U.S. BANK NATIONAL ASSOCIATION v. KENNETH D. DWYER
Annotate this CaseNOT 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-2570-19
U.S. BANK NATIONAL
ASSOCIATION, AS INDENTURE
TRUSTEE ON BEHALF OF AND
WITH RESPECT TO AJAX
MORTGAGE LOAN TRUST
2015-C, MORTGAGE-BACKED
NOTES, SERIES 2015-C,
Plaintiff-Respondent,
v.
KENNETH D. DWYER and
CATHERINE T. DWYER,
Defendants-Appellants.
____________________________
Submitted March 16, 2021 – Decided April 5, 2021
Before Judges Mawla and Natali.
On appeal from the Superior Court of New Jersey,
Chancery Division, Ocean County, Docket No. F-
016353-17.
Kenneth D. Dwyer and Catherine T. Dwyer, appellants
pro se.
Pluese, Becker, & Saltzman, LLC, attorneys for
respondent (Stuart H. West, on the brief).
PER CURIAM
This residential foreclosure action returns to us following a remand
directed by our previous opinion, United States Bank Nat'l Ass'n v. Dwyer, No.
A-5882-17 (App. Div. Oct. 2, 2019) (slip op. at 2), where we retained
jurisdiction and ordered the trial court to make additional findings as to whether
plaintiff U.S. Bank National Association possessed standing to prosecute this
foreclosure action against defendants Kenneth D. Dwyer and Catherine T.
Dwyer. Having received and considered the trial court's December 6, 2019 and
January 10, 2020 supplemental opinions, we affirm the March 2, 2018 order
granting summary judgment in plaintiff's favor and the June 4, 2018 final
judgment.
We incorporate by reference the factual and procedural history as set forth
in our prior opinion. By way of background, defendants executed a $404,700
promissory note to Ameriquest Mortgage Company (Ameriquest). As security
for repayment, defendants executed a mortgage to Ameriquest, encumbering
their property in Brick Township.
The Ameriquest mortgage was assigned five times. Ameriquest assigned
the mortgage to CitiMortgage, Inc., who thereafter assigned it to Bayview Loan
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Servicing, LLC (Bayview Loan Servicing). Bayview Loan Servicing then
assigned the mortgage to Bayview Dispositions, LLC, who assigned it to AJX
Mortgage Trust I, three days later on July 13, 2015. Finally, on November 24,
2015, AJX Mortgage Trust I executed an assignment to plaintiff. Each
assignment was duly recorded.
In addition to the aforementioned assignments, the summary judgment
record established that on June 19, 2013, Bayview Loan Servicing informed
defendants that the "mortgage loan" was transferred to U.S. Bank National
Association, as trustee, in trust for the benefit of the holder of Bayview
Opportunity Master Fund REMIC 2013-13NPL1 Beneficial Interest
Certificates, Series 2013-13NPL1. In addition, on November 25, 2013, Bayview
Loan Servicing advised defendants that the note and mortgage was transferred
yet again to a separate entity, BOMF 2013-13NPL1 Corp., and that the
"ownership transfer" took place on November 5, 2013. Finally, on November
17, 2014, Bayview Loan Servicing informed defendants that their loan was
transferred to U.S. Bank National Association, as trustee, in trust for the benefit
of the holder of Bayview Opportunity Master Fund Grantor Trust 2014-15PL1
Beneficial Interest Certificates, Series 2014-15RPL1, and this "ownership
transfer" occurred on October 28, 2014. The aforementioned transfers by
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Bayview Loan are hereinafter referred to as the "Bayview 2013 and 2014 loan
transfers."
Defendants defaulted on the loan by failing to make the monthly payment
due on February 1, 2017, and thereafter. Consequently, and in accordance with
the Fair Foreclosure Act, N.J.S.A. 2A:50-53 to -68, plaintiff's representative
sent defendants a notice of intention to foreclose. Shortly thereafter, plaintiff
filed its foreclosure complaint and defendants filed a contesting answer with
nineteen affirmative defenses.
Plaintiff filed a motion for summary judgment supported by a certification
from Julia Rust, a litigation specialist, who was employed by Gregory Funding,
LLC (Gregory), plaintiff's authorized representative and loan servicer. Rust
certified that she attached true and correct copies of the note and mortgage to
her certification along with defendants' loan modification agreement with
Bayview Loan Servicing, the referenced assignments, and a copy of the payment
history from the prior loan servicer, as well as the payment history when
Gregory began servicing the loan for plaintiff. Based on that payment history,
Rust stated that defendants remained in default under the note.
Rust also attested that the original note was in plaintiff's possession prior
to the filing of the complaint. In this regard, she stated that the "original note
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was sent to [plaintiff's] foreclosure counsel on or about September 8, 2017, and
. . . foreclosure counsel remains in possession of the note." Plaintiff's
foreclosure counsel also certified that his "office received . . . the original note
. . . endorsed in blank . . . on September 11, 2017."
In their opposition and cross-motion, defendants argued that: 1) plaintiff
lacked standing to prosecute the foreclosure because the summary judgment
record did not include competent proof that it possessed the note the day the
complaint was filed, and breaks in the chain of title caused by the Bayview 2013
and 2014 loan transfers made all subsequent assignments invalid; 2) plaintiff's
motion was not supported by competent evidence as Rust based her certific ation
on "unreliable" information; 3) defendants made the disputed mortgage
payments and consequently were not in default; and 4) plaintiff improperly
accelerated the note contrary to its express terms.
After considering the parties' oral arguments, the court granted plaintiff
summary judgment and denied defendants' cross-motion in separate March 2,
2018 orders. In its oral decision, the court rejected defendants' standing
argument finding plaintiff produced the original note and established "a chain
of unbroken assignments which were recorded." Based on the Rust certification,
the court concluded defendants did not "make the payments due on the
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mortgage, and the matter remains in default." Finally, the court concluded
defendants failed to raise a genuine or material factual question to dispute
plaintiff's right to foreclose.
Plaintiff filed an unopposed motion for final judgment, which the court
granted on June 4, 2018. Plaintiff's counsel submitted a certification stating that
on April 11, 2018, he communicated with representatives of Gregory, who
"reviewed . . . the original (or a true copy of) the [n]ote, [m]ortgage[,] and
recorded assignments . . . submitted, . . . and confirmed their accuracy." Counsel
also stated he inspected "the documents about to be filed" and acknowledged his
obligation pursuant to Rule 1:4-8 "to amend [the] affidavit if a reasonable
opportunity for further investigation or discovery indicates insufficient
evidentiary support for [the] factual assertion proffered by plaintiff in any court
filings or documents in this case."
Significantly, as we noted in our earlier opinion, the note submitted in
support of final judgment was not the same note to which Rust, and plaintiff's
counsel attested, and to which plaintiff's counsel presented to the court and
defendants for inspection. Rather, the note submitted in support of plaintiff's
motion for final judgment was materially different as it contained two additional
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allonges. 1 The first allonge showed that Bayview Loan Servicing endorsed the
note to Bayview Dispositions, LLC. The second allonge indicated that Bayview
Dispositions, LLC endorsed the note to AJX Mortgage Trust 1.
Defendants thereafter moved to vacate the final judgment. The court
issued a July 6, 2018 order and accompanying oral decision denying defendants'
motion.
Defendants appealed the March 2, June 4, and July 6, 2018 orders
contesting plaintiff’s standing, defendants' default, and plaintiff's attendant right
to accelerate the note. Defendants also contended that the court committed error
in refusing to vacate the final judgment asserting that the note and allonges that
plaintiff submitted in support of final judgment "demonstrate[d] . . . fraud, and
[that] there was no intent to transfer the mortgagee rights."
We concluded that a remand was "necessary solely to address the standing
issues raised by defendants" but otherwise affirmed the trial court's orders. With
respect to the question of plaintiff's standing to foreclosure, we held:
Based on the competing notes submitted by plaintiff in
support of its applications for summary judgment and
final judgment, we are unable to determine on the
current record if plaintiff properly possessed the note
1
An allonge is "[a] slip of paper sometimes attached to a negotiable instrument
for the purpose of receiving . . . indorsements." Black's Law Dictionary 68 (9th
ed. 2009).
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prior to the filing of the foreclosure complaint. In
addition, neither the summary judgment record nor the
record in support of plaintiff's application for final
judgment adequately address the issues raised by
defendants regarding the Bayview 2013 and 2014 loan
transfers.
....
On remand, should plaintiff seek to establish
standing based on possession of the note prior to the
filing of the summary judgment complaint, it shall
submit a certification fully compliant with Rule 1:6-6,
and it shall address the inconsistency between the note
submitted in support of summary judgment and that
filed with its application for final judgment so that the
trial court can make appropriate factual findings in the
first instance. R. 1:7-4 . . . .
With respect to plaintiff's alternative standing
argument that it possessed a valid assignment prior to
the filing of the complaint, we likewise remand for the
court to make additional factual findings that address
the Bayview 2013 and 2014 loan transfers. On appeal,
plaintiff states in conclusory fashion that "[t]here [was]
no break in the chain of the [a]ssignments of
[m]ortgage, and all of the [a]ssignments of [m]ortgage
were properly executed, notarized and recorded. Any
intermediate transfers of the loan that were not
memorialized in an [a]ssignment of [m]ortgage[] are
not relevant to the [plaintiff's] standing."
We are not satisfied that the trial record or the
court's factual findings adequately explain those
transfers, however. To the extent plaintiff relies on the
five recorded assignments to establish standing,
including the final November 24, 2015 assignment
from AJX Mortgage Trust I, on remand plaintiff shall
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detail the Bayview 2013 and 2014 loan transfers in
greater detail to enable the trial judge, and any
reviewing court, to determine if the subsequent
assignments to Bayview Dispositions, AJX, and
plaintiff are valid. We acknowledge case law
questioning whether defendants have standing to
challenge those transactions. . . . Without a clearer
record and understanding as to the nature of those
transactions, however, including whether they
represent securitized mortgage loans governed by a
Pooling and Servicing Agreement, we cannot resolve
that legal issue. We also are unable to glean from the
trial record the relationship, if any, those entities have
with plaintiff.
In accordance with our instructions, on remand, plaintiff filed a motion to
establish standing. In support, plaintiff's counsel provided a certification in
which he stated that his office received the original note on September 11, 2017,
from plaintiff's servicer and that an allonge included in the collateral file was
endorsed in blank. He noted his office did not receive the allonges with respect
to Bayview Dispositions, LLC and AJX Mortgage Trust I as they had been
shredded.
Counsel's certification also attached a true copy of the recorded mortgage
and the five recorded assignments originally attached in support of its motion
for summary judgment. He also attached a true copy of the sheriff's deed
transferring the property to plaintiff after its sale.
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Significantly, counsel's certification also annexed the certification from
David Briggs, the First Vice President of Bayview Loan Servicing. The Briggs
certification explained that the Bayview 2013 and 2014 loan transfers were
"internal transfer[s]" and that an assignment of mortgage was not generated
because "Bayview remained involved as the servicer." Further, Briggs certified
that the allonges with respect to Bayview Dispositions, LLC and AJX Mortgage
Trust I "were created in error."
Plaintiff's counsel also attached a certification from Wan-I J. Lee, a
litigation analyst from Gregory. Lee certified that Gregory received the original
collateral file and note on April 10, 2017. Lee also certified the collateral file
included the three referenced allonges but noted that as the two allonges with
respect to Bayview Dispositions, LLC and AJX Mortgage Trust I "had been
created in error, they were shredded." After Gregory received the collateral file,
Lee certified that it was sent back to plaintiff's custodian of records but that once
litigation commenced, Gregory received the collateral file again on September
7, 2017, and sent it to plaintiff's attorneys who remained in possession of the
file and the note that was included therein.
In response to plaintiff's motion, defendants' filed a cross-motion to
dismiss. Plaintiff opposed the cross-motion and submitted another certification
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from counsel stating "[t]he additional two original but mistaken [a]llonges had
been shredded and were never forwarded to [his] firm." Counsel further stated
that "[w]hen the [m]otion for [f]inal [j]udgment was filed, copies of the two
additional [a]llonges, which had been electronically received and stored in the
firm's [software system], were inadvertently printed out and included with the
[n]ote and one valid [a]llonge."
The court issued supplemental factual findings in accordance with our
remand instructions on December 6, 2019. In its oral decision, the court
concluded the assignments of mortgage represented a continuous chain of title
and that plaintiff was the mortgagee of record as of February 17, 2016. As to
the Bayview assignments, it found the Bayview 2013 and 2014 loan transfers
did not require an assignment of mortgage because Bayview Loan Servicing
"remained the servicer as the trust [and fund were] internal Bayview product[s]."
The court also concluded plaintiff established standing to prosecute the
foreclosure because it was the mortgagee of record when the complaint was filed
on July 6, 2017, and it was in possession of the original note as of April 10,
2017, before the complaint was filed.
The court held a second motion hearing on January 10, 2020, to address
defendants' application, which it noted was "not a cross-motion" but "an
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application to dismiss." The court restated its previous factual and legal
conclusions and noted defendants' motion was "inappropriate" because our
opinion did not vacate the final judgment and the relief defendants requested
was outside the scope of remand. The court denied defendants' motion in a
January 10, 2020 order.
In its supplemental merits briefs before us, defendants contend the trial
court did not "have any equitable powers to grant [p]laintiff's motion because it
did not expunge the [s]heriff's [d]eed, and by not doing so, the foreclosure action
was concluded." They further maintain the Bayview 2013 and 2014 loan
transfers and allonges that were not with respect to Bayview Dispositions, LLC
and AJX Mortgage Trust I are evidence of a "broken chain of title." Further,
they suggest because Gregory, and not plaintiff, was in possession of the original
note, plaintiff cannot establish standing. We disagree with all of these
arguments.
First, defendants' jurisdictional challenge is meritless. The General
Equity Part of the Chancery Division has jurisdiction to hear " [a]ctions in which
the plaintiff's primary right or the principal relief sought is equitable in nature."
R. 4:3-1(a)(1). The primary or principal relief in any foreclosure proceeding is
equitable in nature and thus subject to the jurisdiction of the General Equity
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Part. See United States v. Scurry, 193 N.J. 492, 502 (2008) (citations omitted).
Further, we remanded this case for the court to resolve the narrow issue of
whether plaintiff had standing to enforce the foreclosure action. As such, the
foreclosure action between plaintiff and defendants was ongoing and the trial
court retained jurisdiction to hear the dispute. The fact that the property
proceeded to sheriff's sale clearly did not divest the court of jurisdiction.
Second, as we recognized in our October 2, 2019 opinion, standing may
be established through "either possession of the note or an assignment of the
mortgage that predated the original complaint." Deutsche Bank Tr. Co. Ams. v.
Angeles, 428 N.J. Super. 315, 318 (App. Div. 2012); see also N.J.S.A. 46:18-
13(b)(1). As the court correctly concluded, defendant possessed standing by
both possessing the note prior to the filing of the foreclosure complaint as well
as a valid assignment. Specifically, plaintiff filed the complaint on July 6, 2017,
and Lee certified Gregory, plaintiff's authorized representative and servicer,
received the original note from plaintiff on April 10, 2017, sent it back to
plaintiff, and then received it again on September 7, 2017, for purposes of
litigation before sending it to plaintiff's attorneys.
Further, plaintiff produced valid assignments between the original
mortgagee and itself. We are satisfied from the record that the Bayview 2013
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and 2014 loan transfers were internal Bayview products that did not require
recorded assignments. As such, we are persuaded that the shredded allonges
and the Bayview 2013 and 2014 loan transfers did not break the chain of title as
defendants contend.
We therefore conclude plaintiff had standing to prosecute the for eclosure
action. To the extent not addressed, defendants' remaining arguments lack
sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(e).
Affirmed.
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