BACHOME LOAN SERVICING LP, f/k/a/ COUNTYWIDE HOME LOANS SERVICING, LP v. GREGORY SKINNER and MRS GREGORY SKINNER, his wife

NOT FOR PUBLICATION WITHOUT THE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-2703-16T1

BAC HOME LOAN SERVICING,
LP, f/k/a/ COUNTYWIDE HOME
LOANS SERVICING, LP,

        Plaintiff-Respondent,

v.

GREGORY SKINNER and MRS.
GREGORY SKINNER, his wife,

     Defendants-Appellants.
________________________________

              Submitted February 6, 2018 – Decided February 22, 2018

              Before Judges Reisner and Hoffman.

              On appeal from Superior Court of New Jersey,
              Chancery Division, Monmouth County, Docket No.
              F-046211-09.

              Ira J. Metrick, attorney for appellants.

              Phelan Hallinan Diamond & Jones, PC, attorneys
              for respondent BAC Home Loan Servicing, LP
              (Brian J. Yoder, on the brief).

              Vastola & Sullivan, attorneys for respondents
              Luy Nguyen and Camhong Nguyen (John J.
              Sullivan, Jr., on the brief).

PER CURIAM
     Plaintiff    obtained    a    default       judgment    in    an    action    to

foreclose on a $448,000 mortgage on a home owned by defendant

Gregory Skinner.      On October 3, 2016, the home was sold at

sheriff's sale to a third party purchaser for $362,000.                   After the

ten-day redemption period expired, defendant filed a motion to set

aside   the   sheriff's    sale    and       vacate   plaintiff's       foreclosure

judgment.     On January 20, 2017, the Chancery Division denied

defendant's motion, finding "no reason to vacate the sale" or

judgment of foreclosure.          Discerning no abuse of discretion, we

affirm.

                                         I

     On May 12, 2006, defendant purchased a residence in Belmar;

to finance the purchase, defendant executed a $448,000 note to NJ

Lenders Corp. (Lenders) and a mortgage to Mortgage Electronic

Registration Systems, Inc. (MERS) as Lenders' nominee.                    The note

provided that failure to deliver the full amount of any monthly

payment when due would constitute a default.                  In addition, an

acceleration clause permitted Lenders to demand payment of the

balance due on the principal if the lender did not receive payment

within thirty days of the mailing of a notice of default.

     After    purchasing    the    home,       defendant    made   payments       for

approximately three years; however, he failed to pay his April 1,

2009 installment.     Defendant then received, "by certified mail,

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return receipt requested, and regular first class mail," a notice

of intention to foreclose, as required by 
N.J.S.A. 2A:50-56.                    The

notice of intention stated that "[i]f the default is not cured

within [t]hirty (30) days of the date of this letter, the mortgage

payments will be accelerated and the mortgage will be considered

in    default,     and    we    will   immediately        initiate   foreclosure

proceedings      on   your     property."       The    notice   further    advised

defendant of his "right to cure the default, and bring the loan

payments current . . . until the entry of a foreclosure judgment."

       After defendant failed to cure the default, plaintiff1 filed

a foreclosure complaint on August 27, 2009.                On October 20, 2009,

plaintiff received personal service of the summons and complaint

at his dental office in New York City.

       After defendant failed to file an answer or otherwise respond

to    the   foreclosure      complaint,       the   Chancery    Division   entered

default.       Before the entry of final judgment, defendant filed for

bankruptcy.       This initial bankruptcy petition was dismissed, as

well as a second petition; however, defendant's third petition was

granted on December 19, 2014, resulting in the discharge of

defendant's personal liability on the subject mortgage loan. While

the    third    bankruptcy     was   pending,       plaintiff   re-submitted    its


1
     MERS assigned the mortgage to plaintiff on August 26, 2009.


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application for final judgment; however, the Office of Foreclosure

denied the application and administratively dismissed the case in

December 2013.

      On March 24, 2015, plaintiff filed a motion to reinstate the

foreclosure action to active status.2    On the same date, plaintiff

mailed   the   motion   "via   regular   and   certified   mail"   to:

(1) defendant's former New York City dental office, where he

previously had been personally served;3 (2) defendant's bankruptcy

attorney; and (3) defendant's Atlantic City residence.      Defendant

failed to respond, and on April 24, 2015, the Chancery Division

granted plaintiff's motion.

      Approximately three weeks later, plaintiff mailed defendant

another notice of intention to foreclose to his Atlantic City

address. Subsequently, plaintiff marked defendant's Atlantic City




2 On October 6, 2014, plaintiff assigned the mortgage to Hudson
City Savings Bank, FSB (Hudson City). The February 23, 2016 final
judgment and July 8, 2016 notice of sheriff's sale name Hudson
City as plaintiff. The Chancery Division's April 24, 2015 order
reinstating the case to active status provided that Hudson City
"is substituted in the place" of BAC Home Loans Servicing, LP "as
the party plaintiff." The parties fail to address why BAC Home
Loans Servicing, LP remains the named plaintiff in the instant
appeal; however, plaintiff's brief states it "continues to service
the loan on behalf of the current holder, Hudson City," and
defendant does not assert this oversight constitutes any basis to
reverse the order under review.
3
    Defendant certified he "lost" this office in January 2010.


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address "as a bad address and all further notices for [defendant]

in the matter were sent to the mortgaged property" and defendant's

prior New York City dental office.     On February 23, 2016, the

Office of Foreclosure entered judgment in favor of plaintiff in

the amount of $685,448.75.    Over seven months later, on October

3, 2016, the Monmouth County Sheriff sold the property to a third

party purchaser (TPP).

     Defendant certified he first learned of the sheriff's sale a

week later from his tenant, who resided at the property.4    Beyond

the ten-day redemption period, defendant filed a motion to set

aside the sheriff's sale and to vacate the final foreclosure

judgment.

     On January 20, 2017, following oral argument, the Chancery

judge denied the motion, explaining the reasons for her decision

in an oral opinion; she entered a confirming order on the same

date.   Relying on United States v. Scurry, 
193 N.J. 492 (2008),

she held that the appropriate "remedy is not to vacate the sale";

instead, the appropriate "remedy is to extend the redemption

period."    However, noting defendant conceded he could not redeem

the mortgaged property, and emphasizing the "wrinkle" the TPP



4
   Defendant maintained the property as a rental property; he
alleges that between 2013 and 2014, he spent $150,000 to $200,000
in renovations.

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presented, the judge held "equity would favor the plaintiff and

the [TPP]."       She therefore found "no reason to vacate the sale,"

nor any basis to vacate the foreclosure judgment.

                                       II

      Defendant appeals from the January 20, 2017 order.           He denies

actual notice of the sheriff's sale, stating that all notices

after the motion to reinstate went to his prior dental office

address in New York City and not his Atlantic City residence.5              He

contends plaintiff's failure to send notices to his home address

deprived him of the opportunity to short-sell the property, pursue

"loss mitigation," or otherwise avoid the sheriff's sale.                   He

argues the Chancery judge erred in applying Scurry and holding the

only available remedy was extending his right to redemption.

      "[A]n application to open, vacate or otherwise set aside a

foreclosure judgment or proceedings subsequent thereto is subject

to   an   abuse    of   discretion   standard."   Id.   at   502   (citation

omitted).       We find an abuse of discretion when a decision is "made

without     a    rational   explanation,    inexplicably     departed    from

established policies, or rested on impermissible bias."            U.S. Bank

Nat'l Ass'n v. Guillaume, 
209 N.J. 449, 467 (2012) (citation

omitted).


5
    Defendant concedes plaintiff sent notices to the mortgaged
property.

                                       6                             A-2703-16T1
     Rule 4:65-2 mandates that "notice of the [sheriff's] sale

shall be posted in the office of the sheriff . . . where the

property is located, and also, in the case of real property, on

the premises to be sold . . . ."              Additionally, "at least [ten]

days prior to the date set for sale, [the party obtaining the

order or writ shall] serve a notice of sale by registered or

certified mail, return receipt requested," on "every party who has

appeared" and the "owner of record."

     Moreover, Rule 4:65-5, which governs motions to vacate a

sheriff's sale, requires the service of such motions to occur

"within ten days after the sale" or before the delivery of the

sheriff's deed.       "[A]s a matter of fundamental fairness, [Rule

4:65-2] must be construed as entitling interested parties to actual

knowledge of the adjourned date upon which the sale actually takes

place."     First Mut. Corp. v. Samojeden, 
214 N.J. Super. 122, 123

(App.   Div.    1986).    The    power       to   void   a   sheriff's   sale   "is

discretionary and must be based on considerations of equity and

justice."      First Trust Nat'l Assoc. v. Merola, 
319 N.J. Super. 44,

49 (App. Div. 1999).

     However, in Scurry, our Supreme Court explained that "unique

circumstances" may warrant a departure from procedural formalities

in foreclosure actions.         
193 N.J. at 506.         The Court's remedy for

a notice failure included an extension of the redemption period.

                                         7                                A-2703-16T
1 Id. at 506-07.      The Court remanded the case for the trial court

to determine a "reasonable" time period for the defendant to redeem

and a redemption amount, when the defendant's first notice of the

foreclosure sale was the writ of possession.                Id. at 495, 506.         If

the defendant were able to redeem, the court ruled "[the defendant]

is to be afforded the opportunity [he or she] would have had if

[he or she] properly had been noticed of the sheriff's sale of the

property: the opportunity to purchase [his or her] property free

and clear of all existing liens."              Id. at 507.        However, should

the defendant not be able to redeem "within a reasonable period

of time, . . . then there is no need to vacate the sheriff's sale

and title will remain with plaintiff."              Id. at 506.

       We agree with the Chancery judge in limiting defendant's

remedy to an extension of the redemption period.                         The record

reflects     defendant   received    actual        notice    of    the   motion      to

reinstate the foreclosure proceedings. Defendant sat on his rights

for nearly seven years following service of the initial foreclosure

complaint    and   for   over    eighteen      months   following        service     of

plaintiff's motion to reinstate.               In fact, defendant failed to

file   any   response    until   after       the   sheriff's      sale   to   a   TPP.

Moreover, notice of the sheriff's sale was mailed, via "regular

and certified mail, return receipt requested" to the mortgaged



                                         8                                    A-2703-16T1
property.   Thus, under these circumstances, extension of the

redemption period was an appropriate remedy.

    We are satisfied there was no abuse of discretion by the

Chancery judge in denying the motion to vacate the sheriff's sale

and final judgment.

    Affirmed.




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