RESIDENTIAL MORTGAGE LOAN TRUST 2013-TT2, BY U.S.BANK NATIONAL ASSOCIATION, not in its individual capacity, but solely as legal title trustee, Plaintiff-Respondent,
MORGAN STANLEY MORTGAGE CAPITAL, INC., CONSUMER SOLUTIONS, LLC, SAXON MORTGAGE SERVICES, INC., U.S. BANK as custodian, NEW CENTURY MORTGAGE CORPORATION, NEW CENTURY LIQUIDATING TRUST, Defendants, and CLAUDINEI BARROS and REGIANE BARROS, Defendants-Appellants.
October 11, 2018
appeal from Superior Court of New Jersey, Chancery Division,
Union County, Docket No. C-000108-15.
Thibodaux, III argued the cause for appellants (Berkowitz,
Lichtstein, Kuritsky, Giasullo & Gross, LLC, attorneys;
Roy J. Thibodaux, III, on the briefs).
McFadden-Roan argued the cause for respondent (Parker McCay
PA, attorneys; Kiera McFadden-Roan and Gene Mariano, of
counsel; Stacy L. Moore, Jr., on the brief).
Judges Nugent, Reisner and Mawla. 
foreclosure-related case, defendants Claudinei and Regiane
Barros appeal from a September 13, 2017 order, granting
summary judgment to plaintiff, Residential Mortgage Loan
Trust 2013-TT2 (Residential Mortgage), represented by its
trustee, U.S. Bank National Association, and a September 1,
2017 order denying defendants' summary judgment motion.
order granting summary judgment deemed plaintiff to be the
holder and owner of a $765, 000 note that Claudinei Barros
executed in favor of Wall Street Financial Corporation in
2006. The order also deemed plaintiff to be the assignee of
the mortgage on defendants' house, which they both
executed in 2006 to secure the note. The order barred
plaintiff from pursuing a deficiency action against
defendants under the note. It also barred the named
institutional defendants, or any other entities, from any
further interest in the note and mortgage, and required
plaintiff to indemnify Claudinei and Regiane Barros against
any entity that might in the future assert a claim to enforce
the note or mortgage. Lastly, the order declared that
plaintiff now had standing to file an action to foreclose the
appeal, defendants contend that plaintiff's quiet title
lawsuit was procedurally improper. They also argue that the
action was barred by res judicata. Additionally, they assert
that the case was not appropriate for summary judgment,
because there were material factual disputes about the chain
of title, and possible interested parties were not named in
well-established standard of review is de novo, employing the
Brill standard, the same test used by the trial
court. See Globe Motor Co. v. Igdalev, 225 N.J. 469,
479 (2016); Brill v. Guardian Life Ins. Co. of Am.,
142 N.J. 520, 540 (1995). After reviewing the record in light
of that standard, we conclude that N.J.S.A. 46:18-13
authorized plaintiff to file an action to establish its right
to enforce the mortgage. We also conclude that the lawsuit
was not barred by res judicata, the case was ripe for summary
judgment, and plaintiff was entitled to prevail as a matter
of law. Accordingly, we affirm the orders on appeal.
the first issue in context, in order to foreclose a mortgage,
a plaintiff must prove that it owns or controls the mortgage
and the underlying note. See Capital One, N.A. v.
Peck, 455 N.J.Super. 254, 258-59 (App. Div. 2018);
Deutsche Bank Nat. Trust Co. v. Mitchell, 422
N.J.Super. 214, 224 (App. Div. 2011). The required proofs are
needed to establish the plaintiff's standing to pursue
the action. See Peck, 455 N.J.Super. at 258-59;
Mitchell, 422 N.J.Super. at 224-25. However, proof
that the plaintiff owns the relevant instruments is also
important for the defendant's protection. Otherwise, for
example, after the plaintiff forecloses, a second purported
owner might come forward and sue the defendant to collect on
the note. See Peck, 455 N.J.Super. at 259. Or, if
the defendant redeems the property by paying the first
plaintiff, the second claimant might seek to foreclose on the
property, claiming to be the rightful holder of the mortgage.
Consequently, a foreclosure plaintiff risks dismissal of the
action if it cannot prove standing. See Deutsche Bank
Nat. Trust Co. v. Russo, 429 N.J.Super. 91, 100 (App.
Div. 2012) (quoting Bank of New York v. Raftogianis,
418 N.J.Super. 323, 356 (Ch. Div. 2010)).
to that background, this appeal concerns a mortgage and note
that were transferred multiple times. At some point, it
appears that the original documents were lost. Defendants do
not dispute that they defaulted on the mortgage in April
2007. Thereafter, two different entities filed foreclosure
actions. The first action, filed by Saxon Mortgage Services,
Inc., was eventually dismissed without prejudice on March 30,
2012. The second foreclosure action, filed by
Deutsche Bank on April 24, 2012, was dismissed without
prejudice in 2013, for lack of proof of standing.
its foreclosure complaint was dismissed, Deutsche Bank
assigned its rights to plaintiff Residential Mortgage.
Thereafter, in October 2015, plaintiff filed a General Equity
lawsuit in the nature of a quiet title action, seeking to
establish its rights as the holder of the note and mortgage,
so that it could file a foreclosure action supported by proof
of its standing.
the trial court, defendants contend on appeal that plaintiff
had no right to pursue the quiet title action in General
Equity, but instead was required to ...