THE BANK OF NEW YORK MELLON, ETC. VS. JEFFREY L. DAVIS(F-027418-15, BURLINGTON 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NOT FOR PUBLICATION WITHOUT THE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-1006-16T1
THE BANK OF NEW YORK
MELLON, f/k/a THE BANK OF
NEW YORK, AS TRUSTEE
FOR THE BENEFIT OF THE
CERTIFICATEHOLDERS OF THE
CWABS, INC., ASSET-BACKED
CERTIFICATES, SERIES 2007-BC3,
Plaintiff-Respondent,
v.
JEFFREY L. DAVIS, MRS.
JEFFREY L. DAVIS, his wife,
ELISSA M. DAVIS, MRS. DAVIS,
husband of ELISSA M. DAVIS,
Defendants-Appellants,
and
STATE OF NEW JERSEY, UNITED
STATES OF AMERICA,
Defendants.
———————————————————————————————————
Argued September 26, 2017 – Decided October 16, 2017
Before Judges Hoffman and Mayer.
On appeal from Superior Court of New Jersey,
Chancery Division, Burlington County, Docket
No. F-027418-15.
Louis A. Simoni argued the cause for
appellants.
Brian J. Yoder argued the cause for respondent
(Phelan Hallinan Diamond & Jones, PC,
attorneys; Mr. Yoder, on the brief).
PER CURIAM
Defendants Jeffrey L. Davis and Elissa M. Davis appeal from
the April 29, 2016 Chancery Division order granting summary
judgment in favor of plaintiff on its foreclosure complaint, and
striking defendants' answer and counterclaim.1 Defendants seek
reversal, citing multiple genuine issues of material fact.
Following our review of the record, we vacate and remand.
I.
On March 26, 2007, defendants borrowed $347,000 from Decision
One Mortgage Company, LLC (Decision One) to refinance their home
in Mount Laurel, secured by a note and non-purchase money
mortgage.2 On April 1, 2010, defendants defaulted on the loan.
On November 9, 2011, MERS assigned the mortgage to plaintiff,
and on November 30, 2011, the Burlington County Clerk recorded the
1
Defendants also appeal from the final judgment entered on
September 26, 2016; however, our reversal of the grant of summary
judgment makes it unnecessary to address defendants' challenge to
the final judgment.
2
The mortgage named Mortgage Electronic Registration Systems, Inc.
(MERS) as the nominee for Decision One, its successors and assigns.
2 A-1006-16T1
assignment.3 On February 23, 2015, plaintiff mailed defendants a
notice of intent to foreclose. After defendants failed to cure
the default, plaintiff filed its foreclosure complaint on August
7, 2015.
On September 21, 2015, defendants filed an answer, which
included thirty-six affirmative defenses and a six-count
counterclaim. On October 26, 2015, plaintiff filed its answer to
defendants' counterclaim.
On March 24, 2016, plaintiff moved for summary judgment. In
support of its motion, plaintiff filed a certification signed by
Rebecca Anderson (the Anderson Certification) of Ditech Financial
LLC f/k/a Green Tree Servicing LLC (DiTech). In her capacity as
a "Document Execution Specialist" for Ditech, Anderson described
Ditech as "attorney[-]in[-]fact for" plaintiff and certified she
has "complete access and authorization to review [plaintiff's]
business records, including computer records, logs, loan account
and related business records for and relating to the borrower's
loan." Of note, the Anderson Certification provided no details
regarding the power of attorney document that authorized Ditech
to act as attorney-in-fact for plaintiff nor did plaintiff
otherwise provide a copy of the document with its motion papers.
3
The record lacks documentation evidencing the assignment's
recording.
3 A-1006-16T1
Defendants opposed plaintiff's motion on various grounds,
including the sufficiency of the Anderson Certification.
Defendants also challenged the validity of the assignment of
mortgage and note since plaintiff's predecessor in interest,
Decision One, went out of business in 2007, four years prior to
the assignment.
Following oral argument, the motion judge rejected
defendants' arguments, granting summary judgment in plaintiff's
favor and striking defendants' answer and counterclaim. In a
written opinion, the judge found plaintiff established the
material facts demonstrating its right to foreclose, namely: (1)
the Anderson Certification sufficiently established plaintiff
possessed the note prior to filing the foreclosure complaint; (2)
plaintiff properly served defendants a notice of intent to
foreclose; (3) and defendants defaulted under the note and
mortgage's terms. The judge also held defendants' "affirmative
defenses . . . are nothing more than conclusory arguments devoid
of any factual support or reference."
II.
We apply the same standard as the trial court when reviewing
the disposition of a motion for summary judgment. W.J.A. v. D.A.,
210 N.J. 229, 237 (2012). Summary judgment must be granted if
"the pleadings, depositions, answers to interrogatories and
4 A-1006-16T1
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact challenged
and that the moving party is entitled to a judgment or order as a
matter of law." R. 4:46-2(c). Without making credibility
determinations, the court considers the evidence "in the light
most favorable to the non-moving party" and determines whether it
would be "sufficient to permit a rational factfinder to resolve
the alleged disputed issue in favor of the non-moving party."
Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
In satisfying its burden, the non-moving party may not rest
upon mere allegations or denials in its pleading, but must produce
sufficient evidence to reasonably support a verdict in its favor.
R. 4:46-5(a); Triffin v. Am. Int'l Grp., Inc., 372 N.J. Super.
517, 523 (App. Div. 2004). It is against these standards that we
evaluate defendants' substantive arguments.
On appeal, defendants argue the motion record fails to
establish plaintiff's standing to foreclose, alleging deficiencies
in the Anderson Certification. Specifically, they emphasize that
plaintiff failed to provide basic information, such as the note's
physical location, as well as who transferred the physical loan
documents, and the date of transfer. Defendants further argue
plaintiff failed to establish authorization for the issuance of
the Anderson Certification because it failed to provide any
5 A-1006-16T1
confirming evidence of DiTech's authority to serve as is its
attorney-in-fact.
Plaintiff counters that Anderson had sufficient personal
knowledge to satisfy Rule 1:6-6 because she reviewed defendants'
loan file, which contained business records maintained during the
ordinary course of business, citing Wells Fargo Bank v. Ford, 418
N.J. Super. 592, 600 (App. Div. 2011) and N.J.R.E. 803(c)(6).
Furthermore, plaintiff states Anderson certified that plaintiff
acquired the note and mortgage in November 2011, prior to its
filing the foreclosure complaint, and because an endorsement in
blank permits the note to be transferred and negotiated by delivery
alone to a bearer, Bank of N.Y. v. Raftogianis, 418 N.J. Super.
323, 336 (Ch. Div. 2010), it demonstrated it was the holder of the
note and mortgage. In the alternative, plaintiff argues it also
satisfies the requirements of a "non-holder in possession with the
rights of a holder." See N.J.S.A. 12A:3-203(b).
In order to have standing to foreclose a mortgage, a party
"must own or control the underlying debt." Raftogianis, supra,418 N.J. Super. at 327-28. To establish such ownership or control,
plaintiff must present properly authenticated evidence that it is
the holder of the note or a non-holder in possession with rights
of the holder under N.J.S.A. 12A:3-301. Wells Fargo Bank, supra,418 N.J. Super. at 597-99. Transfer of possession must be
6 A-1006-16T1
"authenticated by an affidavit or certification based on personal
knowledge." Id. at 600; see also R. 1:6-6.
Following our review of the motion record, we conclude
plaintiff failed to establish, as a matter of law, that it acquired
ownership or control of the note to maintain the foreclosure
action. Most notably, plaintiff failed to produce a power of
attorney document evidencing its legal relationship with DiTech.
See N.J.S.A. 46:2B-8.9 ("A power of attorney must be in writing,
duly signed and acknowledged in the manner set forth in [N.J.S.A.]
46:14-2.1."). Furthermore, the Anderson Certification failed to
identify the note's physical location or state details concerning
the note's physical delivery. See e.g., Raftogianis, supra, 418
N.J. Super. at 330-32 (describing how, in the absence of proof
that one is a note holder, a transferee could still "have the
right to enforce the note" through physical delivery).4
Moreover, plaintiff failed to properly authenticate the
documents it relied upon to establish its status as a holder. A
certification will support the grant of summary judgment only if
4
Because Decision One, as the payee of defendant's note, was a
holder, and it allegedly transferred the note to plaintiff without
an indorsement, plaintiff may have acquired the status of a
nonholder in possession of the note with the status of a holder.
See Wells Fargo Bank, supra, 418 N.J. Super. at 599 (citing 6B
Anderson on the Uniform Commercial Code §§ 3-203:4R, 5R, 9R, 10R,
11R (Lawrence ed., 3d ed. 2003)).
7 A-1006-16T1
the material facts alleged therein are based, as required by Rule
1:6-6, on "personal knowledge." See Claypotch v. Heller, Inc.,
360 N.J. Super. 472, 489 (App. Div. 2003). Anderson's
certification does not allege she has personal knowledge that
plaintiff is the holder and owner of the note, and has possessed
the original note and mortgage since April 23, 2014. Instead, the
basis of her certification is "my personal review of the
[p]laintiff's relevant business records," without identifying
those records or how she acquired knowledge of plaintiff's record-
keeping practices. The certification also does not indicate the
source of Anderson's alleged knowledge that "all of the documents
included" in plaintiff's summary judgment motion are "true and
correct copies," except to generally reference "my personal review
of the business records."
Like Wells Fargo Bank, here "the purported assignment of the
mortgage, which an assignee must produce to maintain a foreclosure
action, see N.J.S.A. 46:9-9, was not authenticated in any manner;"
rather, it was attached to plaintiff's motion. The trial court
should not have considered this document unless it was
authenticated by an affidavit or certification based on personal
knowledge. See Celino v. Gen. Accident Ins., 211 N.J. Super. 538,
544 (App. Div. 1986). As noted, the assignment was not made by
Decision One, as payee of the promissory notes secured by the
8 A-1006-16T1
mortgage, but rather by MERS, "as nominee for Decision One."
Although the mortgage appointed MERS as plaintiff's nominee, the
record contains evidence that Decision One ceased operating in
2007, long before the purported assignment of defendant's mortgage
on November 9, 2011. Therefore, we question whether Decision
One's designation of MERS as its nominee remained in effect after
it ceased operations. On remand, the trial court should address
the question of whether MERS remained the nominee of Decision One
or its successor as of the date of its purported assignment of
defendant's note and mortgage to plaintiff.
Because plaintiff did not establish its standing to pursue
this foreclosure action by competent evidence, we vacate the order
granting summary judgment to plaintiff and remand the case to the
trial court. On remand, defendants may conduct appropriate
discovery, including taking the deposition of Anderson and
Dominique Johnson, the person who purported to assign the mortgage
to plaintiff on behalf of MERS.
Accordingly, we vacate the summary judgment entered in favor
of plaintiff and remand to the trial court for further proceedings
in conformity with this opinion. We do not retain jurisdiction.
9 A-1006-16T1