US BANK NATIONAL ASSOCIATION, ETC. VS. RACHELLE Â MATTHEWS(F-059626-09, UNION 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NOT FOR PUBLICATION WITHOUT THE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-1454-15T1
US BANK NATIONAL ASSOCIATION,
as Trustee for CMLTI 2006-WF2,
Plaintiff-Respondent,
v.
RACHELLE MATTHEWS,
Defendant-Appellant,
and
ROBERT GEBHARDT,
Defendant-Respondent.
______________________________________
Argued January 24, 2017 – Decided November 28, 2017
Before Judges Fisher and Leone.
On appeal from Superior Court of New Jersey,
Chancery Division, Union County, Docket No.
F-059626-09.
Rebecca Schore argued the cause for appellant
(Jurow & Schore, LLC, attorneys; Ms. Schore
and Margaret Jurow, on the briefs).
Henry F. Reichner argued the cause for
respondent US Bank National Association (Reed
Smith, LLP, attorneys; Mr. Reichner, on the
brief).
The opinion of the court was delivered by
LEONE, J.A.D.
Defendant Rachelle Matthews appeals from the October 7, 2015
final judgment of foreclosure. She challenges a May 29, 2015
order allowing plaintiff US Bank National Association to reinstate
its foreclosure complaint. We affirm.
I.
In January 2006, Matthews and defendant Robert Gebhardt, who
is now deceased, obtained a $346,750 loan from Wells Fargo Bank.
Defendants executed a note and a mortgage on their property in
Union, which were assigned to US Bank, with Wells Fargo continuing
to service the loan. Defendants defaulted in their payments in
August 2009.
US Bank filed a foreclosure complaint in November 2009. On
April 30, 2010, the Chancery Division struck defendants' answer
and defenses, ordered default be entered, and transferred the
action to the Office Of Foreclosure to be handled as an uncontested
matter.
On December 20, 2010, the Chancery Division issued to Wells
Fargo and other mortgage servicers an order to show cause why the
court should not suspend the processing of all uncontested mortgage
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foreclosure actions in which they were or had been involved. The
order was based on concerns about the accuracy and reliability of
documents submitted to the Office of Foreclosure. After addressing
that issue in US Bank Nat. Ass'n v. Guillaume, 209 N.J. 449 (2012),
our Supreme Court issued an April 4, 2012 order authorizing further
proceedings by order to show cause to determine whether plaintiffs
in uncontested foreclosure actions with deficient notices should
be allowed to serve corrected notices.
In August 2013, the clerk's office told US Bank its action
would be dismissed for lack of prosecution unless US Bank showed
exceptional circumstances. US Bank's counsel certified that the
case could not proceed until the order-to-show-cause process
concluded. On September 13, 2013, the clerk's office ordered
pursuant to Rule 4:64-8 that the action was "dismissed without
prejudice due to lack of prosecution. Reinstatement of the matter
after dismissal may be requested by a motion for good cause."
In August 2014, US Bank filed a motion to vacate the dismissal
and reinstate the complaint. The court's September 5, 2014 order
conditionally granted the motion. The order provided the action
"shall be reinstated upon the filing of a Motion for Final Judgment
. . . not later than 120 days for the date of the . . . order."
The order stated that if US Bank failed to file the motion, then
the action "will remain dismissed and the Plaintiff shall be
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required to file and serve a new complaint in order to foreclose
on the subject premises." US Bank did not file the motion for
final judgment, and the action remained dismissed.
In April 2015, US Bank filed a second motion to vacate the
dismissal and reinstate the complaint. US Bank's counsel certified
that US Bank "was unable to proceed from December 29, 2014, to
February 6, 2015, due to a loss mitigation hold, precluding
plaintiff from applying for Final Judgment within the permissible
time frame as per the reinstatement order. The hold is now removed
and Plaintiff may now proceed toward Final Judgment."
Matthews opposed the motion. She certified she had submitted
her "most recent application for a loan modification to Wells
Fargo in or around November 2014," that "Wells Fargo never sent
me a written notice telling me that my application was either
complete or incomplete as required by law," that "Wells Fargo
never sent me a notice approving or denying my application for a
loan modification," and therefore that the "'loss-mitigation' hold
should still be pending."
In reply, US Bank's counsel submitted a certification
attaching: a January 2, 2015 letter telling defendants that to
process their loan modification application Wells Fargo would need
additional information by February 1, 2015; and a February 4, 2015
letter telling defendants that because Wells Fargo had not received
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the required documentation to complete the application, it was not
able to offer loan modification assistance.
On May 29, 2015, the trial court conditionally granted US
Bank's motion to vacate dismissal. In its statement of reasons,
the court cited the certifications of Matthews and US Bank's
counsel. In particular, the court cited counsel's certification
that US Bank placed the loss mitigation hold on December 29, 2014,
which the court noted was "within the 120 days the Plaintiff had
to submit an entry for final judgment." The court found "that the
review of a loss mitigation packet by the Defendant, which would
benefit the Defendant, constitutes good cause to permit the
Plaintiff to reinstate the complaint" "pursuant to R. 4:64-8."
The court's May 29 order provided the action "shall be
reinstated upon the filing of a Motion for Final Judgment . . .
not later than 150 days for the date of the . . . order."1 Within
150 days, US Bank filed a motion for final judgment, which the
trial court granted on October 7, 2015.
II.
Defendants appealed. US Bank argues that as defendants listed
only the final October 7 order in their notice of appeal, they
cannot appeal the interlocutory May 29 order. Under Rule 2:5-
1
We denied Matthews's motion for leave to appeal the May 29 order.
5 A-1454-15T1
1(f)(3)(A), "'it is only the orders designated in the notice of
appeal that are subject to the appeal process and review.'"
Petersen v. Meggitt, 407 N.J. Super. 63, 68 n.2 (App. Div. 2009)
(citation omitted). Defendant's "case information statement,
however, makes clear that" they sought to challenge the May 29
order, which we had denied them leave to appeal. Tara Enters.,
Inc. v. Daribar Mgmt. Corp., 369 N.J. Super. 45, 60 (App. Div.
2004). In those circumstances, we exercise our discretion to
review the May 29 order. See W.H. Indus., Inc. v. Fundicao
Balancins, Ltda, 397 N.J. Super. 455, 459 (App. Div. 2008).
"Our review of an order [grant]ing reinstatement of a
complaint dismissed for lack of prosecution proceeds under an
abuse of discretion standard." Baskett v. Kwokleung Cheung, 422
N.J. Super. 377, 382 (App. Div. 2011). We must hew to our standard
of review.
III.
Matthews argues US Bank failed to show good cause to vacate
dismissal and reinstate the foreclosure action because its motion
was based on inadmissible hearsay in the certifications by US
Bank's counsel. However, Matthews's certification agreed with the
key statements in the initial certification of US Bank's counsel.
First, Matthews agreed that defendants had filed a loan
modification application within the 120 days in which the trial
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court's September 5, 2014 order gave US Bank to file a motion for
final judgment. Second, Matthews's certification agreed her
application resulted in a "loss-mitigation hold" that barred US
Bank from moving for a final judgment of foreclosure. When the
parties agree on a fact, the court may consider that undisputed
fact. See State v. Evans, 340 N.J. Super. 244, 247 n.1 (App. Div.
2001); see also Pressler & Verniero, Current N.J. Court Rules,
comment on R. 1:6-6 (2018) (stating stipulated facts are
cognizable).2
Those undisputed facts were sufficient to justify the trial
court's finding of "good cause" for US Bank's failure to file a
motion for a final judgment of foreclosure during that period. R.
4:64-8. As the court found, the loss-mitigation hold during the
120-day period allowed defendants' loan modification application
to be reviewed. Moreover, federal regulations bar the filing of
such a motion if a complete application has been filed, and provide
a procedure to allow an applicant the opportunity to submit a
complete application.
"If a borrower submits a complete loss mitigation application
. . . , a servicer shall not move for foreclosure judgment or
2
At oral argument before us, Matthews agreed defendants had
applied for a loan modification which prevented US bank for filing
for a final judgment.
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order of sale, or conduct a foreclosure sale," unless a specified
exception applies. 12 C.F.R. § 1024.41(g) (2014). "Promptly upon
receipt of a loss mitigation application, [the bank shall] review
the loss mitigation application to determine if the loss mitigation
application is complete; and . . . [n]otify the borrower in writing
within 5 days . . . that the servicer has determined that the loss
mitigation application is either complete or incomplete." 12
C.F.R. § 1024.41(b)(2)(i)(A), (B) (2014). "If a loss mitigation
application is incomplete, the notice shall state the additional
documents and information the borrower must submit to make the
loss mitigation application complete" as well as "a reasonable
date by which the borrower should submit the documents and
information necessary to make the loss mitigation application
complete." 12 C.F.R. § 1024.41(b)(2)(i)(B), (ii) (2014).
Given the federal regulations, the trial court properly found
US Bank had "good cause" not to file a motion for final judgment
of forfeiture within 120 days of the September 5, 2014 order. R.
4:64-8. Because defendants filed a loan modification application
during that period, the resulting loss-mitigation hold meant that
US Bank could "not move for foreclosure judgment or order of sale,
or conduct a foreclosure sale." 12 C.F.R. § 1024.41(g) (2014).
Rule 4:64-8 "follows R. 1:13-7." Pressler & Verniero, Current
N.J. Court Rules, comment on R. 4:64-8 (2018). As under Rule
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1:13-7, good cause "'requires the exercise of sound discretion in
light of the facts and circumstances of the particular case.'"
Ghandi v. Cespedes, 390 N.J. Super. 193, 196 (App. Div. 2007)
(citation omitted). Moreover, "'reinstatement is ordinarily
routinely and freely granted when plaintiff has cured the problem
that led to the dismissal even if the application is made many
months later.'" Ibid. (citation omitted). "[A]bsent a finding
of fault by the plaintiff and prejudice to the defendant, a motion
to restore under the rule should be viewed with great liberality."
Id. at 197.
Neither fault nor prejudice has been shown here. US Bank was
not at fault because it could not file a motion for final judgment
within the 120 days once defendants submitted their loan
modification application. Matthews has shown no prejudice from
the delay, during which her application was reviewed and she was
able to remain in the house without making payments. Thus, we
find no abuse of discretion.
IV.
US Bank's counsel also certified that the loss-mitigation
"hold is now removed and plaintiff may now proceed toward final
judgment," and supported that assertion with the letters attached
to his reply certification. Matthews argues that this assertion
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by US Bank's counsel was inadmissible hearsay, and that the trial
court improperly relied on it.
However, there is no indication the trial court relied on
that assertion. The court does not mention it in its statement
of reasons. Moreover, the court could properly grant US Bank's
motion without relying on that assertion.
The issue before the trial court on the motion to vacate
dismissal and reinstate the forfeiture action was whether US Bank
had good cause not to file a motion for final judgment within 120
days of the September 13 order. As set forth above, US Bank showed
good cause because under the loss-modification hold it could "not
move for foreclosure judgment or order of sale, or conduct a
foreclosure sale." 12 C.F.R. § 1024.41(g) (2014).
"Nothing in § 1024.41(g) prevents a servicer from proceeding
with the foreclosure process" in other ways, "so long as any such
steps in the foreclosure process do not cause or directly result
in the issuance of a foreclosure judgment or order of sale, or the
conduct of a foreclosure sale, in violation of § 1024.41." 12
C.F.R. Part 1024 (Supp. I, Official Bureau Interpretation, cmt. 2
to 41(g)). Thus, § 1024.41(g) did not bar US Bank from filing a
motion to vacate dismissal and reinstate, and in that motion US
Bank did not have to show the hold had been lifted.
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Of course, until the hold was lifted, US Bank could not file
a motion for a final judgment of foreclosure. However, the trial
court gave US Bank 150 days to file that motion, and US Bank did
not file that motion for four months. That gave ample time to
lift the hold if it was still pending.
In any event, the record before the trial court indicated the
loss-mitigation hold had been lifted before US Bank filed its
motion to vacate dismissal and reinstate the forfeiture action.
Not only did US Bank's counsel certify the hold had been lifted,
but the letters attached to his reply certification supported that
conclusion.
The letters indicated the procedures in the federal
regulations were followed. See 12 C.F.R. § 1024.41(b)(2)(i)(A) &
(B), (ii) (2014). The January 2, 2015 letter told defendants
their loan modification application was incomplete, specified the
documents needed to make the application complete, and gave
defendants thirty days to submit those documents by February 1,
2015. When defendants failed to do so, the February 4, 2015 letter
notified them it would not provide loan modification assistance.
This supported the initial certification by US Bank's counsel that
the loss-mitigation hold was removed February 6, 2015.
Matthews did not deny the authenticity of either letter.
Instead, she argued the letters were hearsay and that they were
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not properly served on her. However, in his initial certification,
US Bank's counsel certified that he "personally reviewed" and was
"familiar with the records maintained by our firm in the ordinary
course of business in connection with our representation of
Plaintiff in this matter," and that he had "personal knowledge of
the facts set forth herein based upon that review." Moreover, the
lifting of the hold under 12 C.F.R. § 1024.41 was arguably a legal
matter peculiarly within the personal knowledge of counsel.
Further, in his reply certification, US Bank's counsel certified
each letter was "a true and accurate copy." Finally, the January
2 letter stated it was addressed to defendants and sent to the
counsel who had represented defendants, and the February 4 letter
stated it was addressed and sent to defendants.
We need not resolve whether the certification of US Bank's
counsel that the hold was removed was "made on personal knowledge,
setting forth only facts which are admissible in evidence." R.
1:6-6. We also need not determine whether the letters attached
to his reply certification constituted hearsay or were admissible
business records. See New Century Fin. Servs., Inc. v. Oughla,
437 N.J. Super. 299, 317-19, 325-29 (App. Div.), certif. denied,
218 N.J. 531 (2014); Higgins v. Thurber, 413 N.J. Super. 1, 21
n.19 (App. Div. 2010); N.J.R.E. 803(c)(6). Nor need we resolve
whether the letters were properly sent to and received by
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defendants. Those matters go to whether the hold was lifted, an
issue that the trial court did not have to resolve in order to
grant the motion to vacate dismissal and reinstate.
Matthews was not prejudiced by reinstatement because she
could have raised those issues in opposition to US Bank's
subsequent motion for final judgment by arguing that the loss-
mitigation hold was still in place, that the certification that
it was removed was based on inadmissible hearsay, and that the
letters which removed it were not sent to her. Nothing in the
record indicates Matthews opposed the motion for final judgment
or raised those arguments. Her failure to raise those matters
then does not entitle her to invalidate the trial court's earlier,
valid order to vacate dismissal and reinstate.
Matthews's remaining arguments, including her argument about
dual tracking, are without sufficient merit to warrant discussion.
R. 2:11-3(e)(1)(E); see U.S. Bank Nat. Ass'n v. Curcio, 444 N.J.
Super. 94, 113-14 (App. Div. 2016) (rejecting a similar dual-
tracking argument). We need not address US Bank's other arguments.
Affirmed.
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