Opinion
DOCKET NO. A-4593-14T2
07-22-2016
NATIONSTAR MORTGAGE, LLC, Plaintiff-Respondent, v. YAKOV SMOTRITSKIY, Defendant-Appellant, and YAKOV SMOTRITSKIY's heirs, devisees, and personal representatives and his/her, their, or any of their successors in right, title and interest, RIMMA TELEPINSKAYA, his wife, her heirs, devisees, and personal representatives and his/her, their, or any of their successors in right, title and interest, MARINA SMOTRITSKAYA, her heirs, devisees, and personal representatives and his/her, their, or any of their successors in right, title and interest, GARY P. BELLOTTI, her husband, his heirs, devisees, and personal representatives and his/her, their, or any of their successors in right, title and interest, Defendants.
Montell Figgins, attorney for appellant. Ballard Spahr LLP, attorneys for respondent (Martin C. Bryce, Jr. and Daniel C. Fanaselle, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Yannotti and Haas. On appeal from Superior Court of New Jersey, Chancery Division, Morris County, Docket No. F-026623-13. Montell Figgins, attorney for appellant. Ballard Spahr LLP, attorneys for respondent (Martin C. Bryce, Jr. and Daniel C. Fanaselle, on the brief). PER CURIAM
Defendant Yakov Smotritskiy appeals from a final judgment of foreclosure entered by the Chancery Division on April 29, 2015. We affirm.
We briefly summarize the relevant facts and procedural history. On October 18, 2007, Mortgageit, Inc. (Mortgageit) loaned defendant $344,000, as evidenced by a promissory note signed by defendant on that date. Concurrent with the note, defendants Rimma Telepinskaya, Marina Smotritskaya, and Gary P. Bellotti executed a mortgage in favor of Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for the lender, its successors and assigns, with regard to certain real property on Lee Court in Mount Olive. On January 14, 2008, the mortgage was recorded in the Office of the Morris County Clerk.
Thereafter, Mortgageit indorsed the note in blank and transferred the note and mortgage to BAC Home Loans Servicing, LP (BAC). On August 20, 2009, MERS, as nominee for Mortgageit, executed an assignment of the mortgage in favor of BAC. On September 2, 2009, this assignment was recorded in the Office of the Morris County Clerk. On March 1, 2010, defendant signed an agreement, modifying the unpaid principal balance of the loan to $373,591.11, payable at a step interest rate beginning at two percent.
Thereafter, the note and mortgage were transferred to plaintiff Nationstar Mortgage, LLC. On January 2, 2013, Bank of America, N.A., as successor to BAC, executed an assignment of the mortgage to plaintiff. On January 11, 2013, this assignment was recorded in the Office of the Morris County Clerk.
Defendant defaulted on the note and missed the monthly installment payments due on December 1, 2010, and thereafter. On May 14, 2013, plaintiff sent defendant a notice of its intent to foreclose. Plaintiff demanded that defendant either pay the $62,844.33 owed in missed monthly payments and late charges or face foreclosure.
Defendant failed to make payment and on July 29, 2013, plaintiff filed its foreclosure complaint in the trial court against defendant and the other parties who had executed the mortgage. On September 12, 2013, defendant filed a pro se answer with affirmative defenses and counterclaims. Among other things, defendant asserted that plaintiff lacked standing to foreclose.
On September 23, 2013, default was entered against the other named defendants for failure to answer. On October 28, 2013, plaintiff filed an answer to defendant's counterclaims. In November 2013, defendant retained counsel, who entered an appearance. On April 22, 2014, the parties participated in mediation, but did not reach an agreement.
On August 6, 2014, plaintiff filed a motion for summary judgment; to strike defendant's answer and counterclaims; and to refer the matter to the Office of Foreclosure for the entry of a final judgment. In support of its motion, plaintiff submitted a copy of the original note and the assignment of mortgage. Plaintiff also submitted a certification by Kimberly Hastings, an Assistant Secretary for plaintiff. Ms. Hastings asserted that the mortgage was assigned to plaintiff in January 2013.
Defendant's counsel acknowledged receipt of the motion for summary judgment and on August 29, 2014, submitted a settlement offer to plaintiff, which was rejected. Defendant's counsel did not, however, submit any papers opposing plaintiff's motion.
On September 9, 2014, the trial court granted plaintiff's motion in its entirety. The court entered an order, which included the following statement of reasons:
The court finds the note and mortgage are valid, [the] loan is in default, and there are no legitimate defenses. There are no material facts in dispute. The notice of
intent [to foreclose] was properly served, [therefore] plaintiff has standing. As to fraud, there are no specifics and the statute of limitations has run. As to [the Truth in Lending Act, 16 U.S.C.A. §§ 1601 to 67], the [notice of intent] was proper and again the statute of limitations has run. As to amount due, it is premature. That issue may be raised when final judgment is sought.
Defendant thereafter hired a new attorney, who filed a motion on September 26, 2014, seeking reconsideration of the court's order granting summary judgment. On October 28, 2014, the judge entered an order denying the motion. In an accompanying statement of reasons, the judge rejected defendant's claim that he did not have an opportunity to oppose the summary judgment motion.
The judge noted that defendant's former attorneys had acknowledged receipt of the summary judgment motion, and defendant waited until two days after the court had entered the order granting summary judgment to retain new counsel. The judge stated
This is not an excuse to vacate an order because [d]efendant was represented for the summary judgment motion by former counsel. Further, any request to extend the return date on the motion should have been directed [to] the [c]ourt and [p]laintiff. No such request was ever made. As such the [d]efendant is not entitled to reconsideration because [his] instant counsel did not file opposition to a decided motion.
In addition, the judge noted that defendant had not alleged any new facts or presented new evidence that would warrant reconsideration of the prior order. The judge wrote that, as indicated in the prior order, plaintiff had standing to foreclose, the note was in default, and defendant did not have "any legitimate defenses."
The judge stated that although defendant's attorney had argued that there were genuine issues of material fact in this matter, counsel did not "hint as to what those might be." Counsel's assertion was not a sufficient basis to set aside the summary judgment order. The judge added that in his prior order, he had considered and addressed each defense raised in defendant's answer, "even though the application was not opposed."
On February 24, 2015, plaintiff filed an application for entry of final judgment. Defendant did not oppose the application. On April 29, 2015, the court entered final judgment, assessing damages in the amount of $439,843.68, with interest at the contract rate of 5.625% from September 30, 2014, to April 29, 2015, and lawful interest thereafter. The judgment directed that the property be sold at a sheriff's sale. This appeal followed.
On appeal, defendant raises the following arguments:
[POINT I]
THE APPELLATE DIVISION MUST DECIDE WHETHER [PLAINTIFF'S] PROOFS WERE SUFFICIENT TO SUPPORT ENTRY OF FINAL JUDGMENT.
[A.] [PLAINTIFF'S] OWN PROOFS ESTABLISH THAT [PLAINTIFF] IS NOT THE HOLDER OF THE NOTE, AND THEREFORE LACKS STANDING TO FORECLOSE.
[B.] [PLAINTIFF'S] CLAIM OF ASSIGNMENT WAS UNSUPPORTED BY COMPETENT EVIDENCE, AND THEREFORE [PLAINTIFF] FAILED EVEN TO SHOW AN OWNERSHIP INTEREST IN THE NOTE.
[POINT II]
[DEFENDANT] IS ENTITLED TO VACATUR UNDER [RULE 4:50-1(A)] AS HE HAS DEMONSTRATED EXCUSABLE NEGLECT AND MERITORIOUS DEFENSES DUE TO INEFFECTIVE AND INADEQUATE REPRESENTATION BY PREVIOUS COUNSEL.
[POINT III]
[DEFENDANT] IS ENTITLED TO VACATUR UNDER [RULE 4:50-1(F)] AND THE BOUNDARIES OF THE COURT'S AUTHORITY TO VACATE [A] FINAL JUDGMENT ARE AS EXPANSIVE AS NECESSARY TO ACHIEVE EQUITY AND JUSTICE.
As noted, defendant first argues that plaintiff failed to establish that it had standing to foreclose. He asserts that plaintiff did not establish that it is the holder of the note. He also asserts that plaintiff did not submit competent evidence establishing a valid assignment of the mortgage. We disagree.
When reviewing an order granting summary judgment, we apply the same standards that the trial court applies when ruling on a summary judgment motion. Townsend v. Pierre, 221 N.J. 36, 59 (2015). Summary judgment is appropriate where "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 v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
"As a general proposition, a party seeking to foreclose a mortgage must own or control the underlying debt." Deutsche Bank Nat'l Trust Co. v. Mitchell, 422 N.J. Super. 214, 222 (App. Div. 2011) (quoting Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592, 597 (App. Div. 2011)) (citation omitted). The foreclosing party can establish standing by proving that it possessed either the note or an assignment of the mortgage prior to filing the complaint. Deutsche Bank Trust Co. Ams. v. Angeles, 428 N.J. Super. 315, 318 (App. Div. 2012) (citing Mitchell, supra, 422 N.J. Super. at 225).
Here, plaintiff established standing to foreclose with the certification of Kimberly Hastings, who stated that plaintiff was the holder of the note prior to the filing of the complaint and thereafter remained the holder of the note. Ms. Hastings authenticated and attached to her certification a copy of the original note, which had been indorsed in blank by Mortgageit, the original payee. In addition, plaintiff established that it had standing as a result of the mortgage assignment executed on January 2, 2013, which was before the foreclosure action was commenced.
Defendant argues, however, that neither the note nor mortgage was ever validly assigned to plaintiff. He contends that the note was "seemingly" assigned to a third party. Defendant further argues that plaintiff failed to establish its claim of assignment with competent evidence. We are convinced that these arguments are without sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E).
We next consider defendant's contention that the trial court erred by failing to set aside the final judgment pursuant to Rule 4:50-1(a) or (f). We note that defendant never filed a motion in the trial court seeking relief from the judgment under Rule 4:50-1. Nevertheless, defendant has not shown that it would entitled to such relief, had it been sought.
Under Rule 4:50-1(a), the court may grant relief from a final judgment or order if the moving party demonstrates "mistake, inadvertence, surprise, or excusable neglect." Defendant argues that he established excusable neglect because his attorneys were "ineffective and inadequate" in failing to oppose plaintiff's summary judgment motion. "'Excusable neglect' may be found when the default was attributable to an honest mistake that is compatible with due diligence or reasonable prudence." US Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 468 (2012) (citations omitted).
However, defendant has not shown that his attorneys' failure to file a response to plaintiff's summary judgment motion was excusable. As noted previously, the attorneys who were representing defendant at the time acknowledged receipt of plaintiff's motion. After efforts to settle the matter failed, the attorneys did not file papers opposing the motion.
Plaintiff has not shown that counsel's failure to oppose the motion was due to an honest mistake, that is compatible with due diligence. See Baumann v. Marinaro, 95 N.J. 380, 394 (1984) (noting that mere carelessness of an attorney is ordinarily not a basis for relieving the attorney's client from an adverse judgment in a civil action). Furthermore, defendant never identified a meritious defense, which is required for relief under Rule 4:50-1(a). Guillaume, supra, 209 N.J. at 469 (citing Hous. Auth. of Morristown v. Little, 135 N.J. 274, 284 (1994)).
Defendant also failed to show that he was entitled to relief under Rule 4:50-1(f). Under this subsection of the rule, the court may grant relief from a judgment or order for "any other reason justifying relief from the operation of the judgment or order." Ibid. This subsection is a "catchall" provision, which applies "only when truly exceptional circumstances are present." A.B. v. S.E.W., 175 N.J. 588, 593 (2003) (quoting In re Guardianship of J.N.H., 172 N.J. 440, 473 (2002)). The party must show that enforcement of the judgment or order would be "unjust, oppressive or inequitable." Linek v. Korbeil, 333 N.J. Super. 464, 474 (App. Div.) (quoting Quagliato v. Bodner, 115 N.J. Super. 133, 138, (App. Div. 1971)), certif. denied, 165 N.J. 676 (2000).
Defendant claims that the end result is unjust because it will result in the "unnecessary and avoidable loss of a family's home." However, it is undisputed that defendant defaulted on the note. Moreover, plaintiff had standing to foreclose on the mortgage. Under the circumstances, enforcement of the final judgment is not unjust, oppressive or inequitable.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION