ATHENE ANNUITY LIFE ASSURANCE COMPANY v. SERGIO HENRIQUES CUNHA

NOT FOR PUBLICATION WITHOUT THE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-0340-20

ATHENE ANNUITY & LIFE
ASSURANCE COMPANY,

          Plaintiff-Respondent,

v.

SERGIO HENRIQUES CUNHA,
PAWNEE LEASING
CORPORATION, and
MIDLAND FUNDING, LLC,

          Defendants,

and

SONIA GONCALVES
CARVALHO-CUNHA,

     Defendant-Appellant.
___________________________

                   Submitted September 29, 2021 – Decided October 18, 2021

                   Before Judges Whipple, Geiger and Susswein.

                   On appeal from the Superior Court of New Jersey,
                   Chancery Division, Union County, Docket No. F-
                   003789-19.
            Sonia Goncalves Carvalho-Cunha, appellant pro se.

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

PER CURIAM

      Defendant Sonia Goncalves Carvalho-Cunha (Sonia)1 appeals from an

August 7, 2020 Chancery Division order denying defendants' motion to vacate

the final judgment entered in this residential mortgage foreclosure action.

      We briefly recount the pertinent underlying facts. On May 6, 2008,

defendant Sergio Henriques Cunha executed a note in favor of CitiMortgage,

Inc. for $348,750, secured by a mortgage in favor of Mortgage Electronic

Registration Systems, Inc. (MERS), as nominee for CitiMortgage, Inc., its

successors and assigns, on residential property located in Union (the property).

      The mortgage was assigned multiple times, with each assignment recorded

in the Union County Clerk's Office. On September 15, 2010 MERS assigned

the mortgage to CitiMortgage, Inc. On June 10, 2011, CitiMortgage assigned

the mortgage to NationStar Mortgage, LLC. On October 1, 2012, the note and


1
  Because defendant Sonia Goncalves Carvalho-Cunha shares the same surname
with her husband, defendant Sergio Henriques Cunha, we will refer to her by
her first name in this opinion to avoid confusion. We intend no disrespect by
doing so. We refer to them collectively as defendants.
                                                                              A-0340-20
                                       2
mortgage were modified by a Loan Modification Agreement that increased the

principal balance to $483,132.63, which was also recorded.

      On October 11, 2017, NationStar assigned the mortgage to Federal

National Mortgage Association (FNMA). That same day, FNMA assigned the

mortgage to plaintiff Athene Annuity & Life Assurance Company (Athene).

      Defendants defaulted on the loan installment due on January 1, 2018, and

all payments thereafter. On June 7, 2018, Athene, through Select Portfolio

Servicing, Inc., served defendants with a Notice of Intention to Foreclose (NOI)

by certified mail addressed to defendants' address.

      On December 12, 2018, Athene assigned the mortgage to AADE RML,

LLC (AADE). On February 25, 2019, AADE filed this foreclosure action. In

May 2019, AADE applied for the entry of default against all defendants. On

June 21, 2019, AADE assigned the mortgage back to Athene. In October 2019,

Athene was substituted as plaintiff by court order.

      On October 18, 2019, Athene filed a motion for final judgment.

Defendants did not oppose the motion. On November 14, 2019, final judgment

was entered against defendants. In January 2020, Athene served the notice of

the Sheriff's sale on defendants by certified and regular mail.




                                                                          A-0340-20
                                        3
      On July 7, 2020, defendants filed a motion to vacate the final judgment.

On August 7, 2020, Judge Joseph P. Perfilio issued an order and accompanying

written statement of reasons denying the motion. This appeal followed.

      Appellant raises the following point for our consideration:

             THE APPELLATE DIVISION MUST DECIDE
             WHETHER [THE] TRIAL [COURT] ERRED OR THE
             COURT'S DETERMINATION WAS AN ABUSE OF
             DISCRETION[] IN DENYING DEFENDANT[S']
             RIGHTS UPON [HER] MOTION TO VACATE A
             JUDGMENT SEEKING RELIEF PURSUANT TO
             RULE   4:50-1(f), WHERE   DEFENDANT['S]
             WRITTEN ARGUMENTS PRESENTED FACT[S] OF
             RECORD TO JUSTIFY VACATING THE FINAL
             JUDGMENT UNDER . . . RULE 4:50-1(a), (d)[,]
             INCLUDING SUBSECTION (f).

      Sonia first argues that service of the NOI did not comply with the Fair

Foreclosure Act,  N.J.S.A. 2A:50-53 to -68, and service of the summons and

complaint were improper under Rules 4:4-4(a) and 4:4-5(b). Second, Sonia

argues that Athene did not have standing to foreclose because it was not the

original holder of the note and mortgage, nor can it show a valid chain of title

establishing that it was the final controller of the note.

      We find no merit in Sonia's arguments and affirm substantially for the

reasons expressed by Judge Perfilio in his comprehensive and thoughtful written

statement of reasons. We add the following comments.


                                                                          A-0340-20
                                         4
      We review the denial of a motion to vacate default judgment for abuse of

discretion. Deutsche Bank Nat'l Trust Co. v. Russo,  429 N.J. Super. 91, 98

(App. Div. 2012), citing U.S. Bank Nat. Ass'n v. Guillaume,  209 N.J. 449, 467

(2012). See also U.S. Bank Nat'l Ass'n v. Curico,  444 N.J. Super. 94, 105 (App.

Div. 2016) ("The decision whether to grant such a motion is left to the sound

discretion of the trial court."). The trial court's decision is afforded "substantial

deference" and the abuse of discretion must be clear to warrant reversal. Russo,

 429 N.J. Super at 98 (citing DEG, LLC v. Twp. of Fairfield,  198 N.J. 242, 261

(2009)). An abuse of discretion occurs when a decision is made "without a

rational explanation, inexplicably departed from established policies, or rested

on an impermissible basis." Iliadis v. Wal-Mart Stores, Inc.,  191 N.J. 88, 123

(2007) (quoting Flagg v. Essex Cnty. Prosecutor,  171 N.J. 561, 571 (2002)).

       N.J.S.A. 2A:50-56 requires a mortgage lender to provide written notice to

the residential debtor of its intention to commence a foreclosure action,

including notice of the right to cure the default, "at least 30 days, but not more

than 180 days, in advance of such action . . . ." Where the NOI does not comply

with the act, a trial court "may dismiss the action without prejudice, order the

service of a corrected notice, or impose another remedy appropriate to the

circumstances of the case." Guillaume,  209 N.J. at 476.


                                                                               A-0340-20
                                         5
      Rule 4:4-4(a)(1) permits service of process "by delivering a copy of the

summons and complaint to the individual personally, or by leaving a copy

thereof at the individual's dwelling place or usual place of abode with a

competent member of the household of the age of 14 or over . . . residing therein

. . . ." Where there has been "a substantial deviation from service of process

rules . . . casting reasonable doubt on proper notice" this will generally render a

default judgment void under the meaning of Rule 4:50-1(d). Jameson v. Great

Atl. & Pac. Tea Co.,  363 N.J. Super. 419, 425 (App. Div. 2003). "If defective

service renders the judgment void, a meritorious defense is not required to

vacate the judgment under [Rule] 4:50-1(d)." Ibid.

      A return of service consistent with Rule 4:4-4(a) "raises a presumption

that the facts recited therein are true." Resol. Trust Corp. v. Associated Gulf

Contractors, Inc.,  263 N.J. Super. 332, 343 (App. Div. 1993) (quoting Garley v.

Waddington,  177 N.J. Super. 173, 180 (App. Div. 1981)); see also Jameson,  363 N.J. Super. at 426-27 (same). The presumption can be rebutted with clear and

convincing evidence that the return is false. Resol. Trust Corp.,  263 N.J. Super

at 344. Where there is "evidence 'tending to disprove' the presumed fact, the

presumption disappears." Jameson,  363 N.J. Super at 427 (quoting Ahn v. Kim,

 145 N.J. 423, 439 (1996)).       However, uncorroborated testimony from the


                                                                             A-0340-20
                                        6
defendants alone is not enough to rebut the presumption. Ibid. (citing Garley,

 177 N.J. Super. at 181).

      Judge Perfilio found that Athene complied with  N.J.S.A. 2A:50-53 by

properly serving the NOI on defendants. He also found that defendants were

properly served with the summons and complaint. The record fully supports

those findings.

      The address used for service of the NOI, summons and complaint, the

entry of default, and motions on Sonia and her husband matches the address

listed on the note and mortgage. Athene provided affidavits of personal service

of the complaint and summons on both Sonia and her husband. Athene also

provided certificates of service of the entry of default and UPS tracking

information for service of the notice of motion for final judgment. There is no

evidence that Sonia or her husband changed their address at any time during

litigation.

      Judge Perfilio found "no real discrepancy with the descriptions in the

Affidavits of Service [of the NOI]" compared to defendants' drivers licenses,

and that there was sufficient tracking information demonstrating that the notice

to enter default and notice to enter final judgment were also served on

defendants. The minor difference in the descriptions set forth in the affidavits


                                                                          A-0340-20
                                       7
of service compared to defendants' licenses is not clear and convincing evidence

that defendants were not properly served.

      "The only material issues in a foreclosure proceeding are the validity of

the mortgage, the amount of the indebtedness, and the right of the mortgagee to

resort to the mortgaged premises." Inv. Bank v. Torres,  457 N.J. Super. 53, 65

(App. Div. 2018) (quoting Great Falls Bank v. Pardo,  263 N.J. Super. 388, 394

(Ch. Div. 1993), aff'd,  273 N.J. Super. 542 (App. Div. 1994)). The record

demonstrates that a series of recorded assignments of the mortgage established

a clear chain of title to Athene, which clearly had standing to foreclose.

      Under Rule 4:50-1(a), "[a] defendant seeking to set aside a default

judgment must establish that his failure to answer was due to excusable neglect

and that he has a meritorious defense." Russo,  429 N.J. Super. at 98 (citing

Goldhaber v. Kohlenberg,  395 N.J. Super. 380, 391 (App. Div. 2007)).

Excusable neglect may be found if a party's default was due to "an honest

mistake that is compatible with due diligence or reasonable prudence." Ibid.

(citing Guillaume,  209 N.J. at 468).        Sonia has not shown that she has a

meritorious defense.

      "A Rule 4:50-1(d) motion, based on a claim that a judgment is void, does

not require a showing of excusable neglect but must be filed within a reasonable


                                                                             A-0340-20
                                        8
time after entry of the judgment." Russo,  429 N.J. Super. at 98. See also R.

4:50-2 (same). A reasonable time can be less than a year and must be determined

on a case-by-case basis. Orner v. Liu,  419 N.J. Super. 431, 437-38 (App. Div.

2011). When there is a long delay in filing, New Jersey courts will hold that the

motion to vacate was not filed within a reasonable time. See id. at 433 (364-day

delay in filing motion to vacate was unreasonable); Jackson Constr. Co. v.

Ocean,  3 N.J. Tax 296, 310 (Tax Ct. 1981) (waiting seven months to move to

vacate the judgment found unreasonable). Similarly, Federal Rule of Civil

Procedure 60(b), which is essentially identical to Rules 4:50-1 and -2, has been

interpreted as requiring the motion to be filed with a reasonable time, with

delays of less than one year being held unreasonable.2 See, e.g., McLawhorn v.

John W. Daniel & Co.,  924 F.2d 535, 538 (4th Cir. 1991) (three-and-one-half-

month delay); Kagan v. Caterpillar Tractor Co.,  795 F.2d 601, 610-12 (7th Cir.

1986) (approximately four-month delay); Security Mut. Cas. Co. v. Century Cas.

Co.,  621 F.2d 1062, 1068 (10th Cir. 1980) (three-month delay).             Here,

defendants did not move to vacate the judgment within a reasonable time. They

inexplicably waited more than seven months to do so.



2
   We often look to federal decisions when interpreting our own similar court
rules. Orner,  419 N.J. Super. at 438 n.9.
                                                                           A-0340-20
                                       9
      Moreover, under certain circumstances, "equitable considerations may

justify a court in rejecting a foreclosure defendant's belated attempt to raise as a

defense plaintiff's lack of standing . . . ." Russo,  429 N.J. Super. at 99-100. An

unexcused, lengthy delay in asserting the defense of lack of standing post-

judgment, coupled with Athene's legal right to enforce the note at the time final

judgment was entered, "would not constitute a meritorious defense to the

foreclosure complaint." Id. at 101. That is precisely what occurred in this

matter. The judgment is not "void" within the meaning of Rule 4:50-1(d). Ibid.

      Lastly, Rule 4:50-1(f) permits the vacating of a judgment "any other

reason justifying relief from the operation of the judgment or order." Due to the

importance attached to the finality of judgments, to sustain a motion under Rule

4:50-1(f) the movant must show that extraordinary conditions existed

warranting a vacation of judgment. Guillaume,  209 N.J. at 484. "[R]elief under

subsection (f) is available only when 'truly exceptional circumstances are

present.'" In re Guardianship of J.N.H.,  172 N.J. 440, 473 (2002) (quoting

Housing Auth. v. Little,  135 N.J. 274, 283 (1994)). Sonia has not demonstrated

any extraordinary circumstances that would justify relief from the final

judgment under Rule 4:50-1(f).




                                                                              A-0340-20
                                        10
     For these reasons, we discern no abuse of discretion by the trial court.

Defendants' motion to vacate the final judgment was properly denied.

     Affirmed.




                                                                       A-0340-20
                                     11