U.S. BANK NATIONAL ASSOCIATION, ETC. VS. EDWARD A. PROVENCHER (F-044161-14, MONMOUTH 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NOT FOR PUBLICATION WITHOUT THE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-3747-16T3
U.S. BANK NATIONAL ASSOCIATION,
AS TRUSTEE FOR J.P. MORGAN
MORTGAGE ACQUISITION TRUST
2006-CH2 ASSET BACKED
PASS-THROUGH CERTIFICATES, SERIES
2006-CH2,
Plaintiff-Respondent,
v.
EDWARD A. PROVENCHER, his/her heirs,
devisees, and personal representatives,
and his, her, their or any of their
successors in right, title and interest,
Defendant-Appellant,
and
MRS. EDWARD A. PROVENCHER, wife of
Edward A. Provencher; NICOLE L. PROVENCHER,
his/her heirs, devisees, and personal
representatives, and his, her, their or
any of their successors in right, title
and interest; MR. PROVENCHER, husband of
Nicole L. Provencher; CHASE BANK U.S., NA
and STATE OF NEW JERSEY,
Defendants.
Submitted July 9, 2018 – Decided July 23, 2018
Before Judges Carroll and Rose.
On appeal from Superior Court of New Jersey,
Chancery Division, Monmouth County, Docket No.
F-044161-14.
Edward A. Provencher, appellant pro se.
Parker Ibrahim & Berg, LLP, attorneys for
respondent (Charles W. Miller, III, Ben Z.
Raindorf and Robert D. Bailey, on the brief).
PER CURIAM
This residential mortgage foreclosure case has its genesis
in a June 20, 2006 loan from Chase Bank USA (Chase) to defendant
Edward Provencher. The loan is evidenced by a note in the amount
of $212,000 executed and delivered by defendant to Chase, and
secured by a mortgage on property located in Freehold. The
mortgage was duly recorded on July 20, 2006, in the Office of the
Monmouth County Clerk.
On July 6, 2012, Chase assigned the mortgage to plaintiff
U.S. Bank National Association, as Trustee for J.P. Morgan Mortgage
Acquisition Trust 2006-CH2 Asset Backed Pass-Through Certificates,
Series 2006-CH2. The Monmouth County Clerk recorded the assignment
on July 25, 2012.
Pursuant to the note and mortgage, defendant agreed to make
principal and interest payments on the loan on the first day of
each month from August 1, 2006, through July 1, 2036. Under the
terms of the note, a late charge of $29, or six percent of the
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overdue payment, whichever is greater, would be assessed if the
lender had "not received the full amount of any monthly payment
within [ten] days of the payment due date . . . ."
Defendant defaulted under the note and mortgage by failing
to make the May 1, 2011 monthly payment. On October 21, 2014,
plaintiff filed a foreclosure complaint against defendant, who
filed a contesting answer on December 8, 2014. His answer did not
specifically dispute the existence of the debt, the authenticity
of the note and mortgage, and his default in making payments as
required by the note. The answer merely denied generally all the
allegations of the foreclosure complaint and put plaintiff to its
proofs. It also asserted several affirmative defenses, including
plaintiff's alleged lack of standing to bring the foreclosure
action.
On May 15, 2015, plaintiff filed a motion for summary
judgment. Plaintiff supported its motion with a certification
from Karter Nelson, a document control officer employed by
plaintiff's mortgage servicer. Nelson certified that he had
personally reviewed the loan documents, copies of which he attached
to his certification. Nelson further attested that plaintiff had
acquired the loan, including the note and mortgage, prior to the
filing of the foreclosure complaint.
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Defendant opposed the motion and filed a cross-motion to
amend his answer to assert a counterclaim against plaintiff. The
entirety of defendant's accompanying certification stated:
"Subject property is my primary residence" and "Discovery is not
completed." Annexed to defendant's certification, among other
documents, was a proposed amended answer and counterclaim, which
alleged plaintiff violated the New Jersey Home Ownership Security
Act (HOSA), N.J.S.A. 46:10B-22 to -35, with respect to late fees
charged on the mortgage loan.
By orders dated June 26, 2015, the trial court denied
defendant's motion and granted plaintiff's motion for summary
judgment. In an oral opinion, the court first determined that
Nelson's certification was sufficient to establish that
"[p]laintiff is the holder of the note and [d]efendant has provided
no contrary evidence to show that another entity holds the loan."
The court also noted the recorded assignment of mortgage that
predated the foreclosure complaint and concluded plaintiff had
standing.
The court also found defendant's arguments with respect to
the alleged HOSA violation "really . . . difficult to understand."
Ultimately, the court determined the allegation that "[p]laintiff
charged late fees in contravention of N.J.S.A. 46:10[B]-25 would
be a claim for monetary damages and is time-barred." The judge
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elaborated: "Defendant executed the note [and] mortgage on June
20, 2006. [He] had six years to raise a defense; that expired on
June 20, 2012. Again, fees would not be germane to this action
and a dispute over the amount due is appropriate when the
[p]laintiff seeks final judgment." Consequently, the court struck
defendant's answer and returned the matter to the Foreclosure Unit
of the Superior Court to proceed as an uncontested case.
On October 14, 2016, the trial court granted plaintiff's
motion to vacate dismissal for lack of prosecution pursuant to
Rule 4:64-8 and reinstated the case. On February 3, 2017, the
court denied defendant's objection to plaintiff's calculation of
the amount due. A final judgment was ultimately entered in favor
of plaintiff on March 22, 2017, in the sum of $312,936.10.
Defendant now appeals from the orders entered on June 26,
2015, October 14, 2016, February 3, 2017, and from the March 22,
2017 final judgment. Defendant essentially argues that: (1) the
Nelson certification and supporting documents were inadequate to
establish plaintiff's standing; and (2) the trial court erred in
concluding defendant's HOSA claim with respect to late fees was
not germane to the foreclosure action, thus denying defendant the
opportunity to litigate the claim.
We review a grant of summary judgment de novo, observing the
same standard as the trial court. Townsend v. Pierre, 221 N.J.
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36, 59 (2015). Summary judgment should be granted only if the
record demonstrates 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). We consider "whether
the competent evidential materials presented, when viewed in the
light most favorable to the non-moving party, are sufficient to
permit a rational factfinder to resolve the alleged disputed issue
in favor of the non-moving party." Davis v. Brickman Landscaping,
Ltd., 219 N.J. 395, 406 (2014) (quoting Brill v. Guardian Life
Ins. Co. of Am., 142 N.J. 520, 540 (1995)). If no genuine issue
of material fact exists, the inquiry then turns to "whether the
trial court correctly interpreted the law." DepoLink Ct. Reporting
& Litig. Support Servs. v. Rochman, 430 N.J. Super. 325, 333 (App.
Div. 2013) (citations omitted).
Based on our review of the record and applicable law, we
conclude that summary judgment was properly granted in favor of
plaintiff. A lender's right to foreclose is an equitable right
inherent in a mortgage, triggered by a borrower's failure to comply
with the terms and conditions of the associated loan. S.D. Walker,
Inc. v. Brigantine Beach Hotel Corp., 44 N.J. Super. 193, 202 (Ch.
Div. 1957). To obtain relief in a mortgage foreclosure action,
the mortgagee (or its successor in interest) must establish that:
(1) the mortgage and loan documents are valid; (2) the mortgage
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loan is in default; and (3) it has a contractual right to foreclose
in light of the default. See, e.g., Great Falls Bank v. Pardo,
263 N.J. Super. 388, 394 (Ch. Div. 1993), aff'd, 273 N.J. Super.
542 (App. Div. 1994); Somerset Trust Co. v. Sternberg, 238 N.J.
Super. 279, 283-84 (Ch. Div. 1989). The mortgagee has the right
to insist upon strict observance of the obligations that are
contractually owed to it, including timely payment. Kaminski v.
London Pub, Inc., 123 N.J. Super. 112, 116 (App. Div. 1973).
Often, as here, a disputed issue in mortgage foreclosure
actions is whether the plaintiff has established standing to bring
the complaint. In general, the Uniform Commercial Code establishes
three alternative categories of parties who have standing to
enforce negotiable instruments, including promissory notes: (1)
"the holder of the instrument"; (2) "a nonholder in possession of
the instrument who has the rights of the holder"; and (3) "a person
not in possession of the instrument who is entitled to enforce the
instrument pursuant to [N.J.S.A.] 12A:3-309 or subsection d. of
[N.J.S.A.] 12A:3-418." See N.J.S.A. 12A:3-301.
In Deutsche Bank Trust Co. v. Angeles, 428 N.J. Super. 315,
318 (App. Div. 2012), we construed these principles to confer
standing on a mortgage foreclosure plaintiff who establishes
"either possession of the note or an assignment of the mortgage
that predated the original complaint." Here, the motion judge
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fairly and reasonably determined that the record sufficed to meet
either of these two predicates for standing.
First, the unrefuted record reflects that plaintiff was
assigned defendant's mortgage loan before the foreclosure
complaint was filed. The Nelson certification provides a
sufficient evidentiary basis to establish the authenticity of the
business records that reflect the transfer of defendant's loan
from the original lender, Chase, to the present trustee. Further,
the mortgage assignment was recorded and endorsed by the Monmouth
County Clerk. See N.J.R.E. 901 (noting that authentication is
governed by a flexible standard that only requires "evidence
sufficient to support a finding that the matter is what its
proponent claims"). Second, as an alternative basis for standing,
there is sufficient proof in the record to establish that plaintiff
was in possession of the note at the time the lawsuit was filed.
With respect to defendant's HOSA claim, we note that "the
granting of a motion to file an amended [pleading] always rests
in the court's sound discretion." Kernan v. One Wash. Park Urban
Renewal Assocs., 154 N.J. 437, 457 (1998); Fisher v. Yates, 270
N.J. Super. 458, 467 (App. Div. 1994). While motions for leave
to amend pleadings are to be liberally granted, the decision is
best left to the sound discretion of the trial court taking into
consideration the factual situation existing at the time each
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motion is made. Although courts should determine motions for
leave to amend without considering the ultimate merits of the
amendment, "courts are free to refuse leave to amend when the
newly asserted claim is not sustainable as a matter of law." Notte
v. Merchs. Mut. Ins. Co., 185 N.J. 490, 501 (2006) (citation
omitted).
On review, the trial judge's determination will not be
disturbed unless it constitutes a "clear abuse of . . .
discretion." Salitan v. Magnus, 28 N.J. 20, 26 (1958); Franklin
Med. Assocs. v. Newark Pub. Schs., 362 N.J. Super. 494, 506 (App.
Div. 2003). This court will reverse a trial court's exercise of
discretion only "if the discretionary act was not premised upon
consideration of all relevant factors, was based upon
consideration of irrelevant or inappropriate factors, or amounts
to a clear error in judgment." Masone v. Levine, 382 N.J. Super.
181, 193 (App. Div. 2005) (citation omitted). Stated differently,
a trial court abuses its discretion where its decision is arbitrary
or capricious, is "made without a rational explanation,
inexplicably depart[s] from established policies, or rest[s] on
an impermissible basis." Ibid. (quoting Flagg v. Essex Cty.
Prosecutor, 171 N.J. 561, 571 (2002) (citations omitted)).
Guided by these principles, we conclude the trial court did
not err in denying defendant's motion to amend his answer to assert
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a counterclaim against plaintiff seeking damages for violating
HOSA with respect to the assessment of late fees. As noted, the
trial court found this claim time-barred, a ruling that defendant
does not challenge on appeal. An issue not briefed is deemed
waived. See Gormley v. Wood-El, 218 N.J. 72, 95 n.8 (2014). See
also, Pressler & Verniero, Current N.J. Court Rules, cmt. 5 on R.
2:6-2 (2018).
In any event, even if defendant's HOSA claim is not time-
barred as the motion judge found, we nonetheless find no basis to
grant defendant relief. This is so despite our agreement with
defendant that, in viewing the summary judgment record in the
light most favorable to him, defendant's claim regarding the late
fees assessed by plaintiff pursuant to the terms of the note are
germane to the foreclosure action. See R. 4:64-5. As we noted
in Associates Home Equity Services, Inc. v. Troup, 343 N.J. Super.
254, 272 (App. Div. 2001), the purpose of a foreclosure action is
to determine "not only the right to foreclose, but also the amount
due on the mortgage." (Citation omitted).
Here, defendant's HOSA claim related directly to the amount
due on the mortgage, which the motion judge acknowledged in her
decision on the summary judgment motion and defendant's cross-
motion to amend. The motion judge determined that the dispute
"over the amount due is appropriate when the [p]laintiff seeks
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final judgment." Although the judge denied defendant's motion to
assert a counterclaim alleging a HOSA violation, she did not
preclude him from raising the improper late fee issue when
plaintiff applied for final judgment. Defendant did in fact
challenge the amount due when plaintiff made application for final
judgment. However, he failed to challenge the late fees at that
juncture. Instead, defendant's objection to the amount due focused
on disputed tax payments and his standing argument, which the
trial court correctly rejected. Entry of the final judgment
properly followed.
To the extent that we have not specifically addressed any of
defendant's remaining contentions, we find they lack sufficient
merit to warrant discussion in a written opinion. R. 2:11-
3(e)(1)(E).
Affirmed.
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