LYNX ASSET SERVICES L.L.C. v. DONNA L. FERRARO

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

LYNX ASSET SERVICES, L.L.C.,

Plaintiff-Respondent,

v.

DONNA L. FERRARO,

Defendant-Appellant,

and

MR. FERRARO, husband of

DONNA L. FERRARO,

Defendant.

______________________________

June 10, 2015

Submitted April 21, 2015 Decided

Before Judges Fasciale, Hoffman and Whipple.

On appeal from Superior Court of New Jersey, Chancery Division, Hudson County, Docket No. F-007349-12.

Joseph A. Chang & Associates, L.L.C., attorneys for appellant (Mr. Chang, on the briefs).

Joshua G. Curtis, attorney for respondent.

PER CURIAM

Defendant appeals an October 8, 2013 final judgment in foreclosure after the trial court granted summary judgment in favor of plaintiff. We affirm.

We discern the following facts from the record. In 2002, defendant entered into a mortgage with First Metropolitan Mortgage for a newly-constructed two-family house in Bayonne.

In December 2006, defendant refinanced the property through CitiMortgage. She submitted her loan application via a phone interview. The mortgage on that property was entered in the name of Mortgage Electronic Registration Systems, Inc. ("MERS") as nominee for the lender, CitiMortgage and its assigns. In June 2009, defendant lost her job and began to miss payments, defaulting on the refinance on January 1, 2010. On July 23, 2010, CitiMortgage sold the 2006 note to Selene Finance L.P. ("Selene"). In accordance with that sale, MERS assigned the note and mortgage to Selene. On March 9, 2011, Selene assigned the note and mortgage to SRMOF 2009-1 Trust ("SRMOF"). In June 2011, SRMOF assigned the note and mortgage to plaintiff.

On March 6, 2012, plaintiff served defendant with a notice of intent to foreclose and on April 25, 2012, filed a complaint to foreclose in the Chancery Division. Defendant filed an answer and counterclaims alleging, among other things, that plaintiff engaged in unconscionable lending practices under the Consumer Fraud Act, N.J.S.A. 56:8-1 to -20. On June 15, 2012, plaintiff moved for summary judgment, seeking an order striking defendant's answer. Plaintiff's motion was supported by the certification of Arlene Lieberman, plaintiff's portfolio manager.

On June 29, 2012, the trial court entered an order that appeared to strike defendant's answer and transfer the matter to the foreclosure unit for entry of final judgment while adjourning the matter to September 14, 2012 and permitting the parties to complete discovery. The discrepancy was brought to the attention of the court, which entered an amended order on July 13, 2012, clarifying that the prior order was inconsistent with its findings and that the matter was only adjourned until September 14, 2012, to allow for completion of discovery. Plaintiff submitted a supplemental certification from Lieberman on September 4, 2012.

On September 14, 2012, the court denied the motion because Lieberman's certifications did not provide sufficient information to authenticate the assignment records. Plaintiff submitted a new certification from Lieberman, which was also rejected by the court by way of an order entered on September 14, 2012. Plaintiff filed a second summary judgment motion in October 2012 along with another certification from Lieberman, and defendant filed a cross-motion. A new certification was submitted from Lieberman dated January 4, 2013, which contained certified true copies of the three assignments in the chain of title. This time the court accepted the most recent certification, granted summary judgment to plaintiff, struck defendant's answer and defenses, dismissed defendant's counterclaims, and transferred the matter to the foreclosure unit by orders of January 11, 2013, and January 30, 2013.

Defendant filed a motion for reconsideration on February 15, 2013, and, on April 19, 2013, the court issued an order and written opinion reconsidering its January 11, 2013 order for the limited purpose of addressing defendant's previously unaddressed claims which had been dismissed. The matter was then remanded to the foreclosure unit.

Plaintiff moved for entry of final judgment. On May 2, 2013, the court issued final judgment in favor of plaintiff in the amount of $569,633.33, ordered that the property be sold, and directed that plaintiff be paid from the sale. That same day, the court received defendant's opposition papers. As a result, on July 8, 2013, defendant moved to vacate the final judgment. On August 2, 2013, the court granted the motion to vacate and referred the matter for a proof hearing on October 2, 2013. On October 1, 2013, defendant informed the court via letter that she would not be submitting any additional certifications, and the proof hearing was accordingly cancelled. On October 8, 2013, the court entered final judgment in favor of plaintiff.

On appeal, defendant argues that the court erred by (1) holding that plaintiff was the holder in due course of the note; (2) failing to address defendant's contention that plaintiff violated the Consumer Fraud Act, N.J.S.A. 56:8-1 to -20; and (3) granting summary judgment to plaintiff and thereby rejecting defendant's argument that plaintiff engaged in unconscionable commercial practices.1 We disagree.

In order to enforce a negotiable instrument, a plaintiff must be either a holder of the instrument or have the rights of a holder. N.J.S.A. 12A:3-301. To be a holder, a person must be in possession of a negotiable instrument that is payable either to the bearer or to an identified person that is the person in possession; be in possession of a negotiable tangible document of title if the goods are deliverable to the bearer or the person in possession; or be in control of a negotiable electronic document of title. N.J.S.A. 12A:1-201b(21). To have the rights of a holder, the instrument need only be physically delivered with the intent to convey such rights. N.J.S.A. 12A:3-203(a). A plaintiff can establish standing as an assignee by presenting an authenticated assignment indicating that the instrument was assigned to plaintiff before plaintiff filed the original complaint. Deutsche Bank Nat'l Trust Co. v. Mitchell, 422 N.J. Super. 214, 225 (App. Div. 2011).

N.J.S.A. 46:9-9 provides that all mortgages "shall be assignable at law by writing[.]" But an assignment of interest in real estate is only effective if "a description of the real estate sufficient to identify it, the nature of the interest to be transferred, the existence of the agreement and the identity of the transferor and the transferee are proved by clear and convincing evidence." N.J.S.A. 25:1-13b.

Here, plaintiff initially submitted documents which purported to show a chain of assignments from the first mortgagee to plaintiff, culminating in plaintiff's physical possession of the original mortgage. The mortgage was never endorsed; therefore, plaintiff was never a holder in due course, but had the rights of the holder pursuant to N.J.S.A. 12A:3-203(a). Plaintiff was therefore required to authenticate the assignment documents pursuant to Mitchell, supra, 422 N.J. Super. at 225. Plaintiff submitted three certifications from Lieberman, the first of which established that plaintiff was a non-holder in possession of the instrument with the rights of the holder. The second Lieberman certification was not accepted by the court as authenticating the various documents because the documents themselves were not certified. The third Lieberman certification, dated January 4, 2013, successfully authenticated all of the documents in the chain of assignments with certified true copies and was accepted by the court as sufficient to comply with the requirements of our rules of evidence, N.J.R.E. 803(c)(6) (business record exception) and 803(c)(14) (record of document affecting interest in property exception).

Defendant argues that the final Lieberman certification constituted a sham certification because it conflicted with Lieberman's prior deposition testimony that suggested she was not relying upon originals. However, in reviewing Lieberman's testimony, we see no contradiction because in both the certification and the deposition Lieberman confirmed she reviewed the documents. Moreover, we see no reason to disagree with the trial court's determination that Lieberman's certification was credible.

We also reject defendant's argument that the first assignment of the mortgage was not effective. Lieberman submitted documents which adequately established the authority to assign the mortgage with a notarized and recorded assignment and the physical delivery of the mortgage documents to the first assignee. Accordingly, we discern no reason to disturb the trial court's finding that plaintiff had standing to foreclose on the property.

Finally, we conclude that defendant's contentions that the court failed to consider and erred in striking her Consumer Fraud Act argument are without merit to warrant discussion in this opinion. R. 2:11-3(e)(1)(E). Defendant failed to demonstrate that plaintiff had engaged in unlawful business practices or that she suffered any ascertainable detriment under the Consumer Fraud Act.

Affirmed.

1 Defendant appeals from orders entered on June 29, 2012, September 14, 2012, January 11 and 30, 2013, April 19, 2013, and October 8, 2013.