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Capital One, N.A. v. Provost

Superior Court of New Jersey, Appellate Division

October 4, 2013

CAPITAL ONE, N.A., Plaintiff-Respondent,


Submitted September 16, 2013

On appeal from the Superior Court of New Jersey, Chancery Division, Hudson County, Docket No. F-37052-10.

John P. Fazzio, III, attorney for appellant.

Udren Law Offices, P.C., attorneys for respondent (Salvatore Carollo, on the brief).

Before Judges Parrillo, Harris, and Guadagno.


In this foreclosure case, defendant Lesli Provost appeals from the June 21, 2012 Chancery Division order denying her motion to vacate a default judgment, reinstate her answer and counterclaims, and set a discovery schedule and trial date. We affirm.

We glean the following facts from the record on appeal. On August 14, 2006, defendant executed a note in favor of Chevy Chase Bank, F.S.B. (Chevy Chase) for the sum of $535, 000. To secure payment of the note, defendant executed a mortgage to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Chevy Chase on property located on First Street, in Hoboken, New Jersey.

Beginning in November 2009, defendant failed to make the monthly payments on the mortgage. On December 3, 2009, plaintiff sent defendant notice of intention to foreclose. On July 19, 2010, the mortgage was assigned by MERS, as nominee for Chevy Chase, to plaintiff Capital One, N.A.

Plaintiff filed a complaint seeking foreclosure on August 2, 2010. Defendant filed an answer and counterclaims. Plaintiff filed a response to defendant's counterclaims but no discovery was requested by either party. Plaintiff moved for summary judgment on March 18, 2011. No opposition was filed and the Chancery court entered an order on April 29, 2011, granting summary judgment and striking defendant's answer and counterclaims. Final judgment was entered on October 24, 2011.

The first sheriff's sale was scheduled for March 29, 2012, but on March 28, 2012, defendant made her first request for a statutory adjournment. The sheriff's sale was re-scheduled for April 12, 2012, and again, the day before the scheduled sale, defendant exercised her statutory adjournment. The sale was rescheduled to April 26, 2012.

On April 24, 2012, defendant filed a motion to vacate the final judgment and reinstate her answer and counterclaims. Judge Hector R. Velazquez conducted an emergency hearing and stayed the sale for sixty days to permit defendant to file a motion to vacate. On June 21, 2012, Judge Velazquez filed a written decision denying defendant's motion.

On appeal, defendant argues Capital One is not the holder of the note and lacks standing to foreclose. Defendant also challenges the certifications presented by plaintiff in support of final judgment, and plaintiff's "ownership interest" in the note.

We have carefully considered the record in light of defendant's arguments and the applicable law. We are satisfied that Judge Velazquez did not abuse his discretion in entering the order of June 21, 2012, denying defendant's motion to vacate the judgment of foreclosure. We affirm essentially for the reasons stated by Judge Velazquez in his decision, which was based on findings of fact that are adequately supported by the record. R. 2:11-3(e)(1)(A). We add only the following brief comments.

Standing requires a "sufficient stake in and real adverseness with respect to the subject matter, " and a substantial likelihood of harm to the plaintiff by an unfavorable decision. Stubaus v. Whitman , 339 N.J.Super. 38, 47 (App. Div. 2001). "A lack of standing by a plaintiff precludes a court from entertaining any of the substantive issues presented for determination." In re Adoption of Baby T., 160 N.J. 332, 340 (1999).

"Mortgages provide security for the debtor's obligation to pay an underlying obligation, ultimately permitting the mortgagee to force the sale of the property to satisfy that obligation." Bank of N.Y. v. Raftogianis , 418 N.J.Super. 323, 327 (Ch. Div. 2010). To have standing to foreclose a mortgage, a party generally must "own or control the underlying debt." Wells Fargo Bank, N.A. v. Ford , 418 N.J.Super. 592, 597 (App. Div. 2011). The debt is typically secured by a mortgage, and evidenced by a bond or note. Raftogianis, supra , 418 N.J.Super. at 328.

The right to enforce a negotiable instrument, such as a mortgage note, is held by the (1) holder (which requires transfer/possession, and negotiation), or (2) a non-holder in possession of the instrument who has the rights of a holder (via transfer/possession alone). N.J.S.A. 12A:3-301; Raftogianis, supra , 418 N.J.Super. at 329. The burden of proof to prove possession at the time of the complaint is on the plaintiff. Raftogianis, supra , 418 N.J.Super. at 361-62.

Judge Velazquez noted that it is undisputed that defendant defaulted on the underlying loan. He then found that "[t]he record clearly reflects that the originating lender of this loan, Chevy Chase Bank F.S.B., was acquired by successor Capital One N.A. in 2009 and as successor entity had the right to foreclose." The judge also noted that plaintiff "had standing to foreclose the mortgage on defendant's property by virtue of the assignment dated July 19, 2010, which pre-dated the foreclosure complaint." The judge found no merit to defendant's argument that this mortgage was sold to a trust. We agree.

We also find insufficient merit in any of defendant's other arguments to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).


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