U.S. BANK NATIONAL ASSOCIATION v. POLLY GREEN

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

U.S. BANK NATIONAL ASSOCIATION,

not in its individual capacity,

but solely as LEGAL TITLE TRUSTEE

for LVS TITLE TRUST I,

Plaintiff-Respondent,

v.

POLLY GREEN, his/her heirs, devisees,

and personal representatives, and his,

her, their or any of their successors

in right, title and interest; THURSTON

GREEN, his/her heirs, devisees, and

personal representatives, and his, her,

their or any of their successors in right,

title and interest,

Defendants-Appellants.

November 24, 2015

Argued November 2, 2015 - Decided

Before Judges Carroll and Sumners.

On appeal from the Superior Court of New Jersey, Chancery Division, Essex County, Docket No. F-005141-12.

Joseph A. Chang argued the cause for appellants (Mr. Chang, attorney; Mr. Chang and Jeffrey Zajac, on the briefs).

David Neeren argued the cause for respondent (Zucker, Goldberg & Ackerman, LLC, attorneys; Robert D. Bailey, of counsel and on the brief).

PER CURIAM

In this mortgage foreclosure action, defendants Polly and Thurston Green appeal from the March 18, 2013 order granting summary judgment on liability to plaintiff U.S. Bank, National Association, not in its individual capacity, but solely as legal title trustee for LVS Title Trust I, and from the July 3, 2014 final judgment for foreclosure. We affirm.

On November 17, 2006, Polly Green executed and delivered a note to First NCL Financial Services, LLC, DBA The Lending Center (First NCL), in the amount of $229,500. To secure payment, defendants executed a mortgage in favor of Mortgage Electronic Registration Systems (MERS), as nominee for First NCL.

On February 6, 2009, defendants executed a loan modification agreement with CitiMortgage, Inc. (Citi). The modification agreement "amend[ed] and supplement[ed]" the note and designated Citi as "Lender." It provided that defendants

acknowledge[] that [the] Lender is the holder and owner of the [n]ote and understand[] that Lender may transfer the [n]ote, as amended by this Agreement, and that anyone who takes the [n]ote by transfer and who is entitled to receive payments under the [n]ote is called the "Lender" in this Agreement.

Among other things, the modification agreement reduced the interest rate charged on the loan and extended its maturity date from 2036 to 2049. Paragraph 12 further provided

Release and Waiver of Other Claims: In consideration of the modification of certain provisions of the Note and Security Instrument, . . . and the other benefits received by Borrower hereunder, Borrower acknowledges that Borrower currently has no claims against Lender arising out of the origination or servicing of the Note or Security Instrument and does hereby release Lender, and its predecessors, successors, affiliates, assigns, . . . of and from any and all claims, . . . present or future, which Borrower may have against Lender, and its predecessors, successors, affiliates, assigns, . . . arising out of . . . any and all transactions relating to the Note and the Security Instrument occurring prior to the date hereof.

Defendants defaulted on the note by failing to pay the monthly installment due on December 1, 2010, and the monthly payments due thereafter. On March 21, 2012, plaintiff filed a complaint against defendants in the Chancery Division to foreclose on the mortgage. Defendants filed a contesting answer in May 2012, asserting plaintiff's lack of standing as an affirmative defense. Defendants also asserted various counterclaims, including common law fraud and violations of the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, and the Truth in Lending Act (TILA), 15 U.S.C.A. 1601 to -1667f.

On February 12, 2013, plaintiff filed a motion for summary judgment seeking to strike defendants' answer, dismiss their counterclaims, and return the case to the Office of Foreclosure. In support of the motion, plaintiff submitted the certification of Karen L. Shoup, Assistant Vice President of plaintiff's servicing agent, BSI Financial Services (BSI). Shoup represented that plaintiff became the owner and holder of the note on July 29, 2011, and that the mortgage was assigned to plaintiff on November 8, 2011. Attached to Shoup's certification were copies of the note, recorded mortgage, and assignments of the mortgage from MERS to Citi and from Citi to plaintiff.

Defendants opposed the motion. They submitted a certification in which they alleged that the 2006 loan was predatory, that the mortgage broker had falsely represented to them that the loan would be at a fixed $1900 monthly rate that would include payment of their real estate taxes, and that the loan closer failed to explain the contents and meaning of the loan documents that they signed. Defendants admitted executing the loan documents, but did not challenge plaintiff's claimed ownership of the note and mortgage or their failure to make the loan payments.

Following oral argument, the trial court entered an order on March 18, 2013, granting plaintiff's motion. The court found plaintiff's proofs sufficient to establish its possession of the note and mortgage prior to the filing of the foreclosure complaint. The court also found no evidence linking the actions of the mortgage broker to the original lender, and dismissed defendants' counterclaim without prejudice to the filing of an action in the Law Division.1

On appeal, defendants challenge plaintiff's standing and the sufficiency of the proofs plaintiff presented to establish that it owned or "held" both the note and a valid assignment of mortgage. Defendants also argue that the trial court erred in dismissing its CFA claim.

A trial court must grant a summary judgment motion if "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c). "An issue of fact is genuine only if, considering the burden of persuasion at trial, the evidence submitted by the parties on the motion, together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact." Ibid.; see also Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). On appeal, we apply the same standard that governs the trial court. Townsend v. Pierre, 221 N.J. 36, 59 (2015).

The "right to foreclose is an equitable right inherent in the mortgage." Chase Manhattan Mortg. Corp. v. Spina, 325 N.J. Super. 42, 50 (Ch. Div. 1998), aff d, 325 N.J. Super. 1 (App. Div. 1999). The mortgagee has the right to insist upon strict observance of the obligations that are contractually owed to it, including timely payment. See Kaminski v. London Pub, Inc., 123 N.J. Super. 112, 116 (App. Div. 1973). When there is proof of execution, recording and non-payment of the note and mortgage, a mortgagee has established a prima facie right to foreclose. Thorpe v. Floremoore Corp., 20 N.J. Super. 34, 37 (App. Div. 1952).

There are limited defenses to foreclosure actions. A mortgagor opposing summary judgment has a duty to present facts that controvert the mortgagee's prima facie case. Spiotta v. William H. Wilson, Inc., 72 N.J. Super. 572, 581 (App. Div.), certif. denied, 37 N.J. 229 (1962). Here, as noted, defendants do not contest their execution of the loan documents or their subsequent default. Instead, they contend that there was a genuine issue of fact regarding plaintiff's ownership of the note and mortgage. We disagree.

Plaintiff's status as holder of the note was established by Shoup's certification. The trial court properly found that Shoup's knowledge was sufficient. Our foreclosure rules require that

[t]he affidavit shall be made either by an employee of the plaintiff, if the plaintiff services the mortgage, on the affiant's knowledge of the plaintiff's business records kept in the regular course of business, or by an employee of the plaintiff's mortgage loan servicer, on the affiant's knowledge of the mortgage loan servicer's business records kept in the regular course of business.

[R. 4:64-2(c).]

See also Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592, 599 (App. Div. 2011) (noting that the relevant facts showing holder status may be established by a certification if based on "personal knowledge" as required by Rule 1:6-6).

Where, as here, the mortgage was serviced not by plaintiff but by its mortgage loan servicer, BSI, it was sufficient that Shoup, employed by BSI, attested to her "knowledge of the mortgage loan servicer's business records kept in the regular course of business." R. 4:64-2(c). Those are the records Shoup reviewed, as explicitly stated in her certification. She certified that she had personal knowledge of the facts pertaining to plaintiff's status as holder of the note. Shoup averred that the note is endorsed in blank, was sold to plaintiff for valuable consideration, and that plaintiff became the owner and holder of the note on July 29, 2011. Shoup further certified that the mortgage was assigned to plaintiff on November 8, 2011.

Importantly, defendants failed to proffer any affidavit or certification contradicting the assignment of the loan documented in the properly admitted loan documents and affirmed in Shoup's certification. "[C]onclusory claims" without explanation and "[b]ald assertions are not capable of . . . defeating summary judgment." Ridge at Back Brook, LLC v. Klenert, 437 N.J. Super. 90, 97-98 (App. Div. 2014).

The competent proofs in the summary judgment record establish that plaintiff had physical possession of the note eight months before filing the foreclosure complaint, and that the mortgage was assigned to plaintiff four months before the complaint was filed. Thus plaintiff had standing at the time it filed the complaint. See Deutsche Bank Trust Co. Americas v. Angeles, 428 N.J. Super. 315, 318 (App. Div. 2012) (stating that standing is conferred by "either possession of the note or an assignment of the mortgage that predate[s] the original complaint") (citing Deutsche National Trust Co. v. Mitchell, 422 N.J. Super. 214, 216 (App. Div. 2011)).

Finally, defendants' counterclaims were properly dismissed. Even if the actions of the mortgage broker were improper, defendants failed to show that he was either an employee or agent of the plaintiff, as the trial court correctly observed. Additionally, in the 2009 loan modification agreement, defendants expressly waived and released any claims arising out of the origination or servicing of the 2006 loan.

Affirmed.

1 At oral argument, we were advised that no such action has been commenced.