Opinion
DOCKET NO. A-4286-14T1
12-05-2016
WELLS FARGO BANK, N.A., Plaintiff-Respondent, v. ROY SUMMERS, Defendant-Appellant, and MRS. ROY SUMMERS, his wife, and HI-TECH DATA FLOORS, INC., Defendants.
Rubenstein Business Law, attorneys for appellants (David Rubenstein, on the brief). Reed Smith, LLP, attorneys for respondent (Henry F. Reichner, of counsel and 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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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 binding only on the parties in the case and its use in other cases is limited. R.1:36-3. Before Judges Yannotti and Fasciale. On appeal from Superior Court of New Jersey, Chancery Division, Burlington County, Docket No. F-16163-12. Rubenstein Business Law, attorneys for appellants (David Rubenstein, on the brief). Reed Smith, LLP, attorneys for respondent (Henry F. Reichner, of counsel and on the brief). PER CURIAM
Defendant Roy Summers (Summers) appeals from an order entered by the Chancery Division on April 10, 2015, which denied his motion to vacate the final judgment of foreclosure entered in this action. We affirm.
This appeal arises from the following facts. In August 2004, Summers borrowed $237,600 from Wachovia Mortgage Corporation (Wachovia), and executed a note agreeing to repay that sum with interest, in monthly payments to be made over a thirty-month period. To secure repayment of the note, Summers issued to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Wachovia, a purchase money mortgage upon property on Lenape Lane in Burlington. The mortgage was recorded on August 31, 2004.
On February 3, 2010, and November 9, 2011, MERS assigned the mortgage to plaintiff Wells Fargo Bank, N.A., and recorded the assignments on April 5, 2010, and November 22, 2011, respectively. On August 1, 2011, Summers defaulted on the note. On August 14, 2011, plaintiff served a notice of its intent to foreclose upon Summers.
On February 9, 2012, MERS executed a corrected assignment of the mortgage to plaintiff. The corrected assignment was recorded on February 24, 2012. In August 2012, plaintiff filed its foreclosure complaint. Plaintiff named Summers as defendant. It also named Summers' wife and Hi-Tech Data Floors, Inc. as defendants since they may have had a lien, claim, or interest in the mortgaged property. The complaint was served upon Summers on September 1, 2012. Summers did not file an answer or otherwise respond to the complaint, and on October 24, 2012, default was entered against him.
On May 23, 2013, plaintiff served Summers with a notice of motion for entry of final judgment. Summers did not respond to the motion. The court entered a final judgment of foreclosure on August 13, 2013. On October 30, 2013, Summers commenced a bankruptcy proceeding, which was dismissed on November 13, 2013. Thereafter, Summers commenced two other bankruptcy proceedings, which were closed on June 10, 2014, and October 14, 2014, respectively. On October 16, 2014, the property was sold at a sheriff's sale to the Federal National Mortgage Association (FNMA).
On December 24, 2014, Summers filed a pro se motion in the trial court to vacate the default judgment and set aside the sheriff's sale. Summers did not seek a stay. The sheriff's deed to FNMA was recorded on January 5, 2015. Summers retained counsel who argued the motion in the trial court on April 10, 2015. That day, the court filed an order denying the motion, along with a statement of reasons for the order. The court found that Summers failed to show excusable neglect for his failure to appear, and did not establish a meritorious defense to the foreclosure action. This appeal followed.
On appeal, Summers argues that: (1) the trial court's order should be reversed because he established exceptional circumstances for relief from the default judgment pursuant to Rule 4:50-1(f); (2) the default judgment should have been vacated pursuant to Rule 4:50-1(e) because he established that plaintiff did not have standing in the matter, and it was no longer equitable for the judgment to have prospective application; and (3) the sale of the property should be set aside as unconscionable.
We note initially that a trial court's determination under Rule 4:50-1 is entitled to substantial deference and will not be reversed in the absence of a clear abuse of discretion. U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467 (2012). To warrant reversal of the court's order, the defendant must show that the decision was "made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis." Ibid. (quoting Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123 (2007)).
Here, Summers argues that the trial court erred by denying relief under Rule 4:50-1(e) and (f). Subsection (e) provides in pertinent part that the court can grant relief from a judgment if "it is no longer equitable that the judgment or order should have prospective application[.]" R. 4:50-1(e). Relief under this provision of the rule must be supported by changed circumstances. DEG, L.L.C. v. Twp. of Fairfield, 198 N.J. 242, 266 (2009).
Furthermore, subsection (f) provides that a court can grant relief from a judgment or order for "any other reason justifying relief from the operation of the judgment or order." R. 4:50-1(f). To obtain relief under this subsection, the movant must ordinarily show that the circumstances are exceptional, and enforcement of the order would be unjust, oppressive, or inequitable. Guillaume, supra, 209 N.J. at 484.
As noted, Summers argues that he established exceptional circumstances for relief under Rule 4:50-1(f). He contends that the three mortgage assignments were not valid because Wachovia ceased to exist in 2009, and therefore Wachovia was legally incapable of providing authority to MERS to assign the "loan" to plaintiff. In addition, Summers contends that plaintiff lacks standing to enforce his note pursuant to N.J.S.A. 12A:3-301.
These arguments are without merit. Plaintiff has standing to foreclose as successor by merger with Wachovia. See N.J.S.A. 14A:10-6(d) (in a merger, a surviving corporation succeeds to the real and personal property, tangible and intangible, of both corporations); N.J.S.A. 17:9A-139(1) (a merging bank's property and rights are merged into that of a "receiving bank").
Furthermore, standing to foreclose on a mortgage is established by "either possession of the note or an assignment of the mortgage that predate[s] the original complaint[.]" Deutsche Bank Tr. Co. Ams. v. Angeles, 428 N.J. Super. 315, 318 (App. Div. 2012). Here, it is undisputed that MERS assigned the mortgage to plaintiff before the foreclosure complaint was filed.
Summers also argues that he established grounds for relief under Rule 4:50-1(e). He contends that it is no longer equitable for plaintiff to execute upon the default judgment because it was obtained on purely procedural grounds. He asserts that there has been no adjudication of his contention that plaintiff lacks standing to foreclose.
These contentions lack sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E). We note, however, that despite having been served with the complaint, Summers failed to answer or otherwise respond to the foreclosure complaint. In addition, he failed to respond to the motion for entry of final judgment. Thus, Summers had the opportunity to contest the foreclosure and to be heard before the entry of the final judgment. He failed to avail himself of these opportunities. Moreover, as stated previously, there is no merit to his contention that plaintiff lacked standing to foreclose.
Summers further argues that the sheriff's sale should be set aside because the sale price is "grossly inadequate." However, inadequacy of price, standing alone, is not a sufficient basis for setting aside a sheriff's sale. G.E. Capital Mortg. Servs., Inc. v. Marilao, 352 N.J. Super. 274, 285 (App. Div. 2002); First Tr. Nat'l Ass'n v. Merola, 319 N.J. Super. 44, 50 (App. Div. 1999). Summers contends that the alleged inadequate sales price shows that plaintiff did not take "proper steps" to market the property, but there is nothing in the record to support that assertion.
We note that, in the event that plaintiff wanted to obtain a deficiency judgment against Summers for the amount remaining due on the note, plaintiff had to file an action seeking that relief within three months after the date of the sale or confirmation of the sale, if confirmation is required. N.J.S.A. 2A:50-2.
Here, plaintiff did not file a deficiency action. In any event, had such an action been pursued, Summers could have sought a credit for the difference between the fair market value of the property and the amount realized in the sale. N.J.S.A. 2A:50-3.
In view of our decision, we need not address plaintiff's contention that Summers' motion for relief from the judgment should also have been denied because it was not brought within a reasonable time after entry of the judgment, as required by Rule 4:50-2.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION