Opinion
DOCKET NO. A-2373-14T4
05-13-2016
JOSE RODRIGUES, Plaintiff-Appellant, v. WELLS FARGO BANK, N.A., U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE FOR WFMBS 2007-007, AND HSBC BANK USA, NATIONAL ASSOCIATION AS TRUSTEE FOR WELLS FARGO ASSET SECURITIES CORPORATION, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-7, Defendants-Respondents.
Jose Rodrigues, appellant pro se. Reed Smith LLP, attorneys for respondents (Henry F. Reichner, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges St. John and Vernoia. On appeal from Superior Court of New Jersey, Chancery Division, General Equity Part, Hudson County, Docket No. C-144-13. Jose Rodrigues, appellant pro se. Reed Smith LLP, attorneys for respondents (Henry F. Reichner, on the brief). PER CURIAM
Plaintiff Jose Rodrigues appeals from a Chancery Division order granting summary judgment in favor of the defendants, Wells Fargo Bank, N.A. (Wells Fargo), U.S. Bank National Association as Trustee For WFMBS 2007-007 (US Bank), and HSBC Bank USA, National Association as Trustee for Wells Fargo Asset Securities Corporation, Mortgage Pass-Through Certificates, Series 2007-7 (HSBC Bank), and dismissing plaintiff's amended complaint with prejudice. We affirm.
We recite the facts found in the summary judgment record, viewed in a light most favorable to plaintiff. Robinson v. Vivirito, 217 N.J. 199, 203 (2014); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
In October 2005, plaintiff gave a purchase money mortgage of $415,800 to WMC Mortgage Corporation to purchase 289 Highland Avenue in Kearny. On March 28, 2007, plaintiff entered into a loan (Loan or Note) in the amount of $438,400 with Wells Fargo, refinancing the WMC mortgage. The Loan was secured by a mortgage (Mortgage) on the property. In a deposition taken on August 5, 2014, plaintiff admitted that he signed the Note, Mortgage, HUD Statement, Truth-in-Lending Disclosure Statement and Mortgage Broker Fee Disclosure. The Note was endorsed from Wells Fargo to "blank." The Mortgage was recorded in the Hudson County Clerk's office on April 18, 2007.
The Note was securitized into the Wells Fargo Mortgage Backed Securities 2007-007 Trust (Trust) with a closing date of May 30, 2007, with HSBC Bank as the trustee for the Trust. The mechanics of the Trust are governed by the Pooling and Servicing Agreement (PSA) entered into between Wells Fargo as Master Servicer, HSBC Bank as Trustee, and Wells Fargo Asset Securities Corporation as Depositor.
Plaintiff failed to make monthly Mortgage payments as and when due and the Loan became delinquent and entered into default on October 1, 2008. Currently, the loan is due for this missed payment and all subsequent payments as the default has not been cured.
On February 24, 2009, an assignment of the Mortgage from Wells Fargo to US Bank, as Trustee for the Trust, was recorded in the Hudson County clerk's office. On June 25, 2013, Wells Fargo purportedly assigned the same Mortgage to HSBC Bank, as Trustee for Wells Fargo Asset Securities Corporation, Mortgage Pass-Through Certificates, Series 2007-7. This was recorded in the clerk's office on July 1, 2013. It appears that the Mortgage was assigned to two different trustees, but for the same trust.
Foreclosure proceedings were initiated by US Bank. However, on September 23, 2013, they were dismissed without prejudice for lack of prosecution. There is no foreclosure action presently pending against plaintiff.
Plaintiff filed a complaint on October 22, 2013, in the Chancery Division against defendants to quiet title, slander of title, fraudulent conveyance, quia timet, violation of the Uniform Commercial Code (UCC), and unjust enrichment. Defendants' motion to dismiss was denied on January 17, 2014.
On February 27, 2014, plaintiff filed a first amended complaint. He asserted three counts: (1) the Mortgage was wrongfully assigned and defendants have no standing, thus the Mortgage is void (count one); (2) the Mortgage is null and void as it violates HUD and RESPA regulations (count two); and (3) defendants violated the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -184 (count three). Plaintiff sought an order to satisfy and cancel the Mortgage, mark the Note paid, refund the settlement costs, and treble damages.
On April 28, 2014, an order was entered dismissing count two. Further, plaintiff was granted leave to amend the amended complaint to plead a quiet title claim.
Defendants filed a motion for summary judgment and Judge Hector R. Velazquez heard argument on the motion January 9, 2015. At the outset, the court confirmed the only remaining claims were counts one and three. Plaintiff conceded that count three, the alleged violation of the CFA, had no viability and should be dismissed. The court then addressed count one and found plaintiff's argument and the remedy sought to be unavailable, relying on our opinion in Suser v. Wachovia Mortgage, FSB, 433 N.J. Super. 317 (App. Div. 2013).
Plaintiff argued that Wells Fargo's witness testified in deposition that there was an assignment, and this admission indicated the bank no longer had the power to enforce the Mortgage. In response, the judge pointed out "that's an argument you make in a foreclosure action, not here . . . . you're saying to me because of the defective or invalid assignments [I] should discharge the mortgage. Well no, there's no basis for doing that."
The judge noted that Suser recognized the availability of a quiet title action to determine who had the right to prosecute a foreclosure action, but that it would be a "[r]are, rare case when the facts would support a court of equity ever discharging a mortgage." He explained that even if the assignments were void or voidable, the initial Mortgage was not defective and thus entering an order to discharge the Mortgage was not a plausible remedy. Further, "[t]he mortgage doesn't get discharged because you knock out the subsequent assignments. That initial mortgage is still valid."
The same day, the court entered an order granting summary judgment in favor of defendants on count one and dismissing plaintiff's amended complaint with prejudice. The court concluded that a defective assignment would not result in the Mortgage being extinguished because some entity still has a valid right to enforce the Mortgage, thus there is no basis to grant the remedy sought by plaintiff. This appeal followed.
On appeal, plaintiff contends that "regardless of the proofs of fraud obtained through discovery, and the numerous material disputes of fact, the [c]ourt ignored [defendant's] illegal acts which consisted of bogus documents and breaks in the chain of title and dismissed the case." He asserts that Wells Fargo and HSBC Bank have undertaken "unsafe and unsound practices in residential mortgage servicing," making the case one of public interest for all homeowners in New Jersey. He alleges there is no proof of Mortgage ownership by any bank, and that the invalid assignments prevent him from having clear title, which constitutes a violation of the trust and renders the Loan null and void. Plaintiff argues the Mortgage was violated "as [he] never received notice of a new 'lender' when the loan was sold," and that he needs "assurance that after paying [his] mortgage for 30 years, an unknown entity will not come forward and demand payment." Plaintiff seeks judgment in his favor, quieting the title, and releasing the lien, and "return of monies paid."
We assume he is referring to defendant Wells Fargo. --------
Defendants contend that despite any error with the assignments, the relief sought by plaintiff conflicts with our holding in Suser. Further, neither trust law nor the Trust's PSA render the Mortgage void and the Mortgage follows the Note, providing it security. As such, the only issue on appeal is whether the court properly concluded the plaintiff was not entitled to an order declaring the Mortgage void.
"The Court reviews de novo the trial court's entry of summary judgment dismissing [a party's] claims." Manahawkin Convalescent v. O'Neill, 217 N.J. 99, 115 (2014) (citing Town of Kearny v. Brandt, 214 N.J. 76, 91, (2013); Coyne v. State of N.J. Dep't of Trans., 182 N.J. 481, 491 (2005)). A trial court will grant summary judgment to the moving party "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c); see also Brill, supra, 142 N.J. at 523. The Court determines "whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill, supra, 142 N.J. at 540.
We agree with the court's conclusions. Under Suser, a court will not void a mortgage based on a challenge to its assignment where the mortgage was valid when executed and has not been satisfied. Suser, supra, 433 N.J. Super. at 324. Suser was an action to quiet title, arising in the context of foreclosure. The key issue was whether either or both of two mortgage holders, Wells Fargo and Deutsche Bank, had standing to foreclose, despite the fact neither was the original mortgagee. The Chancery Division granted summary judgment in favor of both mortgagees, and we affirmed the holding for Wells Fargo, but reversed as to Deutsche Bank. Ibid. Deutsche Bank's claim of standing was based on assignment, and discovery on the assignment had not yet been completed before summary judgment was granted. The action was brought to determine the party who had standing to foreclose. As the court stated, "an adjudication of that question may not lead to the relief plaintiff most fervently desires, extinguishment of the mortgage, he is certainly entitled to a ruling as to whether Deutsche, and not some other entity, possesses the right to foreclose . . . ." Suser, supra, 433 N.J. Super. at 325.
Here, plaintiff is also challenging an assignment of the Mortgage, but brought the challenge not to determine who owned the Mortgage, but to void it altogether. While the assignments are subject to question, "a finding of a defect in the assignment would simply mean that the right to foreclose would reside with the assignor or some other entity." Suser, supra, 433 N.J. Super. at 324. In his deposition testimony, plaintiff acknowledged signing the Note, Mortgage, and other documents. The Mortgage was properly recorded. In addition, any violation of the PSA does not render the Mortgage void. Finding no defects with the Mortgage, it follows that plaintiff is not entitled to an order extinguishing it. Thus, summary judgment in favor of defendants was proper.
If and when a foreclosure action is filed, plaintiff will have an opportunity to challenge the mortgagee's standing and alleged fraudulent behavior in making the assignments, but this is not the appropriate avenue to bring the challenge, as the only matter on appeal is the order granting summary judgment in favor of defendants and dismissing plaintiff's complaint. Because that order was proper, there is no basis to reverse the Chancery Court's decision.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION