HSBC BANK USA, N.A., ETC. VS. SARAH G. LAKS U.S. BANK TRUST, N.A., ETC. VS. SARAH G. LAKS (F-006955-16 AND F-041499-14, MERCER COUNTY AND STATEWIDE)(CONSOLIDATED)

CourtNew Jersey Superior Court Appellate Division
DecidedOctober 4, 2018
DocketA-5577-16T1/A-0124-17T1
StatusUnpublished

This text of HSBC BANK USA, N.A., ETC. VS. SARAH G. LAKS U.S. BANK TRUST, N.A., ETC. VS. SARAH G. LAKS (F-006955-16 AND F-041499-14, MERCER COUNTY AND STATEWIDE)(CONSOLIDATED) (HSBC BANK USA, N.A., ETC. VS. SARAH G. LAKS U.S. BANK TRUST, N.A., ETC. VS. SARAH G. LAKS (F-006955-16 AND F-041499-14, MERCER COUNTY AND STATEWIDE)(CONSOLIDATED)) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
HSBC BANK USA, N.A., ETC. VS. SARAH G. LAKS U.S. BANK TRUST, N.A., ETC. VS. SARAH G. LAKS (F-006955-16 AND F-041499-14, MERCER COUNTY AND STATEWIDE)(CONSOLIDATED), (N.J. Ct. App. 2018).

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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 NOS. A-5577-16T1 A-0124-17T1

HSBC BANK USA, N.A., as Trustee for NOMURA ASSET ACCEPTANCE CORPORATION ALTERNATIVE LOAN TRUST, Series 2004-AP3,

Plaintiff-Respondent,

v.

SARAH G. LAKS,

Defendant-Appellant, and

PNC BANK, N.A., NEW JERSEY DIVISION OF TAXATION, and UNITED STATES OF AMERICA,

Defendants. __________________________________

U.S. BANK TRUST, N.A., as Trustee for LSF9 MASTER PARTICIPATION TRUST,

Plaintiff-Respondent, v.

SARAH G. LAKS, and EDWARD EINHORN,

Defendants-Appellants,

and

PNC BANK, N.A., AMERICAN EXPRESS BANK FSB, BERNARD I. WEINSTEIN, KENNEDY CONCRETE INC, THE STATE OF NEW JERSEY, and MIDLAND FUNDING LLC, ON BEHALF OF CITIBANK,

Defendants. ___________________________________

Submitted September 5, 2018 – Decided October 4, 2018

Before Judges Alvarez and Gooden Brown.

On appeal from Superior Court of New Jersey, Chancery Division, Mercer County, Docket Nos. F- 006955-16 and F-041499-14.

Sarah G. Laks, appellant pro se (in A-5577-16).

Schiller, Knapp, Lefkowitz & Hertzel, LLP, attorneys for respondent HSBC Bank USA, N.A. (in A-5577-16) (Richard A. Gerbino, on the brief).

Sarah G. Laks and Edward Einhorn, appellants pro se (in A-0124-17).

A-5577-16T1 2 Fein, Such, Kahn, & Shepard, PC, attorneys for respondent U.S. Bank Trust, N.A. (in A-0124-17) (Ashleigh L. Marin, on the brief).

PER CURIAM

In these back-to-back appeals, which we consolidate for the purpose of

issuing a single opinion, defendants Sarah G. Laks and Edward Einhorn appeal

from Chancery Division orders and judgments entered in connection with

foreclosure actions on rental properties located in Trenton. In A-0124-17,

defendants appeal from the following orders: (1) an August 21, 2015 order,

denying defendants' motion for summary judgment; (2) a January 22, 2016

order, granting Bayview Loan Servicing, LLC's (Bayview) motion for summary

judgment and striking defendants' answer; (3) a December 2, 2016 order,

granting Bayview's motion for summary judgment on its amended complaint and

striking defendants' answer; (4) a March 28, 2017 order, substituting U.S. Bank

Trust, N.A., as Trustee for LSF9 Master Participation Trust, as plaintiff; and (5)

a July 17, 2017 order, entering final judgment of foreclosure. In A-5577-16,

Laks appeals from the following orders: (1) an October 28, 2016 order, striking

her answer and granting summary judgment to plaintiff HSBC Bank USA, N.A.,

as Trustee for Nomura Asset Acceptance Corporation Alternative Loan Trust,

A-5577-16T1 3 Series 2004-AP3; and (2) a July 7, 2017 order, entering final judgment of

foreclosure. We affirm.

I.

In A-0124-17, on October 22, 2004, defendants executed a $74,400

promissory note in favor of MIT Lending (MIT) with a "maturity date" of

November 1, 2019. As security for payment of the note, on the same date,

defendants executed a non-purchase money mortgage to Mortgage Electronic

Registration Systems, Inc. (MERS) as nominee for MIT on rental property

located on Genesee Street in Trenton. Defendants defaulted on June 1, 2008,

and thereafter failed to make payments as required under the note.

Through a series of assignments, the mortgage was assigned to Bayview

by assignment dated February 28, 2014, and recorded on March 14, 2014, in the

Mercer County Clerk's Office. On October 3, 2014, Bayview filed a foreclosure

complaint, and defendants filed a contesting answer. On August 21, 2015, Judge

Paul Innes denied the parties' cross-motions for summary judgment. In his

statement of reasons, Judge Innes rejected defendants' "various boilerplate

affirmative defenses," including defendants' challenge to Bayview's standing

A-5577-16T1 4 and contention that the action was barred by the six-year statute of limitations

set forth in N.J.S.A. 2A:50-56.1(1)(a).1

Regarding the statute of limitations argument, the judge explained:

Paragraph [twenty-two] of the [m]ortgage provides that the maturity date can be accelerated upon default, by sending a notice to the borrower. The [c]omplaint states that plaintiff has accelerated the [m]ortgage, and the Notice of Intent to Foreclose [NOI] sent to defendants on May 28, 2014, provides that acceleration was to occur on June 27, 2014[,] if defendants did not reinstate by that date. Defendants misconstrue the terms of the [m]ortgage and the [c]omplaint to mean that acceleration occurred on the date of default. To the contrary, pursuant to the terms of the [m]ortgage, the earliest date that acceleration could have occurred was June 27, 2014. This acceleration date would have started the clock on the [six-]year statute of limitations set forth in N.J.S.A.[] 2A:50-56.1(1)[(a)]. Therefore the present action is not barred by the statute of limitations.

In addition, the language in section (a), "six years from the date fixed for making the last payment or maturity date set forth" does not contain the term "accelerate." Even though the statute acknowledges acceleration as a consequence of default, it fails to define maturity date or acceleration. Here, the maturity

1 Under N.J.S.A. 2A:50-56.1, the statute of limitations for a "residential" foreclosure action is "the earliest" of "[s]ix years from the date fixed for . . . the last payment or the maturity date," "[t]hirty-six years" from the mortgage's recording date, or if not recorded, "the date of execution," or "[t]wenty years" from the date of default.

A-5577-16T1 5 date was November 2, 2019. 2 Thus, the six-year statute of limitations is not appropriate in this case.

Regarding the challenge to Bayview's standing, Judge Innes accepted the

certification of Bayview's Foreclosure Document Supervisor attesting to the fact

that, based on her familiarity with and personal examination of Bayview's

business records, Bayview was in physical possession of the note and mortgage

prior to the commencement of the action. The judge pointed out that the note

annexed to the moving papers and "stamped as a 'certified true copy'" was

"specifically endorsed to MIT Lending, thereby stripping [Bayview] of status as

a 'holder' pursuant to N.J.S.A.[] 12A:1-201(b)(21)." 3 However, according to the

judge,

[t]he note was assigned from MIT, a holder, to Chase Home Finance, LLC, and then to [Bayview]. [Bayview] has certified it is in possession of the [n]ote and was in possession of it when the [c]omplaint was filed. While defendants are correct that [Bayview] does not have the authority to enforce the [n]ote as a holder, [Bayview] has the right to enforce the [n]ote as a non- holder in possession with the rights of a holder, pursuant to N.J.S.A.[] 12A:3-203[(a)]. That section states, "An instrument is transferred when it is

2 Judge Innes inadvertently misstated the note's maturity date. The actual maturity date is November 1, 2019. 3 N.J.S.A.

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HSBC BANK USA, N.A., ETC. VS. SARAH G. LAKS U.S. BANK TRUST, N.A., ETC. VS. SARAH G. LAKS (F-006955-16 AND F-041499-14, MERCER COUNTY AND STATEWIDE)(CONSOLIDATED), Counsel Stack Legal Research, https://law.counselstack.com/opinion/hsbc-bank-usa-na-etc-vs-sarah-g-laks-us-bank-trust-na-etc-vs-njsuperctappdiv-2018.