NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2163-15T3
BANK OF AMERICA, N.A.,
Plaintiff-Respondent,
v.
PIL S. OH AND JEOUNG OK OH,
Defendants-Appellants. _____________________________
Submitted August 8, 2017 – Decided August 21, 2017
Before Judges Sabatino and Whipple.
On appeal from Superior Court of New Jersey, Chancery Division, Ocean County, Docket No. F-41618-13.
Law Offices of Park & Kim, LLC, attorneys for appellants (Kyungjoo Park, on the brief).
Winston & Strawn, LLP, attorneys for respondent (Heather E. Saydah, on the brief).
PER CURIAM
Defendants Pil S. Oh and Jeoung Ok Oh appeal from a December
18, 2015 order entering final judgment in favor of plaintiff, Bank
of America, N.A. We affirm. On February 29, 2008, defendants executed a promissory note
in favor of American Partners Bank (APB) when they borrowed
$385,000. As security for the note, defendants executed a mortgage
secured by their Jackson Township property in favor of Mortgage
Electronic Registration System, Inc. (MERS) as nominee for APB and
APB's successors and assigns. On April 28, 2011, MERS assigned
the mortgage to BAC Home Loans Servicing, L.P. f/k/a Countrywide
Home Loans Servicing, L.P. (BAC). The assignment to BAC was
recorded on August 16, 2011. On July 1, 2011, BAC merged with
plaintiff. The note includes an allonge containing indorsements
from APB to Countrywide Bank FSB, and from Countrywide Bank FSB
to bearer by indorsement in blank.
Defendants stopped making payments on the loan in December
2010. Plaintiff sent defendants Notices of Intent to Foreclose
on June 3, 2013, and subsequently filed a complaint to foreclose
in November 2013. On January 15, 2014, defendants filed an answer
asserting affirmative defenses and a counterclaim asserting
violations of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-2
to -167, and the Truth in Lending Act, 15 U.S.C.A. §§ 1601-1616
(1968). On February 20, 2014, plaintiff moved to dismiss
defendants' counterclaims, which the motion judge granted on March
14, 2014.
2 A-2163-15T3 The matter proceeded to trial on November 5, 2014, where the
trial judge heard testimony from plaintiff's witness and
defendant, Pil S. Oh. The trial judge entered an order deeming
defendants' answer uncontested and referred the matter to the
Office of Foreclosure. On August 18, 2015, plaintiff moved for
the entry of final judgment, which was entered December 18, 2015.
On appeal, defendants argue plaintiff's assignment was
invalid, plaintiff was not authorized to foreclose, and plaintiff
submitted unauthenticated documents. Defendants also argue the
court erred dismissing their counterclaims and defenses. We
disagree.
We accord "substantial deference" to the trial judge's
determination and review the decision for an abuse of discretion.
Deutsche Bank Trust Co. Americas v. Angeles, 428 N.J. Super. 315,
318 (App. Div. 2012) (citing U.S. Bank Nat'l Assoc. v. Guillaume,
209 N.J. 449, 467 (2012)). We will find a judge abused his or her
discretion only "when a decision is 'made without rational
explanation, inexplicably departed from established policies, or
rested on an impermissible basis.'" U.S. Bank Nat'l Assoc., supra,
209 N.J. at 467-68 (quoting Iliadis v. Wal-Mart Stores, Inc., 191
N.J. 88, 123 (2007)).
A party attempting to foreclose a mortgage "must own or
control the underlying debt." Deutsche Bank Nat'l Tr. Co. v.
3 A-2163-15T3 Mitchell, 422 N.J. Super. 214, 223 (App. Div. 2011) (quoting Wells
Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592, 597 (App. Div.
2011)). Parties who can enforce such a negotiable instrument,
such as a note, include "the holder of the instrument, a nonholder
in possession of the instrument who has the rights of a holder,
or a person not in possession of the instrument who is entitled
to enforce the instrument pursuant to N.J.S.A. 12A:3-309 or
subsection d." N.J.S.A. 12A:3-301.
Regarding the first category, a person to whom the instrument
is not payable may become the holder if there is a negotiation.
Ford, supra, 418 N.J. Super. at 598 (citing N.J.S.A. 12A:3-201(a)).
In order for a negotiation to occur there must be a transfer of
possession and an indorsement by the holder. Mitchell, supra, 422
N.J. Super. at 223. An indorsement requires "a signature, other
than that of a signer as maker, drawer, or acceptor, that alone
or accompanied by other words is made on an instrument for the
purpose of negotiating the instrument." Ibid. (quoting N.J.S.A.
12A:3-204(a)). Without this indorsement, standing may be
insufficient to satisfy this category. Ford, supra, 418 N.J.
Super. at 598.
To fall within the second category, one must show the transfer
of rights to the note. Id. at 599. Transfer occurs "when it is
delivered by a person other than its issuer for the purpose of
4 A-2163-15T3 giving to the person receiving delivery the right to enforce the
instrument." N.J.S.A. 12A:3-203(a). This transfer "vests in the
transferee any right of the transferor to enforce the instrument"
whether or not a negotiation also occurs. N.J.S.A. 12A:3-203(b).
If the transferee is not a holder because the transferor did not indorse, the transferee is nevertheless a person entitled to enforce the instrument under section 3-301 if the transferor was a holder at the time of transfer. Although the transferee is not a holder, under subsection (b) the transferee obtained the rights of the transferor as holder.
[UCC Comment 2 to N.J.S.A. 12A:3-203.]
Documents establishing transfer, including an assignment of
a mortgage, must be properly authenticated with certifications
based on personal knowledge, as required by Rule 1:6-6. Ford,
supra, 418 N.J. Super. at 599-600.
Here, plaintiff falls within the first category. MERS
assigned the mortgage to BAC, who merged to become plaintiff. This
is documented by the indorsement on the note. MERS, as nominee
for APB and its successors and assigns, had the authority to assign
the mortgage to BAC, even if APB was no longer in business. This
is apparent from the plain language "successors and assigns."
During the trial, plaintiff's witness testified plaintiff, or its
predecessor, BAC, has been in possession of the note since 2008,
shortly after the loan originated. Based on our review of the
5 A-2163-15T3 record, we are satisfied plaintiff was the holder of the note,
thereby establishing the assignment was valid and plaintiff had
standing to foreclose.1
Defendants argue the trial judge erred by not considering
their defenses and counterclaims. Based upon the record before
us, we see no reason to disturb the trial judge's finding
defendants failed to establish by clear and convincing evidence
the existence of fraud. Additionally, defendants have failed to
support their affirmative defenses and counterclaims by credible
evidence in the record; therefore, the trial judge did not err in
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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.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2163-15T3
BANK OF AMERICA, N.A.,
Plaintiff-Respondent,
v.
PIL S. OH AND JEOUNG OK OH,
Defendants-Appellants. _____________________________
Submitted August 8, 2017 – Decided August 21, 2017
Before Judges Sabatino and Whipple.
On appeal from Superior Court of New Jersey, Chancery Division, Ocean County, Docket No. F-41618-13.
Law Offices of Park & Kim, LLC, attorneys for appellants (Kyungjoo Park, on the brief).
Winston & Strawn, LLP, attorneys for respondent (Heather E. Saydah, on the brief).
PER CURIAM
Defendants Pil S. Oh and Jeoung Ok Oh appeal from a December
18, 2015 order entering final judgment in favor of plaintiff, Bank
of America, N.A. We affirm. On February 29, 2008, defendants executed a promissory note
in favor of American Partners Bank (APB) when they borrowed
$385,000. As security for the note, defendants executed a mortgage
secured by their Jackson Township property in favor of Mortgage
Electronic Registration System, Inc. (MERS) as nominee for APB and
APB's successors and assigns. On April 28, 2011, MERS assigned
the mortgage to BAC Home Loans Servicing, L.P. f/k/a Countrywide
Home Loans Servicing, L.P. (BAC). The assignment to BAC was
recorded on August 16, 2011. On July 1, 2011, BAC merged with
plaintiff. The note includes an allonge containing indorsements
from APB to Countrywide Bank FSB, and from Countrywide Bank FSB
to bearer by indorsement in blank.
Defendants stopped making payments on the loan in December
2010. Plaintiff sent defendants Notices of Intent to Foreclose
on June 3, 2013, and subsequently filed a complaint to foreclose
in November 2013. On January 15, 2014, defendants filed an answer
asserting affirmative defenses and a counterclaim asserting
violations of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-2
to -167, and the Truth in Lending Act, 15 U.S.C.A. §§ 1601-1616
(1968). On February 20, 2014, plaintiff moved to dismiss
defendants' counterclaims, which the motion judge granted on March
14, 2014.
2 A-2163-15T3 The matter proceeded to trial on November 5, 2014, where the
trial judge heard testimony from plaintiff's witness and
defendant, Pil S. Oh. The trial judge entered an order deeming
defendants' answer uncontested and referred the matter to the
Office of Foreclosure. On August 18, 2015, plaintiff moved for
the entry of final judgment, which was entered December 18, 2015.
On appeal, defendants argue plaintiff's assignment was
invalid, plaintiff was not authorized to foreclose, and plaintiff
submitted unauthenticated documents. Defendants also argue the
court erred dismissing their counterclaims and defenses. We
disagree.
We accord "substantial deference" to the trial judge's
determination and review the decision for an abuse of discretion.
Deutsche Bank Trust Co. Americas v. Angeles, 428 N.J. Super. 315,
318 (App. Div. 2012) (citing U.S. Bank Nat'l Assoc. v. Guillaume,
209 N.J. 449, 467 (2012)). We will find a judge abused his or her
discretion only "when a decision is 'made without rational
explanation, inexplicably departed from established policies, or
rested on an impermissible basis.'" U.S. Bank Nat'l Assoc., supra,
209 N.J. at 467-68 (quoting Iliadis v. Wal-Mart Stores, Inc., 191
N.J. 88, 123 (2007)).
A party attempting to foreclose a mortgage "must own or
control the underlying debt." Deutsche Bank Nat'l Tr. Co. v.
3 A-2163-15T3 Mitchell, 422 N.J. Super. 214, 223 (App. Div. 2011) (quoting Wells
Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592, 597 (App. Div.
2011)). Parties who can enforce such a negotiable instrument,
such as a note, include "the holder of the instrument, a nonholder
in possession of the instrument who has the rights of a holder,
or a person not in possession of the instrument who is entitled
to enforce the instrument pursuant to N.J.S.A. 12A:3-309 or
subsection d." N.J.S.A. 12A:3-301.
Regarding the first category, a person to whom the instrument
is not payable may become the holder if there is a negotiation.
Ford, supra, 418 N.J. Super. at 598 (citing N.J.S.A. 12A:3-201(a)).
In order for a negotiation to occur there must be a transfer of
possession and an indorsement by the holder. Mitchell, supra, 422
N.J. Super. at 223. An indorsement requires "a signature, other
than that of a signer as maker, drawer, or acceptor, that alone
or accompanied by other words is made on an instrument for the
purpose of negotiating the instrument." Ibid. (quoting N.J.S.A.
12A:3-204(a)). Without this indorsement, standing may be
insufficient to satisfy this category. Ford, supra, 418 N.J.
Super. at 598.
To fall within the second category, one must show the transfer
of rights to the note. Id. at 599. Transfer occurs "when it is
delivered by a person other than its issuer for the purpose of
4 A-2163-15T3 giving to the person receiving delivery the right to enforce the
instrument." N.J.S.A. 12A:3-203(a). This transfer "vests in the
transferee any right of the transferor to enforce the instrument"
whether or not a negotiation also occurs. N.J.S.A. 12A:3-203(b).
If the transferee is not a holder because the transferor did not indorse, the transferee is nevertheless a person entitled to enforce the instrument under section 3-301 if the transferor was a holder at the time of transfer. Although the transferee is not a holder, under subsection (b) the transferee obtained the rights of the transferor as holder.
[UCC Comment 2 to N.J.S.A. 12A:3-203.]
Documents establishing transfer, including an assignment of
a mortgage, must be properly authenticated with certifications
based on personal knowledge, as required by Rule 1:6-6. Ford,
supra, 418 N.J. Super. at 599-600.
Here, plaintiff falls within the first category. MERS
assigned the mortgage to BAC, who merged to become plaintiff. This
is documented by the indorsement on the note. MERS, as nominee
for APB and its successors and assigns, had the authority to assign
the mortgage to BAC, even if APB was no longer in business. This
is apparent from the plain language "successors and assigns."
During the trial, plaintiff's witness testified plaintiff, or its
predecessor, BAC, has been in possession of the note since 2008,
shortly after the loan originated. Based on our review of the
5 A-2163-15T3 record, we are satisfied plaintiff was the holder of the note,
thereby establishing the assignment was valid and plaintiff had
standing to foreclose.1
Defendants argue the trial judge erred by not considering
their defenses and counterclaims. Based upon the record before
us, we see no reason to disturb the trial judge's finding
defendants failed to establish by clear and convincing evidence
the existence of fraud. Additionally, defendants have failed to
support their affirmative defenses and counterclaims by credible
evidence in the record; therefore, the trial judge did not err in
striking the defenses and counterclaims.
Defendants argue the trial judge erred by allowing in
inadmissible hearsay by plaintiff's witness which allowed
documents to be submitted into evidence during trial. Defendants
did not object to this testimony below, therefore we are
constrained to review defendants' argument under the plain error
standard.
1 Defendants argue MERS did not have the authority to assign the mortgage because the principal no longer existed at the time of the assignment. Defendant has provided no support for such a position. Other jurisdictions have considered the issue and determined the dissolution of the original lender does not affect MERS's ability to assign a mortgage, see, e.g., Rosa v. Mortg. Elec. Registration Sys., Inc., 821 F. Supp. 2d 423, 431 (D. Mass. 2011). We have never addressed this issue and do not address it based on this record.
6 A-2163-15T3 We "will decline to consider questions or issues not properly
presented to the trial court when an opportunity for such a
presentation is available 'unless the questions so raised on appeal
go to the jurisdiction of the trial court or concern matters of
great public interest.'" Nieder v. Royal Indem. Ins. Co., 62 N.J.
229, 234 (1973) (quoting Reynolds Offset Co., Inc. v. Summer, 58
N.J. Super. 542, 548 (App. Div. 1959), certif. denied, 31 N.J. 554
(1960)). After reviewing the record, we do not find the issue to
go to the jurisdiction of the trial court or concern matters of
great public interest. Additionally, plaintiff's witness was
allowed to testify to the business records presented based upon
the business record exception to the hearsay rule as he was an
employee of plaintiff, was familiar with the business records, and
testified the records were created in the ordinary course of
business. See N.J.R.E. 803(c)(6).2 As such, the trial judge did
not err in allowing the admission of the testimony.
2 N.J.R.E. 803(c)(6) states,
A statement contained in a writing or other record of acts, events, conditions, and, subject to Rule 808, opinions or diagnoses, made at or near the time of observation by a person with actual knowledge or from information supplied by such a person, if the writing or other record was made in the regular course of business and it was the regular practice of that business to make it,
7 A-2163-15T3 Affirmed.
unless the sources of information or the method, purpose or circumstances of preparation indicate that it is not trustworthy.
8 A-2163-15T3