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Bank of New York for Benefit of Certificate Holders Asset-Backed Certificates v. Conde

Superior Court of New Jersey, Appellate Division

October 3, 2013

VALERIE CONDE, Defendant-Appellant,


Submitted July 16, 2013

On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. LT-3553-12.

C.N. Njoku, L.L.C., attorneys for appellant (Chinemerem N. Njoku, of counsel and on the brief).

Kristina G. Murtha (Kivitz McKeever Lee, P.C), attorney for respondents.

Before Judges Ostrer and Hayden.


Defendant, Valeria[1] Conde, appeals from the June 22, 2012 Landlord Tenant Part order denying her motion to reopen the consent judgment she entered with plaintiff, Bank of New York for the benefit of the certificate holders asset-backed certificates, series 2007-3 (the Bank). For the reasons that follow, we affirm.

From the record, we glean the following facts. The Bank became the owner of property known as 449 Catherine Avenue, Elizabeth, New Jersey (the property), following an action in mortgage foreclosure against the former owner, Dilson Teixeira. Conde, who had a child with Teixeira, signed a lease as his tenant in February 2010. The sheriff's deed vesting title in the Bank is dated May 4, 2010 and was recorded on June 24, 2010.

On September 29, 2011, the Bank sent a notice to Conde's residence informing her that the prior owner of her residence no longer owned the property due to a foreclosure, and that the Bank was now the owner. The notice provided her with the appropriate address to remit the rent. Conde acknowledged that she had not paid any rent to the Bank, or anyone else, since the Bank's September 2011 notice.

After receiving no rent or communication from Conde, the Bank filed a landlord-tenant action against her for non-payment of rent on February 20, 2012. The parties, represented by counsel, entered into a "consent to enter judgment" in court on May 10, 2012. Conde agreed to vacate the premises within forty-five days and to waive the return of her security deposit. In exchange, the Bank waived the right to the unpaid back rent and future rent until Conde left the premises within the requisite time frame. A Portuguese translator assisted Conde during the hearing and while she reviewed the written agreement prior to signing it. Conde told the judge that she understood and accepted the terms of the agreement.

Conde moved to vacate the consent judgment on May 23, 2012. In her supporting certification, Conde claimed that, a few days after the consent judgment was executed, she decided to pay the entire unpaid back rent, so that she could remain in the property.[2] Apparently, she had gone to a local bank called "The Bank of New York, "[3] where they had no record of owning the subject property. She then searched for records regarding the owner of the property.

Conde further claimed that she uncovered evidence that the deed to the property was transferred to Leonel F. Lopes in 2012.[4]Conde provided copies of documents that listed Lopes as the owner of the property. Based on this "newly discovered evidence, " Conde claimed that Lopes, who she referred to as her "trustee, " had defrauded her by telling her he would help her buy the property. She claimed that the attorney for the Bank and Lopes were involved in the fraud. She certified that she stopped paying her rent because of Lopes' "fraudulent act of deceiving me."

Conde argued that the consent judgment was based on fraud and that the Bank lacked standing in the tenancy court because it did not own the property in question. Conde contended that the consent judgment should be vacated because there is "just too much going on here that we don't know about." She requested that the case be transferred to another court so she can pursue her rights against the Bank's attorney and Lopes.

The Bank's counsel reiterated that Conde voluntarily entered into the consent judgment and she agreed to vacate the premises within a specified period of time. She argued that Conde provided no competent evidence proving her allegations. According to the Bank's counsel, the Bank was the owner based upon its recorded deed from the sheriff's sale.

The judge denied Conde's motion on June 22, 2012, reasoning that Conde entered into the consent judgment voluntarily and failed to provide sufficient proof to warrant vacating it. The judge emphasized that Conde did not provide any affidavit from Lopes claiming that he currently owned the property or that he was collecting rent. This appeal followed.

New Jersey has a strong public policy to foster and uphold the settlement of litigation. Brundage v. Estate of Carambio, 195 N.J. 575, 601 (2008). Consent judgments resolving litigation are authorized by Rule 4:42-1. Midland Funding, L.L.C. v. Giambanco, 422 N.J.Super. 301, 310 (App. Div. 2011). A consent judgment is "'both a contract and a judgment[;] it is not strictly a judicial decree, but rather in the nature of a contract entered into with the solemn sanction of the court.'" Ibid. (quoting Stonehurst at Freehold, Section One, Inc. v. Twp. Comm. of Freehold, 139 N.J.Super. 311, 313 (Law Div. 1976)).

"[A] consent judgment may only be vacated in accordance with R[ule] 4:50-1." Cmty. Realty Mgmt., Inc. v. Harris, 155 N.J. 212, 226 (1998) (internal quotation marks and citations omitted). Rule 4:50-1 enumerates the following grounds for vacation of a judgment:

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.

This Rule "is not an opportunity for parties to a consent judgment to change their minds; nor is it a pathway to reopen litigation because a party either views his settlement as less advantageous than it had previously appeared, or rethinks the effectiveness of his original legal strategy." DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 261 (2009). Relief under this Rule should be "granted sparingly." F.B. v. A.L.G., 176 N.J. 201, 207 (2003) (citing Pressler, Current N.J. Court Rules, comment 1.1 on R. 4:50-1 (2003); Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283-84 (1994)). The Rule "'requires proof of exceptional and compelling circumstances' as it is '[d]esigned to balance the interests of finality of judgments and judicial efficiency against the interest of equity and fairness.'" Eaton v. Grau, 368 N.J.Super. 215, 222 (App. Div. 2004) (citation omitted).

Under Rule 4:50-1(b), regarding newly discovered evidence, "the party seeking relief must demonstrate 'that the evidence would probably have changed the result, that it was unobtainable by the exercise of due diligence for use at the trial, and that the evidence was not merely cumulative.'" DEG, supra, 198 N.J. at 264 (quoting Quick Chek Food Stores v. Twp. of Springfield, 83 N.J. 438, 445 (1980)). All three requirements are necessary for relief. Ibid.

Under Rule 4:50-1(c), regarding fraud, "[t]he party asserting a fraud bears the burden of proving that fraud." Stochastic Decisions, Inc. v. DiDomenico, 236 N.J.Super. 388, 395 (App. Div. 1989) (citing Schmidt v. Schmidt, 220 N.J.Super. 46, 50 (Ch. Div. 1987)), certif. denied, 121 N.J. 607 (1990). "Fraud is not presumed; it must be proven through clear and convincing evidence." Ibid. (citing Albright v. Burns, 206 N.J.Super. 625, 636 (App. Div. 1986)).

"The decision whether to vacate a judgment on one of the six specified grounds [in Rule 4:50-1] is a determination left to the sound discretion of the trial court, guided by principles of equity." F.B., supra, 176 N.J. at 207 (citing Little, supra, 135 N.J. at 283; Hodgson v. Applegate, 31 N.J. 29 (1959)). The trial court's decision will be reviewed on an abuse of discretion standard. Id. at 207-08 (citing Little, supra, 135 N.J. at 283; Hodgson, supra, 31 N.J. at 37). "[A]buse of discretion is demonstrated if the discretionary act was not premised upon consideration of all relevant factors, was based upon consideration of irrelevant or inappropriate factors, or amounts to a clear error in judgment." Masone v. Levine, 382 N.J.Super. 181, 193 (App. Div. 2005) (citing Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002)).

Here, Conde argues that she has "newly discovered evidence" which proves her claim of fraud as grounds for vacating the consent judgment. She contends this evidence, consisting of internet searches and water bills, demonstrates an underlying fraud being perpetrated by the Bank. We disagree.

First, the evidence that Conde presents does not qualify as newly discovered under Rule 4:50-1(b). Conde has not shown that the evidence regarding Lopes would probably change the result given the nature of the consent order, nor has she shown that this information was unobtainable prior to the settlement of the case. See DEG, supra, 198 N.J. at 264. In her certification, Conde argued that she stopped paying rent in 2011 because of Lopes' fraud. According to Conde, Lopes has owned the property since 2008. This "evidence" was available prior to Conde agreeing to the consent judgment.

The evidence presented by Conde contains nothing to demonstrate the Bank committed any fraud. At most, the evidence demonstrates conflicting deeds, which might create a cloud on the title. It does not even suggest fraud, much less meet the clear and convincing evidence standard. See Stochastic Decisions, supra, 236 N.J.Super. at 395. On the contrary, the record shows that Conde's tenancy was created by lease between her and Teixeira in February 2010. The Bank acquired the property after a foreclosure via sheriff's sale in May 2010. The Bank advised Conde that it had become the owner and thereafter, Conde paid no rent to the Bank or anyone else. No other person has stepped in to claim ownership of the property or to collect rent. After not paying rent for several months, Conde voluntarily executed an agreement that she would vacate the premises.

We agree with the trial judge that the record contains insufficient proofs to demonstrate fraud or newly discovered evidence on the part of the Bank to warrant opening the consent agreement under Rule 4:50-1. Consequently, we are convinced that the trial court did not abuse its discretion in denying Conde's motion to vacate the consent order.


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