On appeal from the Superior Court of New Jersey, Chancery Division, Passaic County, Docket No. F-27454-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: January 9, 2013
Before Judges Axelrad and Nugent.
In this mortgage foreclosure case, defendant Providencia Rodriguez appeals from a February 2012 order denying her application to vacate the sheriff's sale of her home pursuant to a default foreclosure judgment entered in December 2009. The judge was not persuaded defendant demonstrated any "considerations of equity and justice" to vacate the sheriff's sale or demonstrated excusable neglect or a meritorious defense to vacate the default judgment pursuant to Rule 4:50-1(a). We affirm substantially for the reasons set forth in Judge Margaret Mary McVeigh's statement of reasons appended to the order.
The facts are straightforward and undisputed. On July 28, 2006, defendant borrowed $227,500 from Chase Bank USA, N.A. (Chase), and executed a note and purchase money mortgage securing her residence in Paterson. Defendant's loan went into default after she failed to make the installment payment due on July 1, 2007, and all subsequent payments. Chase assigned the note and mortgage to plaintiff U.S. Bank National Association, as Trustee for the C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-MX1.
On October 11, 2007, plaintiff filed a foreclosure complaint against defendant. The pleadings recited the aforementioned history. Plaintiff tried unsuccessfully to personally serve defendant and then served defendant by publication on December 27, 2007. Plaintiff's attorney certified to the following in support of its default application: (1) plaintiff sent a summons and complaint to defendant at the property by certified and regular mail; (2) plaintiff conducted a skip trace that indicated plaintiff's last known addresses was the property, but when private process servers went there, they were told by tenants she did not reside there and they were unaware of her address; (3) plaintiff consulted internet sources, directory assistance, DMV and tax records, and conducted a postal inquiry, social security death search, and surrogate's search, which disclosed no additional information; and (4) plaintiff also sent the notice to absent defendant and complaint to another address in Paterson, which had been a potential lead but did not appear to be a viable address for defendant.
Defendant did not file an answer or respond to the complaint, and plaintiff obtained a default against her on May 16, 2008. Plaintiff sent defendant a Fair Foreclosure Act (FFA) notice on May 22, 2008, and a notice of motion for entry of final judgment on June 3, 2009, both by certified and regular mail to the property.
Plaintiff submitted its proofs to the Administrative Office of Foreclosure, and on December 29, 2009, the court entered a final judgment of foreclosure. Notice of the sheriff's sale scheduled for March 23, 2010 was sent to defendant by certified and regular mail. The sale was adjourned several times as a result of defendant exercising her statutory adjournments and then by virtue of the automatic stay created by defendant's Chapter 13 bankruptcy petition filed on April 19, 2010. Defendant's bankruptcy was dismissed on March 7, 2011, and the sheriff's sale was rescheduled to July 19, 2011. Notice of the final sale date was provided to defendant by certified and regular mail; the certified mail was successfully delivered to defendant's address.
Before the sale date occurred, defendant was working with a realtor and had been to multiple attorneys, including her bankruptcy attorney, to assist her with attempting to negotiate a loan modification or some other method to retain possession of the property. She never filed a motion to vacate the default judgment.
The sheriff's sale was conducted on July l9 and plaintiff successfully bid on the property, and defendant's redemption period expired on July 29. The sheriff's deed was delivered to plaintiff on August 19 and recorded on August 24, 2011.
On August 9, 2011, defendant filed an emergent application to vacate the sheriff's sale and/or extend the redemption period and stay the delivery of the sheriff's deed. Defendant certified that during the litigation she resided at the subject address, was never personally served with the complaint, had terminated her relationship with a law firm on July 14, 2011, was receiving assistance from a realtor whom she had authorized to communicate with plaintiff, began working on a mediation package at some undisclosed time, "did not receive any notification of the pending Sheriff's sale, which was held on July 19, 2011," and was "in complete shock" when she learned about the sale.
Following oral argument on September 16, 2011, the parties submitted supplemental briefs. Defense counsel asserted bad faith by the bank's loan servicer in discussing with the realtor defendant's options regarding her home four days before the scheduled sale and not expressly apprising him of the impending sale. Defense counsel also asserted, for the first time, that plaintiff failed to comply with the FFA pre-action notice requirements and lacked standing because it did not have possession of the note when the complaint was filed.
By order of February 16, 2012, Judge McVeigh denied defendant's application to set aside the sale. In an attached statement, she noted "[t]he Chancery Division has the inherent authority to vacate a sheriff's sale" within the court's discretion, citing First Trust National Assoc. v. Merola, 319 N.J. Super. 44, 49 (App. Div. 1999), but such sale should be set aside only in rare instances, when it is necessary for compelling reasons to remedy a plain injustice. See E. Jersey Sav. & Loan v. Shatto, 226 N.J. Super. 473, 476 (Ch. Div. 1987); Karel v. Davis, 122 N.J. Eq. 526, 529 (E. & A. 1937). The judge found no ...