September 9, 2013
LYNX ASSET SERVICES, LLC, Plaintiff-Respondent,
YVONNE R. BOWERS, SR., Defendant-Appellant.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 3, 2013
On appeal from the Superior Court of New Jersey, Chancery Division, Essex County, Docket No. F-23081-09.
Yvonne R. Bowers, Sr., appellant pro se.
The Law Office of Michael A. Alfieri, attorney for respondent (Mr. Alfieri, on the brief).
Before Judges Harris and Fasciale.
Defendant appeals from a May 14, 2012 order denying her motion to dismiss plaintiff's residential foreclosure complaint. The order essentially denied defendant's second motion to vacate a foreclosure judgment and set aside a sheriff's sale. We affirm.
In July 2007, defendant executed a mortgage to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Accredited Home Lenders, Inc. (AHL), regarding the property. In January 2009, defendant defaulted on her mortgage payment. In March 2009, defendant remained in default and received a notice of intent to foreclose (NOI). In April 2009, MERS assigned the mortgage to Wachovia Bank, N.A. (Wachovia), defendant failed to cure the default, and Wachovia filed a foreclosure complaint, which defendant ignored.
In June 2009, defendant received a copy of the complaint, and in September 2009, the court entered default. In November 2009, Wachovia's counsel notified defendant that Wachovia would seek a final judgment if defendant remained in default on her mortgage payments. In February 2010, Wachovia filed a motion with the Office of Foreclosure (OOF) for entry of judgment. On November 23, 2010, the OOF granted the motion as unopposed and entered a final judgment.
In December 2010, Wachovia assigned the mortgage to MCM Capital Homeowners Advantage Trust IX (HAT). In June 2011, HAT assigned the mortgage to plaintiff. In August 2011, plaintiff notified defendant about the assignment, and in September 2011, the court permitted plaintiff to amend the complaint to strike Wachovia's name from the caption and add its own name. The Sheriff then scheduled the sheriff's sale for March 26, 2011, but defendant obtained eleven adjournments. In November 2011, the court denied defendant's request to stay the sale and the property was sold.
In December 2011, defendant moved to set aside the sale and vacate the judgment contending, among other things, that she had not been served with the complaint. On March 9, 2012, the court denied defendant's motion, but ordered plaintiff to re-serve the NOI to ensure full compliance with the Fair Foreclosure Act (FFA), N.J.S.A. 2A:50-53 to -73. In March 2012, plaintiff complied with the court order. Thereafter, defendant remained in default on her mortgage payments.
In or around April 2012, defendant filed her second motion to vacate the judgment and set aside the sale. On May 11, 2012, the judge conducted oral argument and issued a lengthy oral decision. On May 14, 2012, the judge issued an order denying defendant's motion. This appeal followed.
On appeal, defendant raises the following points:
A. [THE] DISTRICT COURT ERRED IN INSISTING [PLAINTIFF] WAS A NONHOLDER IN STANDING.
B. [THE] DISTRICT COURT ERRED IN ALLOWING PLAINTIFF TO CORRECT THE [NOI].
C. [THE] DISTRICT COURT ERRED BY STATING A PROMISSORY NOTE DOES NOT HAVE TO BE ENDORSED.
We focus primarily on defendant's contention regarding her appeal from the order essentially denying the vacation of the foreclosure judgment.
Our standard of review is well-settled. As Justice Patterson reiterated in US Bank National Ass'n v. Guillaume, 209 N.J. 449, 467 (2012), a "party seeking to vacate [a default] judgment" in a foreclosure action must satisfy Rule 4:50-1, which states that
[o]n motion, with briefs, and upon such terms as are just, the court may relieve a party or the party's legal representative from a final judgment or order for the following reasons: (a) mistake, inadvertence, surprise, or excusable neglect; (b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial under R. 4:49; (c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (d) the judgment or order is void; (e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or (f) any other reason justifying relief from the operation of the judgment or order.
The rule is "designed to reconcile the strong interests in finality of judgments and judicial efficiency with the equitable notion that courts should have authority to avoid an unjust result in any given case." Guillaume, supra, 209 N.J. at 467 (internal quotation marks omitted).
We afford "substantial deference" to the trial judge and reverse only if the judge's determination amounts to a clear abuse of discretion. Ibid. An abuse of discretion is when a decision is "made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis." Ibid. (internal quotation marks omitted). We conclude that defendant has not demonstrated that she is entitled to relief under Rule 4:50-1. As such, the judge did not abuse her discretion.
Regarding Rule 4:50-1(a), defendant must show excusable neglect and a meritorious defense. See Guillaume, supra, 209 N.J. at 469. "Excusable neglect" may be found when the default was "'attributable to an honest mistake that is compatible with due diligence or reasonable prudence.'" Id . at 468 (quoting Mancini v. EDS, 132 N.J. 330, 335 (1993)). A motion under subsection (a) must be made within one year of the judgment. R. 4:50-2. Here, defendant filed an untimely motion to vacate the judgment. The court entered the judgment on November 23, 2010, and she filed her first motion to vacate on December 6, 2011, after the property was sold.
Nevertheless, defendant has not shown excusable neglect. The judge found that defendant received proper notice of the complaint on June 21, 2009. Plaintiff provided no credible reason for ignoring the complaint and waiting to vacate the unopposed judgment of foreclosure. Moreover, defendant filed her second motion to vacate the judgment thirty-four months after service of the complaint and seventeen months after entry of the judgment.
Even if defendant showed excusable neglect, defendant is unable to show, on the merits, that she is entitled to vacate the judgment pursuant to Rule 4:50-1(d). "'As a general proposition, a party seeking to foreclose a mortgage must own or control the underlying debt.'" Deutsche Bank Nat'l Trust Co. v. Mitchell, 422 N.J.Super. 214, 222 (App. Div. 2011) (quoting Wells Fargo Bank, N.A. v. Ford, 418 N.J.Super. 592, 597 (App. Div. 2011)); accord Bank of N.Y. v. Raftogianis, 418 N.J.Super. 323, 327-28 (Ch. Div. 2010). Plaintiff produced proof that Wachovia obtained the note and assignment of the mortgage before Wachovia filed the complaint. Thus, Wachovia had standing to file the complaint. And, pursuant to Rule 4:64-2(d), plaintiff's counsel filed the necessary affidavit before entry of judgment.
We also note that "[a] Rule 4:50-1(d) motion, based on a claim that the judgment is void, does not require a showing of excusable neglect but must be filed within a reasonable time after entry of the judgment." Deutsche Bank Nat'l Trust Co. v. Russo, 429 N.J.Super. 91, 98 (App. Div. 2012); see R. 4:50-2. Under certain circumstances, "equitable considerations may justify a court in rejecting a foreclosure defendant's belated attempt to raise as a defense the plaintiff's lack of standing." Russo, supra, 429 N.J.Super. at 100. Such is the case here.
We stated in Deutsche Bank Trust Co. Americas v. Angeles, 428 N.J.Super. 315, 320 (App. Div. 2012), that
[i]n foreclosure matters, equity must be applied to plaintiffs as well as defendants. Defendant did not raise the issue of standing until he had the advantage of many years of delay. Some delay stemmed from the New Jersey foreclosure system, other delay was afforded him through the equitable powers of the court, and additional delay resulted from plaintiff's attempt to amicably resolve the matter. Defendant at no time denied his responsibility for the debt incurred nor can he reasonably argue that Deutsche is not the party legitimately in possession of the property. Rather, when all hope of further delay expired, after his home was sold and he was evicted, he made a last-ditch effort to relitigate the case. The trial court did not abuse its discretion in determining that defendant was not equitably entitled to vacate the judgment.
Like Angeles, defendant failed to deny responsibility for her debt, contributed to the substantial delay by filing numerous adjournment requests, waited to file her motion to vacate until after the sale of the property, and provided no reasonable explanation for her delay.
Furthermore, in Russo, supra, 429 N.J.Super. at 101, we held, based on Guillaume and Angeles, 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 . . . because of [the] defendants' unexcused, years-long delay in asserting that defense." There, defendants challenged plaintiff's standing to file the foreclosure complaint because it did not take an assignment of the mortgage until after the complaint was filed. Id . at 96. We concluded, "in this post-judgment context, that lack of standing would not constitute a meritorious defense to the foreclosure complaint." Id . at 101. "[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)." Ibid. The same rationale applies here. Hence, standing issues aside, plaintiff had a legal right to enforce the note, pursuant to the Uniform Commercial Code, at the time its assignor obtained the judgment. See Ford, supra, 418 N.J.Super. at 597.
Finally, defendant is not entitled to relief pursuant to Rule 4:50-1(f). Subsection (f) permits a judge to vacate a default judgment for "any other reason justifying relief from the operation of the judgment or order, " and "is available only when truly exceptional circumstances are present." Guillaume, supra, 209 N.J. at 484 (internal quotation marks omitted). The applicability of this subsection is limited to "situations in which, were it not applied, a grave injustice would occur." Ibid. (internal quotation marks omitted). On this record, defendant has not shown any such "exceptional circumstances."
After a thorough review of the record and consideration of the controlling legal principles, we conclude that defendant's remaining arguments are without sufficient merit to warrant extended discussion in a written opinion. R. 2:11-3(e)(1)(E).