THE BANK OF NEW YORK MELLON, ETC. VS. ANIL NARANG (F-015924-14, 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NOT FOR PUBLICATION WITHOUT THE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-0591-17T2
THE BANK OF NEW YORK
MELLON f/k/a The Bank of New
York Successor Trustee to JP Morgan
Chase Bank, NA as Trustee for the
Structured Asset Mortgage Investments
II Trust, Mortgage Pass-Through
Certificates, Series 2004-Ar6,
Plaintiff-Respondent,
v.
ANIL NARANG,
Defendant-Appellant,
and
MRS. ANIL NARANG, His Wife,
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,
Solely as Nominee for COUNTRYWIDE
BANK, N.A.,
Defendants.
_____________________________________
Submitted February 5, 2019 – Decided March 5, 2019
Before Judges Fisher and Hoffman.
On appeal from Superior Court of New Jersey,
Chancery Division, Essex County, Docket No. F-
015924-14.
Law Offices of Joseph A. Chang, attorneys for
appellant (Joseph A. Chang, of counsel and on the brief;
Jeffrey Zajac, on the brief).
Sandelands Eyet, LLP, attorneys for respondent
(Kathleen Cavanaugh, of counsel and on the brief).
PER CURIAM
In this residential mortgage foreclosure action, defendant Anil Narang
appeals from the final judgment of foreclosure, in addition to Chancery Division
orders striking his answer, granting summary judgment, and denying
reconsideration, entered in favor of plaintiff The Bank of New York Mellon f/k/a
The Bank of New York Successor Trustee to J.P. Morgan Chase Bank, NA, as
Trustee for the Structure Asset Mortgage Investments II Trust, Mortgage Pass-
Through Certificates, Series 2004-AR6, an assignee of the note and mortgage.
For the following reasons, we affirm.
I.
In August 2004, defendant executed a note made payable to America's
Wholesale Lenders in the amount of $1,481,250. On that same date, defendant
executed a mortgage in favor of Mortgage Electronic Registration Systems, Inc.
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(MERS), as nominee for America's Wholesale Lenders, encumbering his
property on West Road in Short Hills. Defendant defaulted on the loan in
December 2010.
On December 13, 2011, MERS assigned the mortgage to plaintiff. The
assignment was recorded on December 21, 2011, in Book 12343, Page 2903 of
Assignment of Mortgages for Essex County.
The note, which accompanied the mortgage, contained an indorsement
from Countrywide Home Loans, Inc., a New York Corporation, doing business
as America's Wholesale Lender, to JP Morgan Chase Bank, as Trustee. The note
also contained an allonge with an indorsement in blank by JP Morgan Chase
Bank, NA, f/k/a JP Morgan Chase Bank, as Trustee.
When plaintiff filed its foreclosure complaint in April 2014, plaintiff's
mortgage servicing agent, Nationstar Mortgage, LLC (Nationstar), possessed the
original note and mortgage. Nationstar kept these papers at its documents
administration department in Scottsbluff, Nebraska.
Following extensive discovery, plaintiff filed a motion to strike
defendant's amended answer and remand the matter to the Office of Foreclosure
to proceed as an uncontested matter. Defendant opposed plaintiff's motion to
strike and filed a cross-motion to dismiss the foreclosure complaint. In his
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opposition, defendant admitted executing the note and mortgage, and defaulting
on his payments, but challenged plaintiff's standing. The court rejected
defendant's standing argument, granted plaintiff's motion, and then denied
defendant's motion for reconsideration. Plaintiff then moved for entry of final
judgment, which the trial court granted on September 14, 2017. Defendant
moved for reconsideration, which the trial court denied. This appeal followed.
II.
On appeal, defendant raises two main issues. First, defendant challenges
plaintiff's standing to foreclose. Second, defendant challenges plaintiff's compliance
with the pooling and service agreement (PSA).
In arguing that plaintiff lacks standing to foreclose, defendant claims the
evidence shows "another entity holds the note" and "plaintiff has failed to
properly authenticate that it held standing prior to the filing of the complaint as
required." Plaintiff produced certifications from two Nationstar employees,
Lydeisha Barber and Edward Hyne. Barber certified she worked for Nationstar
as a "document execution specialist" and that Nationstar is "a mortgage
servicing agent for the plaintiff relative to [defendant's] loan." As part of her
responsibilities, she became "familiar with the type of records maintained by
Nationstar in connection with [defendant's] loan" and could confirm that
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"plaintiff is the holder and in possession of the note and mortgage subject to this
foreclosure." Her information was taken from Nationstar's "business records,"
of which she had "personal knowledge." Those records were:
(a) made at or near the time of the occurrence of the
matters recorded by persons with personal knowledge
of the information in the business record, or from
information transmitted by persons with personal
knowledge; (b) kept in the court of [Nationstar's]
regularly conducted business activities; and (c) it is the
regular practice of [Nationstar] to make such records.
Hyne's certification explained he worked for Nationstar as a "litigation
resolution analyst" and that Nationstar is "a mortgage servicing agent for the
plaintiff relative to [defendant's] loan." Through his job, he became "familiar
with the type of records maintained by Nationstar in connection with
[defendant's] loan" and could confirm that "plaintiff is the holder and in
possession of the note and mortgage subject to this foreclosure." Similar to
Barber, Hyne's based his certification on a review of Nationstar's "business
records."
Hyne also provided testimony. During his deposition, he reiterated that
Nationstar possessed the "original note, the original mortgage, the original title
policy, the prior servicer's loan modification agreement, and . . . a blank
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assignment." Plaintiff also made defendant's original loan documents available
for review.
In a mortgage foreclosure proceeding, the court must determine three
issues: "the validity of the mortgage, the amount of the indebtedness" and
default, and the right of the party to foreclose on the mortgaged property. Great
Falls Bank v. Pardo, 263 N.J. Super. 388, 394 (Ch. Div. 1993), aff'd, 273 N.J.
Super. 542 (App. Div. 1994). "As a general proposition, a party seeking to
foreclose a mortgage 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 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).
A plaintiff establishes standing by demonstrating "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) (citing Mitchell, 422 N.J. Super. at 216).
Witness certification regarding the authenticity of assignment or
possession of the note and mortgage is adequate when the witness has access to
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the business records of plaintiff and personal knowledge of its business practices
sufficient to provide the court with competent evidence regarding plaintiff's
standing. See New Century Fin. Servs., Inc. v. Oughla, 437 N.J. Super. 299,
317-18 (App. Div. 2014).
Here, we find the certifications of Barber and Hyne sufficient to show that
plaintiff was both the holder of the note and the assignee of the mortgage; as a
result, we conclude the trial court properly granted summary judgment because
plaintiff had standing to foreclose. These certifications established that: 1) they
were employees of Nationstar and, as part of their responsibilities, were familiar
with the type of records maintained by Nationstar with respect to defendant's
loan; 2) the information contained in their certifications was based on
Nationstar's business records; and 3) they had personal knowledge of
Nationstar's procedures for creating and maintaining such records .
In addition to his certification, Hyne provided deposition testimony
regarding the business practices of Nationstar; specifically, he described the
records reflecting defendant's acquisition of defendant's original loan, and the
storage of the loan documents at Nationstar's document administration
department in Nebraska. Hyne also confirmed that Nationstar possessed the
original note before plaintiff filed its foreclosure complaint.
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Defendant argues that "neither Barber nor Hyne certify that they reviewed
the actual documents as contained in the collateral file or documents other than
'business records' kept in the normal course of business of the plaintiff ."
However, during his deposition, Hyne testified that he did observe the original
loan documents. Further, plaintiff's counsel made the original note and
mortgage available for review.
Nonetheless, defendant maintains that "neither Hyne nor Barber exhibit
personal knowledge of the [d]efendant's mortgage account and do not prove that
they were indeed familiar with the specific records at issue." However, "[t]here
is no requirement that the foundation witness [certifying that a record is a
business record must] possess any personal knowledge of the act or event
recorded." Id. at 326 (citing State v. Martorelli, 136 N.J. Super. 449, 453 (App.
Div. 1975)).
Defendant asserts plaintiff must produce a "certification" by a "bank
employee or representative of MERS with respect to the authority to execute the
assignment or the circumstances of the assignment. Without this specific
information contained in a certification, the alleged assignment is not viewed as
self-authenticating."
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Contrary to defendant's argument, our statutes do not require this type of
certification in order to authenticate a document. In fact, "the authenticity of,
and authority to make, each signature on the instrument is admitted unless
specifically denied in the pleadings. . . . [T]he signature is presumed to be
authentic and authorized. . . ." N.J.S.A. 12A:3-308. Also, the mortgage here
specifically appoints MERS as the nominee for America's Wholesale Lender.
Therefore, we reject defendant's argument that plaintiff needed to file a separate
certification from a MERS representative.
As to his second argument, defendant argues the trial court erred in
holding he lacked standing to challenge the plaintiff's compliance with the PSA.
Defendant contends that because plaintiff did not establish it received
assignment of his loan before the trust closed on September 30, 2004, plaintiff's
foreclosure action must fail. We disagree.
All parties agree that assignment of the mortgage to plaintiff did not occur
until December 13, 2011 – well after the closing date for the trust. Thus,
defendant contends that this violation of the trust means that plaintiff's
foreclosure action must fail.
Here, the evidence shows legal title to the subject mortgage loan passed
from MERS, as nominee for America's Wholesale Lender, to plaintiff. Although
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the assignment occurred after the closing of the trust, defendant offers no
evidence to support his argument that this fact renders the assignment void, as
opposed to voidable.
Moreover, defendant failed to show any intent to make him a third-party
beneficiary of the PSA. When determining the existence of "third-party
beneficiary" status, the inquiry "focuses on whether the parties to the contract
intended others to benefit from the existence of the contract, or whether the
benefit so derived arises merely as an unintended incident of the agreement."
Ross v. Lowitz, 222 N.J. 494, 513 (2015) (quoting Broadway Maint. Corp. v.
Rutgers, 90 N.J. 253, 259 (1982)). "If there is no intent to recognize the third
party's right to contract performance, 'then the third person is only an incidental
beneficiary, having no contractual standing.'" Ibid. (quoting Broadway Maint.
Corp., 90 N.J. at 259).
Here, defendant presents no evidence that the parties to the transfer of
defendant's mortgage loan intended to recognize defendant as having a right to
contract performance. The trial court correctly concluded that defendant lacked
standing to contest the PSA.
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To the extent we have not addressed any argument raised by plaintiff, we
have deemed such arguments to lack merit sufficient for discussion in a written
opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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