FV-I, INC. v. KURUK TONO MIAKODA

NOT FOR PUBLICATION WITHOUT THE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-2465-14T3

FV-I, INC. IN TRUST FOR

MORGAN STANLEY MORTGAGE

CAPITAL HOLDINGS LLC,

Plaintiff-Respondent,

v.

KURUK TONO MIAKODA and

SAKARI TIAA MIAKODA,

Defendants-Appellants,

SANDER & CARSON, MEDIATOR,

GMAC MORTGAGE LLC, CITIFINANCIAL

SERVICES INC., MORTGAGE ELECTRONIC

REGISTRATION SYSTEMS, INC., ACTING

SOLELY AS NOMINEE LANCASTER MORTGAGE

BANKERS,

Defendants.

_______________________________________

December 2, 2016

 

Argued November 9, 2016 Decided

Before Judges Ostrer and Vernoia.

On appeal from the Superior Court of New Jersey, Chancery Division, Ocean County, Docket No. F-6601-13.

Kuruk Tono Miakoda, appellant, argued the cause pro se.

GeneR. Mariano argued the cause for respondent (Parker McCay, P.A., attorneys; Whitney E. Weinlein, of counsel; Stacy L. Moore, Jr., on the brief).

PER CURIAM

Defendants Kuruk Tono Miakoda and Sakari Tiaa Miakoda appeal a July 25, 2014 order granting plaintiff summary judgment on its foreclosure complaint and striking defendants' contesting answer, a November 21, 2014 order setting the amount due, and a December 19, 2014 final judgment of foreclosure. Based upon our review of the record in the context of the applicable law, we affirm.

We discern the following undisputed facts from the record and view the facts and all reasonable inferences therefrom in the light most favorable to defendants because they are the parties against whom summary judgment was entered. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

On December 15, 2006, defendants executed a note in favor of Lancaster Mortgage Bankers (Lancaster) in the amount of $411,920. As security for the obligations in the note, defendants executed a mortgage in favor of Mortgage Electronic Registration Systems, Inc. (MERS), the nominee of Lancaster. The mortgage granted a security interest on residential property located in Berkeley Township. Defendants defaulted on the note on April 1, 2007. Following defendants' default, the mortgage was assigned on a number of occasions.

The mortgage was first assigned by MERS to GMAC Mortgage LLC (GMAC) on August 14, 2007, but the assignment of mortgage was not immediately recorded. GMAC executed an assignment of the mortgage to Saxon Mortgage Services, Inc. (Saxon) on April 3, 2008, which was recorded on November 6, 2008. At that time, however, the April 14, 2007 assignment of mortgage from MERS to GMAC had not been recorded. GMAC executed a second assignment of the mortgage to Saxon on April 5, 2010. On April 16, 2010, the August 14, 2007 assignment of mortgage from MERS to GMAC was recorded. The April 5, 2010 assignment of mortgage from GMAC to Saxon was also recorded on April 16, 2010.

On June 21, 2011, Saxon executed an assignment of the mortgage to plaintiff "FV-1, Inc." in trust for Morgan Stanley Capital Holdings LLC (Morgan).1 The assignment was recorded with the Ocean County Clerk on July 6, 2011. Plaintiff FV-I, Inc. (FV-I), however, was incorrectly identified as "FV-1, Inc." in the assignment of mortgage. A corrective assignment of mortgage, which accurately identified FV-I, Inc., as trustee for Morgan, was executed on January 4, 2013, and recorded on January 30, 2013.

On June 21, 2012, plaintiff forwarded a notice of intent to foreclose to defendants. On February 28, 2013, plaintiff filed a foreclosure complaint. Following the filing of defendants' answer and the exchange of discovery, plaintiff moved for summary judgment. Defendants opposed the motion and cross-moved for dismissal of the complaint.

The court heard argument on the motions and on July 25, 2014, entered an order granting plaintiff's motion for summary judgment and denying defendants' cross-motion. The judge rejected defendants' claim that plaintiff lacked standing, finding plaintiff demonstrated it possessed the note prior to the filing of the complaint. The court also rejected defendants' assertion that plaintiff did not exist as a legal entity. The court subsequently entered a November 21, 2014 order, finding the amount due, and a December 19, 2014 final judgment of foreclosure. This appeal followed.2

In our review of a grant of summary judgment, we apply the same legal standard as the motion judge. Cypress Point Condo. Ass'n v. Adria Towers, LLC, 226 N.J. 403, 414-15 (2016) (citing Mem. Props., LLC v. Zurich Am. Ins. Co., 210 N.J.512, 524 (2012)). We must determine whether there is a "genuine issue as to any material fact" when the evidence is "viewed in the light most favorable to the non-moving party." Davis v. Brickman Landscaping, 219 N.J. 395, 405-06 (2014) (first quoting R. 4:46-2(c), then quoting Brill, supra, 142 N.J. at 540). The "trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference" and are reviewed de novo. Estate of Hanges v. Metro. Prop. & Cas. Ins., 202 N.J. 369, 382-83 (2010).

In a mortgage foreclosure proceeding, the court must determine three issues: the validity of the mortgage, the amount of the indebtedness, and the right of the plaintiff to foreclose on the mortgaged property. Great Falls Bank v. Pardo, 263 N.J. Super. 388, 394 (Ch. Div. 1993), aff'd, 273 N.J. Super. 542 (App. Div. 1994). On appeal, defendants concede the mortgage is valid, they are indebted under the note, and they are in default. They argue only that the evidence did not support the court's determination that plaintiff had standing to bring the foreclosure action.

"As a general proposition, a party seeking 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)). If a plaintiff fails to show ownership or control, "the plaintiff lacks standing to proceed with the foreclosure action and the complaint must be dismissed." Ibid.Accordingly, "either possession of the note or an assignment of the mortgage that predated the original complaint confer[s] standing." Deutsche Bank Tr. Co. Ams. v. Angeles, 428 N.J. Super. 315, 318 (App. Div. 2012).

Here, as correctly noted by the judge, the undisputed evidence established that plaintiff had possession of the note prior to the filing of the complaint. Plaintiff's counsel submitted a certification in support of the summary judgment motion stating that counsel's law firm took possession of the original note on behalf of plaintiff on August 30, 2012, and the note was in the firm's possession at the time the complaint was filed on February 28, 2013, and thereafter. In opposition to plaintiff's motion for summary judgment, defendants did not offer any competent evidence creating a genuine issue of material fact concerning plaintiff's possession of the note.

Moreover, the evidence also demonstrated plaintiff was the "holder" of the note under N.J.S.A.12A:3-301. To establish it was the holder, plaintiff was required to demonstrate a negotiation took place because it was an entity other than the one to whom the instrument was made payable. Mitchell, supra, 422 N.J. Super. at 223. Where, as here, the note was payable to an identifiable entity (i.e., Lancaster), "negotiation requires two things: 'transfer of possession of the instrument and its indorsement by the holder.'" Ibid. (quoting N.J.S.A. 12A:3-201(b)). To show an endorsement, a plaintiff must establish that "the note [was] endorsed prior to or at the time of delivery, either in favor of plaintiff or in blank." Bank of N.Y. v. Raftogianis, 418 N.J. Super. 323, 331 (Ch. Div. 2010).

Plaintiff established standing as a holder of the note under N.J.S.A. 12A:3-301 because it presented evidence showing it was in possession of the note prior to the filing of the complaint, and produced the note, which was endorsed in blank. Id. at 330-31. Thus, because there was a transfer and an endorsement, constituting a negotiation, Mitchell, supra, 422 N.J. Super. at 223, prior to the filing of the complaint, the court correctly found plaintiff had standing to foreclose.3 See ibid.

D

efendants' remaining arguments are without merit sufficient to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We offer only the following brief comments. The undisputed competent evidence supported the court's finding that FV-I, Inc. acted as a trustee of Morgan in this matter pursuant to a trust agreement between FV-I, Inc. and Morgan. A copy of the trust agreement was submitted to the court and the court did not err by rejecting the testimony to the contrary of two witnesses who were not shown to have personal knowledge of the corporate status of the two entities.

Affirmed.

1 FV-I, Inc., as trustee, conducted foreclosure and related proceedings for Morgan prior to and following the November 16, 2011 execution of a trust agreement between FV-I, Inc. and Morgan.

2 Although defendants appeal the November 21, 2014 and December 19, 2014 orders, they make no arguments challenging those orders. We therefore do not address the orders here. See, e.g., F.H.U. v. A.C.U., 427 N.J. Super. 354, 380 (App. Div.) (finding issue was waived where brief was "bereft of any argument challenging that finding"), certif. denied, 212 N.J. 198 (2012).

3 Although the court correctly determined plaintiff had standing because it was a holder of the note under N.J.S.A. 12A:3-301, the record also supports a finding that plaintiff had standing because the mortgage had been properly assigned to it prior to the filing of the complaint. Angeles, supra, 428 N.J. Super. at 318. The evidence concerning the assignments of mortgage showed plaintiff received the corrected assignment of the mortgage from Saxon on January 4, 2013, and recorded it on January 30, 2013, prior to the February 28, 2013 filing of the foreclosure complaint. Based upon our review of the record, we are not persuaded defendants presented any competent evidence sufficient to challenge the validity of any of the mortgage assignments preceding Saxon's assignment of the mortgage to plaintiff.