THE BANK OF NEW YORK MELLON v. MARIANNE CORRADETTI

NOT FOR PUBLICATION WITHOUT THE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-5334-16T1
THE BANK OF NEW YORK
MELLON, f/k/a THE BANK OF
NEW YORK, AS TRUSTEE
(CWALT 2006-36T2),
APPROVED FOR PUBLICATION
Plaintiff-Appellant, February 4, 2021
APPELLATE DIVISION
v.
MARIANNE CORRADETTI and
ANTHONY CORRADETTI, h/w,
Defendants-Respondents,
and
STATE OF NEW JERSEY,
Defendant.
______________________________
Argued October 17, 2018 – Decided January 6, 2020
Before Judges Fuentes, Accurso and Vernoia
(Judge Accurso dissenting).
On appeal from the Superior Court of New Jersey,
Chancery Division, Cape May County, Docket No. F-
053052-14.
Michael R. O'Donnell argued the cause for appellant
(Riker Danzig Scherer Hyland & Perretti, LLP, and
KML Law Group, PC, attorneys; Michael R.
O'Donnell, of counsel; Ronald Z. Ahrens and Clarissa
Anne Gomez, on the briefs).
Randolph C. Lafferty argued the cause for respondents
(Cooper Levenson PA, attorneys; Randolph C.
Lafferty, Yolanda N. Melville, and Jennifer Broeck
Barr, on the brief).
The opinion of the court was delivered by
VERNOIA, J.A.D.
In this mortgage foreclosure action, plaintiff Bank of New York Mellon
f/k/a The Bank of New York, as Trustee (CWALT 2006-36T2), appeals from
Chancery Division orders denying its motions for summary judgment and
reconsideration, and from a July 26, 2017 amended final judgment entered
after a bench trial in favor of defendants Marianne and Anthony Corradetti
dismissing the complaint and invalidating and extinguishing plaintiff 's
purported $1,779,000 mortgage on defendants' Ocean City property. We
affirm in part and remand in part.
I.
In 1992, defendants, who are husband and wife, purchased residential
property in Ocean City for $525,000. They executed a purchase money
A-5334-16T1
2
mortgage in favor of New Jersey National Bank to secure a $400,000 loan.
The mortgage was canceled on January 25, 1994.
In 2000, defendants mortgaged the property to Commerce Bank to
secure a $2,300,000 loan. Three years later, defendants gave mortgages on the
property to World Savings Bank (WSB) to secure a $500,000 loan and to
Commerce Bank to secure a $2,300,000 loan. The Commerce Bank mortgage
from 2000 was then canceled.
The purported transaction at the center of this appeal took place in
September 2006. A $1,779,000 promissory note in favor of plaintiff's
predecessor in interest, Countrywide Home Loans, Inc. (Countrywide), was
allegedly signed by defendant Marianne Corradetti on September 25, 2006. A
mortgage was allegedly signed by defendants that same day in favor of
Countrywide to secure the putative $1,779,000 loan to Marianne Corradetti. 1
Defendants' purported signatures on the mortgage are notarized by "Robert A.
Citarelli" on "September 25, 2006."
A HUD-1 Settlement Statement allegedly prepared in connection with
the transaction reflects a September 25, 2006 settlement date for the closing
and contains defendants' purported signatures, each of which is followed by a
1
The mortgage was recorded with the Cape May County Clerk on October 3,
2006.
A-5334-16T1
3
handwritten date of September 25, 2006. The HUD-1 statement indicates
defendants were required to pay $8840.26 at the loan closing. The HUD-1
statement further reflects that proceeds from the loan were remitted by
Countrywide's settlement agent, Boardwalk Title Agency, Inc., to pay the
balances due on defendants' 2003 loans from WSB ($407,000) and Commerce
Bank ($1,352,059.25), as well as local and state taxes.
Three weeks after the purported mortgage loan transaction, WSB
acknowledged it received "full payment and satisfaction" of its 2003 mortgage
on defendants' property and discharged the mortgage. The discharge of WSB's
mortgage was recorded on October 20, 2006.
Two weeks later, on November 6, 2006, Commerce Bank filed a
discharge of its 2003 mortgage on defendants' property. The discharge states
the 2003 mortgage was "fully paid and satisfied."
Plaintiff filed a foreclosure complaint in 2014 alleging it is the successor
in interest to Countrywide by assignment. 2 The complaint alleged defendant
2
The 2006 mortgage was assigned on behalf of Countrywide to the Bank of
New York Mellon f/k/a The Bank of New York as Trustee for the Benefit of
the Certificate Holders of the CWALT, Inc., Alternative Loan Trust 2006-
36T2, Mortgage Pass Through Certificates, Series 2006-36T2. The assignment
of mortgage was recorded on November 17, 2009. The mortgage was then
assigned to plaintiff by way of an assignment of mortgage recorded on
February 14, 2014. The assignment of the mortgage to plaintiff occurred prior
(continued)
A-5334-16T1
4
Marianne Corradetti received a $1,779,000 loan from Countrywide and
executed a promissory note in that amount in Countrywide's favor on
September 25, 2006. The complaint further asserted defendants granted
Countrywide a mortgage on their Ocean City property to secure payment of the
note. The complaint averred defendants failed to make an installment payment
that was due on April 1, 2009, and remained in default thereafter.
Defendants filed a contesting answer which, in pertinent part, denied that
Marianne Corradetti signed the promissory note and that defendants signed the
mortgage. Defendants asserted the "signatures on the mortgage and note are
forgeries and not the signatures of Marianne Corradetti and Anthony
Corradetti."
In 2015, plaintiff filed an amended complaint adding claims against
defendants for equitable subrogation, an equitable lien and unjust enrichment.
Defendants filed a contesting answer to the amended complaint, again
asserting the signatures on the note and mortgage were forgeries. Defendants
(continued)
to the filing of the foreclosure complaint, and plaintiff possessed the
promissory note when the complaint was filed.
A-5334-16T1
5
also filed a third-party complaint against Boardwalk Title Agency, Inc. and
Robert A. Citarelli. 3
Plaintiff subsequently filed a motion for summary judgment. In support
of the motion, plaintiff presented a statement of material facts asserting
Marianne Corradetti signed the 2006 promissory note to Countrywide, both
defendants signed the mortgage, and defendants defaulted on April 1, 2009.
Plaintiff further asserted the HUD-1 statement showed portions of the loan
proceeds would be used to pay the 2003 WSB and Commerce Bank loans, and
the mortgages securing those loans were discharged within six weeks of the
September 25, 2006 loan transaction. Plaintiff relied on exemplars of
defendants' purported signatures on various documents, Marianne Corradetti 's
deposition testimony about the signatures, and a report from an expert forensic
document examiner who opined, within a reasonable degree of scientific
certainty, that the signatures on the 2006 note and mortgage to Countrywide
were defendants'.
3
In August 2015, plaintiff filed a second amended complaint adding
Boardwalk Title Agency, Inc., and Robert A. Citarelli as defendants and
asserting separate claims against them. There is no evidence in the record on
appeal that they were served with defendants' third-party complaint or
plaintiff's second amended complaint. They did not participate in the
proceedings before the trial court and have not entered an appearance in this
appeal.
A-5334-16T1
6
Defendants submitted opposition to plaintiff's motion and filed a cross-
motion for summary judgment, claiming they were entitled to dismissal of the
foreclosure complaint because the evidence established their signatures on the
documents were forgeries and the note and mortgage were therefore invalid.
Defendants produced evidence showing they were on a religious pilgrimage in
Croatia on September 25, 2006—the date the Countrywide loan and mortgage
allegedly closed and the HUD-1 was signed—and did not return to the United
States until September 26, 2006. Marianne Corradetti asserted the signatures
on the HUD-1 and note, dated September 25, 2006, and on the mortgage,
which was notarized on September 25, 2006, could not be hers or her
husband's because they were in Croatia on that date.
Defendants admitted the HUD-1 "reflects" that proceeds from the
disputed loan were "allegedly used" to pay off the WSB and Commerce Bank
loans and taxes defendants owed to the Ocean County Tax Collector and the
New Jersey Division of Taxation, but denied signing the HUD-1. Defendants
further admitted the WSB mortgage was discharged in October 2006 and the
Commerce Bank mortgage was discharged in November 2006, but denied they
were aware "that any payment was made to" either WSB or Commerce Bank
by Countrywide during 2006.
A-5334-16T1
7
Defendants also submitted a certification from a physician explaining
that Anthony Corradetti could not provide any information concerning the
facts pertinent to the matter because he suffers from Alzheimer's disease.
After hearing oral argument, the court issued a written opinion
explaining plaintiff's foreclosure action is based on a mortgage and note that
were purportedly executed on September 25, 2006, but defendants produced
evidence showing they could not have executed the documents on that date
because they were in Croatia. The court rejected plaintiff's reliance on a
certification from a representative of Bayview Loan Servicing, LLC
(Bayview), the company plaintiff used to service its mortgage loans. The
certification incorporated computer records obtained from Countrywide's loan
servicing provider, Bank of America, that showed thirty payments were made
on the loan from November 2006 through March 2009. Plaintiff claimed the
payments confirmed defendants executed the note and mortgage or otherwise
established defendants ratified the note and mortgage. The court rejected
plaintiff's reliance on the certification and records, finding neither stated nor
established defendants made any of the payments.
The court denied plaintiff's motion and defendants' cross-motion for
summary judgment, finding there was a genuine issue of material fact as to
whether defendants executed the note and mortgage and, therefore, whether the
A-5334-16T1
8
documents were valid. The court denied defendants' summary judgment
motion, finding that when the facts were viewed in the light most favorable to
plaintiff, there was evidence supporting plaintiff's claim defendants signed the
documents. The court also found, because there were genuine issues of
material fact as to whether the purported mortgage was valid and whether the
purported mortgage proceeds were used to pay off defendants' existing
mortgages, it could not grant plaintiff's motion for summary judgment on its
mortgage foreclosure, equitable subrogation, equitable lien and unjust
enrichment claims. The court entered a December 14, 2016 order denying
plaintiff's summary judgment motion and defendants' cross-motion.
Plaintiff filed a motion for reconsideration, arguing the court erred by
denying summary judgment on its equitable subrogation claim. Plaintiff
supplied the court with an unpublished Appellate Division decision that
plaintiff asserted permitted application of equitable subrogation under the
circumstances presented here. The court concluded the doctrine of equitable
subrogation does not convert an invalid mortgage into a valid mortgage, and
there was a genuine issue of material fact as to whether the September 25,
2006 mortgage is valid. The court also reasoned that if plaintiff established
the September 25, 2006 mortgage is valid, application of equitable subrogation
would be unnecessary because plaintiff would have a first mortgage on
A-5334-16T1
9
defendants' property and would be able to proceed with the foreclosure. The
court entered a February 3, 2017 order denying the reconsideration motion.
At the bench trial that followed, plaintiff presented a single witness in
support of its foreclosure, equitable mortgage, equitable subrogation, and
unjust enrichment claims. James D'Orlando testified he is a litigation manager
at Bayview. He explained Bayview's practice of conducting a 132-point data
check to verify the information contained in the loan and mortgage documents
supplied by the prior loan service provider before Bayview's assumption of the
servicing of the loan, and testified this process was followed when Bayview
took over the servicing of the purported 2006 loan from Bank of America in
October 2012. However, D'Orlando conceded he had no personal knowledge
regarding the purported September 25, 2006 mortgage transaction or the data
check performed on the 2006 loan documents, and was not involved in the
processing of the loan and mortgage, never spoke to anyone concerning the
transaction, and had no knowledge of whether defendants actually signed the
note, mortgage, HUD-1 statement or any other documents related to the
mortgage loan. His knowledge was limited to his review of Bayview's records
pertaining to the mortgage and the records Bayview received from Bank of
America.
A-5334-16T1
10
D'Orlando's substantive testimony was limited to his identification of
documents in Bayview's loan serving file: the original September 25, 2006
Countrywide note, which contains Marianne Corradetti's purported signature;
the September 25, 2006 mortgage, which lists defendants as the borrowers and
includes their purported signatures; a September 25, 2006 HUD-1 statement
which bears defendants' purported signatures; Bank of America's letter to
Corradetti and enclosed list of thirty payments on the loan from October 2,
2006, through April 30, 2010, as well as other taxes and fees (the payment
history); the "BAC Fee Transaction Histories Prior to Bayview"; a list of 201
transactions from October 20, 2010, through October 2, 2012; a one-page
untitled document containing fifteen transactions of a similar nature to, but
different from those in, the "BAC Fee Transaction Histories Prior to Bayview"
from April 19, 2011, through October 15, 2012; and the "Bayview Customer
Activity Statement," which lists taxes, fees, and insurance premiums paid on
defendants' property from October 25, 2012, through May 19, 2017.
D'Orlando further explained the September 25, 2006 loan closing was for a
mortgage refinance.
The court admitted the documents in evidence, as well as others related
to defendants' 1992 purchase of the Ocean City property, including the
cancellation of the original purchase money mortgage, the subsequent 2000
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11
mortgage to Commerce Bank and its cancellation in 2003, and the 2003
mortgages to WSB and Commerce Bank and their cancellations during the six -
week period following the purported September 25, 2006 loan and mortgage
closing.
The court also admitted in evidence a November 2, 2009 foreclosure
complaint plaintiff filed against defendants, which was subsequently
"voluntarily dismissed," plaintiff's motion for entry of a final judgment of
foreclosure in that matter,4 and a letter allegedly submitted by defendants in
response to plaintiff's request for final judgment in that matter. The letter
stated, "You are hereby notified that I object to the entry of a final judgment in
the above referenced matter[.] I disagree and dispute the amount that you
show as amount owed." The letter bears defendants' purported signatures.
Plaintiff rested without calling any other witnesses or presenting any
other evidence. Although in support of its summary judgment motion plaintiff
provided an expert report opining that the disputed signatures on the loan and
mortgage closing documents were defendants', it did not present any expert or
lay opinion testimony at trial concerning the signatures on any of the
documents admitted in evidence. In addition, although the court noted in its
4
The circumstances of that filing and subsequent voluntary dismissal are
unclear from the record.
A-5334-16T1
12
decision denying summary judgment that there was no evidence establishing
defendants made any of the purported thirty loan payments from November
2006 through March 2009 reflected in the payment history, plaintiff failed to
present any evidence at trial showing defendants made any of the thirty
payments on the loan or paid the $8840.26 due and owing at the September 25,
2006 closing as indicated on the HUD-1 statement.5 Nor did plaintiff produce
records from WSB or Commerce Bank showing the source of the 2006
payments that satisfied defendants' 2003 mortgages, the amounts of the
payments that were accepted in satisfaction of those mortgages or that the
payments were made by Countrywide or its settlement agent, Boardwalk Title
Agency, Inc.6
The defense called defendant Marianne Corradetti as its sole witness.
She testified that she and her husband attended a religious pilgrimage in
5
For example, plaintiff did not present bank records from defendants'
accounts showing they made any of the purported mortgage payments. The
HUD-1 statement, which the court found was forged, indicated that $8840.26
was due and owing from defendants at the September 25, 2006 closing, but
plaintiff did not present any evidence from defendants' bank records showing
they ever made such a payment.
6
Our dissenting colleague correctly points out that the record presented in
support of plaintiff's summary judgment motion included other putative
evidence related to the mortgages. See Post at __, __ (slip op. at 1, n.1, and 9,
n.7). But that evidence was not introduced at trial and cannot be properly
considered in assessing the validity of the trial court's fact findings.
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13
Croatia from September 18, 2006, through September 26, 2006. She further
identified her and her husband's passports, which showed they were not in the
United States on September 25, 2006, when the purported loan and mortgage
closing took place, and that they did not return until September 26, 2006. A
copy of defendants' itinerary for the 2006 Croatia trip, their passports and
photographs of defendants on the trip were admitted in evidence.
Marianne Corradetti denied the signatures on the loan and mortgage
documents were hers or her husband's and testified that she never authorized
anyone to sign them on her behalf.7 She stated she never dealt with
Countrywide, never granted Countrywide a mortgage on the Ocean City
property, and "would have never" agreed to place a mortgage on the property
because it was her "dream house." She further testified that her husband told
her they were "free and clear" of any mortgage, and she was "unaware that [the
property] was mortgaged."
Marianne Corradetti testified that her husband handled the family's
finances and business dealings without her involvement. She denied making
any of the mortgage payments reflected in the Bank of America payment
7
At times, Marianne Corradetti gave conflicting testimony concerning the
authenticity of her and her husband's purported signatures on various
documents shown to her.
A-5334-16T1
14
history or otherwise writing checks toward any mortgage payments for the
property. She was aware of the $2,300,000 mortgage made to Commerce Bank
in 2000, but had no knowledge as to how it was paid.
The court subsequently issued a detailed written decision finding
D'Orlando provided no information "based on his own knowledge with regard
to the closing" and provided only "the minimum testimony necessary to get the
records into evidence pursuant to the business records exception" to the
hearsay rule. See N.J.R.E. 803(c)(6). The court explained D'Orlando's
testimony was imprecise—at times he testified Bayview did a 130-point data
check, and at others he referred to it as a 132-point data check—and found
D'Orlando's testimony beyond "what records are in the Bayview file" was not
credible because it was not based on his personal knowledge. 8
Persuaded by the evidence showing defendants did not return to the
United States until September 26, 2006, the court found credible Marianne
Corradetti's testimony that she and her husband did not sign the September 25,
2006 note, mortgage and HUD-1 statement. The court concluded the mortgage
documents were forgeries and noted plaintiff did not present any credible
8
For example, D'Orlando testified defendants made the thirty loan payments
reflected in the Bayview records. That information, however, is not contained
in the Bank of America records. Those records do not identify the source of
the payments.
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15
evidence establishing that defendants signed the mortgage, note and H UD-1
"on any day other than September 25, 2006," the notary public was "negligent
or unscrupulous," or "defendants authorized someone else to sign their names
for them, to act as their amanuensis." The court also found credible Marianne
Corradetti's testimony that she believed the property was "free and clear" of
any mortgage, "she had no knowledge of the subject mortgage . . . never dealt
with Countrywide, and . . . never was aware of any prior foreclosure."
The court determined "defendants . . . provided clear, satisfactory and
convincing evidence to overcome any presumption of authenticity offered by
the notarial seal" in the mortgage documents. The court further found it was
"enough that defendants show[ed] by clear and convincing evidence that they
did not sign the documents to be relieved of the obligations of the" mortgage,
concluded the legal effect of the forgeries invalidated the mortgage, and
declared the mortgage "void ab initio, canceled, or extinguished."
The court also concluded plaintiff failed to present any credible evidence
establishing an agreement between defendants and Countrywide. The court
rejected plaintiff's argument "that the payment history" for the 2006 loan
establishes "a ratification of the mortgage" and "an agreement between
Countrywide and defendants" and found plaintiff failed to produce any
credible evidence showing defendants actually made the purported payments
A-5334-16T1
16
reflected in the payment history. The court rejected D'Orlando's testimony
regarding the payment history as "not convincing, and . . . not credible"
because D'Orlando "never testified how payments were verified, the payment
dates, the number of payments and amount of payments that were made on"
the mortgage, "could not testify to the information contained in the document,"
and provided conclusory testimony that the information contained in the
document was true. The court reasoned that whoever forged the mortgage
documents may have made the payments to cover up the forgeries, and
plaintiff failed to present any evidence showing defendants actually made any
payments. The only documents plaintiff presented that the court found reliable
were those in Bayview's file showing taxes, fees, and insurance premiums paid
on defendant's property following the purported default.
Moreover, the court found plaintiff failed to present any evidence the
September 25, 2006 mortgage loan proceeds were actually "used to satisfy the
[WSB] and Commerce Bank mortgages." The court found the filed
satisfactions of the mortgages constituted "evidence that the two mortgages
were satisfied," but not by whom. The court observed that plaintiff did not
produce the original WSB mortgage, and the only evidence concerning WSB is
a recorded satisfaction of the mortgage that does not include any reference to
Countrywide, Bayview or a payoff amount. Similarly, the court noted the
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17
Commerce Bank satisfaction makes no mention of Countrywide or Boardwalk
Title Agency, Inc. The court rejected the HUD-1 statement as persuasive
evidence establishing the loan proceeds were used to pay the WSB and
Commerce Bank mortgages because "it too contains a forged signature and it
too is an invalid document."
The court also rejected plaintiff's reliance on the November 2, 2009
letter purportedly sent by defendants in response to plaintiff's request for entry
of a final judgment in the 2009 foreclosure action. Plaintiff argued the letter
only disputed the amount due claimed by plaintiff in the foreclosure action and
thus constituted an admission plaintiff had a valid mortgage on the property.
The court found that the letter, even if written by defendants, disputed not only
the amount allegedly due but also challenged entry of a final judgment and
therefore contested plaintiff's right to foreclose.
The court further rejected plaintiff's argument supporting the existence
of a mortgage under equitable doctrines, finding there was no evidence of
ratification and that the doctrines of waiver, equitable estoppel, and equita ble
subrogation did not apply. The court found plaintiff erroneously attempted "to
use equitable subrogation to transform an invalid mortgage into a valid
mortgage." The court further observed that "no New Jersey case has applied
equitable subrogation where the adverse party is the fee simple owner of the"
A-5334-16T1
18
property at issue. The court declined to create an equitable mortgage because
"there is no evidence of an agreement between defendants and Countrywide."
Last, the court declined to find defendants were unjustly enriched
because plaintiff did not present "evidence [establishing] that Countrywide
money was used to satisfy the [Commerce Bank and WSB] mortgages." The
court held that without credible evidence the proceeds from the purported
September 25, 2006 transaction were used to satisfy the two mortgages, there
is no basis to conclude defendants received a benefit from plaintiff or
plaintiff's predecessor. The court found the HUD-1 signatures were forged,
and, therefore, the HUD-1 statement is invalid and did not establish any
proceeds were used to satisfy the mortgages. Plaintiff presented no other
credible evidence the loan proceeds were actually used to satisfy the
mortgages.
The court determined "[l]enders have an obligation to do everything
correctly because their remedy has significant consequences to real people;
their remedy is ultimately to take someone's home." The court concluded that
plaintiff "failed to exercise due diligence" and had "bad paper: an invalid
mortgage, an invalid note, and an invalid HUD-1."
The court entered a June 30, 2017 order granting judgment in
defendants' favor and dismissing plaintiff's complaint. The court then filed an
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amended order dated July 26, 2017, entering judgment in favor of defendants
and invalidating the September 2006 Countrywide mortgage and note. This
appeal followed.
II.
Plaintiff first argues the court erred by denying its motions for summary
judgment and reconsideration. More specifically, it contends the undisputed
facts presented in support of its summary judgment motion established it is
entitled to a lien on defendants' property under the doctrine of equitable
subrogation because the proceeds from the September 25, 2006 mortgage loan
transaction were used to pay the balances due under the 2003 WSB and
Commerce Bank mortgage loans. Plaintiff contends the court erred by finding
the doctrine is not applicable where loan funds are paid from an allegedly
invalid mortgage loan and cannot be applied against a fee simple ownership
interest.
We review a grant or denial of summary judgment de novo and apply the
same standard as the trial court. See State v. Perini Corp., 221 N.J. 412, 425
(2015). We "must view the facts in the light most favorable to the non-moving
party, which in this case" is defendants. Bauer v. Nesbitt, 198 N.J. 601, 605
n.1 (2009). The moving party must show there is "no genuine issue as to any
material fact challenged and that [it] is entitled to a judgment . . . as a matter of
A-5334-16T1
20
law." Burnett v. Gloucester Cty. Bd. of Chosen Freeholders, 409 N.J. Super.
219, 228 (App. Div. 2009) (quoting R. 4:46-2(c)). Measured against these
well-established principles, we affirm the court's denial of plaintiff's summary
judgment motion on its equitable subrogation claim.
Under the doctrine of equitable subrogation, "[a] refinancing lender
whose security turns out to be defective is subrogated by equitable assignment
'to the position of the lender whose lien is discharged by the proceeds of the
later loan, there being no prejudice to or justified reliance by a party in adverse
interest[.]'" Equity Sav. & Loan Ass'n v. Chi. Title Ins. Co., 190 N.J. Super.
340, 342 (App. Div. 1983) (emphasis added) (citation omitted). Thus, to
succeed under the doctrine of equitable subrogation, the refinancing lender
must establish that the proceeds of its loan were used to satisfy the lien of the
prior lienholder. Ibid.Here, the motion court correctly denied plaintiff's summary judgment
motion on its equitable subrogation claim because there was a genuine issue of
material fact as to whether the proceeds from the September 25, 2006
mortgage loan were used to satisfy the WSB and Commerce Bank mortgage
loans. Plaintiff did not present any direct evidence showing that funds from
the purported September 25, 2006 transaction were used to satisfy the WSB
and Commerce Bank mortgage loans. Instead, plaintiff relied on the HUD-1
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21
statement to establish the mortgage loan proceeds were used to satisfy those
loans. But defendants presented evidence establishing they did not sign the
HUD-1 statement; they were out of the country and otherwise challenged the
authenticity of the signatures. 9
Similarly, plaintiff relied on the cancellation of the WSB and Commerce
Bank mortgages within weeks of the purported September 25, 2006 transaction
to support its claim it was entitled to summary judgment on its equitable
subrogation claim. But again defendants denied their participation in the
transaction, and plaintiff failed to present competent evidence showing that as
a matter of undisputed fact the proceeds from the transaction were actually
used to satisfy the WSB and Commerce Bank mortgage loans.
Although plaintiff presented evidence of many circumstances supporting
its claim the proceeds were used to satisfy the prior mortgage loans, resolution
of the issue depended upon a weighing of the evidence and a determination of
the credibility of the parties' respective evidence and testimony. "In reviewing
whether or not a genuine issue as to any material fact challenged is presented,
the motion judge cannot weigh the credibility of the evidence." Petersen v.
9
Marianne Corradetti testified at her deposition that she did not recall signing
the HUD-1 statement and did not recognize her husband's signature on the
statement. She also testified she was "unsure" if she "recognized" her
purported signature "to be [her] signature."
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22
Twp. of Raritan, 418 N.J. Super. 125, 132 (App. Div. 2011). Thus, the validity
of the HUD-1 statement and its credibility as an accurate statement of the
disposition of the mortgage loan proceeds presented fact issues essential to a
resolution of plaintiff's claimed entitlement to equitable subrogation, and the
motion court therefore correctly denied plaintiff's motion for summary
judgment on its equitable subrogation claim, 10 as well as its subsequent motion
for reconsideration.
III.
Plaintiff also challenges the court's orders, entered after the bench trial,
dismissing its claims and complaint and declaring the purported Countrywide
note and mortgage void and invalid. Plaintiff contends the court 's decision is
not supported by substantial credible evidence, is contrary to the credible
evidence presented and results in a manifest injustice. We are not persuaded.
Our review of "the findings and conclusions of a trial court following a
bench trial are well-established." Allstate Ins. Co. v. Northfield Med. Ctr.,
P.C., 228 N.J. 596, 619 (2017). We do not "engage in an independent
10
Because the motion court correctly determined there was a genuine issue of
material fact as to one of the essential elements of plaintiff's equitable
subrogation claim—the refinancing lender's payment of an existing lien—it is
unnecessary to address plaintiff's argument that the court erred by also finding
the doctrine of equitable subrogation has no application against a fee simple
owner or where loan funds are secured by an invalid mortgage.
A-5334-16T1
23
assessment of the evidence as if [we] were the court of first instance," State v.
Locurto, 157 N.J. 463, 471 (1999), and will "not weigh the evidence, assess
the credibility of witnesses, or make conclusions about the evidence,"
Mountain Hill, L.L.C. v. Twp. of Middletown, 399 N.J. Super. 486, 498 (App.
Div. 2008) (quoting State v. Barone, 147 N.J. 599, 615 (1997)). Instead,
[w]e give deference to the trial court that heard the
witnesses, sifted the competing evidence, and made
reasoned conclusions. Reviewing appellate courts
should "not disturb the factual findings and legal
conclusions of the trial judge" unless convinced that
those findings and conclusions were "so manifestly
unsupported by or inconsistent with the competent,
relevant and reasonably credible evidence as to offend
the interests of justice."
[Allstate Ins. Co., 228 N.J. at 619 (alteration in
original) (citations omitted) (quoting Griepenburg v.
Twp. of Ocean, 220 N.J. 239, 254 (2015)).]
"[W]e defer to the trial court's credibility determinations, because it
'"hears the case, sees and observes the witnesses, and hears them testify,"
affording it "a better perspective than a reviewing court in evaluating the
veracity of a witness."'" City Council of Orange Twp. v. Edwards, 455 N.J.
Super. 261, 272 (App. Div. 2018) (quoting Gnall v. Gnall, 222 N.J. 414, 428
(2015)). We will not disturb a trial court's findings "unless they are so clearly
insupportable as to result in their denial of justice." Estate of Ostlund v.
Ostlund, 391 N.J. Super. 390, 400 (App. Div. 2007). An "appellate court
A-5334-16T1
24
should exercise its original fact finding jurisdiction sparingly and in none but a
clear case where there is no doubt about the matter." Seidman v. Clifton Sav.
Bank, 205 N.J. 150, 169 (2011) (quoting Cesare v. Cesare, 154 N.J. 394, 412
(1998)). We review the trial court's interpretation of law de novo. Manalapan
Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
"Reversal is reserved only for those circumstances when we determine
the factual findings and legal conclusions of the trial judge went 'so wide of
the mark that a mistake must have been made.'" Llewelyn v. Shewchuk, 440
N.J. Super. 207, 214 (App. Div. 2015) (quoting N.J. Div. of Youth & Family
Servs. v. M.M., 189 N.J. 261, 279 (2007)). Such a mistake "can arise in many
ways from manifest lack of inherently credible evidence to support significant
findings, obvious overlooking or underevaluation of crucial evidence, or a
clearly unjust result." Pioneer Nat'l Title Ins. Co. v. Lucas, 155 N.J. Super.
332, 338 (App. Div. 1978). However, "[i]f we are satisfied that the trial
judge's findings and result could reasonably have been reached on sufficient
credible evidence in the record as a whole, his [or her] determination should
not be disturbed." Ibid. "Consequently, when a reviewing court concludes
there is satisfactory evidentiary support for the trial court's findings, 'its task is
complete and it should not disturb the result[.]'" Elrom v. Elrom, 439 N.J.
A-5334-16T1
25
Super. 424, 433 (App. Div. 2015) (quoting Beck v. Beck, 86 N.J. 480, 496
(1981)).
Based on our careful review of the evidentiary record, we cannot
conclude the court's findings of fact are not supported by sufficient evidence it
deemed credible. The court's determination that Marianne Corradetti's
signature on the note and defendants' signatures on the mortgage and HUD-1
were forged is unassailable—the evidence presented at trial establishes
defendants were not in the United States on September 25, 2006, when their
purported signatures were notarized and all of the documents are dated.
Plaintiff was aware prior to trial that defendants disputed their participation in
the alleged September 25, 2006 transaction, as well as their signatures on the
documents, but it opted not to present any evidence to counter the
uncontroverted evidence that defendants could neither have been present for
the purported transaction nor executed the documents upon which plaintiff's
foreclosure and other claims were founded.
The court's well-supported finding that the purported mortgage
transaction occurred through the forgery of defendants' signatures on the note,
mortgage and HUD-1 also reasonably provided the lens through which the
court viewed the other evidence and the lack of evidence. The court rejected
plaintiff's reliance on the HUD-1 to establish that proceeds from the
A-5334-16T1
26
transaction were used to satisfy the WSB and Commence Bank mortgage
loans; it reasoned a forged document could not, and did not, establish one of
the essential elements of plaintiff's causes of action—that funds purportedly
obtained from a forged transaction were actually used to pay off those loans.
The record amply supports the court's finding that plaintiff failed, and
woefully so, to present any evidence showing the proceeds from the alleged
September 25, 2006 transaction were used to satisfy the WSB and Commerce
Bank loans. Confronted with a purported transaction evidenced only by forged
documents, the court did not find the evidence, which showed only that the
WSB and Commerce Bank mortgage loans were discharged, established that
funds from the purported transaction were used for the loan payoffs. Indeed,
and as the court found, plaintiff failed to present any evidence showing the
source of the funds for the loan payoffs, the identity of the payor or that the
payoff amounts were those listed in the forged HUD-1.
Plaintiff also reprises a factual argument it made before the trial court.
It compares defendants' purported signatures on various documents with those
they allegedly (but could not have) signed on September 25, 2006, and
contends the court should have found they are all the same. To be sure, the
signatures on the various documents, including those on the September 25,
2006 purported note, mortgage and HUD-1 look quite similar, and Marianne
A-5334-16T1
27
Corradetti's testimony about the signatures was at times contradictory. But
plaintiff ignores the court's factual finding, which is supported by sufficient
credible evidence and to which we must defer, that the purported September
25, 2006 signatures, some of which were notarized, are forgeries. That the
purported September 25, 2006 signatures may look similar to defendants '
genuine signatures on other documents does not require the conclusion that the
September 25, 2006 signatures are also genuine; as noted, the evidence
otherwise supports the court's determination that the purported September 25,
2006 signatures could not have been made by defendants because they were
not in the United States when the purported transaction took place.
Plaintiff's trial counsel 11 placed a substantial and impossible burden on
its solitary witness, D'Orlando, to establish defendants actually participated in
the mortgage transaction, their signatures on the documents were genuine, the
proceeds were used to satisfy the WSB and Commerce Bank loans and
defendants actually made thirty mortgage payments to Countrywide's service
provider. D'Orlando acknowledged he did not possess a scintilla of personal
knowledge concerning the alleged September 25, 2006 transaction or any of
the other circumstances purportedly reflected in the documents he presented,
11
Plaintiff's trial counsel did not participate in the appeal; plaintiff's appellate
counsel had no involvement in the trial.
A-5334-16T1
28
and the court otherwise found his lack of knowledge and conflicting statements
rendered his testimony not credible and the Bank of America payment history
unreliable. D'Orlando, through no fault of his own, provided only the
minimum testimony necessary to allow a series of documents about which he
had no substantive knowledge to be admitted in evidence. See, e.g., New
Century Fin. Servs., Inc. v. Oughla, 437 N.J. Super. 299, 326 (App. Div. 2014)
(noting that a witness providing the foundation for admission of business
records need not "possess any personal knowledge of the act or event
recorded").
Plaintiff's case required more. Plaintiff knew defendants denied
participation in the purported September 25, 2006 transaction, disputed the
validity of the signatures on the closing documents, contested plaintiff's claim
the transaction proceeds were used to pay off the WSB and Commerce Bank
loans and rejected plaintiff's assertion they ratified the mortgage. Plaintiff
rested its proofs at trial on a witness unarmed with the competent and credible
evidence necessary to prove plaintiff's case in light of defendants' denials and
the uncontroverted evidence showing the closing documents were forged. The
court's finding that the proffered evidence was inadequate is supported by the
record.
A-5334-16T1
29
Plaintiff's appellate counsel makes an able and exhaustive effort to
establish that, despite the lack of credible evidence presented at trial, the court
should have interpreted the evidence differently. Plaintiff's argument that the
court should have concluded defendants signed the mortgage documents on a
day other than September 25, 2006, is undermined by the evidence showing
the signatures were notarized on that date and Marianne Corradetti's testimony,
which the court found credible, that neither she nor her husband signed the
documents. Plaintiff's assertion that defendants received the benefit of the
alleged transaction because the WSB and Commerce Bank mortgages were
satisfied from the proceeds ignores that the court determined plaintiff failed to
present any evidence the court found credible showing the proceeds were
actually used to satisfy those loans. Plaintiff's contention that the documents
showed defendants made thirty mortgage payments following the loan fails to
account for the absence of any credible evidence showing defendants actually
made the payments, and the court's finding that D'Orlando's testimony was not
credible concerning the reliability of the prior mortgage servicer 's payment
history.
Plaintiff argues again that the November 2, 2009 letter defendants
allegedly sent in the 2009 mortgage foreclosure proceeding constituted an
admission to, or ratification of, the mortgage, but the trial court interpreted the
A-5334-16T1
30
letter differently, finding that, contrary to plaintiff's proffered interpretation,
the letter disputed plaintiff's entitlement to a judgment of foreclosure. We do
not substitute our judgment for the trial court's interpretation of the evidence.
"When more than one reasonable inference can be drawn from the review of"
documentary evidence, "then the one accepted by a trial court cannot be
unreasonable" and "the mere substitution of an appellate court's judgment for
that of the trial court's advances no greater good." State v. S.S., 229 N.J. 360,
380 (2017). We have reviewed the letter and cannot conclude that, given all of
the circumstances presented and the court's findings of fact that are supported
by credible evidence, the court's interpretation is "so clearly mistaken—so
wide of the mark—that the interests of justice demand intervention." Id. at
381.
Plaintiff's causes of action are founded on the validity of the note and
mortgage, defendants' acceptance or ratification of the mortgage loan, or
evidence establishing defendants received the benefit of the proceeds of the
purported September 25, 2006 transaction in the form of satisfaction of the
WSB and Commerce Bank mortgages. See Zaman v. Felton, 219 N.J. 199,
217-19 (2014) (explaining factors to be considered in establishing an equitable
mortgage); Reibman v. Myers, 451 N.J. Super. 32, 47-48 (App. Div. 2017)
(explaining elements of an equitable subrogation claim); VRG Corp. v. GKN
A-5334-16T1
31
Realty Corp., 135 N.J. 539, 554 (1994) (explaining elements of an unjust
enrichment cause of action).
Plaintiff's appellate counsel's efforts to resuscitate plaintiff's claims fail,
however, because there is sufficient credible evidence supporting the court's
finding that defendants did not execute the note or mortgage, and the evidence
the court found credible does not establish the proceeds of the purported
September 25, 2006 transaction were used to satisfy the WSB and Commerce
Bank mortgages or that defendants otherwise ratified the purported transaction.
It is not the role of the trial court or this court to fill in the gaps in a plaintiff's
proofs or make decisions that are not supported by sufficient credible
evidence. Where, as here, the trial court's factual findings are supported by
sufficient credible evidence, we defer to those findings. See Rova Farms
Resort, Inc. v. Inv'rs Ins. Co. of Am., 65 N.J. 474, 484 (1974). We therefore
affirm the court's July 26, 2017 amended final judgment, but remand for the
court to consider and determine an issue that was not addressed in its written
decision and judgment.
Although we find no error in the court's findings and conclusions related
to the purported September 25, 2006 mortgage transaction or the alleged use of
the proceeds from the alleged transaction on defendants' behalf, we note one
remaining issue the court did not address. In its finding the Bank of America
A-5334-16T1
32
payment history on the putative mortgage was not sufficiently reliable to
support a determination that defendants made payments on the mortgage and
therefore ratified it, the court expressly found reliable the "BAC Fee
Transaction Histories Prior to Bayview" and the one-page untitled document in
Bayview's file together listing 216 transactions from October 20, 2010,
through October 15, 2012, showing plaintiff's payment of taxes, fees, and
insurance premiums related to defendants' property. The court did not directly
address the reliability or unreliability of the "Bayview Customer Activity
Statement"—which lists similar transactions for the period of October 25,
2012, through May 19, 2017—beyond stating that Bayview "began its own . . .
[s]tatement, presumably after the mortgage was 'boarded.'" However, we note
that it appears none of the court's stated reasons for finding the Bank of
America payment history unreliable apply to the "Bayview Customer Activity
Statement." Together the payments reflected in these documents total a
substantial amount, with the "Bayview Customer Activity Statement" listing an
outstanding escrow balance of $148,151.88 as of May 19, 2017.
The trial court overlooked these documents and their implications, and it
appears plaintiff made the payments to protect its interests in the property
based on its assertion it was the mortgagee. Plaintiff did not present any
evidence demonstrating defendants had knowledge of the payments reflected
A-5334-16T1
33
in these documents—the issue was not addressed by any proofs at trial—and
thus failed to demonstrate that their payment by plaintiff established
defendants' acknowledgment or ratification of the alleged mortgage. However,
the court's finding the documents are reliable supports a claim by plaintiff for
recovery or reimbursement of the sums paid as reflected in the documents
separate from the alleged September 25, 2006 mortgage or any entitlement to
an equitable lien based on the alleged disbursement of funds from the putative
mortgage transaction.
It is not our intention that this opinion foreclose plaintiff from
appropriately seeking recovery or reimbursement of sums it has paid that
might have inured to defendants' benefit based on its erroneous belief it held
an enforceable mortgage or equitable lien on defendants' property. We
therefore remand for the parties and the court to address the issue of plaintiff's
entitlement, if any, to the sums it paid on defendants' behalf and the manner in
which that issue will be addressed and decided. We offer no opinion on the
merits of the potential claim, possible defenses or the procedure the parties and
the court should employ to address the issue. We remand because plaintiff's
entitlement to recovery or reimbursement of the sums paid that inured to
defendant's benefit as suggested in the documents the court found reliable, or
otherwise, should be addressed.
A-5334-16T1
34
Affirmed and remanded for further proceedings. We do not retain
jurisdiction.
A-5334-16T1
35
____________________________
ACCURSO, J.A.D., dissenting.
This case turns on our struggle with the standard of review. And,
essentially, on one finding, that the loan documents the Corradettis purportedly
signed on September 25, 2006 are forgeries. The majority terms that finding
"unassailable." Ante at __ (slip op at 26). I think it's unsupported and so
"inconsistent with the competent, relevant and reasonably credible evidence as
to offend the interests of justice." Griepenburg v. Twp. of Ocean, 220 N.J.
239, 254 (2015) (quoting Rova Farms Resort v. Investors Ins. Co., 65 N.J. 474,
484 (1974)). Accordingly, I respectfully dissent.
This case is difficult for the reasons the majority has so capably
emphasized, the proofs are thin and appellate review of the factual findings of
the trial court sitting in a non-jury case is so deferential. There is no question
but that additional proofs would make the case easier to resolve. 1 The issue,
1
I am not so convinced as the majority that the fault for that lies exclusively
with the bank. The summary judgment record reveals several important
documents produced by the Corradettis in discovery, including a letter from
Countrywide to Anthony Corradetti dated September 7, 2006, outlining the
writer's understanding "of the current situation pertaining to your mortgage s,"
and identifying the Commerce mortgage as a "[b]lanket mortgage covering 2
commercial properties, residence in Cinnaminson and 2nd position on Ocean
City for $1,353,000" having a monthly payment of $21,432 for principal,
interest, taxes and insurance and a "1st Mortgage on Ocean City for $405,000,"
having a monthly payment of $2705, principal and interest only for total
(continued)
however, is not whether the case could have been better tried. The answer to
that question is undoubtedly yes. 2 The sole question to be resolved is whether,
based on those few facts in the record, "there is substantial evidence in support
of the trial judge's findings and conclusions." In re Tr. Created by Agreement
(continued)
monthly mortgage payments of $24,442. The letter proposed a "[n]ew first
mortgage on Ocean City property for $1,800,000. This would result in the two
commercial properties being paid off in full" and a monthly savings of
$3725.87. The Corradettis also produced a September 29, 2006 letter from
Boardwalk Title Agency referencing the "Corradetti refinance . . . Closing
date: September 25, 2006 Disbursement Date: September 29, 2006" enclosing
a "trust account check in the amount of $1,108.80," "represent[ing] the
proceeds of your transaction" and a copy of the title agency's check. Mrs.
Corradetti had no knowledge of the documents. The bank deposed the
Corradettis' adult daughter, who apparently produced the documents on her
parents' behalf, who could only say they did not come out of the file drawer in
the Cinnaminson house where her parents kept their financial records and may
have come out of one of the file cabinets in Mr. Corradetti's office.
2
This is not meant as a criticism of trial counsel. We are aware the title
agency that closed this loan is no longer in business, and plaintiff could not
locate the notary who acknowledged the Corradettis' signatures on the loan
documents. We are also aware that Mr. Corradetti, apparently the only person
with personal knowledge of the several mortgages on the Ocean City property,
was unavailable to testify. I surmise the inability of either side to present a
witness with personal knowledge of this transaction led to the failure to
introduce at trial what would appear to be relevant documents in the summary
judgment record, such as the Countrywide letter to Mr. Corradetti of
September 9, 2006, outlining the proposed loan. Given what we know, I am
somewhat uncomfortable with the repeated emphasis on the absence of
documents in the record that could have assisted in resolving this matter. I
thus have attempted to confine my analysis of the court's findings to the
evidence in the trial record, not the absence of documents we have no way of
knowing were available to the parties.
A-5334-16T1
2
Dated Dec. 20, 1961, ex rel. Johnson, 194 N.J. 276, 284 (2008) (quoting Rova
Farms, 65 N.J. at 484).
The trial court accepted that when the Corradettis left for their religious
pilgrimage to Croatia in September 2006, there were two mortgages recorded
against their Ocean City shore house securing loans of $2.8 million. One was
to World Savings for a $500,000 loan given in 2003 and the other to
Commerce Bank for a loan, also given in 2003, in the original principal
amount of $2.3 million. Following the recording of the $1.8 million
Countrywide mortgage at issue on October 3, 2006, less than ten days after the
Corradettis returned to New Jersey, both those mortgages were marked
satisfied and cancelled of record, the World Savings mortgage on October 20
and the Commerce mortgage on November 6. 3
Marianne Corradetti, eighty-five years old at the time of trial, testified
she knew nothing about any of those loans, and specifically that she would
never have agreed to allow Countrywide or Bank of New York to place a
mortgage on the property because it "was [her] dream house." Mrs. Corradetti
eventually allowed that she knew they had a mortgage on the shore house
when they purchased it in 1992, but testified her husband Anthony, eighty -
3
Funds from the Countrywide refinance were also used to satisfy a $2482.38
State tax lien against the Corradettis' Ocean City property.
A-5334-16T1
3
three at the time of trial and suffering from Alzheimer's, told her "[s]ome time
ago" that they were "free and clear." Shown the purchase money mortgage on
cross-examination, Mrs. Corradetti testified she thought the signature on the
document was hers but said she did not know whether her husband's signature
was his, testifying "I don't know. I don't think so."
Mrs. Corradetti also testified her husband handled all of their business
dealings with banks and insurance companies, and that she "wasn't in on
anything in [his] business." 4 She agreed with the bank's lawyer that if she and
her husband "were going to get a mortgage loan from Countrywide" that "he
would be the one to talk to." She also agreed she "would only show up and
sign something when he told [her] to do that." Shown the September 25
Countrywide note bearing her signature, Mrs. Corradetti testified
unequivocally "[t]hat is not my handwriting."
Mrs. Corradetti also swore unequivocally that it was not her signature on
the September 25 Countrywide mortgage, although at her deposition she
testified only that she was "not sure" whether it was her signature. She gave
the same testimony about the HUD-1 and the other documents for the
4
Mrs. Corradetti testified her husband owned his own business, a general
merchandise wholesaler, which had its ups and downs, but "was sliding" since
about 2000.
A-5334-16T1
4
September 25 transaction, testifying at her deposition that she was "not sure"
whether it was her signature on the documents, and at trial that she had "no
doubt" it was not her signature.
Although initially testifying on cross-examination she "was sure" she did
not sign the $2.3 million Commerce Bank mortgage given in 2000 and
cancelled in 2003, Mrs. Corradetti changed her testimony after being
confronted with her deposition where she had admitted the authenticity of her
signature on the same document. Asked how that $2.3 million mortgage had
been satisfied if not replaced with the second $2.3 million Commerce
mortgage, which was cancelled only weeks after the September 25, 2006 loan
transaction purportedly took place, Mrs. Corradetti testified she did not know.
She was also adamant she had never seen the 2010 letter from her and her
husband to the Office of Foreclosure objecting to the entry of final judgment in
the prior foreclosure, saying "[t]hose aren't our signatures at all. Never."
Mrs. Corradetti also testified she did not write the mortgage check for
$13,126.16 in November 2006 for the shore house mortgage, nor any of the
other almost thirty checks logged in the bank's payment history, which she
claimed was not unusual as "[i]t was always done at [Anthony's] office." In
response to questions by the trial judge, Mrs. Corradetti testified she and her
husband sold two commercial buildings related to his business in the last ten
A-5334-16T1
5
years. Observing that documents in evidence "suggest[ed] that maybe there
were some mortgages taken out on the Ocean City property for some
significant amount of money," the trial judge asked Mrs. Corradetti if she
knew whether that money was used for the business or for household bills.
She responded she did not "know any of that."
Based on Mrs. Corradetti's testimony, the trial judge found "Mrs.
Corradetti believes what she says." He also found, however,
that she is not aware of what she signed and what she
did not sign, and she is not aware of what Mr.
Corradetti signed and what he did not sign. Her
memory was lacking as to many documents, and her
demeanor was such that she seemed unsure and
hesitant to say whether certain documents were signed
by her or were not signed by her; she seemed to be
calculating what answer her attorney was expecting
more than giving the answer that she remembered.
The court noted the best example of that was Mrs. Corradetti's testimony
about the first Commerce Bank mortgage for $2.3 million given in 2000,
where "she simply reversed her testimony." It found Mrs. Corradetti "is
simply not sure what documents she did sign or did not sign." 5 The court
found "Mrs. Corradetti's testimony with regard to her not signing the subject
Note, Mortgage, and HUD-1 Settlement Statement on September 25, 2006 to
5
At her deposition, Mrs. Corradetti denied she signed the handwriting
exemplars produced by her counsel in discovery.
A-5334-16T1
6
be credible; as to what other documents were signed or not signed by her and
her husband, the court finds her testimony not credible" (emphasis added).
Thus, I find inexplicable the court's leap from those findings to its
conclusion that the loan "documents are not authentic," "do not create a valid
mortgage," and that defendants succeeded on their affirmative defense of
forgery "by clear and convincing evidence." See Dencer v. Erb, 142 N.J. Eq.
422, 426 (Ch. Div. 1948) (holding "statements contained in the
acknowledgment may be shown to be untrue. . . . [b]ut to establish its falsity
and overcome the strong presumption of its integrity the proof must be clear,
satisfactory, and convincing") (citations omitted). There is no question but
that the Corradettis did not sign the loan documents on the day they are dated,
Monday, September 25, 2006. Their passport stamps established they did not
return to New Jersey until the following day, September 26. 6 In addition to
6
It is unlikely Mrs. Corradetti's own testimony, standing alone, could be
relied on to establish that fact. I quote her direct examination on that point:
Defendants' Counsel: Now, Mrs. Corradetti, in 2006,
September 25th of 2006, where
were you and Mr. Corradetti?
Mrs. Corradetti: Preparing to go away.
Defendants' Counsel: No. September 25th?
(continued)
A-5334-16T1
7
their not returning to New Jersey until Tuesday, September 26, the court noted
(continued)
Mrs. Corradetti: The 25th.
Defendants' Counsel: You were away from the 18th
to the 26th.
Mrs. Corradetti: Okay.
Defendants' Counsel: Where were you on September
25th?
Mrs. Corradetti: In Croatia.
Defendants' Counsel: Were you in Toms River or
Burlington County, New
Jersey?
Mrs. Corradetti: I don't remember the two we were in.
Defendants' Counsel: No. No. No. Were you in
New Jersey, the United States?
Mrs. Corradetti: Yeah.
Defendants' Counsel: On September 25th, 2006, you
were in Croatia, right?
Mrs. Corradetti: We were in Croatia.
Defendants' Counsel: Were you in Toms River at the
same time you were —
Mrs. Corradetti: Oh, no. How could I be?
Defendants' Counsel: Okay.
The Court: So Stipulated.
A-5334-16T1
8
the HUD-1 in evidence states it was "Printed on 09/26/2006 at 15:52," the day
after original signatures were purportedly affixed. 7 But a finding that a
document was not signed on the day it's dated does not ineluctably lead to the
conclusion the document was forged, and certainly should not here in light of
the court's critical finding that Mrs. Corradetti could not reliably say what
documents she and her husband signed or did not sign. 8
Instead of focusing on the evidence in the record, the trial judge focused
on what was not there:
7
Similarly the closing instructions, which were not admitted in evidence at
trial but were included in the summary judgment record, reflect they were
"prepared on 09/25/2006 [at] 16:43:51," that is, near the close of business on
the day the documents were purportedly signed.
8
A far simpler explanation might be provided by the Truth in Lending Act's
three-day right of rescission in the borrower. See 15 U.S.C. § 1635(a). If the
loan documents were executed when the Corradettis were back in New Jersey
on September 26, the day the HUD-1 statement appears to have been printed,
this loan could not have been funded until Saturday, September 30. As there
are no Fedwire transactions on the weekend, see
https://www.federalreserve.gov/paymentsystems/fedfunds_about.htm, the
World Savings and Commerce Bank mortgages could not have been paid off
until after the start of the new month, Monday, October 2, 2006. Although 12
C.F.R. § 226.23(e) permits a borrower to waive the right to rescind in the
event of "a bona fide personal financial emergency," backdating occurs, see,
e.g., In re Shaw, 178 B.R. 380 (D.N.J. 1994), and sometimes only for reasons
of "ease and economy," see generally, Jeffrey L. Kwall & Stuart Duhl,
Backdating, 63 Bus. Law. 1153, 1171 (2008).
A-5334-16T1
9
[T]here is no handwriting expert who testified that the
signatures are in fact defendants. [9] There is no
evidence that defendants authorized someone else to
sign their names for them, to act as their amanuensis.
See N.J.S.A. 46:14-4.2. There is no evidence that
defendants authorized or asked someone to
impersonate them, and that the notary was somehow
duped. There is no evidence that defendants
designated an agent to sign on their behalf, or gave a
power of attorney to someone to sign the documents.
There is no evidence that defendants had an agreement
with Countrywide to enter into this mortgage on
September 25, 2006 or any other day. In the absence
of such evidence, the only conclusion that can be
reached is that the signatures are not the defendants'
signatures, and their signatures were forged on the
Mortgage, the Note, and the HUD-1 Settlement
Statement.
While I agree there is nothing in the record to suggest the Corradettis
inveigled someone to act as their amanuensis, or any of the other things the
court imagined, I cannot accept there is "no evidence" in this record "that
defendants had an agreement with Countrywide to enter into this mortgage on
September 25, 2006 or any other day." Among the evidence supporting the
existence of an agreement by Countrywide to lend $1.8 million to the
Corradettis secured by a first mortgage on their Ocean City shore house is the
note and mortgage bearing their signatures; the HUD-1 closing statement
9
It is unclear why the court held the absence of a handwriting expert against
the bank when the Corradettis were the party asserting the affirmative defense
of forgery.
A-5334-16T1
10
noting the payoff of their existing World Savings and Commerce Bank
mortgage loans; the discharge of those mortgages shortly after the recording of
the Countrywide mortgage the week after the Corradettis returned from
Croatia; the twenty-nine loan payments of more than $13,000 each month from
November 2006 through March 2009 reflected in the prior servicer's payment
history; the November 2009 complaint in the prior foreclosure action, alleging
default as of April 1, 2009, the same date reflected in the prior servicer's
payment history in the record sent to Mrs. Corradetti during the pendency of
that action; the motion for final judgment filed in that action in July 2010; the
letter from the Corradettis to the Foreclosure Unit objecting to the amount
claimed due; and the Corradettis' failure to pay any real estate taxes or
insurance on their shore house for over eight years.
The majority characterizes the finding of forgery as "reasonably
provid[ing] the lens through which the court viewed" the other evidence in the
record. I would put it differently. I would conclude the court's finding of
forgery, for which the only support in the record is that the documents were
not signed on the day they are dated, infected its other findings. Most
important, it allowed the court to disregard the HUD-1 statement linking the
Countrywide loan to the payoff of the Corradettis' existing mortgages to World
Savings and Commerce Bank. The trial court accepts defendants' mortgages
A-5334-16T1
11
were paid off, it holds only that "[t]here is nothing in the record of an
agreement between the defendants and Countrywide that Countrywide money
was to be used to satisfy the World Savings Bank and Commerce Bank
mortgages."10 The HUD-1, of course, evidences that agreement. The trial
court only rejects the HUD-1, as far as I can tell, for its being dated the day
before the Corradettis returned to New Jersey, notwithstanding the notation on
the document that it was printed the following day, when the Corradettis were
back in New Jersey and available to sign it. Critically, the Corradettis offer no
explanation as to how they paid off the World Savings and Commerce Bank
mortgages if not with Countrywide's money.
The trial court's fact finding surrounding the servicer's records of loan
payments and default is also concerning. The glaring problem with the
payments is that the bank offered nothing to show they were made by the
Corradettis. The trial court, however, goes well beyond simply stating the
obvious. The court found as a fact, apparently simply from a review of the
documents, that "Bayview never checked and confirmed the information
contained in the BAC payment history." It also found the testimony offered by
10
The judge also found that even if there were proof that Countrywide money
was used to pay off the World Savings and Commerce Bank mortgages, the
bank would not be entitled to assert equitable subrogation because defendants
"never agreed that Countrywide could pay off the two mortgages."
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plaintiff's witness "with regard to Exhibit P5," the prior servicer's payment
history "incredible and not consistent with what the records actually document,
how the records were assembled or created, and what the process was for
confirming the information in the records." The court explained it rejected the
witness's testimony explaining how Bayview, his employer for the last
fourteen years, "boards" loans it accepts for servicing from another servicer
because
[a]t various times, [the witness] testified that
two employees did a 130 point data check, and at
other times two employees did a 132 point data check,
before a mortgage was "boarded" for servicing. He
did not seem to feel that there was a big difference
between 130 points and 132 points; however, the court
finds that it shows a failure to comprehend the
importance of precision in his testimony.
A review of the witness's trial testimony confirms the witness and
lawyers for both sides referred alternately to both a 130- and to a 132- point
check. But the witness was never asked to clear up the discrepancy, making a
credibility finding based on that point suspect. The court further criticized the
witness for failing to "testify that monthly payments were made beginning in
November 2006 and continued until March 2009, a total of nearly 30
payments, and that the total payments were over $350,000," positing "[t]hat
might have been persuasive testimony." But the witness identified the
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13
payment record in evidence, which reflected those twenty-nine payments, each
over $13,000, and he noted both the date of the mortgage, September 25, 2006,
and that the loan went into default for non-payment on April 1, 2009, with the
last payment being made on March 16, 2009. Thus, I cannot understand the
significance for the trial court of the witness's failure to "testify that monthly
payments were made beginning in November 2006 and continued until March
2009, a total of nearly 30 payments, and that the total payments were over
$350,000."
As already noted, the problem with the payment record is its obvious
limits; it does not include cancelled checks showing who made the twenty-nine
payments. Thus, the court's difficulty in interpreting the servicing records,
which it failed to ask the witness to explain, or its speculations about whether
there could have been some other servicer before Bank of America, which
likely could have been answered by the witness had anyone asked, would
appear beside the point.
More troubling, the court reaches several conclusions as to the reliability
of the documents based on purported gaps it perceived in the records, which
seem both unnecessary and not well-founded. Its speculation that the nearly
thirty payments logged on this loan might be explained if the same servicer
who serviced the Countrywide mortgage loan also serviced the prior
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14
Commerce Bank and World Savings mortgage loans is particularly troubling
given they were all separate loans made by different banks at different times,
with different loan numbers, terms, payment amounts and due dates. Those
off-point musings for me, which the judge made a part of his written opinion
in this matter, only reinforce my view that the factual findings here are
seriously flawed and should not get our customary unswerving deference.
The court's conclusions as to the letter purportedly sent by the
Corradettis to counsel for the bank and the Foreclosure Unit in response to the
bank's motion for final judgment in the prior foreclosure highlights the flaws
in the fact finding. The bank's final judgment motion, which was admitted in
evidence at trial, was served on the Corradettis at their home address in
Cinnaminson (the same address as on the invoice for the Corradettis'
pilgrimage admitted in evidence at trial) by certified and regular mail on July
7, 2010. The notice of motion advised that final judgment would be entered in
the discretion of the court unless the party served notified the Foreclosure Unit
and the attorney for the moving party within ten days of service of an objection
to the entry of the order. The letter, purportedly from the Corradettis and
bearing both their signatures, is dated July 19, 2010, addressed to both the
Foreclosure Unit and counsel for the bank and includes a subject line
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15
referencing the motion for final judgment with the docket number of the prior
foreclosure. It states:
Dear [Counsel]
You are hereby notified that I object to the entry of a
final judgment in the above reference matter. I
disagree and dispute the amount that you show as
amount owed.
The trial court acknowledged the bank's argument that the letter was
proof of an agreement between Countrywide and defendants because "if there
was not a valid mortgage, defendants would have written there was no
agreement and no mortgage." It found, however, that "[w]hile the letter
purports to be signed by the defendants, Mrs. Corradetti's testimony is that she
did not sign the letter, and that is not her signature on the letter. There is no
evidence to the contrary."
The judge also rejected the bank's argument that the Corradettis not only
failed to repudiate the mortgage "but impliedly admitted their assent to same
by only contesting the amount due." The judge found:
[p]laintiff misreads the letter. Plaintiff argues
that there is just one point made in the letter: that
defendants object to the amount owed. The letter
clearly states, however, that defendants object to the
entry of judgment. That statement could not be made
more clearly. A second objection is to the amount
due. Even if you read the second sentence as
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dependent on the first sentence, defendants are not
conceding or ratifying the validity of the mortgage.
Further, defendants were pro se defendants.
Plenty of trained writers and legal advocates might not
be as clear as plaintiff is demanding defendants should
have been in their letter objecting to the final
judgment.
Two points need to be made about the trial court's finding as to this
letter. First, the trial court's reliance on Mrs. Corradetti's testimony that she
did not sign the letter is obviously at odds with its conclusion that her
testimony as to any documents signed by her and her husband beyond "her not
signing the subject Note, Mortgage, and HUD-1 Settlement Statement on
September 25, 2006 . . . the court finds . . . not credible." The judge having
already concluded Mrs. Corradetti was not credible when she testified that
neither she nor her husband signed this letter, there is actually nothing in the
record to dispute its authenticity.
Second, I find it impossible to accept that your typical homeowners
receiving by certified mail the motion for entry of final judgment of
foreclosure in evidence, listing the date of the note and mortgage, its
recording, the address of the property and claiming over $1.8 million due that
the homeowners do not recognize as a mortgage they gave for a loan of that
size, write the three-line letter the Corradettis wrote. The trial court appears to
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have lost all sight of the import of this letter in the context of this contested
residential foreclosure proceeding.
The issue is not whether the Corradettis objected to the entry of final
judgment or only to the amount due. An objection to the amount due is an
objection to the entry of final judgment. See Wells Fargo Bank, N.A. v.
Garner, 416 N.J. Super. 520, 523-24 (App. Div. 2010). The issue is that the
Corradettis' defense to this foreclosure is that it is a fraud, that their names
were forged on the loan documents, that they never borrowed $1.8 million
from Countrywide and never gave it a mortgage on their Ocean City shore
house. This letter from the Corradettis obviously does not square with that
defense, especially considering the Corradettis would have already been
personally served with the complaint and did not file an answer asserting the
fraud. Reasoned fact finding requires the trier of fact to weigh conflicting
evidence, not explain it away by refusing to acknowledge its import for proof
of a proposition or its defense. See Pioneer Nat'l Title Ins. Co. v. Lucas, 155
N.J. Super. 332, 339 (App. Div.) (reversing findings in a bench trial based on
the trial court's failure to "properly evaluate significant evidence," resulting in
"manifestly erroneous" inferences from the evidence), aff'd, 78 N.J. 320(1978).
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18
Plaintiff was required to establish by a preponderance of the evidence its
entitlement to foreclose the recorded mortgage it obviously believed it held on
the Corradettis' property, reflected in the majority's acknowledgment that the
bank has been paying the real estate taxes and homeowners' insurance
premiums on the Corradettis' shore house since assuming the mortgage loan,
see ante at __ (slip op at 33). That means the bank had to prove based on all of
the evidence in the record, fairly considered, that it was more likely than not
that the Corradettis replaced the World Savings and Commerce Bank
mortgages on their shore house totaling $2.3 million with the $1.8 million
Countrywide mortgage recorded weeks before the cancellation of the World
Savings and Commerce Bank mortgages were recorded, that they failed to
make payment as required and that the bank was entitled to foreclose. See
Great Falls Bank v. Pardo, 263 N.J. Super. 388, 394 (Ch. Div. 1993).
Here, the trial court apparently found it more likely that someone forged
the Corradettis' signatures on the loan documents, but instead of making away
with cash, paid $8840.26 on the Corradettis' behalf at closing, arranged for the
payoff of their prior mortgages totaling $2.3 million, made payments on the
fraudulent mortgage for the next two-and-a-half years to cover their tracks, and
when the Corradettis finally discovered the fraud when the bank tried to
foreclose the bogus mortgage, they wrote the three-line letter to the bank's
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19
counsel "object[ing] to the entry of a final judgment" because they
"disagree[d] and dispute[d] the amount that you show as amount owed." The
court comes to that extraordinary conclusion based, as far as I can tell, only on
proof that the documents were not signed on September 25, 2006, the day they
were dated, and thus, a fortiori, that they "are forged documents, and anyone
who forges documents might make efforts to cover their forging." I do not
believe adherence to our standard of review requires me to accept such
findings, as I view them as "so wide of the mark that a mistake must have been
made." C.B. Snyder Realty, Inc. v. BMW of N. Am., Inc., 233 N.J. Super. 65,
69 (App. Div. 1989) (quoting Pioneer, 155 N.J. Super. at 338).
This case would be decidedly different for me had the trial judge deemed
Mrs. Corradetti a credible witness regarding the documents she and her
husband signed instead of one "who is not aware of what she signed and what
she did not sign." See In re Return of Weapons to J.W.D., 149 N.J. 108, 117
(1997) (noting "[d]eference to a trial court's fact-findings is especially
appropriate when the evidence is largely testimonial and involves questions of
credibility"). Faced with a witness it deemed so unreliable that it rejected as
not credible everything she said about what documents she signed or didn't
sign, except as to her not signing the "Note, Mortgage and HUD-1 Settlement
Statement on September 25, 2006," the trial court, in my view, went wide of
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20
the mark in finding defendants carried their burden to prove their affirmative
defense of forgery by clear and convincing evidence based on her testimony.
To me, those findings are fatally inconsistent and not deserving of our
deference.
Because I do not agree there is "adequate, substantial and credible
evidence," Rova Farms, 65 N.J. at 484, in this record to support a finding that
the Corradettis established forgery by clear and convincing evidence, I would
reverse the trial court's decision invalidating the September 25, 2006 note and
mortgage and remand for retrial or dismissal without prejudice. 11 Because the
majority affirms a finding of forgery, which I do not believe is supported by
substantial evidence in the trial record, I respectfully dissent.
11
Doing so I believe is what our standard of review requires. See Bank of
N.Y. v. Raftogianis, 418 N.J. Super. 323, 363 (Ch. Div. 2010) (dismissing the
bank's foreclosure complaint after trial without prejudice to its right to institute
a new action when it could prove its right to proceed on the loan documents).
I can accept one might reasonably conclude plaintiff did not prove its
entitlement to foreclose the Countrywide mortgage on the evidence adduced at
trial, even though I "might have reached a different conclusion were [I] the
trial tribunal." State v. Johnson, 42 N.J. 146, 162 (1964). What I cannot
accept is that defendants proved the loan documents were forgeries by clear
and convincing evidence, thus invalidating those loan documents.
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