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Phh Mortgage Corporation v. Deborah A. Krowicki

August 27, 2012

PHH MORTGAGE CORPORATION, PLAINTIFF-RESPONDENT,
v.
DEBORAH A. KROWICKI, DEFENDANT-APPELLANT, AND MR. KROWICKI, HUSBAND OF DEBORAH A. KROWKICKI; RONALD J. KROWICKI; MRS. RONALD J. KROWICKI, HIS WIFE; UNITED STATES OF AMERICA; STUDENT LOAN MARKETING ASSOCIATION, DEFENDANTS.



On appeal from the Superior Court of New Jersey, Chancery Division, Warren County, Docket No. F-20669-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted August 22, 2012 -

Before Judge J. N. Harris and Fasciale.

Defendant Deborah A. Krowicki appeals from a November 4, 2011 order denying her motion to vacate a June 4, 2007 default final judgment of foreclosure. We affirm.

In 1991, defendant and her father*fn1 executed a residential mortgage and a seven-year balloon note to secure the sum of $138,000. In 1998, they extended their loan, modified the note and mortgage, and reduced the principal to $126,238.76. In August 2006, they defaulted on the loan and plaintiff then filed its foreclosure complaint. Defendant failed to respond to the properly served complaint, and on January 22, 2007, plaintiff obtained default. Plaintiff obtained default judgment on June 4, 2007.

Defendant was able to have the sheriff's sale adjourned at least eight times and filed three bankruptcy petitions. In March 2010, after the parties mediated the case unsuccessfully, New Jersey Home Construction, Inc. (NJHC), purchased the property. From April 2010 to September 2011, defendant engaged in motion practice, which stayed the delivery of the deed and allowed another opportunity for the parties to participate in mediation sessions.*fn2 After the parties failed again to mediate the dispute successfully, the judge ordered the sheriff to deliver the deed to NJHC.

In September 2011, four years and three months after default judgment was entered, defendant filed her motion to vacate. She argued that plaintiff foreclosed on the wrong mortgage. She explained that plaintiff's complaint referenced the 1991 mortgage erroneously, rather than the 1998 mortgage, and that her 1991 mortgage should have been canceled when she and her father extended the original loan. As a result, defendant contended that the judgment is void. She requested, therefore, that the foreclosure complaint, filed five years earlier, be dismissed.

NJHC, the innocent third-party purchaser, contended that there was no basis, pursuant to any of the subsections of Rule 4:50-1, to vacate the judgment. NJHC argued that defendant failed to satisfy subsection (a) because she did not demonstrate excusable neglect and a meritorious defense; subsection (b) because she failed to uncover newly discovered evidence which, by due diligence, could not have been discovered before the court entered judgment; and subsection (c) because there was no evidence of fraud. NJHC also asserted that Rule 4:50-2 barred defendant from seeking relief under subsections (a), (b), or (c) because she filed her motion beyond the one-year timeframe. Moreover, NJHC argued that defendant failed to meet subsections (d), (e), and (f) because under subsection (d), the judgment was not void; under subsection (e), the 1991 mortgage was never satisfied and the 1998 mortgage was simply an extension of the original loan; and under subsection (f), the circumstances were not "exceptional." Plaintiff agreed with the contentions advanced by NJHC and added that the doctrines of laches and equitable estoppel barred defendant from seeking any relief.

The parties waived oral argument and, on November 4, 2011, Judge Allison E. Accurso rendered a twenty-six page oral opinion and entered an order denying defendant's motion. The judge stated:

[Defendant] contend[s] that the [f]oreclosure [j]udgment is void and must be dismissed as a matter of law pursuant to Rule 4:50-1(d)[,] which [defendant incorrectly contends] has no time limitation . . . . Even under (d) . . . [the motion] must be made within a reasonable time

[T]here is no excusable neglect, none shown, none even put forward as to why [defendant] allowed . . . the [f]oreclosure [j]udgment to enter.

It is clear . . . that the 1991 loan was extended in accordance with its terms. [Although] defendant [contends] that the loan was paid in full[,] [i]t clearly was not . . . . The loan number continued. [Defendant] exercised [her] right to extend, and . . . the parties entered into a new note . . . and mortgage in 1998 which reduced the principal balance from [$]138[,000] to ...


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