months later, when he filed for bankruptcy. But, if plaintiff failed to make proper service of the complaint, defendant was not obligated to file an answer, the court lacked jurisdiction ab initio, and any judgment entered on the basis of the complaint would be void. See Peralta v. Heights Medical Center, 485 U.S. 80, 84-85, 108 S. Ct. 896, 898-99, 99 L. Ed. 2d 75, 80-81 (1988); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S. Ct. 559, 564, 62 L. Ed. 2d 490, 497 (1980). Under Rule 4:50-1(d), a judgment may be vacated on the grounds that "the judgment or order is void." Unlike section (a) of the Rule, section (d) does not require a showing of "excusable neglect" in failing to answer the complaint. See R. 4:50-1(a). Nor does it require a showing of a meritorious defense. Peralta, supra, 485 U.S. at 86-87, 108 S. Ct. at 900, 99 L. Ed. 2d at 82; Jameson v. Great Atlantic and Pacific Tea Co., 363 N.J. Super. 419, 425 (App. Div. 2003), certif. denied, 179 N.J. 309 (2004); M & D Assocs. v. Mandara, 366 N.J. Super. 341, 353 (App. Div.), certif. denied, 180 N.J. 151 (2004).
Service by publication, which occurred here, is a last resort, because it is virtually guaranteed not to provide a defendant with actual notice. See Modan v. Modan 327 N.J. Super. 44, 46-48 (App. Div. 2000). If plaintiff's employees knew defendant's whereabouts and knew how to contact him in India, they should have arranged to serve him there, by mail, email or other alternate means. Id. at 48-49. Thus far, the record reflects defendant's unrebutted certification on that point. We therefore remand for discovery and a plenary hearing on that limited, but important issue.