September 9, 2013
DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR CARRINGTON MORTGAGE LOAN TRUST, SERIES 2005-0PT2, ASSET BACKED PASS-THROUGH CERTIFICATES, SERIES 2005-OPT2, Plaintiff-Respondent,
STEPHEN LANKENAU and SUZANNE LANKENAU, Defendants-Appellants, and OAK LEAF FINANCIAL, LLC, Defendant.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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, Cape May County, Docket No. F-59382-10.
Stephen Lankenau and Suzanne Lankenau, appellants pro se.
Ralph F. Casale & Associates, LLC, attorneys for respondent (Patrick O. Lacsina, on the brief).
Before Judges Harris and Fasciale.
Defendants appeal from a July 12, 2012 order denying their motion to vacate a March 21, 2012 foreclosure judgment, and an August 23, 2012 order denying reconsideration. We affirm.
In 2005, defendants executed a note and mortgage to Nations Home Mortgage Corporation (NHMC) regarding their investment property. In 2007, NHMC assigned the mortgage to Option One Mortgage Corporation (OOMC). On December 6, 2010, OOMC assigned the mortgage to plaintiff. On December 9, 2010, plaintiff filed its foreclosure complaint. In February 2011, defendants' attorney filed an answer to the complaint. In April 2011, plaintiff moved for summary judgment. In June 2011, the judge granted plaintiff's motion as unopposed,  and the matter returned to the Office of Foreclosure (OOF). On March 21, 2012, the OOF entered the foreclosure judgment. Defendants proceeded pro se.
In or around June 2012, defendants moved to vacate the foreclosure judgment. Defendants did not identify Rule 4:50-1 in support of their motion. Instead, they contended for the first time that plaintiff lacked standing to file the complaint and failed to comply with the Fair Foreclosure Act (FFA), N.J.S.A. 2A:50-53 to -73, by not serving a notice of intent (NOI) to foreclose. In July 2012, the judge conducted oral argument and denied defendants' motion to vacate. Defendants then moved for reconsideration arguing that the mortgage assignment was forged. On August 23, 2012, the judge rejected defendants' new assertion and denied reconsideration. This appeal followed.
On appeal, defendants raise the following points:
A. THE STANDARD OF REVIEW.
B. THE TRIAL COURT ERRED IN GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT ON THE BASIS THAT PLAINTIFF HAS NOT DEMONSTRATED THAT IT HOLDS THE RIGHT TO ENFORCE THE NOTE AND IT COMPLIED WITH THE [FFA].
C. THE TRIAL COURT ERRED IN DENYING DEFENDANTS' MOTION FOR VACATING THE FINAL JUDGMENT AND DISMISSING THE COMPLAINT.
We focus primarily on defendants' contentions regarding their appeal from the order 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 in pertinent part 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 defendants have not demonstrated that they are entitled to relief under Rule 4:50-1. As such, the judge did not abuse his discretion.
Regarding Rule 4:50-1(a), defendants 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)).
In September 2010, plaintiff's servicer served the NOI to foreclose on defendants and provided defendants with plaintiff's name, address, and phone number. In February 2011, defendants filed an answer to plaintiff's complaint. Plaintiff properly served defendants with the summary judgment motion, the judge verified with defense counsel that defendants would not be opposing the motion, the judge granted the motion and the matter proceeded to the OOF without objection, resulting in the foreclosure judgment. Plaintiff established the validity of the note and mortgage, and it is uncontested that defendants have defaulted on their mortgage payments since 2010. As a result, defendants are not entitled to relief pursuant to Rule 4:50-1(a).
Moreover, defendants are unable to show, on the merits, that they are 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 it acquired the loan and obtained the assignment prior to obtaining the foreclosure judgment.
Finally, defendants are 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, defendants have not shown any such "exceptional circumstances."
After a thorough review of the record and consideration of the controlling legal principles, we conclude that defendants' remaining arguments are without sufficient merit to warrant extended discussion in a written opinion. R. 2:11-3(e)(1)(E).