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Wells Fargo Bank, N.A. v. Yitzchock Follman


June 27, 2012


On appeal from the Superior Court of New Jersey, Chancery Division, Mercer County, F-20836-09.

Per curiam.


Submitted: June 19, 2012

Before Judges Axelrad and Parrillo.

In this mortgage foreclosure case, defendant Yitzchock Follman*fn1 appeals from an order of April 8, 2011, denying his motion to vacate a default judgment against him and stay a sheriff's sale. He challenges the trial court's finding that he failed to establish excusable neglect based on alleged lack of personal service and failed to establish a meritorious defense of an invalid mortgage based on a typographical error in the property address and a claim of predatory lending based on an inflated appraisal. We affirm.

On June 30, 2003, defendant borrowed $88,000 from Wells Fargo Home Mortgage, Inc. and executed a note and mortgage securing an investment property in Trenton. The mortgage was recorded on August 7, 2003 in the Office of the Clerk of Mercer County. Wells Fargo Home Mortgage, Inc. is now known as plaintiff, Wells Fargo Bank, N.A. (Wells Fargo).

Defendant failed to make the installment payment due on January 1, 2009, and the loan went into default in February 2009. On April 21, 2009, Wells Fargo filed a foreclosure complaint against defendant. The affidavit of service reflects personal service on defendant on June 20, 2009. Defendant did not file an answer or respond to the complaint.

Plaintiff filed a request to enter default on September 23, 2009. On February 8, 2010, plaintiff filed a motion to enter default judgment. On May 6, 2010, the Clerk's Office returned defendant's pro se motion to vacate as "received but not filed" for noncompliance with Rule 4:43-3 as it was not accompanied by an answer or dispositive motion. On October 29, 2010, the court entered final judgment of default.

On or about March 4, 2011, present counsel filed a motion on defendant's behalf to vacate the default judgment and stay an imminent sheriff's sale. Defendant certified that he was never personally served with the complaint, he first received the complaint by ordinary mail on June 25, 2009, and he thought the time to respond had elapsed since thirty-five days had passed from April 2l, 2009, so he did not file an answer. He further certified he never received a response to his motion to vacate stamped in by the intake clerk on April l9, 2010.

Defendant's asserted meritorious defenses were: (l) the note and mortgage incorrectly listed the property address as 23 Delaware Avenue, which is non-existent, rather than 23 Delawareview Avenue, thereby voiding the documents, and (2) consumer fraud and predatory lending because "the property was purchased for $2000.00 in 2000[,] [t]he loan application stated that the current value [w]as $65,000 yet the loan amount was $88,000.00. This was an inflated appraisal." His sole legal argument on the issue was that "an appraisal that allegedly overstated the value of the property by nearly $25,000 was used by the mortgage company in computing the loan value, payments and so forth, fails to comply with the guidelines governing such matters, as laid down by Fannie May."

Judge Mary C. Jacobson denied defendant's motion by order of April 8, 2011, providing a detailed explanation in an appended statement of reasons. Judge Jacobson found defendant's claims of excusable neglect unpersuasive, noting the process server's proof of service and the unambiguous language of the summons alerting a defendant that an answer must be filed "within 35 days from the date you receive this summons." The judge further commented that defendant was not unsophisticated in these matters, having extensive involvement in real estate and fifteen pending foreclosures as of April 2010.

The judge found defendant's claimed meritorious defenses were similarly deficient, both procedurally and substantively. The judge noted that defendant did not file a proposed answer with the motion, R. 4:43-3, provided no documentary proof or anything other than a "bare assertion" of his claims, and cited no case law to support the claim that an inconsistency in the property address would invalidate the underlying obligation or constitute a meritorious defense. This appeal ensued.

On appeal, defendant renews the arguments almost verbatim with no additional legal support or analysis. In U.S. Bank National Ass'n v. Guillaume, our Supreme Court recently reiterated the standard of review of a trial court's determinations on a motion to vacate a default judgment under Rule 4:50-l as follows:

The trial court's determination under the rule warrants substantial deference, and should not be reversed unless it results in a clear abuse of discretion. See DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 261 (2009); Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283 (l994). The Court finds an abuse of discretion when a decision is "'made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.'" Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123 (2007) (quoting Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002)). [209 N.J. 449, 467-68 (2012).]

We discern no abuse of discretion and affirm substantially for the reasons stated by Judge Jacobson in her comprehensive written opinion. We add the following brief comments.

Defendant does not dispute that he resided at the address in Lakewood listed on the process server's affidavit of service or that he did not fit the detailed description of the male accepting service on June 20, 2009. See, e.g., Jameson v. Great Atl. & Pac. Tea Co., 363 N.J. Super. 419, 426 (App. Div. 2003) (reiterating that a sheriff's return of service "facially indicates compliance with the pertinent service rule" and, accordingly, is prima facie evidence of proper service), certif. denied, 179 N.J. 309 (2004); Resolution Trust Corp. v. Associated Gulf Contractors, Inc., 263 N.J. Super. 332, 343-44 (App. Div.) (holding that a sheriff's return of service is presumed correct, and may be rebutted only by clear and convincing evidence), certif. denied, 134 N.J. 480 (1993).*fn2

Plaintiff's listing of the property address as "Delaware" Avenue rather than "Delawareview" Avenue in the note and mortgage was clearly a minor typographical error. Defendant cited no case law to the trial court or to us where such a typographical error invalidates the instruments. Defendant does not dispute that at the time the note and mortgage were signed, defendant owned the investment property located on Delawareview Avenue in Trenton and the parties intended for the mortgage to encumber that property. There is no evidence defendant believed the mortgaged property was actually located on Delaware Avenue, particularly as such street does not even exist in Trenton. Thus, defendant has failed to assert a viable challenge to the mortgage.

It is undisputed defendant provided "security for [his] obligation to pay an underlying obligation, ultimately permitting the mortgagee to force the sale of the property to satisfy that obligation[.]" Bank of N.Y. v. Raftogianis, 418 N.J. Super. 323, 327 (Ch. Div. 2010). Defendant defaulted on the loan and failed to establish a valid defense to the foreclosure action.


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