THE BANK OF NEW YORK MELLON, ETC. VS. ANIL NARANG (F-015924-14, ESSEX COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: March 5, 2019
• Docket: A-0591-17T2
• Status: Unpublished

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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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 NO. A-0591-17T2

THE BANK OF NEW YORK MELLON f/k/a The Bank of New York Successor Trustee to JP Morgan Chase Bank, NA as Trustee for the Structured Asset Mortgage Investments II Trust, Mortgage Pass-Through Certificates, Series 2004-Ar6,

Plaintiff-Respondent,

v.

ANIL NARANG,

Defendant-Appellant,

and

MRS. ANIL NARANG, His Wife, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Solely as Nominee for COUNTRYWIDE BANK, N.A.,

Defendants. _____________________________________

Submitted February 5, 2019 – Decided March 5, 2019 Before Judges Fisher and Hoffman.

On appeal from Superior Court of New Jersey, Chancery Division, Essex County, Docket No. F- 015924-14.

Law Offices of Joseph A. Chang, attorneys for appellant (Joseph A. Chang, of counsel and on the brief; Jeffrey Zajac, on the brief).

Sandelands Eyet, LLP, attorneys for respondent (Kathleen Cavanaugh, of counsel and on the brief).

PER CURIAM

In this residential mortgage foreclosure action, defendant Anil Narang

appeals from the final judgment of foreclosure, in addition to Chancery Division

orders striking his answer, granting summary judgment, and denying

reconsideration, entered in favor of plaintiff The Bank of New York Mellon f/k/a

The Bank of New York Successor Trustee to J.P. Morgan Chase Bank, NA, as

Trustee for the Structure Asset Mortgage Investments II Trust, Mortgage Pass-

Through Certificates, Series 2004-AR6, an assignee of the note and mortgage.

For the following reasons, we affirm.

I.

In August 2004, defendant executed a note made payable to America's

Wholesale Lenders in the amount of $1,481,250. On that same date, defendant

executed a mortgage in favor of Mortgage Electronic Registration Systems, Inc.

A-0591-17T2 2 (MERS), as nominee for America's Wholesale Lenders, encumbering his

property on West Road in Short Hills. Defendant defaulted on the loan in

December 2010.

On December 13, 2011, MERS assigned the mortgage to plaintiff. The

assignment was recorded on December 21, 2011, in Book 12343, Page 2903 of

Assignment of Mortgages for Essex County.

The note, which accompanied the mortgage, contained an indorsement

from Countrywide Home Loans, Inc., a New York Corporation, doing business

as America's Wholesale Lender, to JP Morgan Chase Bank, as Trustee. The note

also contained an allonge with an indorsement in blank by JP Morgan Chase

Bank, NA, f/k/a JP Morgan Chase Bank, as Trustee.

When plaintiff filed its foreclosure complaint in April 2014, plaintiff's

mortgage servicing agent, Nationstar Mortgage, LLC (Nationstar), possessed the

original note and mortgage. Nationstar kept these papers at its documents

administration department in Scottsbluff, Nebraska.

Following extensive discovery, plaintiff filed a motion to strike

defendant's amended answer and remand the matter to the Office of Foreclosure

to proceed as an uncontested matter. Defendant opposed plaintiff's motion to

strike and filed a cross-motion to dismiss the foreclosure complaint. In his

A-0591-17T2 3 opposition, defendant admitted executing the note and mortgage, and defaulting

on his payments, but challenged plaintiff's standing. The court rejected

defendant's standing argument, granted plaintiff's motion, and then denied

defendant's motion for reconsideration. Plaintiff then moved for entry of final

judgment, which the trial court granted on September 14, 2017. Defendant

moved for reconsideration, which the trial court denied. This appeal followed.

II.

On appeal, defendant raises two main issues. First, defendant challenges

plaintiff's standing to foreclose. Second, defendant challenges plaintiff's compliance

with the pooling and service agreement (PSA).

In arguing that plaintiff lacks standing to foreclose, defendant claims the

evidence shows "another entity holds the note" and "plaintiff has failed to

properly authenticate that it held standing prior to the filing of the complaint as

required." Plaintiff produced certifications from two Nationstar employees,

Lydeisha Barber and Edward Hyne. Barber certified she worked for Nationstar

as a "document execution specialist" and that Nationstar is "a mortgage

servicing agent for the plaintiff relative to [defendant's] loan." As part of her

responsibilities, she became "familiar with the type of records maintained by

Nationstar in connection with [defendant's] loan" and could confirm that

A-0591-17T2 4 "plaintiff is the holder and in possession of the note and mortgage subject to this

foreclosure." Her information was taken from Nationstar's "business records,"

of which she had "personal knowledge." Those records were:

(a) made at or near the time of the occurrence of the matters recorded by persons with personal knowledge of the information in the business record, or from information transmitted by persons with personal knowledge; (b) kept in the court of [Nationstar's] regularly conducted business activities; and (c) it is the regular practice of [Nationstar] to make such records.

Hyne's certification explained he worked for Nationstar as a "litigation

resolution analyst" and that Nationstar is "a mortgage servicing agent for the

plaintiff relative to [defendant's] loan." Through his job, he became "familiar

with the type of records maintained by Nationstar in connection with

[defendant's] loan" and could confirm that "plaintiff is the holder and in

possession of the note and mortgage subject to this foreclosure." Similar to

Barber, Hyne's based his certification on a review of Nationstar's "business

records."

Hyne also provided testimony. During his deposition, he reiterated that

Nationstar possessed the "original note, the original mortgage, the original title

policy, the prior servicer's loan modification agreement, and . . . a blank

A-0591-17T2 5 assignment." Plaintiff also made defendant's original loan documents available

for review.

In a mortgage foreclosure proceeding, the court must determine three

issues: "the validity of the mortgage, the amount of the indebtedness" and

default, and the right of the party to foreclose on the mortgaged property. Great

Falls Bank v. Pardo, 263 N.J. Super. 388, 394 (Ch. Div. 1993), aff'd, 273 N.J.

Super. 542 (App. Div. 1994). "As a general proposition, a party seeking to

foreclose a mortgage must own or control the underlying debt." Deutsche Bank

Nat'l Tr. 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)).

Absent a showing of ownership or control, a "plaintiff lacks standing to proceed

with the foreclosure action and the complaint must be dismissed." Ibid. (quoting

Ford, 418 N.J. Super. at 597).

A plaintiff establishes standing by demonstrating "either possession of the

note or an assignment of the mortgage that predated the original complaint."

Deutsche Bank Tr. Co. Ams. v. Angeles, 428 N.J. Super. 315, 318 (App. Div.

2012) (citing Mitchell, 422 N.J. Super. at 216).

Witness certification regarding the authenticity of assignment or

possession of the note and mortgage is adequate when the witness has access to

A-0591-17T2 6 the business records of plaintiff and personal knowledge of its business practices

sufficient to provide the court with competent evidence regarding plaintiff's

standing. See New Century Fin. Servs., Inc. v. Oughla, 437 N.J. Super. 299,

317-18 (App. Div. 2014).

Here, we find the certifications of Barber and Hyne sufficient to show that

plaintiff was both the holder of the note and the assignee of the mortgage; as a

result, we conclude the trial court properly granted summary judgment because

plaintiff had standing to foreclose. These certifications established that: 1) they

were employees of Nationstar and, as part of their responsibilities, were familiar

with the type of records maintained by Nationstar with respect to defendant's

loan; 2) the information contained in their certifications was based on

Nationstar's business records; and 3) they had personal knowledge of

Nationstar's procedures for creating and maintaining such records .

In addition to his certification, Hyne provided deposition testimony

regarding the business practices of Nationstar; specifically, he described the

records reflecting defendant's acquisition of defendant's original loan, and the

storage of the loan documents at Nationstar's document administration

department in Nebraska. Hyne also confirmed that Nationstar possessed the

original note before plaintiff filed its foreclosure complaint.

A-0591-17T2 7 Defendant argues that "neither Barber nor Hyne certify that they reviewed

the actual documents as contained in the collateral file or documents other than

'business records' kept in the normal course of business of the plaintiff ."

However, during his deposition, Hyne testified that he did observe the original

loan documents. Further, plaintiff's counsel made the original note and

mortgage available for review.

Nonetheless, defendant maintains that "neither Hyne nor Barber exhibit

personal knowledge of the [d]efendant's mortgage account and do not prove that

they were indeed familiar with the specific records at issue." However, "[t]here

is no requirement that the foundation witness [certifying that a record is a

business record must] possess any personal knowledge of the act or event

recorded." Id. at 326 (citing State v. Martorelli, 136 N.J. Super. 449, 453 (App.

Div. 1975)).

Defendant asserts plaintiff must produce a "certification" by a "bank

employee or representative of MERS with respect to the authority to execute the

assignment or the circumstances of the assignment. Without this specific

information contained in a certification, the alleged assignment is not viewed as

self-authenticating."

A-0591-17T2 8 Contrary to defendant's argument, our statutes do not require this type of

certification in order to authenticate a document. In fact, "the authenticity of,

and authority to make, each signature on the instrument is admitted unless

specifically denied in the pleadings. . . . [T]he signature is presumed to be

authentic and authorized. . . ." N.J.S.A. 12A:3-308. Also, the mortgage here

specifically appoints MERS as the nominee for America's Wholesale Lender.

Therefore, we reject defendant's argument that plaintiff needed to file a separate

certification from a MERS representative.

As to his second argument, defendant argues the trial court erred in

holding he lacked standing to challenge the plaintiff's compliance with the PSA.

Defendant contends that because plaintiff did not establish it received

assignment of his loan before the trust closed on September 30, 2004, plaintiff's

foreclosure action must fail. We disagree.

All parties agree that assignment of the mortgage to plaintiff did not occur

until December 13, 2011 – well after the closing date for the trust. Thus,

defendant contends that this violation of the trust means that plaintiff's

foreclosure action must fail.

Here, the evidence shows legal title to the subject mortgage loan passed

from MERS, as nominee for America's Wholesale Lender, to plaintiff. Although

A-0591-17T2 9 the assignment occurred after the closing of the trust, defendant offers no

evidence to support his argument that this fact renders the assignment void, as

opposed to voidable.

Moreover, defendant failed to show any intent to make him a third-party

beneficiary of the PSA. When determining the existence of "third-party

beneficiary" status, the inquiry "focuses on whether the parties to the contract

intended others to benefit from the existence of the contract, or whether the

benefit so derived arises merely as an unintended incident of the agreement."

Ross v. Lowitz, 222 N.J. 494, 513 (2015) (quoting Broadway Maint. Corp. v.

Rutgers, 90 N.J. 253, 259 (1982)). "If there is no intent to recognize the third

party's right to contract performance, 'then the third person is only an incidental

beneficiary, having no contractual standing.'" Ibid. (quoting Broadway Maint.

Corp., 90 N.J. at 259).

Here, defendant presents no evidence that the parties to the transfer of

defendant's mortgage loan intended to recognize defendant as having a right to

contract performance. The trial court correctly concluded that defendant lacked

standing to contest the PSA.

A-0591-17T2 10 To the extent we have not addressed any argument raised by plaintiff, we

have deemed such arguments to lack merit sufficient for discussion in a written

opinion. R. 2:11-3(e)(1)(E).

Affirmed.

A-0591-17T2 11