EVERBANK v. MR LARRY HUSBAND OF JEAN LARRY AND BENEFICIAL NEW JERSEY INC BENEFICIAL MORTGAGE CO (2013)

In this foreclosure matter, defendant Jean Larry appeals from the October 12, 2012 Chancery Division order, which denied her second motion to vacate a default judgment entered on April 18, 2012.   We affirm.

The facts are straightforward and supported by a certification from an authorized representative of plaintiff Everbank based on the representative's personal knowledge and personal review of the loan documents.   On October 21, 2004, defendant executed a note to Equihome Mortgage Corp. (Equihome) in the amount of $251,600.   Equihome endorsed the note in blank to Flagstar Bank FSB (Flagstar).   To secure payment of the note, defendant executed a mortgage to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Equihome, on her property in Elizabeth (the property).   The mortgage was recorded with the Union County Clerk on December 1, 2004.   On March 1, 2006, the original note, which Flagstar endorsed in blank, was transferred to plaintiff, and has been in plaintiff's possession since that date.

Defendant defaulted on March 1, 2010.   On October 6, 2010, MERS executed an Assignment of Mortgage to plaintiff, and on October 20, 2010, plaintiff recorded the assignment with the Union County Clerk.   The assignment assigned the mortgage “[t]ogether with the Bond, Note or other Obligation therein described, and interest thereon and any and all rights thereunder.”  (Emphasis added.)

On October 22, 2010, plaintiff filed a complaint for foreclosure.   On November 26, 2010, defendant was personally served with the summons and complaint and mediation program documents.   On February 4, 2011, the court entered default against defendant after she failed to file an answer or otherwise defend.   On April 18, 2012, the court entered a final judgment granting foreclosure and a writ of execution.¹

Defendant filed a motion to vacate the default judgment.   The record does not disclose the court rule upon which defendant relied, and defendant did not supply a transcript of Judge John Malone's May 25, 2012 oral decision denying the motion, in contravention of Rule 2:6–1(a)(1).

On September 17, 2012, defendant filed a second motion to vacate the default judgment and dismiss the complaint.   She did not deny she was personally served with the summons and complaint;  rather, she gave reasons for failing to file an answer.   She argued the final judgment should be vacated based on unclean hand because plaintiff did not advise the court that EquiHome sold the loan to Flagstar, not plaintiff, the assignment did not assign the note, and plaintiff lacked standing because it did not possess the note when it filed the complaint.

In his October 12, 2012 oral opinion, Judge Frederic Kessler considered the motion under Rule 4:50–1(a), (d) and (f), and denied it.   The judge found there was no dispute that defendant executed the note and mortgage, the note was transferred to Flagstar, Flagstar endorsed the note in blank, and plaintiff had standing because it possessed the original note.   The judge also determined that defendant failed to show excusable neglect, a meritorious defense, or exceptional circumstances to warrant relief from the default judgment.   This appeal followed.   On appeal, defendant raises the same arguments she raised before Judge Kessler.²

We review the trial court's decision on a motion to vacate a default judgment for abuse of discretion.  U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467–68 (2012).  “The trial court's determination under [Rule 4:50–1] warrants substantial deference,” and the abuse of discretion must be clear to warrant reversal.  Id. at 467.

We have considered defendant's arguments in light of the record and applicable legal principles and conclude they are without sufficient merit to warrant discussion in a written opinion.   R. 2:11–3(e)(1)(E).   We discern no abuse of discretion in this case, and affirm substantially for the reasons Judge Kessler expressed in his oral opinion.   However, we make the following brief comments.

“[S]tanding is not a jurisdictional issue in our State court system and, therefore, a foreclosure judgment obtained by a party that lacked standing is not ‘void’ within the meaning of Rule 4:50–1(d).”  Deutsche Bank Nat'l Trust Co. v. Russo, 429 N.J.Super. 91, 101 (App.Div.2012).   The judgment is voidable unless the plaintiff has standing from either possession of the note or an assignment of the mortgage that predated the original complaint.  Deutsche Bank Trust Co. Ams. v. Angeles, 428 N.J.Super. 315, 319–20 (App.Div.2012).   Here, plaintiff had possession of the note and an assignment of the mortgage and note prior to filing the complaint.   Thus, Judge Kessler correctly determined that plaintiff had standing to file the foreclosure complaint.

Affirmed.

FOOTNOTES

FN1. The final judgment also awarded plaintiff $283,258.71 plus counsel fees and costs..  FN1. The final judgment also awarded plaintiff $283,258.71 plus counsel fees and costs.

FN2. We decline to address the arguments defendant improperly raised for the first time in her reply brief that she did not default, was not served with the summons and complaint, and only Fannie Mae had standing.   Goldsmith v. Camden Cnty. Surrogate's Office, 408 N.J.Super. 376, 387 (App.Div.), certif. denied, 200 N.J. 502 (2009)..  FN2. We decline to address the arguments defendant improperly raised for the first time in her reply brief that she did not default, was not served with the summons and complaint, and only Fannie Mae had standing.   Goldsmith v. Camden Cnty. Surrogate's Office, 408 N.J.Super. 376, 387 (App.Div.), certif. denied, 200 N.J. 502 (2009).

PER CURIAM