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U.S. Bank National Association v. Lopez

Superior Court of New Jersey, Appellate Division

June 17, 2013



Submitted June 4, 2013

On appeal from Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. F-36708-08.

Joseph A. Chang & Associates, L.L.C., attorneys for appellants (Mr. Chang, on the brief).

Reed Smith, L.L.P., attorneys for respondent (Henry F. Reichner, of counsel; Alex G. Gross, on the brief).

Before Judges Reisner and Hayden.


Defendants Sergio and Rosa A. Lopez appeal from a March 2, 2012 Chancery Division order denying as untimely their motion to vacate a final judgment of foreclosure entered on December 1, 2009 in favor of plaintiff U.S. Bank National Association. They also appeal from the April 13, 2012 order denying their motion for reconsideration. We affirm.

We discern the following from the record. On September 8, 2006, defendants entered into a mortgage for $310, 000 with Aames Funding Corporation d/b/a Aames Home Loan. Defendants stopped making payments on the loan on April 1, 2008. The mortgage was assigned to plaintiff U.S. Bank as trustee on September 9, 2008, and the assignment was recorded on October 21, 2008.

On September 19, 2008, plaintiff filed a foreclosure complaint against defendants. After three attempts to serve defendants at the mortgaged property, plaintiff served the complaint by certified mail on October 17, 2008, which defendants acknowledged receiving.

Defendants failed to answer the complaint. The court entered default against defendants on December 16, 2008. On December 24, 2008, plaintiff sent a notice to defendants that it intended to proceed with the entry of judgment, pursuant to the Fair Foreclosure Act, N.J.S.A. 2A:50-53 to -58. Defendants then twice attempted to file an answer pro se, but both times the court rejected the answers as deficient. The Chancery Division entered a final judgment of foreclosure on December 1, 2009.

Subsequently, plaintiff sent defendants a notice of a sheriff's sale of the foreclosed property on January 12, 2010. Defendants retained counsel for the first time after receiving this notice, and obtained two statutory adjournments of the sheriff's sale. Thereafter, defendants obtained numerous stays of the sale in order to participate in court-sponsored mediation. After four mediation sessions over the course of a year, mediation concluded without resolution.

Defendants retained new counsel on January 11, 2011. A year later, on January 18, 2012, defendants moved to vacate the default judgment under Rule 4:50-1. Defendants alleged, among other claims, that the judgment was void because plaintiff lacked standing to foreclose on the mortgage and because the bank failed to comply with all statutory notice requirements. R. 4:50-1(d). Defendants further argued for relief from the judgment under Rule 4:50-1(f) due to exceptional circumstances.

In denying the motion, Judge Harry G. Carroll found that defendants had not filed it within a reasonable time after entry of the final judgment for foreclosure. The judge further found that defendants produced no proof of exceptional circumstances for their failure to file a timely answer to the complaint or for the years of delay in filing their motion. Finally, he found that defendants' argument that plaintiff did not have standing, even if timely, was without merit. Judge Carroll concluded that defendants had proven neither excusable neglect nor a meritorious defense on the merits. Defendants then filed a motion for reconsideration, which the judge denied on April 13, 2012. This appeal followed.

A motion to set aside a default judgment pursuant to Rule 4:50-1 requires "a showing of excusable neglect and a meritorious defense." U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 468 (2012); Goldhaber v. Kohlenberg, 395 N.J.Super. 380, 391 (App. Div. 2007). Pursuant to Rule 4:50-2, motions based on Rule 4:50-1(a), (b) and (c) must be filed within a year of the judgment. Motions filed under any subsection of Rule 4:50 "must be filed within a reasonable time." Deutsche Bank Nat'l Trust Co. 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.

On appeal, defendants argue that, for a variety of reasons, plaintiff lacked standing to bring the foreclosure action as it is not the legitimate holder of the note. Thus, they maintain, the judgment of foreclosure is void. Further, defendants contend that extraordinary circumstances to vacate the judgment exist due to plaintiff's lack of standing and its failure to provide certain statutory notices. Having considered defendants' arguments in light of the facts and the applicable legal principles, we find that they lack sufficient merit to warrant extended discussion. R. 2:11-3(e)(1)(E). We affirm based upon Judge Carroll's thorough analysis in his March 2, 2012 opinion. We add only the following brief comments.

Defendant's argument that, under Rule 4:50-1(d), the judgment is void because plaintiff did not have standing lacks any merit. "[S]tanding is not a jurisdictional issue in our State court system and, therefore, a foreclosure judgment obtained by a party that lacked standing is not 'void' within the meaning of Rule 4:50-1(d)." Russo, supra, 429 N.J.Super. at 101. In that case, we observed that "even if [the] plaintiff did not have the note or a valid assignment when it filed the complaint, but obtained either or both before entry of judgment, dismissal of the complaint would not have been an appropriate remedy" due to the defendants' extensive delay in asserting that defense. Ibid. Similarly, here, defendants' delay in raising these arguments was extended and unreasonable.

In addition defendants sought relief under Rule 4:50-1(f) arguing that "the unnecessary and avoidable loss of a family's home" was an exceptional case warranting relief under this subsection Judge Carroll found that defendants' failure to answer was not excusable under the facts here and that defendants had not demonstrated exceptional circumstances or shown that enforcing the judgment at issue will result in consequences that are unjust oppressive or otherwise grossly inequitable See Guillaume 209 N.J. at 484 The record shows that defendants were well aware of the foreclosure proceedings and had ample opportunity to present any defenses in the more than three years since they were served with the foreclosure complaint We discern no grave injustice here that warrants granting relief under subsection (f)

On this record we find no abuse of discretion in Judge Carroll's determination that defendants were not entitled to vacate the judgment particularly given defendants' unexcused years-long delay in asserting any defense or claim


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