Opinion
DOCKET NO. A-3889-14T2
09-28-2016
WELLS FARGO BANK, N.A., Plaintiff-Respondent, v. DEMETRIA GUIUAN, Defendant-Appellant.
Demetria Guiuan, appellant pro se. Reed Smith LLP, attorneys for respondent (Henry F. Reichner, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is only binding on the parties in the case and its use in other cases is limited. R.1:36-3. Before Judges Yannotti and Kennedy. On appeal from Superior Court of New Jersey, Chancery Division, Essex County, Docket No. F-024967-12. Demetria Guiuan, appellant pro se. Reed Smith LLP, attorneys for respondent (Henry F. Reichner, on the brief). PER CURIAM
Defendant Demetria Guiuan appeals from an order entered by the Chancery Division on April 9, 2015, which denied her motion to vacate the previously-entered final judgment of foreclosure and to dismiss the complaint with prejudice. We affirm.
We briefly summarize the relevant facts and procedural history. In May 2013, defendant executed a note in favor of Greenlight Financial Services in the principal amount of $322,700, with an annual interest rate of 4.375%. The note was secured by a mortgage on defendant's property in Livingston, and recorded in the office of the Essex County Clerk on June 3, 2003. Mortgage Electronic Registration Systems, Inc. (MERS) was the lender's nominee.
On April 1, 2006, defendant failed to make the monthly payment due on the note and thereafter did not make any further payments. On January 10, 2012, MERS assigned the mortgage to plaintiff Wells Fargo Bank, N.A. (Wells Fargo). The assignment of the mortgage was recorded in the office of the Essex County Clerk. In January and May 2012, Wells Fargo sent defendant notices of its intent to foreclose on the mortgage.
On October 26, 2012, Wells Fargo filed a foreclosure complaint in the Chancery Division, and defendant responded by filing a motion to dismiss the complaint. After hearing arguments by the parties, the court entered an order dated May 31, 2013, denying the motion. On June 24, 2013, defendant filed an answer, affirmative defenses, and a counterclaim. Wells Fargo answered the counterclaim on June 30, 2013.
On March 28, 2014, Wells Fargo filed a motion for summary judgment and thereafter defendant filed a cross-motion for summary judgment. The trial court considered the motions on May 7, 2014. On that date, the court entered an order granting Wells Fargo's motion and denying defendant's cross-motion. Defendant then filed a motion for reconsideration, which the court denied on July 24, 2014.
On December 1, 2014, Wells Fargo served a notice upon defendant that it intended to seek a final judgment in the matter. On January 7, 2015, Wells Fargo filed a motion in the trial court for entry of that judgment. The court granted the motion and entered final judgment for Wells Fargo on February 19, 2015, in the amount of $543,867.65.
Thereafter, defendant filed a motion to vacate the final judgment and to dismiss the complaint with prejudice. She argued that the complaint was time-barred, and her rights had been violated because she allegedly had not received timely notice that Wells Fargo would be seeking the entry of final judgment. On April 9, 2014, the trial court denied defendant's motion. This appeal followed.
On appeal, defendant raises the following arguments:
[POINT I]
THE APPELLATE DIVISION MUST DECIDE WHETHER A GENUINE ISSUE OF MATERIAL FACT WAS IN [DISPUTE] THAT SHOULD HAVE PRECLUDED SUMMARY JUDGMENT, AND IF NOT, WHETHER THE TRIAL COURT RULED CORRECTLY ON THE LAW WHERE APPELLANT INVOKED THE NEW JERSEY STATUTE OF LIMITATIONS.
[POINT II]
THE APPELLATE DIVISION MUST DECIDE WHETHER [WELLS FARGO'S] PROOFS WERE SUFFICIENT TO SUPPORT ENTRY OF FINAL JUDGMENT.
[POINT III]
WELLS FARGO'S OWN PROOFS ESTABLISH THAT WELLS FARGO IS NOT THE HOLDER OF THE NOTE, AND THEREFORE LACKS STANDING TO FORECLOSE.
[A.] IN ORDER TO HAVE STANDING TO FORECLOSE, A PLAINTIFF MUST SHOW BOTH (1) THAT DEFENDANT OWES A DEBT TO THE PLAINTIFF AND (2) THAT PLAINTIFF HAS A SECURITY INTEREST IN THE PROPERTY.
[B.] TRANSFER OF A NEGOTIABLE INSTRUMENT IS GOVERNED BY THE UNIFORM COMMERCIAL CODE, WHICH REQUIRES PHYSICAL POSSESSION AND INDORSEMENT OF A NOTE PAYABLE TO ORDER.
[C.] [WELLS FARGO'S] ALLEGED OWNERSHIP INTEREST IN THE NOTE, SUPPORTED ONLY BY AN ASSIGNMENT OF MORTGAGE, FAILS TO MEET THE REQUIREMENTS OF THE UNIFORM COMMERCIAL CODE AND DOES NOT GIVE RISE TO A CLAIM OF RELIEF AGAINST THE MAKER OF THE NOTE.
[D.] WELLS FARGO'S CLAIM OF ASSIGNMENT WAS UNSUPPORTED BY COMPETENT EVIDENCE, AND THEREFORE WELLS FARGO FAILED EVEN TO SHOW AN OWNERSHIP INTEREST IN THE NOTE.
[E.] WELLS FARGO'S CLAIM FAILED TO SHOW THAT IT WAS THE HOLDER OF THE NOTE AND [AS] THE ASSIGNEE OF THE MORTGAGE IT IS NOT A PROPER PARTY TO THE FORECLOSURE ACTION AND LACKS STANDING TO FORECLOSE.
[POINT IV]
THE COURT MISAPPLIED THE HOLDER IN DUE COURSE DOCTRINE AND, HAVING FAILED TO SHOW THAT IT WAS THE HOLDER OF THE NOTE, WELLS FARGO ALSO FAILED TO SHOW IT WAS A HOLDER IN DUE COURSE.
[A.] HOLDER IN DUE COURSE STATUS IS AN EXCEPTION TO THE GENERAL RULE THAT A HOLDER OF A NOTE IS SUBJECT TO ANY CLAIMS AND DEFENSES THAT COULD BE ASSERTED AGAINST THE ORIGINAL CONTRACTING PARTY AND THE BURDEN OF PROOF FOR HOLDER IN DUE COURSE STATUS RESTS WITH THE HOLDER.
[B.] THE COURT MISAPPLIED THE RULING IN CARNEGIE BANK V. SHALLECK BY FAILING TO RECOGNIZE THAT HOLDER IN DUE COURSE STATUS IS A QUESTION OF FACT AND IS NOT PRESUMED MERELY ON THE BASIS OF A MORTGAGE ASSIGNMENT.
[POINT V]
HOLDER IN DUE COURSE STATUS DOES NOT IMMUNIZE A PARTY AGAINST ALL DEFENSES, AND HAVING FAILED TO ANALYZE [DEFENDANT'S] DEFENSES, THE TRIAL COURT'S RULING THAT [DEFENDANT] HAD PROFFERED NO DEFENSES AGAINST WELLS FARGO WAS IN ERROR.
[A.] THE COURT ERRED BY FAILING TO RECOGNIZE THAT PURSUANT TO THE UNIFORM COMMERCIAL CODE, REAL DEFENSES SUCH AS FRAUD AND ILLEGALITY SURVIVE AGAINST [A] HOLDER IN DUE COURSE.
[B.] THE COURT ERRED BY FAILING TO RECOGNIZE THAT THE TRUTH IN LENDING ACT[] PERMITS RESCISSION AGAINST ASSIGNEES TO THE SAME EXTENT AVAILABLE AGAINST THE ORIGINAL CREDITOR
AND DAMAGES AGAINST ASSIGNEES WHERE DISCLOSURE[] VIOLATIONS ARE APPARENT.
[C.] THE COURT ERRED BY FAILING TO RECOGNIZE THAT DEFENDANT RAISED DEFENSES AND COUNTERCLAIMS AS AGAINST WELLS FARGO FOR ITS OWN ACTIONS AND NOT MERELY IN ITS ROLE AS ASSIGNEE.
We are convinced from our review of the record that defendant's arguments are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). However, we add the following comments.
Defendant argues that a foreclosure action is subject to the six-year statute of limitations in N.J.S.A. 12A:3-118(a) and N.J.S.A. 2A:50-56.1. Defendant contends Wells Fargo's complaint was time-barred because it was not filed within six years after April 1, 2006, when she first defaulted on the note. Defendant's argument is entirely without merit.
In Security Nat. Partners Ltd. v. Mahler, 336 N.J. Super. 101 (App. Div. 2000), certif. denied, 169 N.J. 607 (2001), we addressed the question of whether a six-year or twenty-year statute of limitations applied to mortgage foreclosure actions. Id. at 103. We held that "[t]here is a twenty year limitation period governing institution of a mortgage foreclosure suit." Id. at 108. Thus, Wells Fargo's foreclosure complaint was timely filed.
Defendant further argues that Wells Fargo did not have standing to foreclose on the mortgage. We have held, however, that "either possession of the note or an assignment of the mortgage that predate[s] the original complaint confer[s] standing" to foreclose. Deutsche Bank Trust Co. Americas v. Angeles, 428 N.J. Super. 315, 318 (App. Div. 2012) (citation omitted). In this case, Wells Fargo established that the mortgage had been assigned to it before the foreclosure complaint was filed. The trial court correctly found that Wells Fargo had standing to foreclose.
In addition, defendant argues that Wells Fargo cannot foreclose unless it can enforce the note that is secured by the mortgage. According to defendant, Wells Fargo had to establish that it had physical possession of the note, or that the note had been endorsed to it. However, as stated previously, Wells Fargo may foreclose by showing that it either had a valid assignment of the mortgage or possession of the note before the foreclosure complaint was filed. Ibid.
In this case, Wells Fargo presented the trial court with a certification of Andrea Krause, a Vice President for Loan Documentation. In her certification, Krause stated that Wells Fargo was in possession of the note when the complaint was filed. Krause also stated that Wells Fargo's attorneys had possession of the note for purposes of this litigation.
Defendant further argues that Wells Fargo could not pursue this action because it was not a holder in due course of the note. Defendant did not, however, present sufficient evidence to raise a genuine issue of material fact as to Wells Fargo's status as a holder in due course.
In addition, defendant asserts that Wells Fargo's assignment is subject to rescission under the Truth-In-Lending Act (TILA), 15 U.S.C.A. §§ 1601 to 1667f, but any such claim was barred by the TILA's three-year statute of repose. 15 U.S.C.A. § 1635f. Furthermore, defendant did not present any proof to show that she would have been entitled to rescission under the TILA, even if her claim had been asserted in a timely manner.
Defendant also asserts that Wells Fargo failed to follow through on an alleged promise for a loan modification or short sale. There is, however, insufficient competent evidence to support this claim. Moreover, defendant was not otherwise entitled to a loan modification or a short sale. Under these circumstances, Wells Fargo could not be precluded from proceeding with a foreclosure action.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION