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The Provident Bank v. Kapoor

Superior Court of New Jersey, Appellate Division

June 4, 2013

THE PROVIDENT BANK, Plaintiff-Respondent,


Argued May 21, 2013

On appeal from the Superior Court of New Jersey, Chancery Division, Monmouth County, Docket No. F-06738-10.

Michael Confusione argued the cause for appellants (Hegge & Confusione, L.L.C., attorneys; Mr. Confusione, of counsel and on the brief).

Janet Silver Rosen argued the cause for respondent (Frank J. Martone, PC, attorneys; Ms. Rosen, on the brief).

Before Judges Reisner and Hayden.


Defendants Ruchi Kapoor Trust and Angela Jaitly appeal from an August 1, 2012 order denying their motion to vacate a final judgment of foreclosure, vacate a consent order, and set aside a sheriff's sale and for other relief. They also appeal from an October 1, 2012 order denying their motion for reconsideration. In their notice of appeal, defendants also listed the following additional orders: an October 3, 2011 final judgment of foreclosure, an October 25, 2011 order directing the sheriff to pay additional sums to plaintiff, and a January 9, 2013 order declaring Jaitly's lease of the mortgaged premises to be a sham and amending the writ of possession to include Daniel R. Ponn. We affirm.


We summarize the history of this case as follows. On January 27, 2010, plaintiff Provident Bank (Provident or the bank) filed a foreclosure complaint, asserting that defendants gave a mortgage to secure a $618, 700 loan on a property at 32 Eric Court in Marlboro, New Jersey, and defaulted on that loan on August 1, 2009.[1] The complaint asserted that the original note had been lost, but the mortgage was recorded on March 16, 1999. Defendants filed a contesting answer on May 19, 2010. On June 4, 2010, plaintiff filed a motion for summary judgment, alleging that defendants had not filed a genuinely contesting answer. Defendants, represented by Andrew Koppel, Esq., filed opposition, claiming that plaintiff had not established possession of the note and raising other technical defenses to the foreclosure. On August 31, 2010, Judge Thomas W. Cavanagh, Jr. denied the summary judgment motion.

On September 20, 2010, the court entered a case management order, scheduling a November 29, 2010 settlement conference and setting a January 5, 2011 trial date. However, on October 18, 2010, the parties, through their attorneys, entered into a consent order withdrawing defendants' answer, "establishing" the lost note, and staying application for final judgment for three months. The body of the order recited that the parties had agreed to a settlement at a September 20, 2010 case management conference, and that the court had reviewed a copy of a Lost Note Certification that plaintiff would have filed had the case not been settled. By order dated September 23, 2010, the complaint was amended to name Jaitly and Ponn as defendants based on their being occupants of the premises.

On March 8, 2011, plaintiff served Jaitly and Ponn with plaintiff's request to enter default against them. That notice was served by mail at the 32 Eric Court address. On April 6, 2011, plaintiff filed a notice of motion for the entry of final judgment. The motion was accompanied by proof of service on defendant's attorney Koppel, as well as service by regular and certified mail on Jaitly and Ponn at the 32 Eric Court address.

The final foreclosure judgment was entered on October 3, 2011, and a writ of execution was issued on the same date. On November 14, 2011, plaintiff's counsel served a notice of sheriff's sale on Jaitly and Ponn, by certified and regular mail sent to the 32 Eric Court address. The sale was rescheduled multiple times, at Jaitly's request, and each time a notice of the rescheduled sale was mailed to her at the Eric Court address.

Thereafter, Jaitly filed two emergent motions to stay sheriff's sales scheduled for January 23, 2012 and February 27, 2012. Both motion certifications asserted that defendants were trying to arrange for a short sale of the property. In her first certification, Jaitly also stated that she "did not learn of the foreclosure proceedings until [she] noticed a sheriff's sale notice on the door of the property . . . around Thanksgiving 2012 [sic]." In her second certification, Jaitly stated that "[t]o the best of my recollection, [p]rior counsel was NOT authorized to enter into a consent order to Dismiss Answer" (emphasis added). On February 27, 2012, Judge Cavanagh rescheduled the sheriff's sale for March 12, 2012, noting that no further adjournments would be granted.

On March 22, 2012, defendants filed a motion to vacate the sheriff's sale, vacate defendants' default, vacate the final foreclosure judgment, or allow a short sale of the property. The motion was accompanied by two carefully worded certifications, one from Jaitly and the other from defendant's new attorney. Jaitly's certification did not state that Koppel was not authorized to sign the consent order. Instead, she asserted that Koppel advised her at some point that "the matter was becoming too complicated" and he "requested that [she] seek other counsel." The certification from the new attorney, Robert F. Schillberg, Jr., contained the following ambiguous hearsay assertions:

In view of the defendant's counsel's [Koppel's] apparent unfamiliarity with the foreclosure area of practice, counsel did not realize the implication of the consent order's terms, and defendant Jaitly indicates that he did so without fully informing the defendants of the legal ramification [sic] of doing so, and failed to obtain the defendants' informed consent and authority to do so.

In opposition to the motion, plaintiff submitted certifications from two of its attorneys, Nicholas J. Purcell, Esq., and Frank J. Martone, Esq. In his certification, Purcell described the negotiations that led to the entry of the October 18, 2010 consent order. In particular, Purcell attested that he told Koppel that his client would delay applying for final judgment for "two months." According to Purcell, Koppel stated that he would meet with his client and provide a response. A few days later, Koppel advised Purcell that his client would withdraw the answer if plaintiff would forebear for a period of ninety days. Plaintiff agreed to that counter-offer.

Martone's certification recited the history of the foreclosure litigation, demonstrating that Jaitly obtained multiple adjournments of the sheriff's sale, without filing a motion to vacate the foreclosure judgment, and attesting that the sheriff's sale finally occurred on March 12, 2012. Martone also attested to the multiple notices his office had previously served on Jaitly, including the request to enter default on March 8, 2011, and the notice of motion for final judgment on April 6, 2011. Copies of all of the proofs of service were attached to his certification.[2]

On April 23, 2012, Jaitly filed a reply certification explaining that she delayed in filing the motion to vacate the judgment, because she believed she would be able to reach an agreement with the bank on a short sale of the property. Again, wording her certification carefully, she stated:

I was never served with any notices of court proceedings. . . . To the best of my recollection, I have not seen most if not all of Mr. Martone's attachments. I was unaware as to a judgment and scheduling of a sheriff's sale until I saw the notice for sale posted to the main door of the property sometime around Thanksgiving of 2011.

She further recited that she and Koppel had "disagreements" leading to her request that he "withdraw from the matter if he was uncomfortable with the representation." She stated, "I never agreed for Mr. Koppel to withdraw all our defenses so that I could not defend the defenses raised thus far." We note that at the time Jaitly signed this certification she had attended two years of law school.

In response, plaintiff's attorney filed an authenticated transcript of Koppel's deposition, in which he testified that Jaitly authorized him to sign the consent order. Koppel also identified "screen shots" of text messages to and from Jaitly concerning the negotiations. He further authenticated an October 29, 2010 letter he sent to Jaitly at 32 Eric Court, advising her: "Enclosed please find copy of Consent Order which was filed with reference to the above litigation. As you are aware the matter has been remanded back to the foreclosure unit to proceed as an uncontested foreclosure."

Jaitly filed a responding certification stating that she "never agreed to withdrawing all defenses, not answering interrogatories, not proceeding with discovery, and surrendering to give the bank title to the property." She did not directly state that she had not received Koppel's October 29 letter or the enclosed consent order. Instead, she stated more obliquely:

Although at page 39 of the Koppel transcript Mr. Koppel indicates that he mailed me the consent order, I did not receive anything saying that I agreed for him to withdraw the defense in this matter thing [sic] and allow the foreclosure to proceed uncontested.

In an oral opinion placed on the record on July 13, 2012, Judge Cavanagh found that defendants had not established excusable neglect. He also found that Jaitly did not present evidence of a meritorious defense, because there was no dispute that Ruchi Kapoor borrowed the money and defaulted on the mortgage. On August 1, 2012, he entered an order denying the motion to vacate the foreclosure judgment.

Jaitly filed a reconsideration motion. In her supporting certification, she explained that although she had attended law school, her legal education was interrupted due to her various arrests for failure to file tax returns, mail fraud, and wire fraud. She also asserted that she did not find out about the foreclosure judgment because she was incarcerated in September and October 2011. Judge Cavanagh denied the motion, for reasons he stated on the record on September 28, 2012.

Next, Jaitly filed an application to delay her eviction from the premises, and an application for a stay pending appeal. She claimed that she was "a tenant, " and that the recent major storm had prevented her from being able to move out. She attested that the property was owned by the Ruchi Kapoor Trust, of which she was a trustee. She submitted a purported lease, signed in India, that permitted her to occupy the premises for ten years without paying rent. Judge Cavanagh stayed the eviction until January 31, 2013. However, on January 7, 2013, he issued an oral opinion, concluding that Jaitly's lease was a sham, and on January 9, 2013, he issued an order denying a stay pending appeal. He also issued a supplemental written opinion with that order.


On this appeal, Jaitly contends that the trial court should have held a testimonial hearing concerning Koppel's authority to sign the October 2010 consent order, because there were material disputes of fact on that issue. She also argues that she was a residential tenant, who could not be evicted as a result of the foreclosure sale, and she contends that the trial court should have held an evidentiary hearing on that issue. Having reviewed the record, we conclude that Jaitly's appellate arguments are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We add the following comments.

A motion to set aside a default judgment pursuant to Rule 4:50-1(a) requires "a showing of excusable neglect and a meritorious defense." US Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 468 (2012). Motions filed under any section of Rule 4:50 must be filed "within a reasonable time." Deutsche Bank Nat'l Trust v. Russo, 429 N.J.Super. 91, 99 (App. Div. 2012) (quoting Deutsche Bank Trust Co. Americas v. Angeles, 428 N.J.Super. 315, 319 (App. Div. 2012)). A trial judge's decision to deny a Rule 4:50 motion "warrants substantial deference, and should not be reversed unless it results in a clear abuse of discretion." Guillaume, supra, 209 N.J. at 467.

Jaitly contends that she did not file her motion to set aside the October 2010 consent order earlier, because she did not authorize her attorney to sign the consent order, and did not know it had been entered. She also contends she did not oppose entry of the final judgment of foreclosure, because she did not know plaintiff had applied for the judgment. She asserts that she did not move to vacate the October 3, 2011 final judgment immediately, because she did not find out about its entry until November 2011.

However, despite her legal training, or perhaps because of it, Jaitly never directly and specifically denied under oath that she authorized Koppel to sign the consent order or that she received his October 29, 2010 letter sending her a signed copy. Plaintiff presented evidence that after the consent order was entered, Jaitly was served with numerous notices, including the application for final judgment, which were sent by certified and regular mail addressed to the property where she claimed to be residing. She did nothing. By November 2011, she knew the property was scheduled for a sheriff's sale, and yet she waited until March 27, 2012 to file her motion to vacate the consent order and the final judgment. Meanwhile, defendants had not been paying the mortgage, and the bank had been paying the taxes and insurance on the property. We agree with Judge Cavanagh that even if Jaitly did not agree to the consent order, her motion was not filed within a reasonable time and was properly denied on that basis.

We also agree with the judge's conclusion, as expressed in his July 13, 2012 opinion, that defendants did not demonstrate that they had a meritorious defense to the foreclosure judgment. Our courts have recently rejected technical objections to a foreclosure complaint as grounds to vacate a foreclosure judgment. See Guillaume, supra; Deutsche Bank v. Russo, supra; Deutsche Bank v. Angeles, supra.

Jaitly's defenses, based on plaintiff's alleged failure to serve pre-action notices and provide initial proof of ownership of the note, would not justify dismissing the complaint and hence would not justify vacating the final judgment of foreclosure. Guillaume, supra; Russo, supra.[3] While Jaitly contends that certain mortgage payments were misapplied, there was no dispute that the mortgagor borrowed the money, defaulted on the mortgage, and had not paid the mortgage or the real estate taxes on the property in several years. Consequently, even if the October 2010 consent order had never been entered, defendants would not have been able to successfully defend against the foreclosure

We likewise find no merit in Jaitly's argument that she was entitled to a stay of eviction because she was a tenant In Chase Manhattan Bank v Josephson 135 N.J. 209 (1994) the Supreme Court held that foreclosure does not defeat the rights of residential tenants to the protections of the Anti-Eviction Act Id at 235 However we agree with Judge Cavanagh that Jaitly was not entitled to the Act's protections because the lease purporting to give her a ten-year no-rent tenancy was a transparent sham See Sec Pacific Nat'l Bank v Masterson 283 N.J.Super 462 463 (Ch Div 1994) We find no abuse of the judge's discretion in denying a stay of eviction


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