U.S. BANK NATIONAL ASSOCIATION, ETC. VS. CHRISTINE COPPOLA F-020791-13, ESSEX COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0008-16T3
U.S. BANK NATIONAL ASSOCIATION,
AS TRUSTEE FOR CREDIT SUISSE
FIRST BOSTON MORTGAGE SECURITIES
CORP., CSMC MORTGAGE-BACKED
PASS-THROUGH SECURITIES,
SERIES 2006-6,
Plaintiff-Respondent,
v.
CHRISTINE COPPOLA, MR.
COPPOLA, HUSBAND OF CHRISTINE
COPPOLA, ROBERT JOHN COPPOLA,
MRS. ROBERT JOHN COPPOLA, HIS
WIFE,
Defendants-Appellants.
________________________________
Submitted October 10, 2017 – Decided November 8, 2017
Before Judges Ostrer and Whipple.
On appeal from Superior Court of New Jersey,
Chancery Division, Essex County, Docket No.
F-020791-13.
Andy Winchell, attorney for appellants.
Reed Smith, LLP, attorneys for respondent
(Henry F. Reichner, of counsel and on the
brief).
PER CURIAM
Defendants, Robert and Christine Coppola, appeal from a July
19, 2016 judgment of foreclosure. Defendants contend the trial
court erred in finding plaintiff had standing to foreclose.
Because plaintiff is a non-holder in possession of the note with
the rights of the holder, we affirm.
Defendant Christine Coppola borrowed $371,000 from NJ Lenders
Corp. (NJ Lenders). In 2006, the loan was secured by a mortgage
executed by Christine and Richard Coppola naming the Mortgage
Electronic Registration System, Inc. (MERS) as mortgagee and
nominee for NJ Lenders. On May 12, 2006, NJ Lenders indorsed the
note and delivered it to Wells Fargo Bank, NA (Wells Fargo),
plaintiff's document custodian and loan servicer. On or about
March 20, 2012, the loan was sold and the mortgage was assigned
to plaintiff.
Defendants defaulted on the note, and, in January 2013,
plaintiff commenced a foreclosure action. A bench trial was
conducted on May 20, 2015. A Wells Fargo loan verification analyst
testified regarding the documents sought to be admitted into
evidence. The judge found the analyst's testimony sufficient to
admit the documents and determined plaintiff had standing to
foreclose. The judge determined plaintiff had standing because
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there was an assignment of the mortgage before the complaint was
filed. This appeal followed.
Defendants argue the trial judge erred in finding plaintiff
had standing to foreclose because it did not own the underlying
debt. We disagree.
We accord "substantial deference" to the trial judge's
determination and review the decision for an abuse of discretion.
Deutsche Bank Trust Co. Americas v. Angeles, 428 N.J. Super. 315,
318 (App. Div. 2012) (citing U.S. Bank Nat'l Assoc. v. Guillaume,
209 N.J. 449, 467 (2012)). We will find a judge abused his or her
discretion only "when a decision is 'made without rational
explanation, inexplicably departed from established policies, or
rested on an impermissible basis.'" U.S. Bank Nat'l Assoc., supra,
209 N.J. at 467-68 (quoting Iliadis v. Wal-Mart Stores, Inc., 191
N.J. 88, 123 (2007)).
A party attempting to foreclose a mortgage "must own or
control the underlying debt." Deutsche Bank Nat'l Tr. Co. v.
Mitchell, 422 N.J. Super. 214, 222 (App. Div. 2011) (quoting Wells
Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592, 597 (App. Div.
2011)). Parties who can enforce such a negotiable instrument,
like a note, include "[1] the holder of the instrument, [2] a
nonholder in possession of the instrument who has the rights of a
holder, or [3] a person not in possession of the instrument who
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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." N.J.S.A. 12A:3-301.
Regarding the first category, a person to whom the instrument
is not payable may become the holder if there is a negotiation.
Ford, supra, 418 N.J. Super. at 598 (citing N.J.S.A. 12A:3-201(a)).
In order for a negotiation to occur, there must be a transfer of
possession and an indorsement by the holder. Mitchell, supra, 422
N.J. Super. at 223. An indorsement requires "a signature, other
than that of a signer as maker, drawer, or acceptor, that alone
or accompanied by other words is made on an instrument for the
purpose of negotiating the instrument." Ibid. (quoting N.J.S.A.
12A:3-204(a)). Without an indorsement, standing may be
insufficient to satisfy this category. Ford, supra, 418 N.J.
Super. at 598.
To fall within the second category, one must show the transfer
of rights to the note. Id. at 599. Transfer occurs "when it is
delivered by a person other than its issuer for the purpose of
giving to the person receiving delivery the right to enforce the
instrument." N.J.S.A. 12A:3-203(a). This transfer "vests in the
transferee any right of the transferor to enforce the instrument"
whether or not a negotiation also occurs. N.J.S.A. 12A:3-203(b).
If the transferee is not a holder because the
transferor did not indorse, the transferee is
nevertheless a person entitled to enforce the
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instrument under section 3-301 if the
transferor was a holder at the time of
transfer. Although the transferee is not a
holder, under subsection (b) the transferee
obtained the rights of the transferor as
holder.
[UCC Cmt. 2 to N.J.S.A. 12A:3-203.]
Documents establishing transfer, including an assignment of
a mortgage, must be properly authenticated with certifications
based on personal knowledge, as required by Rule 1:6-6. Ford,
supra, 418 N.J. Super. at 599-600.
Here, the record establishes plaintiff is a non-holder in
possession of the note with the rights of the holder. MERS was
the mortgagee as nominee for NJ Lenders, its successors and
assigns. MERS delivered the original note to Wells Fargo as
plaintiff's custodian and servicer and the mortgage was assigned
prior to the filing of the complaint.
Based upon the record before us, we see no reason to disturb
the trial judge's findings.
Affirmed.
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