CHB AMERICA BANK, et al. v. KISUNG KIM, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3160-04T5F3160-04T5F

CHB AMERICA BANK, f/k/a CHO HUNG

BANK OF NEW YORK, and CHOHUNG

BANK, NEW YORK BRANCH, f/k/a

CHO HUNG BANK, NEW YORK BRANCH,

Plaintiffs-Respondents,

v.

KISUNG KIM and KWIRYUNG KIM,

Defendants-Appellants,

and

ULTRA-SCOPE INTERNATIONAL,

INC. and CITIBANK, N.A.,

Defendants.

___________________________________

 

Argued December 6, 2005 - Decided January 10, 2006

Before Judges Kestin and Seltzer.

On appeal from the Superior Court

of New Jersey, Chancery Division,

Bergen County, F-20871-03.

Sangwon D. Sohn argued the cause for

appellants.

Richard P. Galler argued the cause for

respondents (Kleeblatt, Galler,

Abramson and Zakim, attorneys; Ian S.

Kleeblatt, on the brief).

PER CURIAM

This is the second time we have considered this foreclosure dispute. In Cho Hung Bank v. Kim, 361 N.J. Super. 331 (App. Div. 2003), we vacated a default judgment and remanded for, among other things, "more complete proof" of the amount owed to plaintiffs. After the remand, the parties executed a consent order providing for the dismissal of the action and the institution of a new complaint. That new complaint was filed on November 18, 2003. Defendants Kisung Kim and Kwiryung Kim filed a contesting answer and, on March 16, 2004, plaintiffs filed a motion for summary judgment. The motion was granted on May 14, 2004, and the matter referred to the Foreclosure Unit. Plaintiffs, on notice to defendants, submitted proof of the existence of the debt and the amount due. Defendants objected to the amount claimed to be due. For reasons unexplained by this record, the Foreclosure Unit, rather than referring the matter to the vicinage of origin, recommended the entry of judgment in the amount claimed by plaintiffs. The judgment was ultimately entered, after which defendants sought relief under R. 4:50-1. Judge Escala declined to vacate or modify the judgment, and defendants appeal. On appeal, defendants assert:

POINT ONE

JUDGMENT FOR FORECLOSURE SHOULD BE VACATED BECAUSE CHO HUNG BANK FAILED TO ADEQUATELY PROVE THE AMOUNT DUE.

POINT TWO

JUDGMENT FOR FORECLOSURE SHOULD BE VACATED BECAUSE CHO HUNG BANK SEEKS UNREASONABLE LATE CHARGES AND DEFAULT INTEREST.

POINT THREE

JUDGMENT FOR FORECLOSURE SHOULD BE VACATED BECAUSE CHO HUNG BANK IMPROPERLY DISPOSED PROCEED FROM OTHER COLLATERAL.

The arguments raised by defendants do not require extensive discussion. Defendants do not contest the fact of default; they argue only that the judgment, based upon the proofs required by R. 4:64-1(b), fixes an excessive amount as due plaintiffs. They fail, however, to identify the defects in the judgment amount. Insead, they base their objection on the undisputed fact that, in prior proceedings, plaintiffs had claimed differing amounts. They argue that plaintiffs' claim of different amounts at different times "suggests that the plaintiff's certifications of proof are simply unreliable." Accordingly, defendants argue, a hearing should have been conducted at which "plaintiff's witnesses are exposed to cross-examination."

Judge Escala rejected that argument in the absence of some particularized objection to the proofs submitted to the Foreclosure Unit. We agree. The proofs submitted here specified the amounts due as to each category of principal, interest, advances and late fees, and did not suffer from the defects we identified in our earlier opinion. As we have said, defendants do not claim that they do. Nor have defendants suggested that, for some reason, they are unable to identify a particular error. Given defendants' failure to identify any impropriety in the judgment amount, no hearing was necessary.

Defendants also claim that the late charges and default interest rates authorized by the documents and utilized by plaintiffs in computing the amount due under the mortgage were unreasonable. Although unreasonable charges are not enforceable, reasonableness is presumed and the burden of overcoming that presumption is placed upon defendants. Metlife Fin. Corp. v. Washington Ave. Assoc., L. P., 159 N.J. 484, 501 (1999). Defendants have adduced no evidence to overcome that presumption and there is no basis to disturb the judgment insofar as it includes late charges and the application of a default interest rate.

Finally, defendants assert that they were entitled to have surplus funds, generated in a separate foreclosure by plaintiffs of property owned by defendants in New York, applied to the amount due on this mortgage. In fact, those surplus funds were applied by plaintiffs to another loan owed by defendants. At argument before us, defendants conceded that there was no connection between the loan secured by the mortgage involved in this foreclosure, the loan secured by the mortgage foreclosed in New York, and the loan to which the New York surplus funds were applied. Moreover, defendants do not assert that they had directed the application of the surplus funds to the loan secured by this mortgage.

Under these circumstances, defendants have no right to a credit for those surplus funds. See Craft v. Stevenson Lumber Yard, Inc., 179 N.J. 56, 72 (2004) ("As a general proposition, a creditor who is owed more than one debt by a debtor may apply the payments to the debtor's account in any manner it chooses so long as the debtor has not issued specific directions to the contrary. That is known as the payment application rule."). If, as defendants claim, plaintiffs applied the surplus funds to a loan discharged by a bankruptcy, defendants may have a remedy in a separate action. They may not, however, obtain that relief here. R. 4:64-5.

 
Affirmed.

 
 

Although such motions are typically designated as motions for summary judgment, they are, in fact, applications for a partial summary judgment. Under our procedure, a dismissal of an answer does not result in the entry of a judgment but, merely, a referral of the file to the Foreclosure Unit which considers proofs and, to the extent there is no dispute, recommends the entry of a judgment to the Chancery Division. See generally 30A New Jersey Practice, Law of Mortgages, 30.3 at 4-6 (Myron C. Weinstein) (2d ed. 2000).

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A-3160-04T5F

January 10, 2006