AURORA LOAN SERVICES, LLC v. ANSELEM NWAORGU
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3821-16T4
AURORA LOAN SERVICES, LLC
by assignee NATIONSTAR
MORTGAGE, LLC,
Plaintiff-Respondent,
v.
ANSELEM NWAORGU, a/k/a
ANSLEM NWAROGU, his heirs,
devisees, and personal
representatives, and his
successors in right, title
and interest; MRS. NWAORGU;
and JP MORGAN CHASE BANK,
N.A.,
Defendants-Appellants.
________________________________
Submitted March 1, 2018 – Decided April 11, 2018
Before Judges Simonelli and Gooden Brown.
On appeal from Superior Court of New Jersey,
Chancery Division, Essex County, Docket No.
F-044317-08.
Chinemerem N. Njoku, attorney for appellant.
Sandelands Eyet, LLP, and Shapiro & DeNardo,
LLC, attorneys for respondent (Cara Ann
Murphy, on the brief).
PER CURIAM
In this residential mortgage foreclosure action, defendant
Anselem Nwaorgu appeals from an April 13, 2017 Chancery Division
order denying his motion to vacate the Sheriff's sale, writ of
execution, and final judgment of foreclosure in favor of plaintiff
Nationstar Mortgage, LLC (Nationstar). We affirm.
We derive the following facts from the record. On December
1, 2006, defendant executed a thirty-year promissory note for
$300,000 to First Financial Equities (FFE). On the same date, in
order to secure payment of the note, defendant executed a purchase
money mortgage on his Newark property to Mortgage Electronic
Registration Systems, Inc. (MERS), as nominee for FFE. The
mortgage was recorded with the Essex County Register on January
16, 2007. On February 28, 2007, MERS, as nominee for FFE, assigned
the mortgage to Washington Mutual Bank, FA, which assignment was
recorded on March 8, 2007.
On May 1, 2008, defendant failed to pay the monthly
installment due on the note and mortgage, and has not made any
mortgage payments since then. On October 28, 2008, by operation
of a series of mergers and acquisitions, JP Morgan Chase Bank, NA,
as successor in interest to Washington Mutual Bank, FA, as
successor in interest to Washington Mutual Home Loans, Inc., as
2 A-3821-16T4
successor by merger to Fleet Mortgage Corp., assigned the mortgage
to Aurora Loan Services, LLC (Aurora), and the assignment was
recorded on November 5, 2008.
On the same date, after complying with the notice requirement
of the Fair Foreclosure Act,
N.J.S.A. 2A:50-56, Aurora filed a
complaint for foreclosure against defendant.
1 On December 9, 2010,
the court entered a final judgment of foreclosure by default. The
judgment specified that Aurora's "fixed rate note, mortgage and
assignment of mortgage" were "presented and marked as exhibits by
the [c]ourt," indicating that Aurora was in possession of the
documents. In addition, a writ of execution was issued.
Subsequently, a Sheriff's sale, scheduled for December 4,
2012, was canceled. On April 18, 2014, Aurora assigned the
foreclosure judgment to Nationstar Mortgage, LLC (Nationstar).
The assignment was filed on April 24, 2014. On July 14, 2014, the
trial court entered an order listing Nationstar as the plaintiff
in the caption of the complaint and requiring that "[a]ll future
pleadings filed with the [c]ourt" use Nationstar "as [p]laintiff
in the caption."
1
Although not participating in the foreclosure proceedings or
appeal, JP Morgan Chase Bank, NA, was a named defendant in the
foreclosure complaint because they were a holder of an instrument
or interest appearing of record that may have affected the
mortgaged premises.
3 A-3821-16T4
On November 14, 2014, Aurora by Nationstar, its attorney-in-
fact, assigned the mortgage on the subject property to U.S. Bank
NA (U.S. Bank), as trustee, successor in interest to Wilmington
Trust Company, as trustee, successor in interest to Bank of America
NA, as trustee, successor by merger to LaSalle Bank NA, as trustee
for Lehman XS Trust Mortgage Pass-Through Certificates, Series
2007-6. On December 19, 2014, U.S. Bank filed a foreclosure
complaint against defendant, and, on July 27, 2016, obtained a
final judgment of foreclosure by default.
As a result of having two pending foreclosure judgments on
the same property, the court entered two separate orders on
September 30, 2016. In one order, on Nationstar's motion and with
defendant's consent, the court vacated the December 9, 2010
foreclosure judgment and writ of execution, and ordered that the
writ of execution be returned to the court marked "unsatisfied."
In the other order, the court granted defendant's motion to vacate
the July 27, 2016 foreclosure judgment and entered a case
management order to schedule the litigation of the case.
Subsequently, the parties reached a settlement, and on
October 25, 2016, the court entered two consent orders vacating
its September 30, 2016 orders, reinstating Nationstar's December
9, 2010 foreclosure judgment and writ of execution, and dismissing
U.S. Bank's foreclosure complaint with prejudice. On December 28,
4 A-3821-16T4
2016, in accordance with Rule 4:65-2, Nationstar provided notice
of a Sheriff's sale on the subject property scheduled for January
10, 2017. While the notice contained the correct defendant and
property address, the caption referenced the dismissed U.S. Bank
foreclosure complaint and docket number.
Over ten days after the sale, on February 1, 2017, defendant
moved to vacate the Sheriff's sale, final judgment of foreclosure,
and writ of execution under Rule 4:50-1, arguing "[t]here was no
assignment of [the] mortgage or the note" to Aurora or Nationstar
in order to confer standing. In addition, defendant argued the
notice of sale was defective and the sale thereby invalid because
"the docket number under which it was sold was under the docket
number that was dismissed."
On April 13, 2017, after oral argument, the court denied the
motion. The court determined that the motion was "well outside"
the time constraints of Rule 4:50-1. Further, the court decided
it was "not going to reopen a consent order" and "undo an
agreement" that was negotiated while "[defendant] was represented
by counsel." The court also rejected defendant's argument that
Aurora lacked standing because it did not "have the note and
mortgage," and explained that "the Office of Foreclosure never
would have entered the judgment without those proofs."
5 A-3821-16T4
Moreover, because Aurora assigned the foreclosure judgment
to Nationstar, the court concluded Nationstar did not need to be
in possession of the note and mortgage. According to the court,
[a]t the point in time that the judgment has
been transferred to them[,] [i]t's been
transferred to them by the owner of the note
and mortgage.
. . . [T]he whole purpose of owning the
note and mortgage up to the time of final
judgment is to make sure somebody else doesn't
come in with final judgment. Once
they . . . get the final judgment, there's no
need to transfer the note and mortgage because
they have been deemed to be the owner of
the . . . note, the holder of the mortgage[,]
and they have a right to transfer their
judgment, which they've done.
The court further pointed out that there was no "question in
this case that . . . defendant [had] defaulted, at least as far
back as 2008," and "[n]o one else [had] come forward in nine years"
to foreclose on the property. The court concluded that "at some
point, with a property that's been in default as long as this
[had] been, and given . . . that prior applications were made to
the [c]ourt" and "these issues were previously litigated" and
"resolved," there was a need for "finality."
Turning to the notice of sale, the court agreed with defendant
that the caption and docket number erroneously referred to the
dismissed U.S. Bank foreclosure complaint. However, the court
noted the complaint used "the same property address," and that
6 A-3821-16T4
defendant would have known about the two docket numbers because
he was involved in the litigation that led to the dismissal of the
U.S. Bank foreclosure complaint and judgment. Although it did not
find the errors had prejudiced defendant, the court extended the
redemption period for twenty days from the date of the order, as
an equitable remedy. In so doing, the court gave defendant twice
"what the redemption period would [have been]," in order to "cover
the ten days of the notice plus the ten-day redemption period."
The court entered a memorializing order on the same date, and this
appeal followed.
On appeal, defendant raises the following points for our
consideration:
POINT I:
THE COURT ERRED IN DENYING DEFENDANT'S MOTION
SEEKING TO VACATE THE SHERIFF'S SALE AND
VACATE THE FINAL JUDGMENT OF FORECLOSURE AND
WRIT OF EXECUTION BECAUSE PLAINTIFFS, AURORA
LOANS AND NATIONSTAR MORTGAGE, LLC, HAD NO
STANDING TO COMMENCE THE LAWSUIT AND PRESENTLY
DO[] NOT HAVE ANY RIGHTS TO THE PROPERTY.
POINT II:
THE COURT ERRED IN NOT VACATING THE SALE OF
THE PROPERTY BECAUSE THE NOTICE OF SALE WAS
INVALID[,] AND ONLY A VACATION OF THE NOTICE
COULD HAVE CURED THE INVALIDITY OF THE SALE.
POINT III:
THE JUDGMENT OF FORECLOSURE, WRIT OF EXECUTION
AND SHERIFF'S SALE SHOULD BE VACATED AND
7 A-3821-16T4
DECLARED VOID BECAUSE OF MISREPRESENTATION AND
FRAUD AND FOR THE SAKE OF EQUITY.
Our review is governed by Rule 4:50-1, which permits a court,
in its discretion, to relieve a party from a final judgment for
the following reasons:
(a) [M]istake, inadvertence, surprise, or
excusable neglect; (b) newly discovered
evidence which would probably alter the
judgment or order and which by due diligence
could not have been discovered in time to move
for a new trial under [Rule] 4:49; (c) fraud
(whether heretofore denominated intrinsic or
extrinsic), misrepresentation, or other
misconduct of an adverse party; (d) the
judgment or order is void; (e) the judgment
or order has been satisfied, released or
discharged, or a prior judgment or order upon
which it is based has been reversed or
otherwise vacated, or it is no longer
equitable that the judgment or order should
have prospective application; or (f) any other
reason justifying relief from the operation
of the judgment or order.
Motions seeking to set aside a judgment "must be filed within
a reasonable time." Deutsche Bank Tr. Co. Ams. v. Angeles,
428 N.J. Super. 315, 319 (App. Div. 2012) (quoting Orner v. Liu,
419 N.J. Super. 431, 437 (App. Div. 2011)); see also R. 4:50-2
(requiring a motion for relief from a judgment or order to "be
made within a reasonable time"). Specifically, claims based on
subsections (a), (b), and (c) of Rule 4:50-1, are time-barred if
filed "more than one year after the judgment, order or proceeding
was entered or taken." R. 4:50-2.
8 A-3821-16T4
Rule 4:50-1 is "designed to reconcile the strong interests
in finality of judgments and judicial efficiency with the equitable
notion that courts should have authority to avoid an unjust result
in any given case." US Bank Nat'l Ass'n v. Guillaume,
209 N.J.
449, 467 (2012) (quoting Mancini v. EDS,
132 N.J. 330, 334 (1993)).
However, relief from judgment under Rule 4:50-1 "is not to be
granted lightly." Cho Hung Bank v. Kim,
361 N.J. Super. 331, 336
(App. Div. 2003). Rather, Rule 4:50-1 "provides for extraordinary
relief and may be invoked only upon a showing of exceptional
circumstances." Ross v. Rupert,
384 N.J. Super. 1, 8 (App. Div.
2006) (quoting Baumann v. Marinaro,
95 N.J. 380, 393 (1984)).
Indeed, the discretionary authority afforded the trial court under
Rule 4:50-1 is to be "exercised with equitable principles in mind,
and will not be overturned in the absence of an abuse of that
discretion." Marder v. Realty Constr. Co.,
84 N.J. Super. 313,
318 (App. Div.), aff’d,
43 N.J. 508 (1964).
Further, it is generally recognized that "the showing of a
meritorious defense is a traditional element necessary for setting
aside . . . a default judgment." Pressler & Verniero, Current
N.J. Court Rules, cmt. on R. 4:43-3 (2018); see also Marder,
84 N.J. Super. at 318. That is so because when a party has no
meritorious defense, "[t]he time of the courts, counsel and
litigants should not be taken up by such a futile proceeding."
9 A-3821-16T4
Guillaume,
209 N.J. at 469 (quoting Schulwitz v. Shuster,
27 N.J.
Super. 554, 561 (App. Div. 1953)).
Here, defendant renews the same arguments that were properly
rejected by the trial court. On this record, we find no abuse of
discretion. Defendant has made no showing to justify vacating the
final judgment under any provision of Rule 4:50-1 nor of a
meritorious defense. Defendant does not dispute that he executed
the loan documents and defaulted on the payments due under the
mortgage note, which was duly recorded. Where a defendant does
not challenge the execution, recording, or nonpayment of the
mortgage, a prima facie right to foreclose is established. See
Thorpe v. Floremoore Corp.,
20 N.J. Super. 34, 37 (App. Div. 1952);
see also Great Falls Bank v. Pardo,
263 N.J. Super. 388, 394 (Ch.
Div. 1993), aff’d,
273 N.J. Super. 542 (1994).
In turn, the party "seeking to foreclose a mortgage must own
or control the underlying debt." Bank of N.Y. v. Raftogianis,
418 N.J. Super. 323, 327-28 (Ch. Div. 2010) (citing Gotlib v. Gotlib,
399 N.J. Super. 295 (App. Div. 2008)). Here, the evidence clearly
demonstrates that JP Morgan Chase assigned the note and mortgage
to Aurora before Aurora filed the foreclosure complaint, thereby
conferring standing, because "either possession of the note or an
assignment of the mortgage that predated the original complaint
confer[s] standing." Angeles,
428 N.J. Super. at 318.
10 A-3821-16T4
Moreover, "[a] final judgment in foreclosure is binding upon
all parties to the action," and "[o]ne of the legal consequences
of the final judgment is that the mortgage itself no longer has
legal vitality." Resolution Tr. Corp. v. Griffin,
290 N.J. Super.
88, 91 (Ch. Div. 1994). At that point, "it has 'merged' into the
final judgment," and "[w]hat had been a private claim under the
mortgage contract becomes a special form of judgment entitling the
plaintiff to a writ of execution to sell the designated property
to satisfy the amount determined to be due." Ibid. Thus, as the
trial court correctly pointed out, because the foreclosure
judgment was assigned to Nationstar, there was no need for
Nationstar to possess the mortgage note.
Indeed, even if Aurora lacked standing to foreclose,
"standing is not a jurisdictional issue in our State court
system[,] and, therefore, a foreclosure judgment obtained by a
party that lacked standing is not 'void' within the meaning of
Rule 4:50-1(d)." Deutsche Bank Nat'l Tr. Co. v. Russo,
429 N.J.
Super. 91, 101 (App. Div. 2012). Notably, as the trial court
pointed out when it rejected defendant's belated challenge to
plaintiff's standing, defendant did not claim that any other entity
sought repayment of the mortgage loan during the nine-year period
the loan was in default. As we noted in Angeles,
11 A-3821-16T4
In foreclosure matters, equity must be applied
to plaintiffs as well as defendants.
Defendant did not raise the issue of standing
until he had the advantage of many years of
delay . . . . Defendant at no time denied his
responsibility for the debt
incurred . . . . Rather, when all hope of
further delay expired, after his home was
sold . . . , he made a last-ditch effort to
relitigate the case. The trial court did not
abuse its discretion in determining that
defendant was not equitably entitled to vacate
the judgment.
[
428 N.J. Super. at 320.]
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." Ibid. 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.
The power to void a sheriff's sale "is discretionary and must
be based on considerations of equity and justice." First Tr.
Nat'l Assoc. v. Merola,
319 N.J. Super. 44, 49 (App. Div. 1999).
However, in United States v. Scurry,
193 N.J. 492, 506 (2008), our
12 A-3821-16T4
Supreme Court explained that "unique circumstances" may warrant a
departure from procedural formalities in foreclosure actions. In
Scurry, where the defendant's first notice of the foreclosure sale
was the writ of possession, the Court's remedy for a notice failure
included an extension of the redemption period. 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. Id. at 506. If the defendant was 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.
Here, we agree with the court's decision to limit defendant's
remedy to an extended redemption period. As the court noted,
defendant was clearly aware of both foreclosure proceedings,
having participated in the litigation that led to the reinstatement
of the Nationstar judgment and the dismissal of the U.S. Bank
judgment. Moreover, defendant did not deny having notice of the
sheriff's sale, and only claimed that the caption and the docket
13 A-3821-16T4
number erroneously reflected the U.S. Bank judgment that had been
dismissed. Thus, under these circumstances, an extension of the
redemption period was an appropriate remedy.
Affirmed.
14 A-3821-16T4
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