DLJ MORTGAGE CAPITAL INC v. ELI HERNANDEZ

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

DLJ MORTGAGE CAPITAL, INC.,

Plaintiff-Respondent,

v.

ELI HERNANDEZ,

Defendant-Appellant,

and

MORTGAGE ELECTRONIC

REGISTRATION SYSTEMS, INC.,

solely as nominee for ACT

LENDING CORPORATION d/b/a

ACT MORTGAGE CAPITAL; PNC

BANK, N.A.; COUNTY OF CAMDEN;

RUSSO MUSIC CENTER and STATE

OF NEW JERSEY,

Defendants.

_______________________________

April 22, 2014

Submitted March 18, 2014 Decided

Before Judges Ostrer and Carroll.

On appeal from the Superior Court of New Jersey, Chancery Division, Union County, Docket No. F-17310-06.

Eli Hernandez, appellant pro se.

Michael D. LiPuma, attorney for respondent.

PER CURIAM

Defendant Eli Hernandez appeals from a January 7, 2013, order denying his motion to vacate a default foreclosure judgment. We affirm.

We discern the following facts from the record. On November 4, 2005, defendant executed a thirty-year note in the amount of $308,000, secured by a purchase money mortgage on a residential property in Hillside Township.

Defendant defaulted in May 2006. On May 23, 2006, the mortgage was assigned to plaintiff, DLJ Mortgage Capital, Inc. (DLJ). A notice of default was sent to plaintiff in July 2006. DLJ filed and served its foreclosure complaint the following October.

Defendant did not answer the complaint. In February 2007, plaintiff served on defendant its notice of intent to enter final judgment, including a copy of the default filed in December 2006. Defendant did not respond and a final judgment of foreclosure was entered on April 5, 2007, stating that $328,236.59 was due as of that date. A copy of the final judgment was served on defendant approximately one year later.

Sheriff's sales were scheduled numerous times beginning in 2007 on notice to defendant, but they did not occur. Defendant filed a bankruptcy proceeding in March 2010, but the United States Bankruptcy Court in November 2010 granted a motion for relief from the stay with respect to the Hillside property. A corrective notice of intention to foreclose was served on defendant in October 2011. It stated that over $115,000 was required to be paid by November 25, 2011, to cure defendant's default.

Defendant's first filing in the action was an emergent motion to stay the sheriff's sale for thirty days on October 10, 2012. His sole ground was that he had found a purchaser of the property. His request was apparently denied.

Almost a month later, on November 6, 2012, defendant filed his motion to vacate the final judgment. Five-and a-half years had passed since entry of the final judgment. Defendant asserted he had made payments to plaintiff's servicer in the amounts of $20,000, $10,000, and $5,000; he claimed he was told those payments would bring his account current.1 Defendant also questioned DLJ's standing. He asserted the note was not endorsed, DLJ lacked possession, and was not a holder, or a non-holder with the authority to enforce the rights of a holder. He also alleged the notice of intention to foreclose failed to meet statutory requirements.

In an oral decision on January 7, 2013, Judge Frederic S. Kessler denied the motion on the papers, neither party having requested oral argument. Judge Kessler found that, pursuant to Rule 4:50-2, defendant was time-barred from seeking relief under Rule 4:50-1(a), (b) and (c). Relying on our recent decision in Deutsche Bank National Trust Co. v. Russo, 429 N.J. Super. 91 (App. Div. 2012), Judge Kessler held that lack of standing did not render the default judgment void. Therefore, defendant's standing arguments did not provide a basis for reopening the judgment pursuant to Rule 4:50-1(d), which allows for relief from a void judgment or order. Finally, the court found no "grave injustice," citing Housing Authority of Morristown v. Little, 135 N.J. 274, 289 (1994), to justify relief under the catch-all provision of Rule 4:50-1(f).

On appeal, defendant argues the court mistakenly exercised its discretion in denying relief. He argues there were insufficient proofs to support entry of final judgment, and DLJ lacked standing to foreclose because it was not a holder of the note. He seeks to excuse his default based on his argument that he was "working with the servicer of [his] mortgage seeking a loan modification," and the servicer allegedly assured him that his payments brought his account current.

We defer to the sound discretion of the trial court in deciding whether to grant relief from a final judgment. See US Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467 (2012). We discern no mistaken exercise of discretion here. Rather, we affirm, substantially for the reasons set forth in Judge Kessler's cogent oral opinion.

Defendant has failed to meet his heavy burden to establish an equitable basis to vacate a judgment more than five years after entry. See Prof'l Stone, Stucco & Siding Applicators, Inc. v. Carter, 409 N.J. Super. 64, 68 (App. Div. 2009) (stating that "Rule 4:50 is instinct with equitable considerations"). A motion to vacate must be made within a reasonable time, and, when relief is sought under Rule 4:50-1(a), (b) or (c), within one year after judgment is entered. R. 4:50-2.

We are unpersuaded by defendant's excuse that he delayed responding to the complaint because he was pursuing a loan modification, and he was assured that his payments in 2006 and 2007 brought his account current. The Court in Guillaume found that efforts to secure a modification of a loan did not excuse a failure to answer a complaint. Guillaume, supra, 209 N.J. at 468-69. Moreover, defendant presents no evidence of any payments or communications with the servicer after late 2007. Thereafter, it was patently clear based on numerous sheriff's sale notices, the corrective notice of intention to foreclose, and the motion in the bankruptcy action that plaintiff was proceeding to enforce its rights.

We have declined to disturb default judgments of foreclosure based on standing challenges in less extreme instances of delay than that presented in this case. See Russo, supra, 429 N.J. Super. at 96, 101-02 (affirming order denying untimely motion for relief from judgment after approximately two years); Deutsche Bank Trust Co. Ams. v. Angeles, 428 N.J. Super. 315, 316, 320 (App. Div. 2012) (same). In any event, we discern no merit to defendant's standing argument. Regardless of the status of the note, plaintiff has presented evidence of the assignment of the mortgage in May 2006, five months before the complaint was filed. "[E]ither possession of the note or an assignment of the mortgage that predated the original complaint confer[s] standing." Angeles, supra, 428 N.J. Super. at 318.

Defendant's remaining arguments lack sufficient merit to warrant further comment in a written opinion. R. 2:11-3(e)(1)(E).

1 Defendant attached copies of a fax transmittal sheet, purporting to confirm the wire transfer of $20,000 on November 26, 2007; a customer receipt for a $2000 Western Union payment on November 26, 2007; and virtually illegible bank checks that appear to be in the amounts of $5000 and $10,000 from May 2006.