Opinion
DOCKET NO. A-5599-13T4
06-22-2015
INDYMAC FEDERAL BANK FSB, Plaintiff-Respondent, v. KELLY A. SMITH, f/k/a KELLY A. HALL, Defendant-Appellant.
Howard A. Miller, attorney for appellant. Blank Rome LLP, attorneys for respondent (Donna M. Bates and David A. DeFlece, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Lihotz and St. John. On appeal from Superior Court of New Jersey, Chancery Division, Passaic County, Docket No. F-7533-09. Howard A. Miller, attorney for appellant. Blank Rome LLP, attorneys for respondent (Donna M. Bates and David A. DeFlece, on the brief). PER CURIAM
Defendant Kelly A. Smith, f/k/a Kelly A. Hall, appeals from a July 29, 2014 order denying her motion to quash an alias writ of execution and stay the sheriff's sale of her Haskell residential real property following entry of a final judgment of foreclosure in favor of plaintiff, IndyMac Federal Bank FSB. On appeal, defendant argues the Chancery judge erred in denying her motion because defendant's notice was defective and statements made within the certification of diligent inquiry as to the accuracy of foreclosure documents and factual assertions, see Rule 4:64-2(d), were legally insufficient to support relief. We reject defendant's contentions and affirm.
These facts are taken from the motion record. On July 28, 2006, defendant borrowed $270,000 from Indymac Bank, FSB. To secure repayment under the terms of the thirty-year note, defendant also executed a mortgage, naming Mortgage Electronic Registration Systems Inc. (MERS) as nominee for Indymac Bank, FSB, which was recorded on August 16, 2006 with the Passiac County Clerk's Office.
On May 1, 2008, defendant defaulted on the note. MERS assigned the mortgage to plaintiff on January 29, 2009. Defendant was notified of, but failed to cure, the default. On February 10, 2009, plaintiff filed a complaint in foreclosure with the Superior Court of New Jersey, Chancery Division, Passaic County. Defendant did not answer or otherwise defend assertions within the complaint and plaintiff moved for entry of default.
On June 19, 2009, defendant requested the parties commence foreclosure mediation. Plaintiff did not immediately respond and, instead, moved for entry of final judgment of foreclosure. On March 17, 2010, the Chancery Division entered a final judgment, foreclosing defendant's interest in the real property. By writ of execution, a sheriff's sale of the underlying realty was scheduled for May 25, 2010.
On May 3 2010, defendant moved to stay the sale and requested the parties be ordered to attend foreclosure mediation. By agreement, the sheriff's sale was adjourned until August 17, 2010 so the parties could attend Civil Complementary Dispute Resolution. Agreement on a loan modification proved elusive, "because [d]efendant did not satisfy the income requirements necessary to modify the loan." Defendant filed a voluntary Chapter 7 Bankruptcy petition on August 30, 2010.
During the pendency of defendant's bankruptcy proceedings, the Supreme Court of New Jersey issued a notice mandating certain "standardized form certifications . . . [be] annexed to residential mortgage foreclosure complaints pursuant to Rule 1:5-6(c)(1)(E) and Rules 4:64-1(a)(2) and (3) . . . , and notices of motion for judgement in residential foreclosure actions pursuant to Rule 4:64-2(d)," as set forth in rule amendments adopted by the Court on December 20, 2010. In compliance with the rule amendments, the notice identified specific affirmations and factual assertions each certification of diligent inquiry must contain when affixed to foreclosure complaints filed after December 20, 2010. A certification of diligent inquiry was also required to be served upon all defendants in "all uncontested residential mortgage foreclosure actions pending and awaiting judgments as of that date" and those actions where judgment was entered but a sheriff's sale had not be held.
The notice and forms are found on the Judiciary's website. See Notice to the Bar: Residential Mortgage Foreclosures — Certifications of Diligent Inquiry (January 7, 2011), available at http://www.judiciary.state. nj.us/notices/2011/n110107i.pdf.
On February 11, 2014, plaintiff filed a substitution of legal counsel in the foreclosure litigation. Current counsel requested entry of an alias writ of execution and the rescheduling of the sheriff's sale of defendant's residential real estate to satisfy the final judgement of foreclosure. Attached to the alias writ, in support of plaintiff's request, current counsel filed a certification of diligent inquiry, certifying foreclosure proceedings were executed in compliance with Rule 4:64(d) and Rule 1:4-8(a). The certification, however, did not contain a formal attestation clause, as set forth in Rule 1:4-4(b). Defendant was served with the alias writ and all supporting documents by certified and first class mail May 15, 2014. The Chancery judge executed the writ and the sheriff's sale was scheduled for July 29, 2014.
An alias writ is "[a]n additional writ issued after another writ of the same kind in the same case." Black's Law Dictionary 1747 (9th ed. 2009). Essentially, this document is filed to satisfy a judgment unenforced or unsatisfied by a previous writ. The alias writ in this matter was issued because the original writ of execution, dated March 17, 2010, expired. See Rule 4:59-1 (stating "[u]nless the court otherwise orders, every writ of execution . . . shall be returnable within [twenty-four] months after the date of its issuance").
Defendant moved to quash the writ and cancel the sale. She argued notice was deficient because (1) her attorney was never notified of the substitution of counsel; (2) her attorney was not separately served with the writ, "[d]espite being the attorney of record"; and (3) the certification of diligent inquiry, as presented, amounted to mere "uncertified assertion[s]." After considering the arguments presented, the Chancery judge denied defendant's motion on July 29, 2014. Defendant filed an emergent application with this court to stay the sheriff's sale, and appealed from the Chancery judge's order. The sale was temporarily stayed pending emergent review. Ultimately, we denied defendant's motion and vacated the temporary stay. The sheriff's sale was held on August 12, 2014; plaintiff was the successful bidder.
One day prior to the scheduled oral argument, defendant filed an emergent application with this court, seeking to "quash a legally defective alias writ [of execution]" because she "was informed verbally that [her] application . . . [wa]s going to be denied." We denied the application as premature. --------
On appeal, defendant challenges the denial of her motion to quash the writ, arguing counsel's underlying certification of diligent inquiry was legally defective. Because the issue requires interpretation of the court rules, we consider the legal conclusions de novo. Mortg. Grader, Inc. v. Ward & Olivo, LLP, 438 N.J. Super. 202, 209 (App. Div. 2014), certif. granted, 221 N.J. 216 (2015); Washington Commons, LLC. v. City of Jersey City, 416 N.J. Super. 555, 560 (App. Div. 2010), certif. denied, 205 N.J. 318 (2011). See also Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) (recognizing "interpretations of the law and the legal consequences that flow from established facts" are subject to plenary review). "When interpreting court rules, we . . . apply canons of statutory construction. Wiese v. Dedhia, 188 N.J. 587, 592 (2006).
[A]s with a statute, the analysis must begin with the plain language of the rule. DiProspero v. Penn, 183 N.J. 477, 492 (2005). The Court must "ascribe to the [words of the rule] their ordinary meaning and significance . . . and read them in context with related provisions so as to give sense to the [court rules] as a whole . . . ." Id. at 492 (citations omitted). If the language of the rule is ambiguous such that it leads to more than one plausible interpretation, the Court may turn to extrinsic evidence. Id. at 493.
[Ibid. (alterations in original).]
In addition to the substantive provisions added by Rule 4:64-2(d)'s amendments, the proposed form certification of diligent inquiry required to accompany residential foreclosure pleadings includes the verification as recited by Rule 1:4-4(b). We consider whether plaintiff's counsel's certification, which included all necessary provisions except the Rule 1:4-4(b) verification, is fatally flawed.
The court rules were amended in 1969 to add the Rule 1:4-4(b) verification requirement, which allowed certifications to be filed in lieu of more formal affidavits. State v. Parmigiani, 65 N.J. 154, 156 (1974); Pressler & Verniero, Current N.J. Court Rules, cmt. 2 on R. 1:4-4(b) (2015). The "allowance of certification in lieu of oath was admittedly intended as a convenience[,] but it in nowise reduced the solemnity of the verification or declaration of truth." Parmigiani, supra, 65 N.J. at 157. See also State v. Angelo's Motor Sales, Inc., 125 N.J. Super. 200, 207 (App. Div. 1973), aff'd, 65 N.J. 154 (1974) ("Certification is only another way of swearing or affirming."). To ensure verifiable statements and acknowledge punishment by the court for statements spuriously made, the affiant's signature must be preceded by the statement included in Rule 1:4-4(b). See ibid.; Pressler & Verniero, supra, comment 2 on R. 1:4-4(b) (stating the acceptance of a certification in lieu of an oath was nonetheless designed "to serve the main function as a jurat").
Equally relevant to our discussion are the amendments to Rules 1:5-6, 4:64-1 and 4:64-2 governing residential foreclosure proceedings.
The rule amendments require plaintiff's counsel in all residential foreclosure actions to file with the court (1) an affidavit or certification executed by the attorney that the attorney has communicated with an employee or employees of the plaintiff who (a) personally reviewed documents for accuracy and (b) confirmed the accuracy of all court filings in the case to date; (2) the name(s), title(s), and responsibilities of the employee(s) of the plaintiff who provided this information to the attorney; and (3) an affidavit or certification executed by the attorney that all the filings in the case comport with all requirements of Rule 1:4-8(a).Significant are the requirements for counsel's: (1) personal communication with the plaintiff's agent or employee, who has examined the documents supporting plaintiff's ownership of the note secured by the mortgage; and (2) a certification under Rule 1:4-8(a)(3).
[Notice to the Bar: Emergent Amendments to Rules 1:5-6, 4:64-1 and 4:64-2 (December 20, 2010), available at http://www.judiciary.state.nj.us/notices/2010/n101220a.pdf.]
Patterned after Rule 11 of the Federal Rule of Civil Procedure, Rule 1:4-8(a) addresses an attorney's obligation to refrain from filing frivolous pleadings. The rule provides:
The signature of an attorney or pro se party constitutes a certificate that the signatory has read the pleading, written motion or other paper. By signing, filing or advocating a pleading, written motion, or other paper, an attorney or pro se party certifies that to the best of his or her knowledge, information, and belief, formed
after an inquiry reasonable under the circumstances:
(1) the paper is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;
(2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a non-frivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;
(3) the factual allegations have evidentiary support or, as to specifically identified allegations, they are either likely to have evidentiary support or they will be withdrawn or corrected if reasonable opportunity for further investigation or discovery indicates insufficient evidentiary support; and
(4) the denials of factual allegations are warranted on the evidence or, as to specifically identified denials, they are reasonably based on a lack of information or belief or they will be withdrawn or corrected if a reasonable opportunity for further investigation or discovery indicates insufficient evidentiary support.
[R. 1:4-8(a).]
Counsel's certification of compliance with the frivolous litigation rule certifies to personal knowledge of the facts undergirding the litigation, which have evidential support and present a legally sustainable action. Under the rule, a party who fails to verify the factual and legal basis for asserted claims is subject to the sanction procedure set forth in Rule 1:4-8(b). As is the case with Rule 1:4-4(b), the important criterion of the statements made is truthfulness.
We do not agree with plaintiff's broad assertion that Rule 1:4-4(b) presents a mere technical procedural requirement. As a substitute for an oath, a certification must aver the truth of the statements made, which are based on the personal knowledge of the signor. The rule's provisions assure compliance with these requisites.
Cases have rejected certifications and affidavits that failed to include assertions of personal knowledge. See e.g., Stowell v. N.J. State Ass'n of Chiefs of Police, 325 N.J. Super. 512, 520-21 n.2 (App. Div. 1999) (finding the allegation in an affidavit that statements made in a complaint "are true to the best of the affiant's knowledge and belief" did not comply with the rule (brackets omitted) (citation and internal quotation marks omitted)); State v. One (1971) Datsun, 189 N.J. Super. 209, 211 (App. Div. 1983) (stating the facts in a complaint were "true to the best of my knowledge and belief," rather than based on personal knowledge, was a "nullity"). That issue is not present here.
Although we instruct the use of the verification language set forth in Rule 1:4-4(b) is preferred, we conclude the certification of diligent inquiry in this matter, which included assertions of compliance with the more stringent provisions of Rule 1:4-8(a), met the substantive assertions of personal knowledge and truthfulness found in Rule 1:4-4(b). Counsel's certification of diligent inquiry stated he was personally familiar with the litigation pleadings and documents and the facts set forth in the certification. He certified to communicating, in writing, with an employee of plaintiff's loan servicer, who reviewed the certification of amount due and the original documents and he executed the certification in compliance of counsel's obligations with the provisions of Rule 4:64(d) and Rule 1:4-8(a). None of these assertions were challenged by defendant as inaccurate or even misleading.
We also reject defendant's analogy of the facts at hand to those in Pascack Community Bank v. Universal Funding, LLP, 419 N.J. Super. 279 (App. Div. 2011). In that matter, this court found counsel's certification filed in support of summary judgment not only omitted the verification required under Rule 1:4-4(b), but also had no evidentiary value and was defective because it "did not represent that counsel had any personal knowledge of any of the facts asserted therein, provided no basis for a conclusion that he was competent to testify as to any of those factual assertions, and neither referred to nor attached any documents to support those assertions." Id. at 288.
The certification of diligent inquiry filed in this matter was not filed in support of entry of judgment or to fix the amount due. See R. 4:64-2(b) (requiring general proof of the amount due in a foreclosure proceeding be set forth in an affidavit). Rather, it had a very limited purpose; to reschedule the sheriff's sale of the mortgaged realty in collection of the judgment. Further, counsel represented its contents, that is, the factual support and legal sufficiency of the litigation, as well as the documents upon which it was derived, were based upon his personal knowledge. Finally, counsel's compliance with Rule 1:4-8(a) provided the truthful assurance and legal sufficiency of the facts to sustain an action. On the specific facts of this case, we cannot find the omission of the required language set forth in Rule 1:4-4(b) warrants the alias writ be quashed and the sheriff's sale canceled.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION