November 2, 2012
PNC MORTGAGE, A DIVISION OF PNC BANK, N.A., PLAINTIFF-RESPONDENT,
RAYNARD L. WILLIAMS, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Union County, Docket No. F-04723-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 23, 2012 -
Before Judges Harris and Hoffman.
This appeal arises from a residential mortgage foreclosure proceeding in the Chancery Division. Defendant Raynard L. Williams appeals from the February 23, 2012 order that denied his motion to vacate an entry of default.*fn1 We affirm.
We glean the following facts from the pleadings and motion record. On January 15, 2010, plaintiff PNC Mortgage, a Division of PNC Bank, National Association (PNC), claiming to be a successor by merger to National City Mortgage, a Division of National City Bank (National City), filed a two-count foreclosure complaint in the Union County vicinage against Williams. The complaint recited that on April 24, 2009, Williams executed (1) a note to National City in the sum of $353,204 and (2) (along with Sharonda L. Williams) a mortgage on realty in Rahway to secure payment of the note. According to the complaint, Williams made two monthly installment payments, and went into default on August 1, 2009.
On November 16, 2009, PNC directed a Notice of Intention to Foreclose (the Notice of Intention) to the Rahway address of the mortgaged property. The Notice of Intention was received there and signed for by a person identified as Chris Williams. Among other things, the Notice of Intention was addressed to defendant, and it clearly identified the mortgaged property, the current lender and loan servicer, the amount of the original indebtedness, the event constituting default, and explained how to cure the default by contacting "PNC Mortgage/Collections" at an address and telephone number in Ohio.
After filing the foreclosure complaint two months later, PNC accomplished service of process of the pleadings by delivering them to a person described as "Chris Williams, [defendant's] son and co-occupant" at the mortgaged property. Williams failed to answer or otherwise challenge the complaint in the Chancery Division. Instead, according to his motion certification, he "began to aggressively seek help in renegotiating [his] loan terms." He contacted several third parties to no avail, and his efforts to renegotiate with his loan servicer were unsuccessful.
Default was entered against Williams on April 23, 2010. In June 2010, independent of the foreclosure litigation, PNC received an "Authorization to Loan Servicer for Release of Information" (the Authorization) from Faith Fellowship Community Development Corporation (Faith Fellowship), a "HUD-approved housing counseling agency." The Authorization contained Williams's signature appended to it and purported to permit PNC to discuss Williams's "case" with a Faith Fellowship housing counselor.*fn2 The record does not indicate whether there were any further contacts between PNC and Faith Fellowship.
As far as the record reveals, nothing further occurred in the foreclosure action until December 20, 2010, when Judge Glenn A. Grant, in his capacity as Acting Administrative Director of the Courts, issued Administrative Order 01-2010,*fn3 captioned "Administrative Order Directing Submission of Information From Residential Mortgage Foreclosure Plaintiffs Concerning Their Document Execution Practices to a Special Master." This Administrative Order affected PNC and twenty-three other foreclosure plaintiffs who were each prosecuting at least 200 residential foreclosure proceedings throughout the State. According to PNC, the Administrative Order effectively stayed the further processing of PNC's foreclosure action against Williams.
Our research*fn4 reveals that on August 23, 2011, Special Master Recall Judge Walter R. Barisonek entered an order finding PNC to "have sufficient policies and procedures in place to demonstrate affirmatively that there should not be irregularities in their handling of foreclosure proceedings in this State." Accordingly, Administrative Order 01-2010 was "dismissed against PNC Bank." On February 2, 2012, Judge Grant terminated Administrative Order 01-2010, ordering that "the operative provisions of the Administrative Order 01-2010 related to the twenty-four foreclosure plaintiffs identified in the caption are hereby closed."
On January 5, 2012, Williams filed his motion "to vacate judgment in favor of defendant [sic], pursuant to Rule 4:50-1(a) and for leave to file answer." The legal memorandum submitted in support of the motion referred to the application as one seeking the "reopening of default judgment" rather than vacating the entry of default. Williams also attached a proposed answer, which denied every allegation in PNC's complaint and asserted seven affirmative defenses, including lack of standing and unclean hands.
Factually, Williams asserted that he "was actively pursuing a loan modification" and "[PNC] has failed to comply [with] the standard of the Notice of Intention under the Fair Foreclosure Act." Specifically, Williams averred that his efforts aimed at renegotiating his loan included contacting "several non-profit corporations" and his loan servicer, which all proved unsuccessful.*fn5 As for the Notice of Intention, Williams certified that he "was never served with a Notice of Intent to Foreclose that identified the lender and the lender's representative being identified in that notice" (emphasis in the original).
In response, PNC provided a certification from a "Default Litigation Coordinator," which refuted Williams's contentions.
The Chancery Division decided the motion without oral argument because the parties waived it. On February 23, 2012, the court rendered an oral decision, which recognized that "[c]court records indicate only that default has been entered not judgment, . . . which, of course, lowers the standard for the [c]court to consider the motion under Rule 4:43 rather than under [Rule] 4:50." After canvassing the motion record, including the Notice of Intention and its proof of service, the court found that PNC "has demonstrated . . . compliance with the . . . Fair Foreclosure Act." The court also made a passing reference to PNC's standing, finding it adequate. Finally, the court stated, "there is no explanation other than efforts to try to settle the case to explain why the defendant didn't file a timely answer." Consequently, Williams's motion was denied. This appeal followed.
Rule 4:43-3 authorizes relief from the entry of default. That rule provides: "For good cause shown, the court may set aside an entry of default and, if a judgment by default has been entered, it may likewise set it aside in accordance with R[ule] 4:50." "The required good cause showing for setting aside an entry of default pursuant to this rule is clearly a less stringent standard than that imposed by R[ule] 4:50-1 for setting aside a default judgment." Pressler & Verniero, Current N.J. Court Rules, comment on R. 4:43-3 (2013); see also US Bank Nat'l. Ass'n v. Guillaume, 209 N.J. 449, 467 (2012). By contrast, a default judgment will be disturbed only if the moving party meets the much more rigorous standard of Rule 4:50-1. Ibid.
A motion under Rule 4:43-3 is addressed to the sound discretion of the motion court, which should be guided by equitable principles in determining whether relief should be granted or denied. See O'Connor v. Altus, 67 N.J. 106, 129 (1975). In our review we do not "decide whether the trial court took the wisest course, or even the better course, since to do so would merely be to substitute our judgment for that of the lower court. The question is only whether the trial judge pursued a manifestly unjust course." Gittleman v. Cent. Jersey Bank & Trust Co., 103 N.J. Super. 175, 179 (App. Div. 1967), rev'd on other grounds, 52 N.J. 503 (1968). We are unable to reach that conclusion.
The recipe for relief supplied by Williams contained two ingredients: Williams's unsuccessful efforts to refinance the unpaid mortgage and his claim that the Notice of Intention failed to identify "the lender and the lender's representative" (emphasis in the original). The motion court rightly rejected the contention that Williams's efforts to save his realty -- the same type of efforts undertaken by thousands of similarly-situated mortgagors -- constituted (individually or in the aggregate) good cause for ignoring his legal obligation to answer the complaint.
At the time Williams's motion was filed, in January 2012, PNC had made only two installment payments and had an overdue mortgage of at least thirty months. For the almost-twenty-two months since Williams had been served with the pleadings, he had failed to even once participate in the formal litigational process that was engulfing him. "In foreclosure matters, equity must be applied to plaintiffs as well as defendants." Deutsche Bank Trust Co. Ams. v. Angeles, ___ N.J. Super. ___, ___ (App. Div. 2012) (slip op. at 7).
We also do not detect an abuse of discretion in the motion court's summary rejection of Williams's unfocused Notice of Intention argument. On the face of the Notice of Intention is the identification of the lender and its servicer. Indeed, it is reasonable to conclude that Williams supplied that very information to his credit counselors at Faith Fellowship because it was used to communicate with PNC. Although not explored at length in the motion court's determination, our review of the record convinces us that what Williams supplied was insufficient to vault even the low threshold of good cause.