NATIONSTAR MORTGAGE, LLC VS. FARAH YUCEYUKSEL DONTAS(F-47496-09, MORRIS 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NOT FOR PUBLICATION WITHOUT THE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-2217-14T2
NATIONSTAR MORTGAGE, LLC,
Plaintiff-Respondent,
v.
FARAH YUCEYUKSEL DONTAS,
Defendant-Appellant,
and
FARAH YUCEYUKSEL DONTAS, her heirs, devisees
and personal representatives, and her, his,
their or any of their successors in right, title
and interest; ERKAN S. YUCEYUKSEL, his heirs,
devisees and personal representatives, and his,
her, their or any of their successors in right,
title and interest; MRS. ERKAN S. YUCEYUKSEL;
TOWNSHIP OF PARSIPPANY-TROY HILLS; and PNC BANK,
Defendants.
________________________________
Submitted January 9, 2017 – Decided September 6, 2017
Before Judges Nugent and Currier.
On appeal from Superior Court of New Jersey,
Chancery Division, Morris County, Docket No.
F-47496-09.
Joseph A. Chang & Associates, LLC, attorneys
for appellant (Mr. Chang, of counsel and on
the brief; Jeffrey Zajac, on the brief).
Ballard Spahr, LLP, attorneys for respondent
(Martin C. Bryce, Jr. and William J. DeSantis,
on the brief).
PER CURIAM
This is a residential mortgage foreclosure action. Defendant
Farah Yucekyuksel Dontas appeals from orders denying her motion
to vacate a default and entering the final foreclosure judgment.
For the reasons that follow, we affirm.
In 2001, defendant purchased her Parsippany home and executed
an adjustable rate mortgage with ten percent interest. Four years
later, on December 7, 2005, she refinanced, executed a note to
Lehman Brothers Bank, FSB, and executed a thirty-year fixed rate
mortgage with six percent interest. The mortgagee was Mortgage
Electronic Registration System, Inc. ("MERS"), as nominee for
Lehman Brothers Bank.1 According to defendant, her mortgage broker
– referred by the loan officer from whom defendant obtained the
original loan – assured defendant refinancing was her "best
option." Defendant also asserts she obtained the refinancing
without providing any documentation. Defendant acknowledges she
received paperwork for the refinancing, but denies she was notified
1
The mortgage was duly recorded in the Morris County Clerk's
Office.
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of her right to reject the loan within three days of completing
the paperwork.
Defendant defaulted on the loan on March 1, 2009. Thereafter,
she contacted Aurora Loan Services, LLC ("Aurora") to inquire
about a mortgage modification under the Federal Home Affordable
Modification Program ("HAMP").
On August 24, 2009, MERS assigned defendant's mortgage to
Aurora. Aurora filed a foreclosure complaint on August 31, 2009,
alleging defendant had been in default since April 1, 2009. When
defendant failed to answer or otherwise plead to the complaint,
Aurora filed a request and certification of default on April 8,
2010. Aurora mailed a copy of the request and certification of
default to defendant four days before filing it.
Thereafter, Aurora placed defendant on two consecutive six-
month trial payment plans for mortgage modification, but
ultimately denied her request for permanent modification, claiming
she submitted deficient documents. Defendant maintains she paid
Aurora during each trial program, from April 2010 through June
2011.
On June 25, 2012, Aurora assigned defendant's mortgage to
Nationstar Mortgage ("Nationstar"). Neither party took any
further action until May 3, 2013, when defendant filed a motion
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to vacate the entry of default and requested leave to file an
answer out of time.
On June 21, 2013, the court held oral argument and determined
defendant received notice of Aurora's intent to foreclose, Aurora
had no obligation to grant defendant a mortgage modification, and
Aurora held the note at the time it filed the foreclosure action.
Accordingly, the court denied defendant's motion on the basis that
she lacked "any type of real meritorious defense." The court
finalized its decision in an order.
On January 16, 2014, the court entered an order substituting
Nationstar as plaintiff. Nationstar filed a notice of motion for
final judgment on November 5, 2014, and the court entered a final
judgment of foreclosure on December 8, 2014, from which defendant
now appeals.
On appeal, defendant argues the trial court erred in denying
her motion to vacate the default because her conduct was not
contumacious and she "possessed a meritorious defense worthy of
judicial determination." The primary dispute on appeal is whether
defendant possessed a meritorious defense.
Defendant contends she possessed several meritorious
defenses. First, she contends she had a viable claim under the
Consumer Fraud Act ("CFA"), N.J.S.A. 56:8-2 to -204, based on a
theory of predatory lending. Next, she asserts violations of
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HAMP, 12 U.S.C. § 5201-5261 (2008), can constitute evidence
supporting a CFA claim. She also asserts plaintiff or its
predecessor engaged in the practice of dual tracking by
simultaneously pursuing both a loan modification and foreclosure.
Lastly, defendant argues Aurora violated the CFA while defendant
was trying to obtain a mortgage modification by continually
insisting defendant provide documents she previously provided and
by claiming her application was incomplete. According to
defendant, Aurora giving her a "run-around" supports a CFA claim.
In addition to her CFA contentions, defendant claims the
complaint must be dismissed because "plaintiff . . . cannot produce
evidence of ownership or control of the note" and therefore lacks
standing to foreclose. Lastly, defendant argues the Chancery
Division's denial of her motion to vacate the default was not
supported by the record, and the motion should have been granted
in any event because defendant's conduct was not contumacious.
Rule 4:43-3 authorizes a court to set aside an entry of
default "[f]or good cause shown." "[A]n application to vacate
default 'should be viewed with great liberality and every
reasonable ground for indulgence is tolerated to the end that a
just result is reached.'" N.J. Div. of Youth and Family Servs.
v. P.W.R., 410 N.J. Super. 501, 508 (App. Div. 2009) (citations
omitted), rev’d on other grounds, 205 N.J. 17 (2011). The standard
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for setting aside an entry of default is less stringent than the
standard for setting aside a default judgment. US Bank Nat. Ass'n
v. Guillaume, 209 N.J. 449, 466-67 (2012) (citation omitted).
A party seeking to set aside an entry of default may establish
good cause by demonstrating "the presence of a meritorious defense
worthy of judicial determination . . . and the absence of any
contumacious conduct." O'Connor v. Altus, 67 N.J. 106, 129 (1975).
"[T]he 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, comment on
R. 4:43-3 (2017). That element is required because, like a motion
to vacate a default judgment, when a party has no meritorious
defense, "[t]he time of the courts, counsel and litigants should
not be taken up by such a futile proceeding." Guillaume, supra,
209 N.J. at 469 (quoting Schulwitz v. Shuster, 27 N.J. Super. 554,
561 (App. Div. 1953)). We review the denial of a motion to vacate
default under an abuse of discretion standard. Cf. id. at 467.
In the case now before us, defendant attempted to demonstrate
good cause by establishing she had a meritorious defense and was
not culpable of contumacious conduct. Having considered her
arguments in light of the record and applicable legal principles,
we conclude the trial court did not abuse its discretion in denying
her motion.
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Defendant argues her situation presents a case of predatory
lending, which violates the CFA. Predatory lending is:
a mismatch between the needs and capacity of
the borrower . . . . In essence, the loan
does not fit the borrower, either because the
borrower's underlying needs for the loan are
not being met or the terms of the loan are so
disadvantageous to that particular borrower
that there is little likelihood that the
borrower has the capacity to repay the loan.
[Assocs. Home Equity Servs., Inc. v. Troup,
343 N.J. Super. 254, 267 (App. Div. 2001)
(alteration in original) (citation omitted).]
Predatory lenders "target certain populations for onerous credit
terms" and
take advantage of borrowers due to their lack
of sophistication in the lending market, . .
. their lack of perceived options for the loan
. . ., or due to deceptive practices engaged
in by the lender that mislead or fail to inform
the borrower[s] of the real terms and
conditions of the loan.
[Id. at 268 (citation omitted).]
Here, though defendant earned an adjusted gross income of
only $27,278, she received a $306,000 loan from Lehman Brothers,
who did not request or review any documentation beforehand.
Defendant argues the lender extended the note "with reckless
unconcern as to [defendant's] ability to pay, . . . and by
extension, [Nationstar] committed an unconscionable commercial
practice."
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Although it appears defendant did lack the capacity to repay
the loan, Nationstar is not the original lender, but rather became
the note and mortgage holder upon an assignment. Assuming for
purposes of this discussion that Lehman Brothers engaged in an
actionable predatory lending practice, defendant fails to explain
how Nationstar could be held accountable for Lehman Brothers'
wrongs. Defendant has neither claimed nor established either that
Nationstar was Lehman Brothers' agent or that Nationstar was in
some other way vicariously liable for Lehman Brothers' actions.
More significantly, defendant has cited no legal authority to
support such a proposition. In other words, defendant has not
established a meritorious defense against Nationstar.
Defendant next contends violations of HAMP "constitute[]
evidence that can be utilized to support a CFA claim." In that
regard, defendant asserts her:
Two Period Plan ("TPP") agreements were marred
by the bad faith conduct of Aurora, which
continually requested documents already
provided, falsely [claimed] it lacked
materials actually in its possession, [failed]
to implement adequate procedures and systems
to respond to inquiries and complaints, and .
. . [prolonged] and [delayed] its extension
of offers for a permanent loan modification.
Defendant, however, does not support her contention with
facts or evidence from the record. She concedes these shortcomings
by admitting "[t]he facts relating to the two HAMP TPPs [were] not
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fully documented below. However, given the chance to file[] an
[a]nswer to the [c]omplaint and conduct discovery, the violations
under HAMP can be outlined." This assertion by defendant overlooks
her burden of establishing an affirmative defense to the
foreclosure action. Unsupported conclusory allegations are
inadequate to carry this burden.
Defendant's remaining arguments are without sufficient merit
to warrant further discussion. R. 2:11-3(e)(1)(E). We add only
these comments. Defendant did not raise before the trial court
her argument here that the practice of "dual tracking" —
"initiating foreclosure proceedings while also negotiating a
mortgage modification," U.S. Bank Nat. Ass'n v. Curcio, 444 N.J.
Super. 94, 113 (App. Div. 2016) (citation omitted) — constituted
a defense to the foreclosure action. We thus decline to consider
it. Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973).
Defendant's "standing" argument — "given the complications
presented by the involvement of [MERS] and the fact that the
[p]laintiff represents the third mortgagee in this matter . . .
there would certainly be issues of fact relating to the ownership
of both the note and mortgage documents" — is an engagement in
speculation, not the establishment of an affirmative defense.
Based on the record before us, we are unable to conclude the
trial court abused its discretion when it denied defendant's motion
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to vacate the default. Defendant failed to establish an
affirmative defense, "a traditional element necessary for setting
aside both a default and a default judgment." Pressler & Verniero,
supra, comment on R. 4:43-3.
Affirmed.
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