U.S. BANK NATIONAL ASSOCIATION, ETC. VS. TRACEY M.CHRISTENSEN(F-027291-14, OCEAN COUNTY AND STATEWIDE) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE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-5540-15T1
U.S. BANK NATIONAL ASSOCIATION,
AS TRUSTEE FOR RESIDENTIAL
ASSET SECURITIES CORPORATION,
HOME EQUITY MORTGAGE ASSET-
BACKED CERTIFICATES, SERIES
2006-EMX2,
Plaintiff-Respondent,
v.
TRACEY M. CHRISTENSEN; MR.
CHRISTENSEN, husband of TRACEY
M. CHRISTENSEN; SCOTT A.
CHRISTENSEN; MRS. SCOTT A.
CHRISTENSEN, his wife,
Defendants-Appellants,
and
BENEFICIAL NEW JERSEY INC.,
d/b/a BENEFICIAL MORTGAGE
COMPANY AND EQUABLE ASCENT
FINANCIAL LLC,
Defendants.
______________________________
Submitted September 28, 2017 – Decided October 19, 2017
Before Judges Simonelli and Gooden Brown.
On appeal from Superior Court of New Jersey,
Chancery Division, Ocean County, Docket No.
F-027291-14.
Tracey M. Christensen and Scott A.
Christensen, appellants pro se.
Reed Smith LLP, attorneys for respondent
(Henry F. Reichner, of counsel and on the
brief).
PER CURIAM
In this foreclosure matter, defendants Tracey M. Christensen
and Scott A. Christensen appeal from the August 5, 2016 Chancery
Division order, which denied their motion to vacate final judgment
entered on November 29, 2015, following a trial at which defendants
appeared. For the following reasons, we affirm.
On November 1, 2005, defendants executed a note to Mortgage
Lenders Network, USA, Inc. (MLN) in the amount of $220,500. MLN
executed an endorsement of the note to Emax Financial Group (Emax),
and Emax executed an allonge endorsing the note to MLN. To secure
payment of the note, defendants executed a mortgage to Mortgage
Electronic Registration Systems, Inc. (MERS), as nominee for MLN
and its successors and assigns, on their property located in Brick.
The mortgage was recorded with the Ocean County Clerk on November
16, 2005.
Defendants defaulted on July 1, 2012. Prior thereto, on
March 1, 2007, Wells Fargo Bank, N.A., as servicer for plaintiff,
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received possession of the original note and mortgage. On August
16, 2012, MERS, as nominee for MLN, executed an assignment of the
mortgage "together with the note" to U.S. Bank National
Association, as trustee for RASC 2006-EMX2. The assignment was
recorded with the Ocean County Clerk on August 17, 2012.
On April 15, 2014, U.S. Bank National Association, as trustee
for RASC 2006-EMX2 by Wells Fargo Bank, N.A., as attorney-in-fact,
executed an assignment of mortgage to plaintiff, as trustee for
Residential Asset Securities Corporation, Home Equity Mortgage
Asset-Backed Pass-Through Certificates, Series 2006-EMX2. The
purpose of the assignment was to clarify the name of the trust to
whom MERS had assigned the mortgage and note on August 16, 2012.
The assignment was recorded with the Ocean County Clerk on April
22, 2014.
On April 11, 2014, plaintiff, through its agent, Wells Fargo,
mailed a notice of intention to foreclose to defendants. After
defendants failed to cure, on July 3, 2014, plaintiff filed a
foreclosure complaint. Defendants filed an answer and asserted
eleven affirmative defenses, including plaintiff's lack of
standing.
At trial, defendants did not challenge the validity of the
note and mortgage or deny their default. Rather, they challenged
plaintiff's standing and the assignment of mortgage. In a June
3 A-5540-15T1
30, 2015 oral decision, the trial judge found plaintiff had
physical possession of the original note and assignment of the
mortgage to confer standing, and thus plaintiff established a
prima facie right to foreclose. The judge entered an order on
June 30, 2015, striking defendants' answer and returning the matter
to the Office of Foreclosure. On November 29, 2015, the court
entered final judgment in plaintiff's favor. Defendants were
served with the final judgment on December 7, 2015.
Defendants did not file any post-judgment motions or an
appeal. Instead, on July 11, 2016, seven months after receiving
the final judgment and after a Sheriff's sale had been scheduled,
defendants filed a motion to vacate the final judgment.1
Defendants argued the trial judge made erroneous factual findings
and the evidence did not establish plaintiff had physical
possession of the original note and mortgage to confer standing.
Defendants also challenged the validity of the assignment of
mortgage, arguing that, according to a July 2016 search of the
records of the Securities and Exchange Commission (SEC), the trust
did not exist.
In opposition, plaintiff argued that defendants did not
search the complete and proper name of the trust. Plaintiff
1
The motion papers in the record did not specify on what
subsection of Rule 4:50-1 defendants relied.
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provided a correct SEC search, which revealed the existence of the
trust with the Pooling and Servicing Agreement filed with the SEC
on March 10, 2006.
The motion judge determined the motion was untimely, and
defendants failed to show excusable neglect. Addressing the
merits, the judge found plaintiff had physical possession of the
original note and assignment of mortgage to confer standing, and
defendants lacked standing to challenge the assignment. The judge
also found that a correct search of SEC's records revealed the
existence of the trusts in 2006. This appeal followed.
On appeal, defendants contend they were entitled to relief
under Rule 4:50-1(a), "mistake, inadvertence, surprise, or
excusable neglect;" Rule 4:50-1(d), "the judgment or order is
void;" and Rule 4:50-1(f), "any other reason justifying relief
from the operation of the judgment or order." Defendants argue,
in part, that the judge made erroneous factual findings and there
was no evidence plaintiff had physical possession of the note and
mortgage to confer standing to foreclose. Defendants also argue
they were entitled to relief under Rule 4:50-1(c), "fraud (whether
heretofore denominated intrinsic or extrinsic), misrepresentation,
or other misconduct of an adverse party," because there was no
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power of attorney to authenticate the assignment of mortgage to
plaintiff and the trust did not exist.2
A motion for relief under Rule 4:50-1 should be granted
sparingly and is addressed to the sound discretion of the trial
court, whose determination will not be disturbed absent a clear
abuse of discretion. U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J.
449, 467 (2012). "[A]buse 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)), and occurs when the trial court's decision "is
made without a rational explanation, inexplicably departed from
established policies, or rested on an impermissible basis."
Guillaume, supra, 209 N.J. at 467 (citation omitted). We discern
no abuse of discretion here.
Motions made under Rule 4:50-1 must be filed within a
reasonable time. R. 4:50-2; see also Deutsche Bank Trust Co. Ams.
v. Angeles, 428 N.J. Super. 315, 319 (App. Div. 2012) (citation
omitted). Motions based on Rule 4:50-1(a), (b) and (c) must be
filed within a year of the judgment. Ibid. However, the one-year
2
We decline to address defendants' additional argument that
plaintiff forged the assignment. Defendants did not raise this
issue before the trial judge and it is not jurisdictional in nature
nor does it substantially implicate the public interest. Zaman
v. Felton, 219 N.J. 199, 226-27 (2014) (citation omitted).
6 A-5540-15T1
limitation for subsections (a), (b) and (c) does not mean that
filing within one year automatically qualifies as "within a
reasonable time." Orner v. Liu, 419 N.J. Super. 431, 437 (App.
Div.), certif. denied, 208 N.J. 369 (2011); R. 4:50-2. "[T]he
one-year period represents only the outermost time limit for the
filing of a motion based on Rule 4:50-1(a), (b) or (c). [All]
Rule 4:50 motions must be filed within a reasonable time, which,
in some circumstances, may be less than one year from entry of the
order in question." Orner, supra, 419 N.J. Super. at 437.
"[D]elays of less than one year may be unreasonable." Id. at 438
(citing McLawhorn v. John W. Daniel & Co., 924 F.2d 535, 538 (4th
Cir. 1991) (finding a three-and-one-half-month delay
unreasonable); Kagan v. Caterpillar Tractor Co., 795 F.2d 601,
610-12 (7th Cir. 1986) (finding an approximate four-month delay
unreasonable); Security Mut. Cas. Co. v. Century Cas. Co., 621
F.2d 1062, 1068 (10th Cir. 1980) (finding a three-month delay
unreasonable); West v. Gilbert, 361 F.2d 314, 316 (2d Cir.)
(finding a three-month delay unreasonable), cert. denied, 385 U.S.
919, 87 S. Ct. 229, 17 L. Ed. 2d 143 (1966)).
Here, defendants' seven month delay in filing their Rule
4:50-1 motion was unreasonable in the circumstance. Defendants
were aware of the judge's June 30, 2015 ruling and of entry of
final judgment, but waited seven months after receiving the
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judgment and after the Sheriff's sale was scheduled to file their
motion. Defendants gave no reason for the delay. Accordingly,
their motion was barred by Rule 4:50-2. Even if not time-barred,
the motion lacked merit.
Relief under Rule 4:50-1(a) for mistake does not include
trial errors from which relief must be sought either by direct
appeal, a motion for a new trial, or a motion for judgment
notwithstanding the verdict. See Hodgson v. Applegate, 31 N.J.
29, 35 (1959). The type of mistake entitled to relief under Rule
4:50-1(a) is one the parties could not have protected themselves
from during trial. DEG, LLC v. Twp. of Fairfield, 198 N.J. 242,
263 (2009) (citation omitted). Excusable neglect under Rule 4:50-
1(a) has been defined as excusable carelessness "attributable to
an honest mistake that is compatible with due diligence or
reasonable prudence." Deutsche Bank Nat'l Trust Co. v. Russo, 429
N.J. Super. 91, 98 (App. Div. 2012) (quoting Guillaume, supra, 209
N.J. at 468).
Defendants cannot use a Rule 4:50-1(a) motion to challenge
the judge's factual findings, and they failed to show there was a
mistake they could not have protected themselves from during trial
as well as excusable neglect. Defendants filed an answer, asserted
eleven affirmative defenses, appeared at trial, cross-examined
plaintiff's witness, and entered documents into evidence to
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dispute plaintiff's standing. Because defendants had a full
opportunity to protect themselves during trial, their claim for
relief under Rule 4:50-1(a) fails.
Relief pursuant to Rule 4:50-1(c) requires proof of "fraud,
. . . misrepresentation, or other misconduct." There is no such
proof here, and thus, defendants were not entitled to relief
pursuant to subsection (c).
Defendants were also not entitled to relief pursuant to Rule
4:50-1(d) because, even if plaintiff lacked standing, the
foreclosure judgment was "not 'void' within the meaning of"
subsection (d). Russo, supra, 429 N.J. Super. at 101. The
judgment is "voidable" unless the plaintiff has standing from
either possession of the note or an assignment of the mortgage
that predated the original complaint. Angeles, supra, 428 N.J.
Super. at 319-20. A plaintiff need not actually possess the
original note in order to have standing to file a foreclosure
complaint. Deutsche Bank Nat'l Trust Co. v. Mitchell, 422 N.J.
Super. 214, 255 (App. Div. 2011). A plaintiff can establish
standing as an assignee if it presents an authenticated assignment
of the note indicating that it was assigned the note before it
filed the complaint. Ibid. Here, plaintiff had both possession
of the original note and an assignment of the mortgage and note
9 A-5540-15T1
that predated the complaint. Accordingly, plaintiff had standing
to file the complaint in this matter.
Lastly, relief pursuant to Rule 4:50-1(f), "is available only
when 'truly exceptional circumstances are present.'" Hous. Auth.
of Morristown v. Little, 135 N.J. 274, 286 (1993) (quoting Baumann
v. Marinaro, 95 N.J. 380, 395 (1984)). "[I]n order to obtain
relief under this subsection, the movant must ordinarily show that
the circumstances are exceptional and that enforcement of the
order or judgment would be unjust, oppressive or inequitable."
Pressler & Verniero, Current N.J. Court Rules, comment 5.6.1 on
R. 4:50-1 (2018). "No categorization can be made of the situations
which would warrant redress under subsection (f). . . . [T]he very
essence of (f) is its capacity for relief in exceptional
situations. And in such exceptional cases its boundaries are as
expansive as the need to achieve equity and justice." DEG, supra,
198 N.J. at 269-70 (alteration in original) (quoting Court Inv.
Co. v. Perillo, 48 N.J. 334, 341 (1966)). There are no exceptional
circumstances in this case that warrant relief under subsection
(f).
Affirmed.
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