William Suser v. Wachovia Mortgage, Fsb

78 A.3d 1014, 433 N.J. Super. 317

• Court: New Jersey Superior Court Appellate Division
• Decided: November 4, 2013
• Docket: A-1330-12
• Status: Published

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-1330-12T2

WILLIAM SUSER,

Plaintiff-Appellant, APPROVED FOR PUBLICATION v. November 4, 2013

WACHOVIA MORTGAGE, FSB f/k/a APPELLATE DIVISION WORLD SAVINGS BANK, FSB, and DEUTSCHE BANK NATIONAL TRUST COMPANY, f/k/a WASHINGTON MUTUAL BANK, FA,

Defendants-Respondents,

and

PORT IMPERIAL CONDOMINIUM ASSOCIATION and UNITED STATES DEPARTMENT OF THE TREASURY – INTERNAL REVENUE SERVICE, and/or his, her, their or its successor in right, title and interest,

Defendants.

___________________________________________________

Submitted October 8, 2013 – Decided November 4, 2013

Before Judges Fisher, Espinosa and O'Connor.

On appeal from the Superior Court of New Jersey, Chancery Division, Hudson County, Docket No. C-25-12.

Zwerling & Deshpande, LLC, attorneys for appellant (Shay S. Deshpande and David J. Zwerling, on the brief). Reed Smith, LLP, attorneys for respondent Wachovia Mortgage, FSB f/k/a World Savings Bank, FSB (Henry F. Reichner, of counsel; Kevin L. Jayne, on the brief).

Bertone Piccini, LLP, attorneys for respondent Deutsche Bank National Trust Company, f/k/a Washington Mutual Bank, FA (Grace C. Bertone and Cristina Z. Sinclair, of counsel; Ms. Sinclair, on the brief).

The opinion of the court was delivered by

FISHER, P.J.A.D.

In this appeal, we consider whether the trial judge

correctly granted summary judgment in this convoluted quiet-

title action, which sought, in part, to remove a mortgage

because of alleged inadequacies in its assignment.

Many of the relevant facts are undisputed. Plaintiff

William Suser obtained and recorded, on July 29, 2006, a

mortgage on a West New York condominium unit securing his

$150,000 loan to the prior owner. Plaintiff later sued for and

obtained a foreclosure judgment and, after making a successful

$100 bid, obtained a sheriff's deed which acknowledged title was

subject to prior encumbrances. Plaintiff then commenced this

action seeking to quiet title through the removal of the two

prior mortgages on the property, one of which was recorded by

World Savings Bank, FSB (the World Savings mortgage), on

September 23, 2004, to secure a $200,000 loan to the original

owner, and the other recorded by Washington Mutual Bank, FA (the

2 A-1330-12T2 WaMu mortgage), on October 8, 2004, to secure a $999,999 loan to

the original owner. Defendant Wachovia Mortgage FSB, doing

business as Wells Fargo Bank, N.A. (Wells Fargo), appeared with

regard to the World Savings mortgage, and defendant Deutsche

Bank National Trust Company, as Trustee WAMU 2005-AR2 (Deutsche)

appeared to defend the WaMu mortgage.

In his quiet-title complaint, plaintiff claimed the World

Savings and WaMu mortgages "should not be recognized in equity

because they have been satisfied, settled, obtained by mistake

and/or [sic] improperly encumber the subject premises without

legal right or standing to enforce same." Despite this

allegation's broad tone, the main thrust of plaintiff's

arguments in the trial court related to defendants' standing to

seek foreclosure of the mortgages and not the validity of the

mortgages.

After a discovery dispute between plaintiff and Deutsche

resulted in a protective order favorable to the latter, both

defendants moved for summary judgment, and plaintiff cross-moved

for summary judgment. The trial judge granted defendants'

motions and denied plaintiff's, and plaintiff now appeals,

arguing with respect to Deutsche that he was erroneously denied

discovery into the circumstances surrounding the assignment of

the WaMu mortgage and that both defendants should have been

3 A-1330-12T2 "estopped and barred from maintaining their liens on the subject

property under doctrines of laches and waiver."1 We separately

consider plaintiff's arguments as to each defendant.

I

Plaintiff's arguments regarding defendants' standing to

seek foreclosure – based on concerns of "robo-signing" in any

relevant assignments of a nature that led to the Supreme Court's

emergent amendments in December 2010 to Rule 4:64 – have no

bearing on Wells Fargo. The record does not suggest that Wells

Fargo's authority to seek foreclosure of the World Savings

mortgage was based on an assignment. Instead, Wells Fargo

asserted, without substantial contradiction, that the original

mortgage holder – World Savings Bank, FSA – changed its name to

Wachovia Mortgage, FSB, effective December 31, 2007, and that

Wachovia was acquired by and merged into Wells Fargo effective

November 1, 2009. It would appear that Wells Fargo's right to

enforce the mortgage arises by operation of its ownership of the

asset through mergers or acquisitions, not assignment.

Accordingly, plaintiff's assertions regarding standing have no

1 Both Wells Fargo and Deutsche argue that plaintiff never presented his laches and waiver arguments in the trial court and that, as a consequence, they should not be considered now. The record on appeal, however, is not sufficiently clear for us to agree with that contention, so we have considered the merits of plaintiff's equitable arguments.

4 A-1330-12T2 bearing on Wells Fargo; in addition, the discovery issue raised

by plaintiff relates only to Deutsche.

As to Wells Fargo, plaintiff only argues that the World

Savings mortgage should not further burden his title because, in

plaintiff's view, Wells Fargo's failure to enforce its interest

equitably bars any future attempt to enforce it. In this

regard, plaintiff alludes to the fact that in July 2008 Wells

Fargo commenced a foreclosure action which was dismissed without

prejudice a few months later when the prior owner cured the

default. With that factual event as background, plaintiff

argues Wells Fargo has had "three previous bites at the apple,"

referring to the undisputed facts that Wells Fargo did not

intervene in plaintiff's foreclosure action, did not bid at the

sheriff's sale, and did not commence its own foreclosure action

after the prior owner again defaulted. Absent evidence that

plaintiff obtained ownership of the property in the good faith

belief title was free and clear of the World Savings mortgage,

Wells Fargo was under no obligation to commence its own

foreclosure action, join in another's, or bid at a sheriff's

sale to protect its interest.

In support of his theory, plaintiff cites only Last v.

Audubon Park Assocs., 227 N.J. Super. 602 (App. Div. 1988). The

application of the doctrine of laches in Last, however, was

5 A-1330-12T2 necessary in light of the new owner's good faith belief that

senior mortgage rights had been cut off by a tax sale together

with the owner's investment of millions of dollars in a housing

project on the land that the mortgagee "silently observed . . .

from the sidelines" over a period of years. Id. at 608. Those

compelling circumstances materially distinguish Last from the

case at hand. And plaintiff has failed to demonstrate any other

compelling circumstances that warrant the extraordinary relief

of extinguishing a valid mortgage of which he was aware when he

took title.

We find insufficient merit in any of plaintiff's other

arguments – to the extent they are intended as an attack on the

summary judgment entered in favor of Wells Fargo – to warrant

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

II

Plaintiff's argument regarding the propriety of summary

judgment in favor of Deutsche is somewhat different. To be

sure, Deutsche's position is similar to Wells Fargo insofar as

it was stipulated between plaintiff and Deutsche that plaintiff

made his loan to the original owner with knowledge of: the

existence of the WaMu mortgage; that the WaMu mortgage was

senior to plaintiff's; and that the interest conveyed by the

sheriff to plaintiff remained encumbered by all "[p]rior

6 A-1330-12T2 mortgage[s] or liens." Plaintiff claimed, however, that

Deutsche lacks standing to seek foreclosure based upon some

irregularity in the assignment to Deutsche – a fact which

plaintiff claims warrants removing that encumbrance from his

title to the property.

In examining the summary judgment entered in favor of

Deutsche, we must assume the truth of plaintiff's assertion that

the assignment of the mortgage to Deutsche was defective or

otherwise precludes Deutsche from foreclosing on the mortgage

pursuant to the procedures contained in Rule 4:64. Brill v.

Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). The

fact that the trial judge barred discovery into the assignment

amplifies the importance of our assumption of the truth of

plaintiff's allegations. See Velantzas v. Colgate Palmolive

Co., 109 N.J. 189, 193 (1988) (recognizing "it is especially

inappropriate to grant summary judgment when discovery is

incomplete"). Because the suit was dismissed before the facts

were fully developed, we are required to review summary judgment

"from the standpoint of whether there is any basis upon which

plaintiff should be entitled to proceed further." Bilotti v.

Accurate Forming Corp., 39 N.J. 184, 193 (1963).

Notwithstanding the caution militated by the incomplete

record, the existing evidence permitted an inference of

7 A-1330-12T2 insufficiencies in the assignment of the WaMu mortgage. The

record reveals that Deutsche commenced a foreclosure action

against the prior owner in July 2009, alleging its right to

foreclose the WaMu mortgage based on the following:

[The WaMu mortgage] was assigned by an assignment dated 06/03/2009 from JPMORGAN CHASE BANK, NATIONAL ASSOCIATION to DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE WAMU 2005-AR2, plaintiff herein, which is unrecorded at this time.

The real party in interest in the proceeding is JPMorgan Chase Bank, National Association, as purchaser of the loan and other assets of Washington Mutual Bank, formerly known as Washington Mutual Bank, FA (the "Savings Bank") from the Federal Deposit Insurance Corporation, acting as receiver for the Savings Bank and pursuant to its authority under the Federal Deposit Insurance Act[,] 12 U.S.C. § 1821(d), as further evidenced by Affidavit of the Federal Deposit Insurance Corporation dated October 2, 2008, recorded in the office of the Director of Records and Licensing, King County, State of Washington on October 3, 2008.

The absence of a recorded assignment and these other confusing

and otherwise unexplained allegations, which alone cast a shadow

over Deutsche's claim of standing to foreclose the WaMu

mortgage, were not tested or adjudicated in this earlier suit.

Instead, Deutsche dismissed the action without prejudice in

September 2010 and, apparently, has made no attempt to enforce

its interest since.

8 A-1330-12T2 Until discovery casts greater illumination on the subject,

we must conclude there is a legitimate dispute as to whether

Deutsche obtained an effective assignment of the WaMu mortgage.

And, in viewing the facts and inferences in the light most

favorable to plaintiff, Brill, supra, 142 N.J. at 540, we

proceed in determining the maintainability of this quiet-title

action on the assumption that the assignment did not validly

transfer the mortgage to Deutsche. That does not, however, end

the matter. If the assignment was invalid or otherwise

defective, it does not automatically follow that the WaMu

mortgage must be extinguished. A finding of a defect in the

assignment would simply mean that the right to foreclose would

reside with the assignor or some other entity.

On the other hand, that the relief to which plaintiff may

be entitled is so limited does not mean plaintiff is barred from

pursuing this quiet-title action. N.J.S.A. 2A:62-1 permits a

person "in the peaceable possession of lands" to bring an action

to "clear up all doubts and disputes" concerning some other

person's claim to "a lien or encumbrance thereon." Here, there

is no legitimate dispute that the WaMu mortgage was valid when

executed, has not been satisfied, and was recorded prior to

plaintiff's mortgage. But there is a dispute about whether

9 A-1330-12T2 Deutsche is the proper holder of the WaMu mortgage and that

question may be adjudicated in a quiet-title action.

One of the purposes of N.J.S.A. 2A:62-1 is to permit a

landowner to sue for clarification of the validity or reach of

his title in circumstances that otherwise preclude a forum for

the resolution of such a dispute. Albro v. Dayton, 50 N.J. Eq.

574, 575 (Ch. 1892). Stated another way, a plaintiff in a

quiet-title action must show not only that there is no other

forum for an adjudication of the dispute but also that there is

no other adequate remedy at law.2 Here, plaintiff has not

claimed the WaMu mortgage is invalid or unenforceable,3 only that

Deutsche has no standing to enforce or foreclose the WaMu

mortgage. Although an adjudication of that question may not

2 For example, if plaintiff challenged the legitimacy of the WaMu mortgage, he could sue to quiet title without being required to wait until the mortgage holder sued him. Additionally, if a plaintiff's interest in property could be adequately vindicated through an ejectment action, the court need not invoke its equitable jurisdiction to quiet title. The quiet-title action, which, even though codified by statute retains its equitable underpinnings, see Holland v. Challen, 110 U.S. 15, 24-25, 3 S. Ct. 495, 500-01, 28 L. Ed. 52, 56 (1884); Estate of Smith v. Cohen, 123 N.J. Eq. 419, 425 (E. & A. 1938); Brady v. Carteret Realty Co., 70 N.J. Eq. 748, 754 (E. & A. 1906), is generally appropriate only in the absence of an adequate remedy at law, McGrath v. Norcross, 71 N.J. Eq. 763, 765 (E. & A. 1907). 3 As mentioned – and rejected – earlier, plaintiff has argued that neither Wells Fargo nor Deutsche may seek foreclosure based on the doctrines of laches, estoppel and waiver. Plaintiff has not otherwise argued that the World Finance or WaMu mortgages are unenforceable or do not have priority over his interest.

10 A-1330-12T2 lead to the relief plaintiff most fervently desires –

extinguishment of the mortgage – he is certainly entitled to a

ruling as to whether Deutsche, and not some other entity,

possesses the right to foreclose by way of a quiet-title action.

As the record demonstrates, that Deutsche believes it

possesses and may some day assert such a right is not illusory.

Deutsche has already sued on the mortgage; that Deutsche may in

the near or distant future hale plaintiff into court seeking

foreclosure of the WaMu mortgage is not inconceivable. That

cloud sufficiently enshrouds plaintiff's title as to permit

invocation of the rights provided by N.J.S.A. 2A:62-1.4

Plaintiff is entitled to an adjudication of Deutsche's right to

pursue such an action even though the outcome of that dispute

might only be that some other entity is found to be the proper

mortgage holder.

Because the trial judge mistakenly precluded discovery into

the circumstances surrounding Deutsche's assignment and

Deutsche's entitlement to sue on the mortgage, we find it

4 To be clear, although what constitutes a cloud on title has always been broadly interpreted, see 65 Am. Jur. 2d, Quieting Title § 13 (2011), we do not suggest every perceived or imagined cloud on title is entitled to adjudication. Courts need not entertain doubts about title that are trifling or suggest only immaterial damage. See Paternoster v. Shuster, 296 N.J. Super. 544, 559 (App. Div. 1997). Each case must be assessed in view of its particular facts and the magnitude of the threat to the plaintiff's title and use of the property.

11 A-1330-12T2 necessary to: vacate the order denying plaintiff's motion for

summary judgment against Deutsche; vacate the order granting

Deutsche's motion for summary judgment; reverse the protective

order; and remand for discovery and other proceedings in

conformity with this opinion.5

Affirmed in part; vacated in part; reversed in part; and

remanded. We do not retain jurisdiction.

5 We do not suggest that summary judgment may not be appropriate once discovery is complete.

12 A-1330-12T2