THE BANK OF NEW YORK MELLON, ETC. VS. JANET FONTANA (F-027513-17, BERGEN COUNTY AND STATEWIDE) ( 2020 )

NOT FOR PUBLICATION WITHOUT THE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-2924-18T3
THE BANK OF NEW YORK
MELLON, f/k/a THE BANK
OF NEW YORK, AS TRUSTEE
FOR THE CERTIFICATE
HOLDERS CWALT, INC.,
ALTERNATIVE LOAN TRUST
2004-14T2, MORTGAGE PASS-
THROUGH CERTIFICATES,
SERIES 2004-14T2,
Plaintiff-Respondent,
v.
JANET FONTANA and FRANCIS
S. CUTRUZZULA, w/h, each of
their heirs, devisees, and his, her,
their or any of their successors in
right, title and interest,
Defendants-Appellants,
and
UNITED STATES OF AMERICA
and INFINITI BUSINESS
PRODUCTS CORP.,
Defendants.
___________________________
Submitted December 3, 2019 – Decided January 2, 2020
Before Judges Hoffman and Currier.
On appeal from the Superior Court of New Jersey,
Chancery Division, Bergen County, Docket No.
F-027513-17.
Hinman, Howard & Kattell, LLP, attorneys for
appellants (Kevin J. Bloom, on the brief).
KML Law Group, PC, attorneys for respondent (Ujala
Aftab, on the brief).
PER CURIAM
Defendants Janet Fontana and Francis Cutruzzula appeal from an August 24,
2018 Chancery Division order denying their motion to vacate default. We affirm.
On March 12, 2003, Fontana executed a note in favor of Countrywide Home
Loans (Countrywide) in the principal amount of $640,000.00.1 The note required
Fontana to pay monthly installments of $4331.80, with a December 1, 2033 maturity
date. Fontana's obligation under the note was secured by a mortgage in favor of
Countrywide. The mortgage was recorded in the Bergen County Clerk's office.
1
On May 8, 2019, in the final judgment for foreclosure, the court ordered the
mortgage reformed to include Fontana's husband, Cutruzzula.
A-2924-18T3
2
In November 2003, Countrywide assigned the mortgage to the Bank of New
York (BNY). The assignment of mortgage was recorded on May 10, 2005 in the
Bergen County Clerk's office. On August 1, 2009, Fontana defaulted under the terms
of the note and mortgage by failing to make a required payment. On June 9, 2009,
BNY assigned the mortgage to the Bank of New York Mellon (Mellon).
On December 8, 2017, Mellon filed a foreclosure complaint against
defendants.2 On December 12, 2017, Mellon served defendants with the complaint.
Defendants never filed a responsive pleading. On February 23, 2018, Mellon filed
a request to enter default, which the court entered on March 2, 2018. On August 1,
2018, defendants filed a motion to vacate default, which Mellon opposed.
On August 24, 2018, the motion judge denied defendants' motion and issued
a written opinion setting forth the reasons for her decision. The judge found Mellon
adequately served defendants, who unsuccessfully explained why they did not
respond for "almost five months after default was entered." Defendants attempted
to explain their inaction by arguing there was "confusion as to why the instant
foreclosure proceeding was initiated after [Mellon] voluntarily dismissed an earlier
2
Two prior foreclosure actions against defendants were dismissed without
prejudice on September 13, 2013 and October 12, 2016.
A-2924-18T3
3
foreclosure proceeding without prejudice." The judge rejected defendants'
explanation and ruled they failed to demonstrate good cause.
I
We review the denial of a motion to vacate default based on an abuse of
discretion standard. See U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467
(2012). Pursuant to Rule 4:43-3, we may vacate the entry of default upon "good
cause shown." "[T]he requirements for setting aside a default under Rule 4:43-3 are
less stringent than . . . those for setting aside an entry of default judgment under Rule
4:50-1." N.J. Mfrs. Ins. Co. v. Prestige Health Grp., LLC, 406 N.J. Super. 354, 360
(App. Div. 2009). "[G]ood cause . . . requires the exercise of sound discretion by
the court in light of the facts and circumstances of the particular case." O'Connor v.
Altus, 67 N.J. 106, 129 (1975) (citation omitted).
In considering whether good cause exists, we generally consider the movant's
"absence of any contumacious conduct" and the presence of a meritorious defense.
Ibid. In particular, "the showing of a meritorious defense is a traditional element
necessary for setting aside both a default and a default judgment . . . ." Pressler &
Verniero, Current N.J. Court Rules, cmt. on R. 4:43-3 (2019). As with a motion to
vacate a default judgment, there is no point in setting aside an entry of default if the
defendant has no meritorious defense. "The time of the courts, counsel and litigants
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should not be taken up by such a futile proceeding." Guillaume, 209 N.J. at 469
(citation omitted). We have previously noted:
This is especially so in a foreclosure case where the mere
denominating of the matter as a contested case moves it
from the expeditious disposition by the Office of
Foreclosure in the Administrative Office of the Courts, R.
1:34-6 and R. 4:64-1(a), to a more protracted treatment by
the Chancery Division providing discovery and raising
other problems associated with trial calendars. If there is
no bona fide contest, a secured creditor should have
prompt recourse to its collateral.
[Trs. of Local 478 Trucking & Allied Indus. Pension Fund
v. Baron Holding Corp., 224 N.J. Super. 485, 489 (App.
Div. 1988).]
In a foreclosure action, a meritorious defense must challenge the validity of
the mortgage, the amount due thereon, or the right of the plaintiff to foreclose. See
Joan Ryno, Inc. v. First Nat'l Bank of S. Jersey, 208 N.J. Super. 562, 570 (App. Div.
1986); Great Falls Bank v. Pardo, 263 N.J. Super. 388, 394 (Ch. Div. 1993).
In order to have standing to foreclose, a party "must own or control the
underlying debt." Deutsche Bank Nat'l Tr. Co. v. Mitchell, 422 N.J. Super. 214, 222
(App. Div. 2011) (quoting Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592,
597 (App. Div. 2011)). Absent "a showing of such ownership or control, [a] plaintiff
lacks standing to proceed with the foreclosure action and the complaint must be
dismissed." Ibid. (quoting Ford, 418 N.J. Super. at 597).
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An assignee can establish standing to foreclose by presenting a properly
"authenticated assignment indicating that it was assigned the note before it filed the
original complaint." Id. at 225. Therefore, a plaintiff has the right to pursue
foreclosure if it had "either possession of the note or an assignment of the mortgage
that predated the original complaint." Deutsche Bank Tr. Co. Ams. v. Angeles, 428
N.J. Super. 315, 318 (App. Div. 2012).
The motion judge found defendants conceded they had adequate notice of the
foreclosure action and therefore had the burden of showing good cause. The judge
ruled defendants presented an inadequate defense because they simply alleged they
were confused why Mellon filed the current proceeding against them, after filing
two prior suits that were dismissed without prejudice. The judge rejected that
argument and found defendants failed to show good cause because they did not set
forth specific facts supporting a meritorious defense.
Defendants failed to explain how the without-prejudice dismissal of Mellon's
previous complaints constitutes a viable defense; instead, they simply argue that
policy considerations demand the granting of their motion. Mellon filed two
separate foreclosure actions that were dismissed without prejudice in 2013 and 2016.
Nonetheless, defendant had a legal obligation to answer Mellon's 2017 complaint.
A-2924-18T3
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Defendants also argued the previous foreclosure actions Mellon filed did not
stem from the same default dates to support their defense of confusion. However,
defendants simply may have defaulted on multiple different dates. Importantly,
defendants do not contest that they defaulted in August 2009, which is the date of
the current foreclosure action. Therefore, we find this argument meritless because
defendants still defaulted in the current suit filed against them and failed to oppose
the complaint in a timely manner.
Lastly, defendants assert they sought to challenge whether Mellon was the
actual holder of the note and mortgage, which is essentially a standing argument.
The record defendants provided indicates NYB transferred the note and mortgage to
Mellon on June 9, 2009. Therefore, Mellon proved it had standing because it filed
the action under review on December 18, 2017, after it came into possession of the
note. Angeles, 428 N.J. Super. at 318. Defendants failed to set forth any specific
facts as to why Mellon is not the holder of the note and mortgage.
In summary, we conclude defendants failed to advance a meritorious defense
to the foreclosure complaint in accordance with Rules 1:6-6 and 4:43-3.
Accordingly, the motion judge properly exercised her discretion in denying
defendants relief.
Affirmed.
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