ATHENE ANNUITY & LIFE ASSURANCE COMPANY VS. SERGIO HENRIQUES CUNHA (F-003789-19, UNION COUNTY AND STATEWIDE) ( 2021 )


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  •                                 NOT FOR PUBLICATION WITHOUT THE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-0340-20
    ATHENE ANNUITY & LIFE
    ASSURANCE COMPANY,
    Plaintiff-Respondent,
    v.
    SERGIO HENRIQUES CUNHA,
    PAWNEE LEASING
    CORPORATION, and
    MIDLAND FUNDING, LLC,
    Defendants,
    and
    SONIA GONCALVES
    CARVALHO-CUNHA,
    Defendant-Appellant.
    ___________________________
    Submitted September 29, 2021 – Decided October 18, 2021
    Before Judges Whipple, Geiger and Susswein.
    On appeal from the Superior Court of New Jersey,
    Chancery Division, Union County, Docket No. F-
    003789-19.
    Sonia Goncalves Carvalho-Cunha, appellant pro se.
    Zeichner Ellman & Krause, LLP, attorneys for
    respondent (Kerry A. Duffy and BJ Finneran, on the
    brief).
    PER CURIAM
    Defendant Sonia Goncalves Carvalho-Cunha (Sonia)1 appeals from an
    August 7, 2020 Chancery Division order denying defendants' motion to vacate
    the final judgment entered in this residential mortgage foreclosure action.
    We briefly recount the pertinent underlying facts. On May 6, 2008,
    defendant Sergio Henriques Cunha executed a note in favor of CitiMortgage,
    Inc. for $348,750, secured by a mortgage in favor of Mortgage Electronic
    Registration Systems, Inc. (MERS), as nominee for CitiMortgage, Inc., its
    successors and assigns, on residential property located in Union (the property).
    The mortgage was assigned multiple times, with each assignment recorded
    in the Union County Clerk's Office. On September 15, 2010 MERS assigned
    the mortgage to CitiMortgage, Inc. On June 10, 2011, CitiMortgage assigned
    the mortgage to NationStar Mortgage, LLC. On October 1, 2012, the note and
    1
    Because defendant Sonia Goncalves Carvalho-Cunha shares the same surname
    with her husband, defendant Sergio Henriques Cunha, we will refer to her by
    her first name in this opinion to avoid confusion. We intend no disrespect by
    doing so. We refer to them collectively as defendants.
    A-0340-20
    2
    mortgage were modified by a Loan Modification Agreement that increased the
    principal balance to $483,132.63, which was also recorded.
    On October 11, 2017, NationStar assigned the mortgage to Federal
    National Mortgage Association (FNMA). That same day, FNMA assigned the
    mortgage to plaintiff Athene Annuity & Life Assurance Company (Athene).
    Defendants defaulted on the loan installment due on January 1, 2018, and
    all payments thereafter. On June 7, 2018, Athene, through Select Portfolio
    Servicing, Inc., served defendants with a Notice of Intention to Foreclose (NOI)
    by certified mail addressed to defendants' address.
    On December 12, 2018, Athene assigned the mortgage to AADE RML,
    LLC (AADE). On February 25, 2019, AADE filed this foreclosure action. In
    May 2019, AADE applied for the entry of default against all defendants. On
    June 21, 2019, AADE assigned the mortgage back to Athene. In October 2019,
    Athene was substituted as plaintiff by court order.
    On October 18, 2019, Athene filed a motion for final judgment.
    Defendants did not oppose the motion. On November 14, 2019, final judgment
    was entered against defendants. In January 2020, Athene served the notice of
    the Sheriff's sale on defendants by certified and regular mail.
    A-0340-20
    3
    On July 7, 2020, defendants filed a motion to vacate the final judgment.
    On August 7, 2020, Judge Joseph P. Perfilio issued an order and accompanying
    written statement of reasons denying the motion. This appeal followed.
    Appellant raises the following point for our consideration:
    THE APPELLATE DIVISION MUST DECIDE
    WHETHER [THE] TRIAL [COURT] ERRED OR THE
    COURT'S DETERMINATION WAS AN ABUSE OF
    DISCRETION[] IN DENYING DEFENDANT[S']
    RIGHTS UPON [HER] MOTION TO VACATE A
    JUDGMENT SEEKING RELIEF PURSUANT TO
    RULE   4:50-1(f), WHERE   DEFENDANT['S]
    WRITTEN ARGUMENTS PRESENTED FACT[S] OF
    RECORD TO JUSTIFY VACATING THE FINAL
    JUDGMENT UNDER . . . RULE 4:50-1(a), (d)[,]
    INCLUDING SUBSECTION (f).
    Sonia first argues that service of the NOI did not comply with the Fair
    Foreclosure Act, N.J.S.A. 2A:50-53 to -68, and service of the summons and
    complaint were improper under Rules 4:4-4(a) and 4:4-5(b). Second, Sonia
    argues that Athene did not have standing to foreclose because it was not the
    original holder of the note and mortgage, nor can it show a valid chain of title
    establishing that it was the final controller of the note.
    We find no merit in Sonia's arguments and affirm substantially for the
    reasons expressed by Judge Perfilio in his comprehensive and thoughtful written
    statement of reasons. We add the following comments.
    A-0340-20
    4
    We review the denial of a motion to vacate default judgment for abuse of
    discretion. Deutsche Bank Nat'l Trust Co. v. Russo, 
    429 N.J. Super. 91
    , 98
    (App. Div. 2012), citing U.S. Bank Nat. Ass'n v. Guillaume, 
    209 N.J. 449
    , 467
    (2012). See also U.S. Bank Nat'l Ass'n v. Curico, 
    444 N.J. Super. 94
    , 105 (App.
    Div. 2016) ("The decision whether to grant such a motion is left to the sound
    discretion of the trial court."). The trial court's decision is afforded "substantial
    deference" and the abuse of discretion must be clear to warrant reversal. Russo,
    429 N.J. Super at 98 (citing DEG, LLC v. Twp. of Fairfield, 
    198 N.J. 242
    , 261
    (2009)). An abuse of discretion occurs when a decision is made "without a
    rational explanation, inexplicably departed from established policies, or rested
    on an impermissible basis." Iliadis v. Wal-Mart Stores, Inc., 
    191 N.J. 88
    , 123
    (2007) (quoting Flagg v. Essex Cnty. Prosecutor, 
    171 N.J. 561
    , 571 (2002)).
    N.J.S.A. 2A:50-56 requires a mortgage lender to provide written notice to
    the residential debtor of its intention to commence a foreclosure action,
    including notice of the right to cure the default, "at least 30 days, but not more
    than 180 days, in advance of such action . . . ." Where the NOI does not comply
    with the act, a trial court "may dismiss the action without prejudice, order the
    service of a corrected notice, or impose another remedy appropriate to the
    circumstances of the case." Guillaume, 
    209 N.J. at 476
    .
    A-0340-20
    5
    Rule 4:4-4(a)(1) permits service of process "by delivering a copy of the
    summons and complaint to the individual personally, or by leaving a copy
    thereof at the individual's dwelling place or usual place of abode with a
    competent member of the household of the age of 14 or over . . . residing therein
    . . . ." Where there has been "a substantial deviation from service of process
    rules . . . casting reasonable doubt on proper notice" this will generally render a
    default judgment void under the meaning of Rule 4:50-1(d). Jameson v. Great
    Atl. & Pac. Tea Co., 
    363 N.J. Super. 419
    , 425 (App. Div. 2003). "If defective
    service renders the judgment void, a meritorious defense is not required to
    vacate the judgment under [Rule] 4:50-1(d)." 
    Ibid.
    A return of service consistent with Rule 4:4-4(a) "raises a presumption
    that the facts recited therein are true." Resol. Trust Corp. v. Associated Gulf
    Contractors, Inc., 
    263 N.J. Super. 332
    , 343 (App. Div. 1993) (quoting Garley v.
    Waddington, 
    177 N.J. Super. 173
    , 180 (App. Div. 1981)); see also Jameson, 
    363 N.J. Super. at 426-27
     (same). The presumption can be rebutted with clear and
    convincing evidence that the return is false. Resol. Trust Corp., 263 N.J. Super
    at 344. Where there is "evidence 'tending to disprove' the presumed fact, the
    presumption disappears." Jameson, 363 N.J. Super at 427 (quoting Ahn v. Kim,
    
    145 N.J. 423
    , 439 (1996)).       However, uncorroborated testimony from the
    A-0340-20
    6
    defendants alone is not enough to rebut the presumption. 
    Ibid.
     (citing Garley,
    
    177 N.J. Super. at 181
    ).
    Judge Perfilio found that Athene complied with N.J.S.A. 2A:50-53 by
    properly serving the NOI on defendants. He also found that defendants were
    properly served with the summons and complaint. The record fully supports
    those findings.
    The address used for service of the NOI, summons and complaint, the
    entry of default, and motions on Sonia and her husband matches the address
    listed on the note and mortgage. Athene provided affidavits of personal service
    of the complaint and summons on both Sonia and her husband. Athene also
    provided certificates of service of the entry of default and UPS tracking
    information for service of the notice of motion for final judgment. There is no
    evidence that Sonia or her husband changed their address at any time during
    litigation.
    Judge Perfilio found "no real discrepancy with the descriptions in the
    Affidavits of Service [of the NOI]" compared to defendants' drivers licenses,
    and that there was sufficient tracking information demonstrating that the notice
    to enter default and notice to enter final judgment were also served on
    defendants. The minor difference in the descriptions set forth in the affidavits
    A-0340-20
    7
    of service compared to defendants' licenses is not clear and convincing evidence
    that defendants were not properly served.
    "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." Inv. Bank v. Torres, 
    457 N.J. Super. 53
    , 65
    (App. Div. 2018) (quoting Great Falls Bank v. Pardo, 
    263 N.J. Super. 388
    , 394
    (Ch. Div. 1993), aff'd, 
    273 N.J. Super. 542
     (App. Div. 1994)). The record
    demonstrates that a series of recorded assignments of the mortgage established
    a clear chain of title to Athene, which clearly had standing to foreclose.
    Under Rule 4:50-1(a), "[a] defendant seeking to set aside a default
    judgment must establish that his failure to answer was due to excusable neglect
    and that he has a meritorious defense." Russo, 429 N.J. Super. at 98 (citing
    Goldhaber v. Kohlenberg, 
    395 N.J. Super. 380
    , 391 (App. Div. 2007)).
    Excusable neglect may be found if a party's default was due to "an honest
    mistake that is compatible with due diligence or reasonable prudence." 
    Ibid.
    (citing Guillaume, 
    209 N.J. at 468
    ).        Sonia has not shown that she has a
    meritorious defense.
    "A Rule 4:50-1(d) motion, based on a claim that a judgment is void, does
    not require a showing of excusable neglect but must be filed within a reasonable
    A-0340-20
    8
    time after entry of the judgment." Russo, 429 N.J. Super. at 98. See also R.
    4:50-2 (same). A reasonable time can be less than a year and must be determined
    on a case-by-case basis. Orner v. Liu, 
    419 N.J. Super. 431
    , 437-38 (App. Div.
    2011). When there is a long delay in filing, New Jersey courts will hold that the
    motion to vacate was not filed within a reasonable time. See 
    id. at 433
     (364-day
    delay in filing motion to vacate was unreasonable); Jackson Constr. Co. v.
    Ocean, 
    3 N.J. Tax 296
    , 310 (Tax Ct. 1981) (waiting seven months to move to
    vacate the judgment found unreasonable). Similarly, Federal Rule of Civil
    Procedure 60(b), which is essentially identical to Rules 4:50-1 and -2, has been
    interpreted as requiring the motion to be filed with a reasonable time, with
    delays of less than one year being held unreasonable.2 See, e.g., McLawhorn v.
    John W. Daniel & Co., 
    924 F.2d 535
    , 538 (4th Cir. 1991) (three-and-one-half-
    month delay); Kagan v. Caterpillar Tractor Co., 
    795 F.2d 601
    , 610-12 (7th Cir.
    1986) (approximately four-month delay); Security Mut. Cas. Co. v. Century Cas.
    Co., 
    621 F.2d 1062
    , 1068 (10th Cir. 1980) (three-month delay).             Here,
    defendants did not move to vacate the judgment within a reasonable time. They
    inexplicably waited more than seven months to do so.
    2
    We often look to federal decisions when interpreting our own similar court
    rules. Orner, 
    419 N.J. Super. at 438 n.9
    .
    A-0340-20
    9
    Moreover, under certain circumstances, "equitable considerations may
    justify a court in rejecting a foreclosure defendant's belated attempt to raise as a
    defense plaintiff's lack of standing . . . ." Russo, 429 N.J. Super. at 99-100. An
    unexcused, lengthy delay in asserting the defense of lack of standing post-
    judgment, coupled with Athene's legal right to enforce the note at the time final
    judgment was entered, "would not constitute a meritorious defense to the
    foreclosure complaint." Id. at 101. That is precisely what occurred in this
    matter. The judgment is not "void" within the meaning of Rule 4:50-1(d). Ibid.
    Lastly, Rule 4:50-1(f) permits the vacating of a judgment "any other
    reason justifying relief from the operation of the judgment or order." Due to the
    importance attached to the finality of judgments, to sustain a motion under Rule
    4:50-1(f) the movant must show that extraordinary conditions existed
    warranting a vacation of judgment. Guillaume, 
    209 N.J. at 484
    . "[R]elief under
    subsection (f) is available only when 'truly exceptional circumstances are
    present.'" In re Guardianship of J.N.H., 
    172 N.J. 440
    , 473 (2002) (quoting
    Housing Auth. v. Little, 
    135 N.J. 274
    , 283 (1994)). Sonia has not demonstrated
    any extraordinary circumstances that would justify relief from the final
    judgment under Rule 4:50-1(f).
    A-0340-20
    10
    For these reasons, we discern no abuse of discretion by the trial court.
    Defendants' motion to vacate the final judgment was properly denied.
    Affirmed.
    A-0340-20
    11