WELLS FARGO BANK, N.A., ETC. VS. MURTAZA ALI KHAN (F-018496-18, MONMOUTH COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: April 15, 2021
• Docket: A-0757-19
• Status: Unpublished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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-0757-19

WELLS FARGO BANK, N.A. as TRUSTEE FOR OPTION ONE MORTGAGE LOAN TRUST 2007-6 ASSET- BACKED CERTIFICATES, SERIES 2007-6,

Plaintiff-Respondent, v.

MURTAZA ALI KHAN and SYEDA SHAHNOOR KHAN,

Defendants-Appellants. __________________________

Submitted January 6, 2021 – Decided April 15, 2021

Before Judges Geiger and Mitterhoff.

On appeal from the Superior Court of New Jersey, Chancery Division, Monmouth County, Docket No. F- 018496-18.

Murtaza Ali Khan and Syeda Shahnoor Khan, appellants pro se.

Stradley, Ronon, Stevens & Young, LLP, attorneys for respondent (Len A. Fisher, on the brief). PER CURIAM

Pro se defendants Murtaza Ali Khan 1 and Syeda Shahnoor Khan appeal

from a June 21, 2019 order granting summary judgment in favor of plaintiff

Wells Fargo Bank, N.A. as trustee for Option One Mortgage Loan Trust 2007-

6, Asset-Backed Certificates, Series 2007-6, and denying Ms. Khan's cross-

motion for summary judgment. We affirm.

On March 2, 2007, Murtaza Ali Khan executed and delivered a note in the

sum of $768,750 in favor of First Interstate Financial Corporation, its successors

and assigns. To secure payment on the note, Mr. Khan and his wife, defendant

Syeda Shahnoor Khan, executed a non-purchase money mortgage as co-

mortgagors to Mortgage Electronic Registration Systems, Inc., as nominee for

First Interstate Financial Corporation, its successors and assigns. Defendant was

a signatory to the mortgage, but not the note. Covenant thirteen of the mortgage

provides:

[A]ny Borrower who co-signs this Security Instrument but does not execute the Note (a "co-signer"): . . . (c) agrees that Lender and any other Borrower can agree to

1 Mr. Khan never appeared in the foreclosure action, and his first filing in this action was his Notice of Appeal. Because he failed to enter an appearance or raise any arguments or defenses up to and including at the summary judgment stage, Mr. Khan is not a proper party to this appeal. Regardless, Mr. Khan presents the same arguments for our consideration as his wife. Therefore, we will address only Ms. Khan's arguments. A-0757-19 2 extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer's consent.

On March 8, 2007, the mortgage was assigned to Option One Mortgage

Corporation. On October 27, 2009, the mortgage was assigned to plaintiff.

After defaulting on the loan, Mr. Khan and plaintiff executed a loan

modification and shared appreciation agreement in September 2016. The

amended terms lowered the interest rate, reduced monthly payments, and cured

Mr. Khan's default. The first payment under the modified agreement was due

on December 1, 2016. The agreement also required Mr. Khan to make a final

"balloon payment" for the full amount of the outstanding balance on July 1,

2037.

Mr. Khan, but not defendant, signed a disclosure of the balloon feature

explaining its terms. The disclosure did not list the amount that would be due

on the final balloon payment. A provision directly above the date and signature

lines on the disclosure reads:

*All individuals on the title (even if not a borrower on the note) must sign this agreement. If there are more than two title holders to this property, please have them sign below.

The modification agreement was to supplement and amend the note

secured by the mortgage. Paragraph 4(E) of the agreement states:

A-0757-19 3 [A]ll terms and provisions of the Loan Documents, except as expressly modified by this Agreement, remain in full force and effect; nothing in this Agreement shall be understood or construed to be a satisfaction or release in whole or in part of the obligations contained in the Loan Documents; and that except as otherwise specifically provided in, and as expressly modified by, this Agreement, the Servicer and I will be bound by, and will comply with, all of the terms and conditions of the Loan Documents.

Mr. Khan failed to make the monthly payment due on April 1, 2018, and

all payments thereafter. Consequently, plaintiff commenced foreclosure

proceedings on June 4, 2018. Mr. Khan was served with Notice of Intent to

Foreclose by regular and certified mail. On September 7, 2018, plaintiff filed a

foreclosure complaint. On November 12, 2018, defendant filed a certification

in lieu of an answer, requesting dismissal of plaintiff's complaint. On December

7, 2018, defendant filed an answer. Mr. Khan did not respond.

On January 16, 2019, a case management conference was held and a

discovery order was entered. The discovery order directed the parties to

exchange responses to written discovery requests by April 19, 2019. Defendant

alleges she received plaintiff's answers to interrogatories almost two weeks late.

Despite the late submission, defendant failed to file a motion to compel or to

extend discovery.

A-0757-19 4 On May 20, 2019, plaintiff moved for summary judgment with a return

date of June 21, 2019. On June 11, 2019, defendant filed a cross-motion for

summary judgment, with the return date of June 21, 2019, and waiving oral

argument. She did not, however, respond to plaintiff's statement of undisputed

facts.

With its motion for summary judgment, plaintiff submitted the

certification of Guirlene Dolcine, a Contract Management Coordinator for

plaintiff's loan servicer. The certification is based on Dolcine's personal review

of relevant business records and sets forth a factual basis for the note's

execution, chain of possession, assignment and recording history, and Mr.

Khan's default.

On June 18, 2019, plaintiff filed opposition to defendant's cross-motion.

Later that day, the trial judge's law clerk contacted defendant to inform her that

the hearing was rescheduled to June 20, 2019, and indicated that plaintiff had

filed its opposition to her cross-motion. On June 19, 2019, defendant faxed a

letter to the judge's chambers requesting an adjournment because she had not

yet received or reviewed plaintiff's opposition. 2 On the same day, the law clerk

2 Plaintiff produced a certification indicating its opposition to defendant's cross- motion was sent via Federal Express to the mortgaged property on June 18, 2019. A-0757-19 5 faxed a copy of plaintiff's opposition to the number defendant used to fax her

letter to the court. The trial judge granted defendant's request and adjourned the

hearing until June 21, 2019.

On June 20, 2019, the judge received a second letter from defendant,

requesting another adjournment to allow her to review the opposition and

possibly retain counsel. She argued that in light of plaintiff's late submission of

discovery materials, and its failure to serve her with its opposition, she should

be given more time to prepare a response. The trial judge denied the request

and confirmed the motion was scheduled on June 21, 2019.

On the return date, plaintiff appeared but defendant did not. On the

record, the judge explained that she denied defendant's request for an

adjournment for several reasons. First, Rule 1:6-3 does not permit a cross-

movant to submit a reply to the opposition of their cross-motion without leave

of the court. Second, although plaintiff allegedly did not timely respond to

defendant's request for answers to interrogatories, she received them well before

the close of discovery, giving her "plenty of time" to consider a response.

Additionally, defendant did not make any objection when she received the

discovery. Finally, the judge noted that during the January 16, 2019 case

management conference, she explained to defendant that plaintiff would almost

A-0757-19 6 certainly move for summary judgment. Therefore, the judge found defendant

had ample opportunity to retain counsel and another adjournment, requested on

the eve of the return date, was not appropriate.

In light of defendant's absence, the judge decided not to hear arguments

regarding plaintiff's right to foreclose and rendered her decision on the motion

papers. Relying on the Dolcine certification, the judge found plaintiff had

established a prima facie showing of its right to foreclose. She noted that

defendant did not address the foreclosure issue in her cross-motion. Rather, the

arguments she advanced related to the loan modification agreement's execution

without her consent. The judge found covenant thirteen of the mortgage allowed

Mr. Khan and the lender to execute the loan modification without defendant's

consent. Further, because she was not a party to the loan modification

agreement, plaintiff was not required to provide defendant with notice of the

balloon provision. Therefore, the judge found the loan modification agreement

was valid and that defendant failed to raise any genuine dispute regarding

plaintiff's right to foreclose. Accordingly, the judge granted plaintif f's motion

for summary judgment and denied defendant's cross-motion.

On appeal, defendant raises the following issues for our review:

POINT I

A-0757-19 7 THE TRIAL COURT ACTED UNFAIRLY AND UNREASONABLY IN DENYING [DEFENDANT'S] SHORT ADJOURNMENT REQUEST TO ALLOW [HER] TO RECEIVE AND REVIEW PLAINTIFF'S REPLY SUBMISSION TO THE COURT AND . . . TO OBTAIN COUNSEL.

POINT II

THE TRIAL COURT ERRED IN AUTHORIZING THE FORECLOSURE OF A MODIFIED MORTGAGE [THAT] WAS NEVER EXECUTED BY OR ASSENTED TO BY DEFENDANT . . . AND WHICH [INCLUDED A] BALLOON FEATURE [THAT] WAS NEVER LAWFULLY DISCLOSED TO . . . MURTAZA ALI KHAN.

POINT III

THE TRIAL COURT FAILED TO READ ALL INFERENCES IN FAVOR OF DEFENDANT AS REQUIRED IN A MOTION FOR SUMMARY JUDGMENT.

This court "review[s] the trial court's grant of summary judgment de novo

under the same standard as the trial court." Templo Fuente De Vida Corp. v.

Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016) (citing Mem'l

Props., LLC v. Zurich Am. Ins. Co., 210 N.J. 512, 524 (2012)). A motion for

summary judgment should be granted "if the pleadings, depositions, answers to

interrogatories and admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact challenged and that the

A-0757-19 8 moving party is entitled to a judgment or order as a matter of law." R. 4:46-

2(c). The evidence must be viewed "in the light most favorable to the non-

moving party[.]" Mem'l Props., LLC, 210 N.J. at 524 (citing Brill Guardian Life

Ins. Co. of Am., 142 N.J. 520, 523 (1995)).

Defendant argues her request for an adjournment to review plaintiff's

opposition and possibly retain counsel was improperly denied. Because she

received the opposition on June 19, 2019, defendant had only two days to

prepare a response before the hearing. As English is her second language,

defendant contends she was unfairly prejudiced because she was not given

enough time to comprehend what was going to take place.

Initially, we note that defendant was not automatically entitled to file a

response to plaintiff's opposition. If a cross-motion is germane to the original

motion, a cross-movant may not file a reply to their adversary's opposition

without leave of the court. Pressler & Verniero, Current N.J. Court Rules, cmt.

2 on R. 1:6-3 (2021). She also waived oral argument. Thus, if defendant could

not file a reply and did not intend to argue her motion before the court, we are

perplexed as to how she was prejudiced.

Regardless, defendant's contentions are belied by the record which

suggests, in fact, the motion judge apprised defendant of all the facts necessary

A-0757-19 9 to make an informed decision regarding her representation. On January 16,

2019, during the case management conference, the judge warned defendant that

plaintiff would likely file a motion for summary judgment prior to the trial date.

On May 20, 2019, plaintiff moved for summary judgment. That provided more

than four months to retain counsel, which she chose not to do. Defendant has

participated in this litigation since November 2018. One day before the return

date of plaintiff's motion for summary judgment, which was likely dispositive

of the foreclosure action, defendant requested an adjournment to possibly retain

counsel. Under those circumstances, we find the request was properly denied.

Because defendant made a conscious decision to proceed as a pro se litigant, her

decision not to retain counsel earlier in the litigation is not grounds for an

adjournment, or reversal.

With regard to the modification agreement, defendant argues the motion

judge misapplied the law in two respects. First, defendant asserts the loan

modification agreement is invalid because it altered the terms of the mortgage

without her consent. That premise is incorrect. The loan modification

agreement amended only the repayment schedule of the loan secured by the

mortgage, it did not alter or amend the terms of the mortgage. Moreover, even

if the terms of the mortgage were modified, which they were not, covenant

A-0757-19 10 thirteen of the mortgage expressly authorized Mr. Khan, as the sole signatory of

the note, to "agree to extend, modify, forbear or make any accommodations with

regard to the terms of this Security Instrument or the Note without the co -

signer's consent." The mortgage agreement required defendant to forfeit her

interest in the mortgaged property if her husband did not make timely payments

on the note. Because the terms of the mortgage were not amended by the

modification agreement, defendant's rights were not affected by its execution.

Therefore, defendant is still bound by the terms of the mortgage.

Defendant also argues plaintiff violated certain provisions of the Truth in

Lending Act (TILA), 15 U.S.C. § 1601 to 1667f, which required plaintiff to

disclose the amount of the final balloon payment to Mr. Khan before executing

the loan modification. She also points to the clause directly above the signature

line on the balloon disclosure, which required the signature of all individuals on

the title to the mortgaged property. Defendant argues the alleged TILA violation

as well as plaintiff's failure to obtain her signature, renders the entire agreement

unenforceable.

The "TILA seeks to 'protect . . . consumer[s] against inaccurate and unfair

credit billing and credit card practices' and promote 'the informed use of credit'

by 'assur[ing] a meaningful disclosure' of credit terms." Vincent v. The Money

A-0757-19 11 Store, 756, F.3d 88, 105 (2d Cir. 2013) (alterations in original) (quoting 15

U.S.C. § 1601(a)); see also Strubel v. Comenity Bank, 842 F.3d 181, 186 (2d

Cir. 2016). Lenders must "provide borrowers with clear and accurate

disclosures of terms dealing with things like finance charges, annual percentage

rates of interest, and the borrower's rights." Beach v. Ocwen Fed. Bank, 523

U.S. 410, 412 (1998).

With regard to mortgages, the TILA promotes the informed use of credit

by requiring mortgage lenders to make certain disclosures to borrowers before

consummation of the transaction. 15 U.S.C. § 1638(a). If the terms of the loan

agreement require a balloon payment, defined as a payment that is more than

two times a regular periodic payment, a balloon disclosure is required. 12 C.F.R.

§ 226.18(s)(5)(i). A balloon disclosure requires lenders to list the estimated

amount that will be due on the final balloon payment. Ibid. Similar disclosures

are required when a consumer refinances their mortgage. 12 C.F.R. § 226.20(a).

"A refinancing occurs when an existing obligation that was subject to this

subpart is satisfied and replaced by a new obligation undertaken by the same

consumer." Ibid.

However, "[a] reduction in the annual percentage rate with a

corresponding change in the payment schedule" is not "treated as a refinancing

A-0757-19 12 . . . ." 12 C.F.R. § 226.20(a)(2). In this case, the loan modification agreement

merely altered the interest rate, lowered monthly payments, and required a final

balloon payment. It did not result in the satisfaction of any obligation under the

original loan. Paragraph 4(E) of the modification agreement makes clear that

the obligations under the original note were not extinguished and remained in

full force and effect.

Because the loan modification agreement amended the terms of the

original note, it did not represent a new credit transaction triggering TILA

protections, therefore a balloon disclosure was not required. See Ryder v. J.P.

Morgan Chase Bank, 767 Fed. App'x 29, 31-32 (2d Cir. 2019) (holding loan

modification agreements, unlike mortgage refinances, do not require

supplemental TILA disclosures upon execution). Accordingly, plaintiff was not

obligated to provide defendant or husband with a balloon disclosure, and the

absence of her signature on the disclosure page is immaterial.

Lastly, defendant argues the motion judge incorrectly applied the

summary judgment standard in concluding plaintiff had established its right to

foreclose on the mortgaged property. Our review of the record, however, reveals

defendant failed to dispute any facts material to plaintiff's right to foreclose.

A-0757-19 13 "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 mortgaged premises" Great Falls Bank v. Pardo, 263 N.J. Super.

388, 394 (Ch. Div. 1993). "[E]xecution, recording, and non-payment of the

mortgage" must be demonstrated by a party seeking to foreclose. Thorpe v.

Floremoore Corp., 20 N.J. Super. 34, 37 (App. Div. 1952). "A certification will

support the grant of summary judgment only if the material facts alleged therein

are based, as required by Rule 1:6-6, on 'personal knowledge.'" Wells Fargo

Bank, N.A. v. Ford, 418 N.J. Super. 592, 599 (App. Div. 2011) (citing Claypotch

v. Heller, Inc., 360 N.J. Super. 472, 489 (App. Div. 2003)).

Preliminarily, we note defendant's failure to respond to plaintiff's

statement of undisputed facts in support of its motion for summary judgment.

Rule 4:46-2(b) requires a party opposing a motion to "file a responding

statement either admitting or disputing each of the facts in the movant's

statement." Unless specifically disputed in the responding statement, "all

material facts in the movant's statement which are sufficiently supported will be

deemed admitted . . . ." R. 4:46-2(b). As defendant did not provide a responding

statement, all supported facts in plaintiff's statement are deemed admitted.

A-0757-19 14 The record amply supports the motion judge's determination that plaintiff

was entitled to foreclose. Paragraph three of the Dolcine certification, the note,

and the mortgage establish execution of the note. Paragraphs six and seven of

the Dolcine certification list the chain of possession and recording history of the

note. The assignment and recording receipts were also attached as exhibits.

Paragraphs nine and eleven of the Dolcine certification establish non -payment

of the mortgage. Finally, paragraph one of the Dolcine certification indicates

all of the certified statements were based upon Ms. Dolcine's personal review of

business records.

Consequently, the Dolcine certification is sufficient, Wells Fargo Bank,

N.A., 418 N.J. at 599, to establish all of the necessary elements to a foreclosure

action. Thorpe, 20 N.J. Super. at 37. In her cross-motion for summary judgment

and on appeal, defendant does not challenge the execution or recording of the

note, or her husband's failure to make timely payments. Therefore, the motion

judge did not err in finding plaintiff had proven its right to foreclose.

Defendant's remaining arguments lack sufficient merit to warrant

discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.

A-0757-19 15