LASALLE BANK N.A., ETC. VS. KELLEY A. SPEAR(F-017220-08, ESSEX COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-5377-15T1
LASALLE BANK N.A. AS TRUSTEE
FOR THE MLMI TRUST SERIES 2006-AHL1,
Plaintiff-Respondent,
v.
KELLEY A. SPEAR,
Defendant-Appellant,
and
WILLIAM R. SPEAR and
RJM ACQUISITIONS LLC,
Defendants.
Submitted September 26, 2017 – Decided October 5, 2017
Before Judges Carroll and Mawla.
On appeal from the Superior Court of New
Jersey, Chancery Division, Essex County,
Docket No. F-017220-08.
Kelley A. Spear, appellant pro se.
Sandelands Eyet LLP, attorneys for respondent
(Kathleen Cavanaugh, of counsel and on the
brief).
PER CURIAM
Defendant Kelley A. Spear appeals from a June 28, 2016 order
denying her motion to vacate a March 15, 2016 amended final
judgment of foreclosure entered in plaintiff's favor. We affirm.
The record reveals that, in January 2006, defendant borrowed
$225,000 from Accredited Home Lenders, Inc. Repayment was secured
by a mortgage, which was recorded the following month. Defendant
defaulted by failing to make the monthly payment due on January
1, 2008, and all payments that came due thereafter.
Plaintiff filed a foreclosure complaint on May 1, 2008, and
an amended complaint on August 18, 2008. Defendant did not file
a responsive pleading, and default was entered against her on
February 10, 2009, followed by entry of a final judgment of
foreclosure on January 5, 2010. Defendant then filed a motion to
vacate the default judgment on February 24, 2011, which Judge
Kenneth S. Levy denied on June 17, 2011.
On February 9, 2016, plaintiff moved for entry of an amended
final judgment to update the amount due. Plaintiff's motion was
granted, and an amended final judgment of foreclosure was entered
on March 15, 2016. On April 19, 2016, defendant filed a motion
to vacate the amended final judgment, pursuant to Rule 4:50-1(a),
(d), and (f), on the basis that plaintiff lacked standing to seek
foreclosure. Judge Walter Koprowski, Jr., denied defendant's
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motion on June 28, 2016. In his accompanying written statement
of reasons, the judge found that "[d]efendant admitted her failure
to answer the foreclosure [complaint] at her own peril, thus,
there is no excusable neglect here." The judge also found that
Judge Levy had previously rejected defendant's argument that
plaintiff lacked standing to foreclose when he denied her first
motion to vacate final judgment in June 2011.
On appeal, defendant renews her argument that plaintiff
failed to establish that it was the holder of the note when it
initiated the foreclosure action and hence lacked standing to
foreclose. Defendant continues to seek relief from the final
judgment of foreclosure pursuant to Rule 4:50-1 on this basis.
Based on our review of the record and applicable law, we are not
persuaded by defendant's argument.
Our standard of review is well-settled. As the Court noted
in US Bank National Ass'n v. Guillaume, 209 N.J. 449, 467 (2012),
a "party seeking to vacate [a default] judgment" in a foreclosure
action must satisfy Rule 4:50-1, which states in pertinent part
that
[o]n motion, with briefs, and upon such terms
as are just, the court may relieve a party or
the party's legal representative from a final
judgment or order for the following reasons:
(a) mistake, inadvertence, surprise, or
excusable neglect; . . . (d) the judgment or
order is void; . . . or (f) any other reason
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justifying relief from the operation of the
judgment or order.
"The rule is 'designed to reconcile the strong interests in
finality of judgments and judicial efficiency with the equitable
notion that courts should have authority to avoid an unjust result
in any given case.'" Ibid. (quoting Mancini v. EDS, 132 N.J. 330,
334 (1993)).
We afford "substantial deference" to the trial judge and
reverse only if the judge's determination amounts to a clear abuse
of discretion. Ibid. An abuse of discretion is "when a decision
is made without a rational explanation, inexplicably departed from
established policies, or rested on an impermissible basis." Ibid.
In support of the motion to vacate, defendant relied on
subsections (a), (d), and (f) of Rule 4:50-1. We conclude that
defendant has not demonstrated that she is entitled to relief
under any of these sections. As such, the judge did not abuse his
discretion.
Regarding her Rule 4:50-1(a) contention, defendant has not
demonstrated excusable neglect and a meritorious defense as
required under this section of the rule and case law. See
Guillaume, supra, 209 N.J. at 469. "'Excusable neglect' may be
found when the default was 'attributable to an honest mistake that
is compatible with due diligence or reasonable prudence.'"
Guillaume, supra, 209 N.J. at 468 (quoting Mancini, supra, 132
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N.J. at 335). Such was clearly not the case here, as Judge
Koprowski correctly determined.
Furthermore, we reject defendant's reliance on subsection (d)
because defendant is unable to show, on the merits, that she is
entitled to a vacation of the judgment. "A Rule 4:50-1(d) motion,
based on a claim that the judgment is void, does not require a
showing of excusable neglect but must be filed within a reasonable
time after entry of the judgment." Deutsche Bank Nat'l Trust Co.
v. Russo, 429 N.J. Super. 91, 98 (App. Div. 2012) (citing R.
4:50-2). Under certain circumstances, "equitable considerations
may justify a court in rejecting a foreclosure defendant's belated
attempt to raise as a defense the plaintiff's lack of standing[.]"
Id. at 99-100. Such is the case here.
We stated in Deutsche Bank Trust Co. Americas v. Angeles, 428
N.J. Super. 315, 320 (App. Div. 2012), that "[i]n foreclosure
matters, equity must be applied to plaintiffs as well as
defendants." In Russo, supra, 429 N.J. Super. at 101, we held
based on Guillaume and Angeles, that "even if [the] plaintiff did
not have the note or a valid assignment when it filed the
complaint, but obtained either or both before entry of judgment,
dismissal of the complaint would not have been an appropriate
remedy [] because of [the] defendants' unexcused, years-long delay
in asserting that defense." In Russo, defendants challenged
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plaintiff's standing to file the foreclosure complaint because it
did not take an assignment of the mortgage until after the
complaint was filed. Id. at 96. We concluded, "in this post-
judgment context, lack of standing would not constitute a
meritorious defense to the foreclosure complaint." Id. at 101.
"[S]tanding is not a jurisdictional issue in our State court system
and, therefore, a foreclosure judgment obtained by a party that
lacked standing is not 'void' within the meaning of Rule
4:50-1(d)." Ibid.
Finally, we disagree that Rule 4:50-1(f) justifies vacation
of the judgment. Subsection (f) permits a judge to vacate a
default judgment for "any other reason justifying relief from the
operation of the judgment or order," and "is available only when
'truly exceptional circumstances are present.'" Guillaume, supra,
209 N.J. at 484 (quoting Hous. Auth. of Morristown v. Little, 135
N.J. 274, 286 (1994)). The applicability of this subsection is
limited to "situations in which, were it not applied, a grave
injustice would occur." Ibid. As plaintiff points out, defendant
has made no mortgage or tax payment since 2007. On this record,
defendant has not shown any such "exceptional circumstances" that
would warrant relief under subsection (f), or any other section
of the rule.
Affirmed.
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