NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-1217-18T3
U.S. BANK TRUST, N.A., AS TRUSTEE FOR LSF9 MASTER PARTICIPATION TRUST,
Plaintiff-Respondent,
v.
JOSEPH DURELLI, a/k/a JOSEPH V. DURELLI and CHERYL DURELLI, his wife,
Defendants-Appellants,
and
VANZ LLC, CAPITAL ONE BANK USA, NA, ATLANTIC CREDIT AND FINANCE, STATE OF NEW JERSEY, LEXINGTON NATIONAL INSURANCE CORPORATION, and ABC BAIL BONDS, INC.,
Defendants. _____________________________
Submitted November 7, 2019 – Decided November 20, 2019 Before Judges Nugent and Suter.
On appeal from the Superior Court of New Jersey, Chancery Division, Mercer County, Docket No. F- 030316-16.
Joseph Durelli and Cheryl Durelli, appellants pro se.
Shapiro & DeNardo, LLC, attorneys for respondent (Elizabeth L. Wassall, on the brief).
Defendants Joseph and Cheryl Durelli appeal the October 1, 2018 final
judgment of foreclosure and three other orders 1 entered in this residential
foreclosure. They claim the trial court erred by granting the foreclosure
judgment because the underlying note was lost. We affirm the judgment and
orders under appeal.
On March 10, 2006, defendants signed a $272,000 note with HSBC
Mortgage Corporation (USA) (HSBC). The same day, they signed a mortgage
with the Mortgage Electronic Registration System, Inc. (MERS) as nominee for
HSBC on a property located in Hamilton. The mortgage was recorded in April
2006. Defendants defaulted on the mortgage loan in April 2010.
1 The September 15, 2017 order granted plaintiff's motion for summary judgment, striking defendants' answer. The August 6, 2018 order denied defendants' objection to entry of the final judgment. The September 21, 2018 order denied reconsideration of the summary judgment order. A-1217-18T3 2 The mortgage was assigned on three occasions. MERS assigned the
mortgage to BAC Home Loans Servicing, LP, f/k/a Countrywide Home Loans
Servicing, LP (BAC), and recorded it in August 2010. The mortgage was
assigned by BAC to Nationstar Mortgage, LLC (Nationstar) and recorded in
April 2014. On August 18, 2016, Nationstar assigned the mortgage to plaintiff,
U.S. Bank Trust, N.A. as Trustee for LSF9 Master Participation Trust. This was
recorded on October 13, 2016.
Plaintiff filed a complaint in November 2016 seeking to foreclose on the
mortgage. Plaintiff's summary judgment motion was granted on September 15,
2017. The trial court found there were no genuine issues of fact regarding
plaintiff's right to foreclose. Plaintiff submitted an affidavit from Nationstar's
representative providing that Nationstar lost the note prior to April 20, 2016.
She certified that Nationstar and its "successors and/or assigns [would] hold
harmless the borrower(s) and indemni[fy] the borrower(s) should any unknown
party seek to enforce the lost note and mortgage against the borrower(s)."2 The
mortgage also was assigned to plaintiff and recorded prior to filing the
foreclosure complaint. The court found plaintiff had standing to foreclose.
2 Defendants overlook this paragraph in arguing that they were not protected against a third party seeking to enforce the note. A-1217-18T3 3 Defendants' answer was stricken and the case was returned to the Office of
Foreclosure (OOF) as uncontested.
Plaintiff filed a motion to enter final judgment, but defendants opposed it.
In its denial of defendants' objection, the court noted defendants did not "make
a specific objection to the calculation of the amount due," did not suggest
another amount was due or submit their own calculations to suggest another
amount due. The court found the certification from the loan servicer was a
business record that evidenced an amount due of $447,299.47 on the mortgage
loan. The trial court denied defendants' objection to the amount due, and on
August 6, 2018, returned the case to the OOF.
Defendants' motion for reconsideration of this order was denied. The
court found its decision was not palpably incorrect. It had taken into
consideration defendants' arguments about the lost note, the notices of intention
to foreclose and the statute of limitations. A final judgment of foreclosure was
entered on October 1, 2018, with an amount due of $447,299.47. In January
2019, the property was sold at public auction. Plaintiff recorded its deed to the
property in March 2019.
A-1217-18T3 4 On appeal, defendants contend the trial court erred and abused its
discretion by granting summary judgment to plaintiff and also by entering a final
judgment of foreclosure without protecting them from plaintiff's lost note claim.
A decision to vacate a final judgment lies within the sound discretion of
the trial court, guided by principles of equity. Hous. Auth. of Morristown v.
Little, 135 N.J. 274, 283 (1994). An "abuse of discretion only arises on
demonstration of 'manifest error or injustice.'" Hisenaj v. Kuehner, 194 N.J. 6,
20 (2008) (quoting State v. Torres, 183 N.J. 554, 572 (2005)). It occurs when
the "'decision [was] made without a rational explanation, inexplicably departed
from established policies, or rested on an impermissible basis.'" United States
ex rel. U.S. Dep't of Agric. v. Scurry, 193 N.J. 492, 504 (2008) (alteration in
original) (quoting Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571 (2002)).
Our review of a trial court's legal determinations is plenary. D'Agostino v.
Maldonado, 216 N.J. 168, 182-83 (2013) (citing Manalapan Realty, L.P. v. Twp.
Comm. of Manalapan, 140 N.J. 366, 378 (1995)).
"The only material issues in a foreclosure proceeding are the validity of
the mortgage, the amount of the indebtedness, and the right of the mortgagee to
resort to the mortgage premises." Great Falls Bank v. Pardo, 263 N.J. Super.
388, 394 (Ch. Div. 1993). Here, defendants have not denied the execution of
A-1217-18T3 5 the note or mortgage. They have not disputed that the mortgages were recorded
in the Clerk's office or that there is a recorded mortgage to plaintiff. They do
not deny they are in default. They never contested the application of this
mortgage to their residential property. They never raised a specific contest to
the amount due under the mortgage. Therefore, the court did not abuse its
discretion by entering a final judgment of foreclosure.
Defendants argue the trial court should not have granted plaintiff summary
judgment because the note was lost and was not in plaintiff's possession when it
filed for foreclosure. A party seeking to establish its right to foreclose on a
mortgage must generally "[']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)); see also Bank of N.Y. v. Raftogianis, 418 N.J. Super. 323, 327-28 (Ch.
Div. 2010). In Deutsche Bank Tr. Co. Ams. v. Angeles, 428 N.J. Super. 315,
318 (App. Div. 2012), we held that "either possession of the note or an
assignment of the mortgage that predated the original complaint confer[s]
standing," thereby reaffirming our earlier holding in Mitchell.
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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-1217-18T3
U.S. BANK TRUST, N.A., AS TRUSTEE FOR LSF9 MASTER PARTICIPATION TRUST,
Plaintiff-Respondent,
v.
JOSEPH DURELLI, a/k/a JOSEPH V. DURELLI and CHERYL DURELLI, his wife,
Defendants-Appellants,
and
VANZ LLC, CAPITAL ONE BANK USA, NA, ATLANTIC CREDIT AND FINANCE, STATE OF NEW JERSEY, LEXINGTON NATIONAL INSURANCE CORPORATION, and ABC BAIL BONDS, INC.,
Defendants. _____________________________
Submitted November 7, 2019 – Decided November 20, 2019 Before Judges Nugent and Suter.
On appeal from the Superior Court of New Jersey, Chancery Division, Mercer County, Docket No. F- 030316-16.
Joseph Durelli and Cheryl Durelli, appellants pro se.
Shapiro & DeNardo, LLC, attorneys for respondent (Elizabeth L. Wassall, on the brief).
Defendants Joseph and Cheryl Durelli appeal the October 1, 2018 final
judgment of foreclosure and three other orders 1 entered in this residential
foreclosure. They claim the trial court erred by granting the foreclosure
judgment because the underlying note was lost. We affirm the judgment and
orders under appeal.
On March 10, 2006, defendants signed a $272,000 note with HSBC
Mortgage Corporation (USA) (HSBC). The same day, they signed a mortgage
with the Mortgage Electronic Registration System, Inc. (MERS) as nominee for
HSBC on a property located in Hamilton. The mortgage was recorded in April
2006. Defendants defaulted on the mortgage loan in April 2010.
1 The September 15, 2017 order granted plaintiff's motion for summary judgment, striking defendants' answer. The August 6, 2018 order denied defendants' objection to entry of the final judgment. The September 21, 2018 order denied reconsideration of the summary judgment order. A-1217-18T3 2 The mortgage was assigned on three occasions. MERS assigned the
mortgage to BAC Home Loans Servicing, LP, f/k/a Countrywide Home Loans
Servicing, LP (BAC), and recorded it in August 2010. The mortgage was
assigned by BAC to Nationstar Mortgage, LLC (Nationstar) and recorded in
April 2014. On August 18, 2016, Nationstar assigned the mortgage to plaintiff,
U.S. Bank Trust, N.A. as Trustee for LSF9 Master Participation Trust. This was
recorded on October 13, 2016.
Plaintiff filed a complaint in November 2016 seeking to foreclose on the
mortgage. Plaintiff's summary judgment motion was granted on September 15,
2017. The trial court found there were no genuine issues of fact regarding
plaintiff's right to foreclose. Plaintiff submitted an affidavit from Nationstar's
representative providing that Nationstar lost the note prior to April 20, 2016.
She certified that Nationstar and its "successors and/or assigns [would] hold
harmless the borrower(s) and indemni[fy] the borrower(s) should any unknown
party seek to enforce the lost note and mortgage against the borrower(s)."2 The
mortgage also was assigned to plaintiff and recorded prior to filing the
foreclosure complaint. The court found plaintiff had standing to foreclose.
2 Defendants overlook this paragraph in arguing that they were not protected against a third party seeking to enforce the note. A-1217-18T3 3 Defendants' answer was stricken and the case was returned to the Office of
Foreclosure (OOF) as uncontested.
Plaintiff filed a motion to enter final judgment, but defendants opposed it.
In its denial of defendants' objection, the court noted defendants did not "make
a specific objection to the calculation of the amount due," did not suggest
another amount was due or submit their own calculations to suggest another
amount due. The court found the certification from the loan servicer was a
business record that evidenced an amount due of $447,299.47 on the mortgage
loan. The trial court denied defendants' objection to the amount due, and on
August 6, 2018, returned the case to the OOF.
Defendants' motion for reconsideration of this order was denied. The
court found its decision was not palpably incorrect. It had taken into
consideration defendants' arguments about the lost note, the notices of intention
to foreclose and the statute of limitations. A final judgment of foreclosure was
entered on October 1, 2018, with an amount due of $447,299.47. In January
2019, the property was sold at public auction. Plaintiff recorded its deed to the
property in March 2019.
A-1217-18T3 4 On appeal, defendants contend the trial court erred and abused its
discretion by granting summary judgment to plaintiff and also by entering a final
judgment of foreclosure without protecting them from plaintiff's lost note claim.
A decision to vacate a final judgment lies within the sound discretion of
the trial court, guided by principles of equity. Hous. Auth. of Morristown v.
Little, 135 N.J. 274, 283 (1994). An "abuse of discretion only arises on
demonstration of 'manifest error or injustice.'" Hisenaj v. Kuehner, 194 N.J. 6,
20 (2008) (quoting State v. Torres, 183 N.J. 554, 572 (2005)). It occurs when
the "'decision [was] made without a rational explanation, inexplicably departed
from established policies, or rested on an impermissible basis.'" United States
ex rel. U.S. Dep't of Agric. v. Scurry, 193 N.J. 492, 504 (2008) (alteration in
original) (quoting Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571 (2002)).
Our review of a trial court's legal determinations is plenary. D'Agostino v.
Maldonado, 216 N.J. 168, 182-83 (2013) (citing Manalapan Realty, L.P. v. Twp.
Comm. of Manalapan, 140 N.J. 366, 378 (1995)).
"The only material issues in a foreclosure proceeding are the validity of
the mortgage, the amount of the indebtedness, and the right of the mortgagee to
resort to the mortgage premises." Great Falls Bank v. Pardo, 263 N.J. Super.
388, 394 (Ch. Div. 1993). Here, defendants have not denied the execution of
A-1217-18T3 5 the note or mortgage. They have not disputed that the mortgages were recorded
in the Clerk's office or that there is a recorded mortgage to plaintiff. They do
not deny they are in default. They never contested the application of this
mortgage to their residential property. They never raised a specific contest to
the amount due under the mortgage. Therefore, the court did not abuse its
discretion by entering a final judgment of foreclosure.
Defendants argue the trial court should not have granted plaintiff summary
judgment because the note was lost and was not in plaintiff's possession when it
filed for foreclosure. A party seeking to establish its right to foreclose on a
mortgage must generally "[']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)); see also Bank of N.Y. v. Raftogianis, 418 N.J. Super. 323, 327-28 (Ch.
Div. 2010). In Deutsche Bank Tr. Co. Ams. v. Angeles, 428 N.J. Super. 315,
318 (App. Div. 2012), we held that "either possession of the note or an
assignment of the mortgage that predated the original complaint confer[s]
standing," thereby reaffirming our earlier holding in Mitchell.
We are satisfied the trial court did not err in granting plaintiff summary
judgment. A representative of plaintiff's servicer certified that the mortgage was
A-1217-18T3 6 assigned to plaintiff in 2016. The recorded assignments were in evidence. We
agree with the trial court that this proof satisfied Angeles' requirements for
standing.
Defendants did not refute plaintiff's proofs. Instead, they argued that
because the note was lost, plaintiff did not have the ability to foreclose. This is
contrary to the court's holding in Angeles that found standing based either on
possession of the note or assignment of the mortgage. Plaintiff proved the
mortgage was assigned to it and recorded prior to filing the foreclosure
complaint. Plaintiff also had an affidavit from Nationstar about the lost note .
Whether the lost note affidavit—by itself—would satisfy the standing
requirement is not the issue; here, there was no dispute that plaintiff was
assigned the mortgage prior to filing the foreclosure complaint. The trial court
did not err in finding that plaintiff had standing to foreclose on the loan executed
by defendants based on the assignment.
Defendants' motion for reconsideration added nothing new. The trial
court did not abuse its discretion by denying reconsideration. Defendants'
remaining arguments are without sufficient merit to warrant discussion in a
written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
A-1217-18T3 7