U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE FOR SG MORTGAGE SECURITIES ASSET BACKED CERTIFICATES, SERIES 2006-FRE2 v. LORI LEFF

NOT FOR PUBLICATION WITHOUT THE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-3406-16T4

U.S. BANK NATIONAL ASSOCIATION,
AS TRUSTEE FOR SG MORTGAGE
SECURITIES ASSET BACKED
CERTIFICATES, SERIES 2006-FRE2,

        Plaintiff-Respondent,

v.

LORI LEFF and KEVIN LEFF,

     Defendants-Appellants.
____________________________________

              Submitted May 2, 2018 – Decided May 22, 2018

              Before Judges Fuentes and Suter.

              On appeal from Superior Court of New Jersey,
              Chancery Division, Middlesex County, Docket
              No. F-010843-09.

              Mark R. Silber, attorney for appellants.

              Reed Smith, LLP, attorneys for respondent
              (Henry F. Reichner, of counsel; Siobhan A.
              Nolan, on the brief).

PER CURIAM
     Defendants Lori and Kevin Leff appeal from the March 8, 2017

final   judgment    that   foreclosed   their   interests   in   certain

residential real estate.     We affirm.

     On April 5, 2006, Lori Leff signed a note in the principal

amount of $484,500 to FGC Commercial Mortgage Finance (FGC) to

finance a residential property in Highland Park.      On the same day,

both defendants executed a non-purchase money mortgage to Mortgage

Electronic Registration Systems, Inc. (MERS) as nominee for FGC.

The mortgage was recorded.       In February 2009, the mortgage was

assigned by MERS to U.S. Bank National Association, as Trustee for

SG Mortgage Securities Asset Backed Certificates, Series 2006-FRE2

(U.S. Bank).       Defendants defaulted on the note on November 1,

2008.   No payments have been made since then.

     On February 27, 2009, U.S. Bank filed a foreclosure complaint,

and amended it in September 2009. Defendants did not answer either

complaint and were defaulted.     They filed a motion to extend time

to answer and an order to show cause to vacate their default, but

their requests were denied on April 21, 2010.       That order has not

been challenged.

     The final judgment of foreclosure for $982,361.69 was not

entered in this case until March 8, 2017.       Defendants appeal that

order, raising a single issue.     They claim the trial court abused

its discretion on October 21, 2016, when it entered an order that

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allowed   U.S.    Bank   to    continue   to    litigate   this    matter.

Specifically,     defendants     challenge     U.S.   Bank's   delay       in

prosecuting this case from February 20, 2015 to June 20, 2016.

     From March 2010 through 2013, this case did not proceed while

the Court's decision in U.S. Bank Nat'l Ass'n v. Guillaume, 
209 N.J. 449 (2012) was pending and thereafter as U.S. Bank implemented

the Court's directives.        In January 2014, U.S. Bank's motion to

reform the mortgage was granted which permitted it to correct the

property's legal description.       Although U.S. Bank applied for a

final judgment of foreclosure in 2014, it withdrew this request

when defendants filed for Chapter 7 bankruptcy protection.               The

bankruptcy was discharged on February 20, 2015.            From that time

on, counsel for U.S. Bank certified that it "was working with

Plaintiff on executing the Certification of the Amount Due . . .

. [and] a draft . . .was sent to Plaintiff on June 15, 2015."

However, it discovered a title issue that would entail "join[ing]

an   additional     defendant,      add[ing]     assignment       recording

information, and . . . [a] new third count [to the complaint]."

     On June 20, 2016, the Clerk of the Superior Court (Clerk)

issued a Foreclosure Dismissal Notice, advising U.S. Bank that the

complaint would be dismissed without prejudice on July 15, 2016,

for lack of prosecution under Rule 4:64-8, unless U.S. Bank

proceeded with the case or filed a certification of "exceptional

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circumstances."     U.S. Bank filed an attorney's certification in

opposition to the lack of prosecution notice, but the Clerk denied

U.S. Bank's request to avoid dismissal on July 22, 2016, with the

notation "Denied: Certification does not set forth exceptional

circumstances."     The Foreclosure Dismissal Order of July 22, 2016,

provided    the   case    was   dismissed   under   Rule   4:64-8   "without

prejudice for lack of prosecution.          Reinstatement of the matter

after dismissal may be requested by a motion for good cause."

     On August 31, 2016, U.S. Bank filed a motion to reinstate the

case to active status.          The supporting certification was similar

to the one submitted to the Clerk, but added that it was prepared

to   file    an   amended       complaint   because   it     had    completed

investigation of the title issue and it could not obtain consent

to the amendment.          Defendants opposed the motion, which was

transferred to the Chancery Division of the Superior Court in

Middlesex County.1       Reinstatement was granted on October 21, 2016.

A final judgment of foreclosure was entered on March 8, 2017.

Defendants appeal from the final judgment.

     On appeal, defendants contend that the                law of   the case

doctrine precluded the court from reinstating the case. Defendants


1
   Once opposition was received, the uncontested order of
reinstatement that was entered on September 16, 2016, was vacated
on October 5, 2016, so that the matter could be heard in the
vicinage.

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argue    that     U.S.     Bank   was       unsuccessful     in   forestalling

administrative dismissal because its certification did not show

exceptional circumstances.          They contend that because of that

decision, the Superior Court was precluded from reinstating the

foreclosure case.        We find absolutely no merit in this argument.

       "[I]t has long been the law of New Jersey that an application

to open, vacate, or otherwise set aside a foreclosure judgment or

proceeding subsequent thereto is subject to an abuse of discretion

standard."      United States v. Scurry, 
193 N.J. 492, 502 (2008).               An

"abuse of discretion only arises on demonstration of 'manifest

error or injustice[,]'" Hisenaj v. Kuehner, 
194 N.J. 6, 20 (2008)

(quoting State v. Torres, 
183 N.J. 554, 572 (2005)), and occurs

when the trial judge's "decision [was] made without a rational

explanation, inexplicably departed from established policies, or

rested on an impermissible basis."                Scurry, 
193 N.J. at 504

(quoting Flagg v. Essex Cnty. Prosecutor, 
171 N.J. 561, 571

(2002)).     There was no abuse of discretion here.

       U.S. Bank's administrative dismissal under Rule 4:64-8 for

lack    of   prosecution    was   without     prejudice.       See   R.    4:64-8

(providing that a foreclosure matter pending for twelve months

without "required" action "will be dismissed without prejudice 30

days following the date of the notice").                   The Rule expressly

provides how to request reinstatement and the standard that must

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be met.     Ibid. (providing "[r]einstatement of the matter after

dismissal may be permitted only on motion for good cause shown").

The court appropriately exercised discretion to reinstate this

complaint where U.S. Bank encountered delays in investigating a

title issue, needed to amend the complaint and had to await

resolution of defendants' bankruptcy filing.

      Rule 4:64-8 "follows R. 1:13-7." Pressler & Verniero, Current

N.J. Court Rules, cmt. on R. 4:64-8 (2018).           As under Rule 1:13-

7, "reinstatement is ordinarily routinely and freely granted when

plaintiff has cured the problem that led to the dismissal even if

the application is made many months later." Ghandi v. Cespedes,


390 N.J. Super. 193, 196 (App. Div. 2007).            "[A]bsent a finding

of fault by the plaintiff and prejudice to the defendant, a motion

to restore under the rule should be viewed with great liberality."

Id. at 197.

       The case was dismissed for lack of prosecution simply as a

docket clearing measure.       Defendants cannot credibly argue that

they were prejudiced given their default on the mortgage for nearly

ten years.

      The law of the case doctrine had no applicability.          "The law

of   the   case   doctrine   requires   judges   to   respect   unreversed

decisions     . . .   by the same court or a higher court regarding

questions of law."      Sisler v. Gannett Co., 
222 N.J. Super. 153,

                                    6                              A-3406-16T4
159 (App. Div. 1987) (citing State v. Reldan, 
100 N.J. 187, 203

(1985)).

     No contested question of law was decided. Here, the dismissal

by the Clerk was not the same as, or higher than, the Superior

Court and there was additional information in U.S. Bank's second

certification that was not before the Clerk. To apply the doctrine

as suggested by defendants would negate the Rule that permits

reinstatement because every application, if not granted by the

Clerk, would be barred thereafter.

     Affirmed.




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