U.S.BANK NATIONAL ASSOCIATION v. CLAUDE GOULDING

NOT FOR PUBLICATION WITHOUT THE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-5379-15T3

U.S. BANK NATIONAL ASSOCIATION,

        Plaintiff-Respondent,

v.

CLAUDE GOULDING and
MICHELLE GOULDING,

        Defendants-Appellants.


              Argued January 23, 2018 – Decided February 9, 2018

              Before Judges Carroll and Leone.

              On appeal from Superior Court of New Jersey,
              Chancery Division, Bergen County, Docket No.
              F-007679-13.

              Michelle Goulding, appellant, argued the cause
              pro se.

              BJ Phoenix Finneran argued the cause for
              respondent (Zeichner Ellman & Krause, LLP,
              attorneys; Kerry A. Duffy, on the brief).

PER CURIAM

        In   this   mortgage     foreclosure     action,     defendants     Claude

Goulding and Michelle Goulding appeal from a July 8, 2016 order

denying their motion for reconsideration of a March 7, 2016 order
declining to vacate a 2014 final judgment of foreclosure entered

in favor of plaintiff U.S. Bank National Association.         We affirm.

     The record discloses that, on November 9, 2004, defendants

borrowed     $172,000   from   Partners   Mortgage,   Inc.   (Partners).

Repayment was secured by a mortgage, which was recorded on December

14, 2004.     Partners promptly assigned the mortgage to plaintiff

by assignment dated November 15, 2004.        The assignment was then

recorded simultaneously with the mortgage on December 14, 2004.

Additionally, an allonge was affixed to the note, thereby rendering

the debt payable to plaintiff.

     Defendants defaulted by failing to make the monthly payment

due on January 1, 2009, and all payments that came due after.           On

September 14, 2011, plaintiff sent a notice of intention to

foreclose (NOI) to the property address, which defendants deny

receiving.

     Plaintiff filed a foreclosure complaint on March 8, 2013.

Defendants were served with the summons and complaint on March 16,

2013.   Defendants did not file a responsive pleading, and default

was entered against them on April 23, 2013.           On May 24, 2013,

plaintiff's counsel sent a notice advising defendants of their

right to cure the mortgage default and that if they failed to do

so plaintiff intended to apply for final judgment of foreclosure.

In response, on July 10, 2013, defendants moved to stay the

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foreclosure action and vacate the default, which the trial court

denied on August 23, 2013.

     Plaintiff filed an application for entry of final judgment

on March 26, 2014.    The application included, among other things,

certified copies of the note, allonge, mortgage, and assignment

of mortgage.   On June 16, 2014, the trial court entered a final

judgment of foreclosure.

     On February 12, 2016, defendants filed a motion to vacate the

final judgment pursuant to Rule 4:50-1.          Among other things,

defendants asserted the judgment was void because plaintiff lacked

standing, the signatures on the note and mortgage were fraudulent,

and plaintiff failed to serve defendants with a NOI.

     Judge Menelaos Toskos denied the motion in a March 7, 2016

written opinion.      Initially, the judge found the motion was

untimely because defendants did not move to vacate the final

judgment within the time constraints imposed by Rule 4:50-2.          The

judge nevertheless went on to address the merits, and found

defendants   failed   to   show   excusable   neglect,   a   meritorious

defense, or "any of the required criteria under [Rule] 4:50-1 to

vacate a judgment."        Judge Toskos determined that plaintiff's

possession of the note prior to the filing of the complaint was

sufficient to confer standing, and that in any event "the law is

clear that lack of standing does not constitute a meritorious

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defense post judgment."    The judge also observed that, in its

opposition to the motion, plaintiff attached copies of the NOI

that it sent to defendants on September 14, 2011.     Finally, the

judge rejected defendants' fraud claims, noting defendants had

"made payments under the loan documents for several years . . .

never raising the issue," and the claims were barred by "N.J.S.A.

2A:14-1[, which] provides for a six year statute of limitations

for claims sounding in fraud."

     Defendants moved for reconsideration, which Judge Toskos

denied on April 29, 2016.     On June 9, 2016, defendants filed

another motion seeking reconsideration of the March 7, 2016 order.

Judge Toskos denied the motion on July 8, 2016, again finding that

defendants failed to satisfy the standards for reconsideration.

This appeal followed.

     On appeal, defendants renew their arguments that the judgment

should be set aside because plaintiff is not the holder of the

note and therefore lacks standing to foreclose, and that plaintiff

failed to serve them with a NOI.     Defendants further argue that

plaintiff's proofs were insufficient to support entry of final

judgment; the trial court misapplied the holder in due course

doctrine; and their defenses of fraud and illegality survive even

against holders in due course.       We reject these arguments and

affirm substantially for the reasons set forth in Judge Toskos'

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cogent    and    well-reasoned    written   opinion     denying   defendants'

motion to vacate the judgment.          We add the following comments.

       Under Rule 4:50—1, the trial court may relieve a party from

an order or judgment for the following reasons:

            (a) mistake, 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 R. 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    made   under   Rule   4:50-1   must   be   filed   within    a

reasonable time.      R. 4:50-2; see also Deutsche Bank Trust Co. Ams.

v. Angeles, 
428 N.J. Super. 315, 319 (App. Div. 2012).                Motions

based on Rule 4:50-1(a), (b), and (c) must be filed within a year

of the judgment.         R. 4:50-2; accord Angeles, 
428 N.J. Super. at
 319.     However, the one-year limitation for subsections (a), (b),

and (c) does not mean that filing within one year automatically

qualifies as "within a reasonable time."           Orner v. Liu, 
419 N.J.

Super. 431, 437 (App. Div. 2011); R. 4:50-2.


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              [T]he one-year period represents only the
              outermost time limit for the filing of a
              motion based on Rule 4:50-1(a), (b)[,] or (c).
              All Rule 4:50 motions must be filed within a
              reasonable time, which, in some circumstances,
              may be less than one year from entry of the
              order in question.

              [Orner, 
419 N.J. Super. at 437.]

       A motion for relief under Rule 4:50-1 should be granted

sparingly and is addressed to the sound discretion of the trial

court, whose determination will not be disturbed absent a clear

abuse of discretion.     U.S. Bank Nat'l Ass'n v. Guillaume, 
209 N.J.
 449,    467    (2012).      "[A]buse   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 court's decision is

"made without a rational explanation, inexplicably departed from

established     policies,    or   rested    on   an   impermissible   basis."

Guillaume, 
209 N.J. at 467 (quoting Iliadis v. Wal-Mart Stores,

Inc., 
191 N.J. 88, 123 (2007)).            Accordingly, this court's task

is not "to decide whether the trial court took the wisest course,

or even the better course, since to do so would merely be to

substitute our judgment for that of the lower court.              The question

is only whether the trial judge pursued a manifestly unjust

course."      Gittleman v. Cent. Jersey Bank & Trust Co., 103 N.J.



                                       6                               A-5379-15T
3 Super. 175, 179 (App. Div. 1967), rev'd on other grounds, 
52 N.J.
 503 (1968).

     Here, we find no abuse of discretion by the trial court.

Defendants' motion to vacate the foreclosure judgment was filed

nearly two years after the judgment was entered.     Consequently,

to the extent the motion sought relief under Rule 4:50-1(a), based

on mistake, inadvertence, surprise, or excusable neglect, or under

Rule 4:50-1(c), based on fraud, misrepresentation, or misconduct,

it was time-barred under Rule 4:50-2, as Judge Toskos properly

found.   Notably, defendants do not even address the timeliness

issue on appeal.

     Further, the judge did not err in concluding defendants were

foreclosed from raising a standing argument for the first time

after entry of final judgment.   "[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).        In Russo, we further

explained that equitable considerations may bar a defendant from

raising a standing argument after final judgment.   Id. at 99-100.

"In foreclosure matters, equity must be applied to plaintiffs as

well as defendants."   Angeles, 
428 N.J. Super. at 320.    Where a

defendant does not "raise the issue of standing until he had the

advantage of many years of delay," the judge need not entertain

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the claim.       Ibid.    Here, defendants waited approximately three

years to assert the standing issue, and did so after default

judgment had been entered.

       In any event, the competent proofs in the record establish

that plaintiff had physical possession of the note before filing

the   foreclosure    complaint.       Moreover,      the    assignment     of   the

mortgage to plaintiff prior to the filing of the foreclosure

complaint conferred standing upon plaintiff.               Id. at 318     (stating

that standing is conferred by "either possession of the note or

an    assignment   of    the   mortgage     that    predate[s]      the   original

complaint") (citing Deutsche Bank Nat'l Tr. Co. v. Mitchell, 
422 N.J. Super. 214, 216, 225 (App. Div. 2011)).                 Thus, defendants'

standing argument is meritless.

       Defendants' contention that plaintiff failed to serve them

with a NOI, in violation of the Fair Foreclosure Act, 
N.J.S.A.

2A:50-53 to -68, is clearly belied by the record.              We consequently

conclude this argument lacks merit.

       Additionally, Rule 4:50-1(f) does not provide defendants with

a basis for relief under the facts presented. As noted, subsection

(f) permits a judge to vacate a default judgment for "any other

reason justifying relief from the operation of the judgment or

order,"    and     "is    available     only       when    'truly    exceptional

circumstances are present.'"          Guillaume, 
209 N.J. at 484 (quoting

                                        8                                  A-5379-15T3
Hous. Auth. of Morristown v. Little, 
135 N.J. 274, 286 (1994)).

The applicability of this subsection is limited to "situations in

which, were it not applied, a grave injustice would occur."     Ibid.

As plaintiff points out, defendants have been in default under the

note and mortgage since 2009.    On this record, defendants have not

shown any such "exceptional circumstances" that would warrant

relief under subsection (f), or any other section of the rule.

     Finally, Judge Toskos correctly denied defendants' motion for

reconsideration.   The denial of a motion for reconsideration rests

within the sound discretion of the trial judge.     Fusco v. Bd. of

Educ. of City of Newark, 
349 N.J. Super. 455, 462 (App. Div. 2002).

"Motions for reconsideration are granted only under very narrow

circumstances."    Ibid.   We have long recognized that:

          Reconsideration should be used only for those
          cases which fall into that narrow corridor in
          which either (l) the [c]ourt has expressed its
          decision based upon a palpably incorrect or
          irrational basis, or (2) it is obvious that
          the [c]ourt either did not consider, or failed
          to appreciate the significance of probative,
          competent evidence.

          [Ibid. (quoting D'Atria v. D'Atria, 242 N.J.
          Super. 392, 401 (Ch. Div. 1990)).]

Defendants failed to meet those criteria here.

     Affirmed.




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