Opinion
DOCKET NO. A-1535-11T4
04-23-2013
U.S. BANK N.A., Plaintiff-Respondent, v. JAYNE A. GARNER, Defendant-Appellant.
David J. Khawam, attorney for appellant. Duane Morris, L.L.P., attorneys for respondent (Brett L. Messinger, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Yannotti and Harris.
On appeal from Superior Court of New Jersey, Chancery Division, Burlington County, Docket No. F-43750-08.
David J. Khawam, attorney for appellant.
Duane Morris, L.L.P., attorneys for respondent (Brett L. Messinger, on the brief). PER CURIAM
Defendant Jayne A. Garner appeals from an order entered by the Chancery Division on December 7, 2011, denying her motion to set aside the final judgment entered in this matter on September 29, 2010. We affirm.
We note that, in her notice of appeal, defendant indicates that she also is appealing from the final judgment. Defendant did not, however, file a notice of appeal within forty-five days of the entry of the final judgment, as required by Rule 2:4-1(a). Therefore, defendant may not challenge the final judgment.
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On November 26, 2006, defendant executed a note in the amount of $194,200 in favor of New Century Mortgage Corporation. To secure payment of the note, defendant executed a mortgage to Mortgage Electronic Systems, Inc. (MERS), as nominee for New Century. The mortgaged premises are located on Pemberton Boulevard in Browns Mills, New Jersey.
The mortgage was assigned to plaintiff, as trustee for the registered holders of CSMC Asset-Backed Trust 2007-NC1 OSI, CSMC Asset-Backed Pass-Through Certificates. On May 1, 2008, defendant defaulted in her payments on the note. Plaintiff declared the entire principal and other sums due and payable immediately, and on October 31, 2008, filed its foreclosure complaint. Defendant filed an answer to the complaint.
Thereafter, plaintiff filed a motion for summary judgment, which defendant opposed. The court issued a written opinion dated September 25, 2009, in which it concluded that there were no genuine issues of material fact and plaintiff was entitled to judgment as a matter of law. The court noted that it was undisputed that defendant owed money on the note, she had defaulted and plaintiff had a right to foreclose on the mortgage. Accordingly, the court struck defendant's answer, entered default and transferred the matter to the Foreclosure Unit to proceed as an uncontested case. On September 29, 2010, the court entered a final judgment of foreclosure, directed the county sheriff to sell the mortgaged premises and pay plaintiff the monies due to it.
It appears that the sheriff's sale was initially scheduled for January 20, 2011. However, defendant filed a bankruptcy petition on January 4, 2011, which stayed the foreclosure proceedings. The bankruptcy court vacated the stay on January 31, 2011. Defendant filed another bankruptcy petition on June 24, 2011, again staying the foreclosure proceedings. The bankruptcy court vacated the stay on July 20, 2011. The sheriff's sale was eventually scheduled for November 10, 2011.
On October 12, 2011, defendant filed a motion to vacate the final judgment, stay the sheriff's sale, and dismiss the foreclosure complaint. Defendant argued that MERS assigned the note to plaintiff on October 14, 2008. She claimed that because plaintiff did not own the note when the notice of intent to foreclose was issued, the notice did not comply with the Fair Foreclosure Act (FFA), N.J.S.A. 2A:50-53 to -68. Defendant also argued that, because the notice did not comply with the FFA, plaintiff lacked standing to file the complaint.
The judge considered the motion on November 4, 2011, and placed his decision on the record that day. The judge concluded that, even if the notice of intent to foreclose erroneously identified the mortgage servicer rather than the lender or assignee, the final judgment would not be set aside because defendant did not raise the issue before the judgment was entered. The judge filed an order dated December 7, 2011, denying the motion. This appeal followed.
Defendant argues that final judgment should have been set aside and the complaint dismissed because plaintiff's notice of intent to foreclose did not comply with the FFA. We cannot agree.
Here, defendant sought relief from the final judgment. Rule 4:50-1 provides that the court may relieve a party from a final judgment or order for several reasons:
(a) mistake, inadvertence, surprise, or excusable neglect; (b) newly discovered evidence which would probably alter the judgment or order . . . ; (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.
Defendant argues that the motion judge erred by denying her motion to set aside the final judgment because the judgment is void. She contends that, when plaintiff sent her the notice of intent to foreclose, it did not own the note. At the time, MERS held the note as nominee for New Century. It appears that MERS did not assign the mortgage to plaintiff until October 14, 2008. Plaintiff filed the foreclosure complaint on October 31, 2008.
The FFA provides that, if a debtor fails to perform any obligation under a residential mortgage, the mortgage lender may accelerate the maturity of the obligation and commence a foreclosure proceeding. N.J.S.A. 2A:50-56(a). The lender must provide the debtor notice of its intent to commence the foreclosure action or other legal proceeding at least thirty days "in advance of such action[.]" Ibid. The notice must be in writing and shall be sent to the debtor by registered or certified mail. N.J.S.A. 2A:50-56(b).
Among other things, the notice must state the obligation or interest involved; the default claimed; the debtor's right to cure the default as provided in N.J.S.A. 2A:50-57; and the actions required to cure the default. N.J.S.A. 2A:50-56(c)(1)-(4). In addition, the notice must provide the name and address of the lender and telephone number of the lender's representative, who the debtor may contact "if the debtor disagrees with the lender's assertion that a default has occurred or the correctness of the mortgage lender's calculation of the amount required to cure the default." N.J.S.A. 2A:50-56(c)(11).
In US Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449 (2012), the defendants sought to set aside a default judgment entered in a foreclosure case, arguing that the notice of intent to foreclose did not comply with the FFA because it listed the name and address of the loan servicer rather than the lender. Id. at 457. The trial court determined that the defendants had not shown excusable neglect for failing to answer the complaint Ibid. It denied their motion to set aside the default judgment because the lender had substantially complied with the statute. Ibid. The trial court permitted the lender to issue a corrected notice of intent to foreclose. Ibid. We affirmed the trial court's order. Ibid.
The Supreme Court modified our judgment and affirmed. Ibid. The Court determined that the lender had not substantially complied with the FFA, and held that N.J.S.A. 2A:50-56(c)(11) requires foreclosure plaintiffs to identify the name and address of the actual lender on the notice of intent to foreclose, along with the contact information of any loan servicer. Id. at 457-58.
The Court held, however, that failure to comply with this statutory requirement does not necessarily require the dismissal of the foreclosure complaint without prejudice. Id. at 458 (overruling in part Bank of New York v. Laks, 422 N.J. Super. 201 (App. Div. 2011)). The Court stated that a trial court may "permit a cure or impose such other remedy as may be appropriate to the specific case[.]" Ibid. The Court concluded that the trial court's order permitting the plaintiff to cure the defect in the notice was a proper exercise of its discretion. Id. at 480.
The Court therefore determined that the defendants had not shown a meritorious defense to the foreclosure complaint, which warranted vacation of the default judgment. Ibid. The Court noted that despite the deficiency in the notice, the defendants were thoroughly familiar with the status of their mortgage, as shown by their consultations with a professional adviser and the loan-modification negotiations they had engaged in with the loan servicer. Ibid.
The Court additionally determined that the default judgment could not be set aside as void pursuant to Rule 4:50-1(d). Id. at 483. The Court stated that the failure to include information required by N.J.S.A. 2A:50-56(c)(11) in the notice of intent to foreclose did not deprive the court of jurisdiction to consider the foreclosure complaint. Ibid.
Here, the trial court correctly determined that defendant had not established a basis to set aside the final judgment. Although plaintiff did not own the note and mortgage at the time the notice of intent to foreclose was issued, the notice provided defendant with the name of the creditor to whom the debt was owed and identified the name of the creditor's representative who could be contacted in the event defendant disputed the obligation or the actions required to cure the default.
In her answer to the complaint and response to plaintiff's summary judgment motion, defendant never claimed that the notice failed to comply with the FFA. Had the issue been raised in a timely manner, the trial court could have permitted plaintiff to issue a notice identifying itself as the lender. Thus, plaintiff's failure to provide a notice that identified it as the lender did not require dismissal of the complaint, nor did it render the final judgment void.
Defendant also argues that plaintiff has no right to collect on the note because "there is no longer any security in the [n]ote when it was placed in a trust." Defendant contends that because the note is "now in a [t]rust[,] it is unsecure[d] and one cannot foreclose upon an unsecured property." This argument is without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
We note, however, that the record shows that plaintiff had the right to enforce the note and mortgage when it filed the foreclosure complaint. Plaintiff presented no evidence to the contrary, nor did she challenge plaintiff's standing to bring the action on this basis. See also Deutsche Bank Nat'l Trust v. Russo, 429 N.J. Super. 91, 101 (App. Div. 2012) (holding that foreclosure judgment obtained by party without standing is not a void judgment within the meaning of Rule 4:50-1(d)).
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION