WILMINGTON SAVINGS FUND SOCIETY, FSB, ETC. VS. KAREEM RAPOSO (L-2983-19, PASSAIC COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE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-3641-19
WILMINGTON SAVINGS
FUND SOCIETY, FSB, as
certificate trustee on behalf of
BOSCO CREDIT II TRUST
SERIES 2010-1,
Plaintiff-Appellant,
v.
KAREEM RAPOSO and
LOURDES RAPOSO,
Defendants-Respondents.
___________________________
Submitted May 5, 2021 – Decided July 1, 2021
Before Judges Alvarez and Mitterhoff.
On appeal from the Superior Court of New Jersey, Law
Division, Passaic County, Docket No. L-2983-19.
Mark Golab, attorney for appellant.
Thomas M. Egan, attorney for respondents.
PER CURIAM
In this case, the trial court found plaintiff Wilmington Savings Fund
Society, FSB (Wilmington Savings), as certificate trustee on behalf of Bosco
Credit II Trust Series 2010-1's cause of action on a note was barred by the one-
year statute of limitations found in N.J.S.A. 2A:50-8, and thus dismissed with
prejudice. We affirm.
On November 30, 2006, defendants Kareem Raposo and Lourdes Raposo 1
purchased real property located in Paterson. They borrowed $200,000 from
Decision One Mortgage Company, LLC (Decision One), secured by a first
mortgage and note assigned to Mortgage Electronics Registration Systems, Inc.
(MERS). They borrowed an additional $50,000 from Decision One, this loan
secured by a second mortgage and note signed the same day and immediately
assigned to MERS.
On February 3, 2009, MERS, as nominee for Decision One, transferred
the first mortgage to Deutsche Bank National Trust Company (Deutsche Bank),
as trustee for HIS Asset Securitization Corporate Trust, 2007-HE2. On February
10, 2009, Deutsche Bank filed a foreclosure action against defendants, naming
MERS as nominee for Decision One a defendant in that proceeding because of
1
Jose Raposo was also a named borrower and mortgagor in these transactions.
His debts were discharged in a 2011 bankruptcy, and thus he was not named a
defendant in this action.
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the second mortgage lien. A foreclosure final judgment totaling $357,583.52
was entered against defendants, and the property was sold at a sheriff's sale on
April 8, 2014, extinguishing the second mortgage.
At some unspecified point in time, after the foreclosure proceedings,
Decision One's interest in the second mortgage note was acquired by
Wilmington Savings. On September 23, 2019, Wilmington Savings filed a
complaint seeking to "collect a debt pursuant to [] either a [n]ote or [m]ortgage
between [d]efendants and Decision One . . . ." Lourdes Raposo was served
October 21, 2019, and Kareem Raposo on February 4, 2020.
On March 31, 2020, Wilmington Savings filed a motion for entry of a
default judgment, its first filing subsequent to the complaint. The Raposos
cross-moved that any order of default that may have entered be vacated and the
matter be dismissed for failure to state a claim upon which relief could be
granted, asserting that the applicable one-year statute of limitations, N.J.S.A.
2A:50-8, had expired. See R. 4:6-2(e).
Wilmington Savings argued that the exception found in N.J.S.A. 2A:50-
2.3(d) applied, acting as a defense to the one-year limit. Nonetheless, the court
dismissed the complaint with prejudice.
A-3641-19
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Judge Vicki A. Citrino, in a cogent written decision, noted preliminarily
that Wilmington Savings had not requested the entry of a default. See R. 4:43-
1. She further noted that Wilmington Savings "has failed to provide any
evidence of a chain of title showing that it owns the rights to the note or
mortgage on which it seeks collection." The complaint itself lacks any narrative
explaining the manner in which Wilmington Savings acquired its interest in the
$50,000 note in dispute.
Acknowledging that pursuant to Rule 4:6-2(e), motions to dismiss should
rarely be granted, Judge Citrino observed that a statute of limitations bar
presents one of those instances. N.J.S.A. 2A:50-8 requires a lender to collect
on a bond or note, originally secured by a mortgage, within one year of a
foreclosure judgment or "be thereafter completely and forever barred for lapse
of time." She distinguished the exception found in N.J.S.A. 2A:50-2.3(d)
because Decision One was the lender on both mortgages and notes. That statute
establishes the statute does not apply:
[w]here a banking institution . . . operating pursuant to
State or Federal law, is the lender, and the mortgage is
given to secure payment of a loan evidenced by a note,
and where the mortgage so given is subject to the lien
or liens of a prior mortgage or mortgages not held by
such institution or association or by any holder in which
such institution or association has an interest or with
which such institution or association has an affiliation.
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[N.J.S.A. 2A:50-2.3(d).]
Additionally, the principal case Wilmington Savings offered in support of its
claim to the exception, Central Penn National Bank v. Stonebridge Ltd., 185
N.J. Super. 289, 297-304 (Ch. Div. 1982), merely reiterated the statutory
scheme. The judge concluded that the case stands for the proposition that the
exception to the one-year statute of limitations applies only if the original
lenders are not the same institution.
Wilmington Savings on appeal asserts the following:
POINT I
THE TRIAL COURT ERRED WHEN IT FOUND
THAT DEFENDANTS DEMONSTRATED
SUFFICIENT GOOD CAUSE UNDER R. 4:50-1.
POINT II
THE TRIAL COURT ERRED WHEN IT DISMISSED
PLAINTIFF'S COMPLAINT WITH PREJUDICE AS
TIME BARRED PURSUANT TO N.J.S.A. 2A:50-8
AND FAILED TO CONSIDER THE APPLICABLE
EXCEPTION CONTAINED IN N.J.S.A. 2A:50-
2.3([d]).
POINT III
BASED ON THE APPLICABILITY OF THE
EXCEPTION CONTAINED IN N.J.S.A. 2A:50-
2.3([d]), THE CONTROLLING STATUTE OF
LIMITATIONS IS N.J.S.A. 12A:3-118([a]).
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We address only Wilmington Savings' claim the judge misapplied the
statute of limitations, as the remaining points are made moot by our decision.
Greenfield v. N.J. Dep't of Corrs., 382 N.J. Super. 254, 257-58 (App. Div. 2006)
("An issue is 'moot' when the decision sought in a matter, when rendered, can
have no practical effect on the existing controversy." (quoting N.Y. S&WR
Corp. v. State Dep't of Treasury, Div. of Tax'n, 6 N.J. Tax. 575, 582 (Tax Ct.
1984))).
Wilmington Savings' argument is that the exception to the one-year statute
of limitations found in N.J.S.A. 2A:50-2.3(d) applies because it is a different
banking institution than the one which held the original first and second
mortgages. Wilmington Savings, however, for purposes of this analysis, stands
in the shoes of Decision One.
Wilmington Savings provides no information regarding its acquisition of
the $50,000 note and the right to collect on that indebtedness, much less
documentation that the note was acquired prior to foreclosure on the fi rst
mortgage and the subsequent sheriff's sale. We do know, however, that Decision
One, Wilmington Savings' predecessor-in-interest, as we have said, was a named
party to the foreclosure proceedings. Wilmington Savings does not claim that
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its predecessor-in-interest failed to receive notice of the foreclosure
proceedings.
Nothing in the statute's legislative history aids our interpretation. The
meaning of the statutory language of N.J.S.A. 2A:50-2.3(d) is not clear in this
context. And when we are required to interpret such language, we may draw
inferences from the statute's overall structure and composition. See Invs. Bank
v. Torres, 243 N.J. 25, 45 (2020). But if the exception was intended to apply to
this scenario, its utility would be defeated. To avoid the statute of limitations
bar, the lender named in a first and second mortgage would merely have to, after
foreclosing on a first mortgage, assign the secondary obligation to another
entity.
Furthermore, N.J.S.A. 2A:25-1 provides:
All contracts for the sale and conveyance of real estate,
all judgments and decrees recovered in any of the courts
of this State or of the United States or in any of the
courts of any other state of the United States and all
choses in action arising on contract shall be assignable,
and the assignee may sue thereon in his own name. In
such an action, the person sued shall be allowed, not
only all set-offs, discounts and defenses he has against
the assignee, but also all set-offs, discounts and
defenses he had against the assignor before notice of
such assignment was given to him.
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The courts of New Jersey "broadly construe[] this statutory provision" and
the note at issue here qualifies as a "chose in action" for purposes of this statute.
See Kimball Int'l, Inc. v. Northfield Metal Prods., 334 N.J. Super. 596, 612
(App. Div. 2000); N.J.S.A. 2A:25-1; see also Torres, 243 N.J. at 38-39 (noting
"rights arising by contract are generally assignable"). In an action brought by
the assignor of the note—Decision One—the Raposos would have been entitled
to argue the statute of limitations defense codified at N.J.S.A. 2A:50-8.
Moreover, if the proper time to assess the applicability of this exception
is at the date of execution of the secondary mortgage and note, then the result is
even more evident as the original lender was the same for both mortgages. By
the plain terms of N.J.S.A. 2A:25-1, defendants retain the right to raise this
defense against plaintiff, the assignee of the note.
The mere fact that Decision One assigned the first mortgage and note and
the second mortgage and note to different parties does not change the source of
the funds or the lender. Wilmington Savings offers no precedent which leads us
to a contrary result. It is the fact that Decision One was the original lender for
both the first and second mortgage that makes the one-year statute of limitations
applicable. Thus, its successor-in-interest is not entitled to the exception that
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would have been in play had the second mortgage lender been a different
banking institution.
Affirmed.
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