U.S. BANK, N.A., ETC. VS. YAKOV RYCHIK (F-002363-15, BERGEN COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: March 5, 2019
• Docket: A-3745-16T3
• Status: Unpublished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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-3745-16T3

U.S. BANK, N.A., SUCCESSOR TRUSTEE TO BANK OF AMERICA, N.A., SUCCESSOR IN INTEREST TO LASALLE BANK, N.A., AS TRUSTEE, ON BEHALF OF THE HOLDERS OF THE WASHINGTON MUTUAL MORTGAGE PASS-THROUGH CERTIFICATES, WMALT SERIES 2007-2,

Plaintiff-Respondent,

v.

YAKOV RYCHIK and ERIKA RYCHIK, his wife,

Defendants-Appellants,

and

613 CONSULTING LLC, and AMERICAN EXPRESS BANK FSB,

Defendants. _____________________________________

Argued January 29, 2019 – Decided March 5, 2019 Before Judges Yannotti and Gilson.

On appeal from Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. F- 002363-15.

Michael M. Cohen argued the cause for appellants (Law Offices of Michael M. Cohen, attorneys; Michael M. Cohen, on the brief).

Charles W. Miller, III, argued the cause for respondent (Parker Ibrahim & Berg, LLC, attorneys; Charles W. Miller, III, Ben Z. Raindorf, and Robert D. Bailey, on the brief).

PER CURIAM

Defendants Yakov Rychik and Erika Rychik appeal from an order entered

by the Chancery Division on October 13, 2015, which struck their answer, and

denied their cross-motion to dismiss the complaint. We affirm.

On November 2, 2006, Yakov Rychik borrowed $1,280,000 from

Greenpoint Mortgage Funding (Greenpoint) and executed a note, promising to

repay that sum with interest, in monthly installments commencing on January 1,

2007. On November 2, 2006, defendants executed and delivered a purchase

money mortgage to Mortgage Electronic Registration Systems, Inc. (MERS), as

nominee for Greenpoint, which granted MERS a security interest in certain real

property on Mountain Road in Englewood.

A-3745-16T3 2 On October 29, 2009, MERS and U.S. Bank, N.A. (plaintiff) executed and

notarized an "Assignment of Mortgage." The assignment grants plaintiff both

the note and mortgage to have and to hold. Margaret Dalton signed the

assignment on behalf of MERS. On the document, Dalton is identified as Vice

President of MERS.

On November 16, 2009, the mortgage and the assignment were recorded

in the Office of the Clerk of Bergen County. In May 2013, plaintiff granted

mortgage servicing rights to JPMorgan Chase Bank, N.A. (JPMorgan) b y way

of limited power of attorney, and in August 2013, JPMorgan transferred those

rights to Select Portfolio Servicing, Inc. (SPS).

Defendants failed to make the installment payment due July 1, 2009, and

they have not made any payments since that date. On November 6, 2014, notices

of intention to foreclose were sent to defendants, and on January 21, 2015,

plaintiff filed a foreclosure complaint in the trial court. Defendants filed an

answer on April 27, 2015.

On July 21, 2015, plaintiff filed a motion for summary judgment. In

support of that motion, plaintiff submitted a certification by Karter Nelson,

document control officer for SPS. Copies of the note, mortgage, and assignment

document were attached to Nelson's certification.

A-3745-16T3 3 In the certification, Nelson stated that his employer, SPS, is "the

[p]laintiff's authorized agent for the subject loan" and that he is "familiar with

business records maintained by [SPS] for the purpose of servicing mortgage

loans." He also stated that he "personally examined these business records

reflecting data and information as of the date of this [c]ertification."

Defendants opposed the motion and filed a cross-motion for summary

judgment. Defendants asserted that there was a genuine issue of material fact

as to whether plaintiff had standing to foreclose. They contended that because

plaintiff failed to establish standing, the court should dismiss the complaint. By

order dated October 13, 2015, the trial court granted plaintiff's motion and

denied defendants' cross-motion for summary judgment.

In an accompanying statement of reasons, the motion judge stated that

plaintiff had established it has possession of both the note and the assignment

of the mortgage. The judge stated that Nelson's certification established that he

had sufficient personal knowledge to certify the authenticity of the note and the

mortgage.

On February 7, 2017, the court entered a final judgment of foreclosure,

which stated that plaintiff was entitled to a sum of $2,059,106.93, which

consisted of the principal amount in default, and advances plaintiff made

A-3745-16T3 4 through the date of the judgment, with interest on all sums due, as well as

attorney's fees. The order further provided that the mortgaged premises would

be sold to raise the sums of money due. The order directed the Sheriff of Bergen

County to make the sale according to law, and to disburse the proceeds of sale

in accordance with the court's directions. On April 21, 2017, defendants filed a

notice of appeal.

According to plaintiff, in May 2017, defendants filed a motion in the trial

court to vacate the final judgment and stay the execution of the final judgment.

The trial court entered an order in July 2017, denying the motion to vacate. The

trial court also denied a motion for a stay of execution of the judgment.

Defendants thereafter filed a motion in this court to stay the execution of the

judgment. By order dated August 23, 2017, we denied the motion.

It appears that a sheriff's sale was scheduled for February 16, 2018.

Defendants filed a motion in this court seeking, among other relief, a stay of the

execution of the judgment pending disposition of the appeal. By order dated

February 1, 2018, we denied the motion. The sheriff's sale was re-scheduled for

March 16, 2018. It appears that the sale did not take place on that date because

defendants filed a bankruptcy petition.

A-3745-16T3 5 On June 7, 2018, we dismissed the appeal without prejudice, but allowed

defendants to seek reinstatement upon completion of the bankruptcy

proceedings. In September 2018, defendants filed a motion to reinstate the

appeal. We granted the motion. The sheriff's sale was re-scheduled for February

8, 2019. The trial court denied defendants' motion to stay the sale.

On appeal, defendants argue that the trial court erred by granting

plaintiff's motion for summary judgment. They maintain there are genuine

issues of material fact as to whether plaintiff has standing to foreclose.

When reviewing a trial court's order granting summary judgment, we

apply the same standard that the trial court applies when ruling on a summary

judgment motion. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super.

162, 167 (App. Div. 1998). Therefore, we must consider whether there are any

genuine issues of material fact and the moving party is entitled to judgment as a

matter of law. R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J.

520, 523 (1995).

"An issue of fact is genuine only if, considering the burden of persuasion

at trial, the evidence submitted by the parties on the motion, together with all

legitimate inferences therefrom favoring the non-moving party, would require

submission of the issue to the trier of fact." R. 4:46-2(c). In a foreclosure

A-3745-16T3 6 proceeding, the only material issues of fact "are the validity of the mortgage, the

amount of the indebtedness, and the right of the mortgagee to resort to the

mortgaged premises." Great Falls Bank v. Pardo, 263 N.J. Super. 388, 394 (Ch.

Div. 1993); see also Central Penn Nat'l Bank v. Stonebridge Ltd., 185 N.J.

Super. 289, 302 (Ch. Div. 1982); Thorpe v. Floremoore Corp., 20 N.J. Super.

34, 37 (App. Div. 1952).

Here, defendants argue that plaintiff failed to submit sufficient evidence

to establish it had standing to foreclose on the subject property. A party may

establish standing to foreclose by showing it is either (1) a holder of the

instrument, (2) a non-holder in possession of the instrument with the rights of

the holder, or (3) a person not in possession but nonetheless entitled to enforce

the instrument. N.J.S.A. 12A:3-301. A party who establishes it is the holder of

the note or mortgage at the time it files the complaint has standing to foreclose

on the subject property. Deutsche Bank Nat'l Trust Co. v. Mitchell, 422 N.J.

Super. 214, 224-25 (App. Div. 2011).

A person other than the person to whom the instrument is made payable

may become a "holder" if there is proof of a "negotiation." Wells Fargo Bank,

N.A. v. Ford, 418 N.J. Super. 592, 598 (App. Div. 2011) (citing N.J.S.A. 12A:3-

201(a)). "Negotiation" occurs when there is both (1) "transfer of possession of

A-3745-16T3 7 the instrument" and (2) "its indorsement by the holder." Mitchell, 422 N.J.

Super. at 223 (quoting N.J.S.A. 12A:3-201(b)).

In this case, plaintiff established it was a "holder" of the subject note and

mortgage because a valid "negotiation" took place. Plaintiff presented evidence

showing that MERS, acting as Greenpoint's nominee, transferred possession of

the note and mortgage to plaintiff. Moreover, MERS indorsed the assignment

documents.

Plaintiff's proofs were sufficient to show that it had standing to foreclose

on the subject property. Rule 4:64-2 states that in a foreclosure action, a party

seeking to foreclose must produce either the original mortgage document "and

any other original document upon which the claim is based" or "a legible copy,"

if recorded or filed, "certified as a true copy by the recording or filing officer or

by a New Jersey attorney, or a copy of an original document, if unfiled or

unrecorded, certified as a true copy by a New Jersey attorney." R. 4:64-2(a).

Here, plaintiff submitted copies of the original note, mortgage, and

assignment documents to the trial court, and plaintiff's attorney certified that all

three of these documents were true copies of the original documents. The

certification complied with Rule 4:64-2(a). Furthermore, plaintiff provided the

A-3745-16T3 8 court with Nelson's certification, in which he states that the documents are

authentic.

Rule 4:64-2(c), which governs the use of affidavits in foreclosure actions,

states:

[t]he affidavit prescribed by this rule . . . shall be made either by an employee of the plaintiff, if the plaintiff services the mortgage, on the affiant's knowledge of the plaintiff's business records kept in the regular course of business, or by an employee of the plaintiff's mortgage loan servicer, on the affiant's knowledge of the mortgage loan servicer's business records kept in the regular course of business.

[Emphasis added.]

Rule 4:64-2(c) also states that the person providing the affidavit must confirm:

(1) that he or she is authorized to make the affidavit on behalf of the plaintiff or the plaintiff's mortgage loan servicer; (2) that the affidavit is made based on a personal review of business records of the plaintiff or the plaintiff's mortgage loan servicer, which records are maintained in the regular course of business; (3) that the financial information contained in the affidavit is accurate; and (4) that the default remains uncured.

In addition, Rule 4:64-2(c) states, "[t]he affidavit shall also include the

name, title, and responsibilities of the individual, and the name of his or her

employer," and "[i]f the employer is not the named plaintiff in the action, . . . a

description of the relationship between the plaintiff and the employer." Ibid.

A-3745-16T3 9 Nelson's certification satisfies these requirements. A certification is

permissible under Rule 1:4-4, in lieu of an affidavit. As noted previously,

Nelson states that he is a document control officer for SPS, and is plaintiff's

"authorized agent for the subject loan." Nelson also states that he is familiar

with the records and is authorized to make the certification.

He "personally examined" the record of the assignment, which is

maintained in the regular course of SPS's business. He states that the

information set forth in the certification is true and accurate, and that defendants'

default remained uncured.

Rule 4:64-2(d) also requires attorneys representing foreclosing plaintiffs

to annex to every motion to enter judgment an "affidavit of diligent inquiry"

stating:

(1) that the attorney has communicated with an employee or employees of the plaintiff or of the plaintiff's mortgage loan servicer who (A) personally reviewed the affidavit of amount due and the original or true copy of the note, mortgage and recorded assignments, if any, being submitted and (B) confirmed their accuracy; (2) the date and mode of communication employed; (3) the name(s), title(s) and responsibilities in those titles of the plaintiff's employee(s) or the employee(s) of the plaintiff's mortgage loan servicer with whom the attorney communicated pursuant to this rule; and (4) that the aforesaid documents comport with the requirements of [Rule] 1:4-8(a).

A-3745-16T3 10 Here, plaintiff's attorney completed a certification of diligent inquiry and

accuracy of foreclosure, dated January 10, 2017. Plaintiff's attorney certified

that she communicated with the document control officer of SPS, who confirmed

to her that he "personally reviewed" the "true copy of the note, mortgage and

recorded assignments, [and] . . . the accuracy of those documents." The

attorney's certification meets the requirements of Rules 4:64-1 and 4:64-2.

Defendants argue, however, that the trial court erred by relying upon

Nelson's certification. They note that in his certification, Nelson stated that he

had examined records, which include "data compilations" and "electronically

imaged documents." Defendants maintain Nelson was required to attest that he

inspected, verified, or copied the original documents.

Defendants further argue that Nelson's certification was deficient because

he failed to state that he personally inspected the original note, and failed to

provide the factual basis for his assertion that the copies of the documents

provided to the court were "true and correct." In addition, defendants contend

Nelson failed to establish that MERS had authority to assign the note and

mortgage to plaintiff. We are not persuaded by these arguments.

Nelson was not required to attest that he had inspected, verified, or copied

the original documents. He stated that plaintiff is the holder of the note. He

A-3745-16T3 11 also stated that on October 29, 2009, MERS, acting as nominee for Greenpoint,

assigned the mortgage to plaintiff. Nelson stated that he made these assertions,

after having personally examined records maintained by SPS. Thus, Nelson

established that he had personal knowledge of the relevant records. We

therefore reject defendants' contention that the trial court erred by relying on

Nelson's certification.

Defendants further argue that the trial court should not have granted

plaintiff's motion for summary judgment because there was a genuine issue of

material fact as to whether Dalton had authority to sign the assignment on behalf

of MERS. In support of this contention, defendants rely upon what appears to

be a compilation of copies of parts of documents, which Dalton signed as Vice

President of various other entities.

Defendants have not, however, submitted an affidavit or certification

identifying or authenticating the documents upon which they rely. Defendants

have only provided the signature sections of the documents. They have not

identified the documents involved, the dates the documents were signed, or the

circumstances under which they were executed.

We conclude the portions of the documents provided to the trial court did

not create a genuine issue of material fact as to whether Dalton had authority to

A-3745-16T3 12 execute the assignment at issue here. The evidence on the issue of standing was

so "one-sided" that defendant was entitled to "prevail as a matter of law." Brill,

142 N.J. at 540 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252

(1986)).

In addition, defendants argue that their cross-motion for summary

judgment should have been granted. They argue that once they raised the issue

of standing, the burden shifted to plaintiff to prove by a preponderance of the

evidence that it had standing to foreclose. Defendants contend plaintiff failed

to establish that it had standing on the day it filed its complaint, and plaintiff

failed to oppose its cross-motion. We are convinced these arguments lack

sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E).

Affirmed.

A-3745-16T3 13