FULTON BANK, N.A. v. DAVID MERMELSTEIN

NOT FOR PUBLICATION WITHOUT THE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-1986-20

FULTON BANK, N.A., as
successor in interest by
merger to PREMIER BANK,

          Plaintiff-Respondent,

v.

DAVID MERMELSTEIN,

     Defendant-Appellant.
__________________________

                   Argued March 31, 2022 – Decided April 11, 2022

                   Before Judges Haas and Mitterhoff.

                   On appeal from the Superior Court of New Jersey,
                   Chancery Division, Atlantic County, Docket No. F-
                   010825-11.

                   Justin T. Loughry argued the cause for appellant
                   (Loughry and Lindsay, LLC, attorneys; Justin T.
                   Loughry, on the briefs).

                   William T. Dudeck argued the cause for respondent
                   (Eastburn and Gray, P.C., attorneys; William T.
                   Dudeck, on the brief).
PER CURIAM

      Defendant David Mermelstein appeals from the Chancery Division's

March 23, 2021 order denying his motion to set aside the May 29, 2014 sheriff's

sale held after defendant defaulted in a commercial foreclosure action involving

property located in Egg Harbor Township (the property). We affirm.

      The facts are not in dispute and are summarized in the Pennsylvania

Superior Court's June 30, 2020 decision in Fulton Bank NA v. Mermelstein, No.

2567-EDA-2019, 2020 Pa. Super. Unpub. LEXIS 2108 (Pa. Super. Ct. June 30,

2020).   On September 12, 2006, defendant executed a commercial loan

agreement with Fulton Bank. Id. at 2. The loan documents were signed in

Pennsylvania. Defendant planned to use the $900,000 loan to finance a housing

development on the property. Fulton Bank secured the loan with a promissory

note and defendant pledged the property as collateral through a mortgage. Ibid.

      On October 1, 2010, defendant defaulted on the loan and Fulton Bank

obtained a $999,657.78 judgment by confession against him in Pennsylvania on

February 3, 2011. Id. at 3. As part of its efforts to collect the judgment, Fulton

Bank filed a complaint for foreclosure in Atlantic County upon the mortgage it

held on the property. Id. at 3-4. Defendant failed to file an answer to the

complaint, and the court entered a default against him. The court entered a final


                                                                            A-1986-20
                                        2
judgment of foreclosure in Fulton Bank's favor in March 2013. Id. at 4. That

same month, a writ of execution directed the county sheriff to sell the property.

      Before the sheriff conducted the sale, Fulton Bank assigned its interest in

the judgments it held against defendant to Autumn Lane Associates, LLC

(Autumn Lane). Ibid. Fulton Bank filed a motion to substitute Autumn Lane as

the plaintiff in the foreclosure action, but the trial court denied this request. On

May 29, 2014, the sheriff conducted the sale and sold the property to Autumn

Lane. Id. at 6.1

      Defendant filed a petition in Pennsylvania seeking an order marking the

judgment of confession satisfied and discharged.         Id. at 1.   The Court of

Common Pleas of Montgomery County denied that request. Ibid. However, the

court entered a deficiency judgment against defendant in the reduced amount of

$738,606.43 after giving him credit, among other things, for the monies Autumn

Lane recouped at the sheriff's sale. Id. at 1, 12.

      Defendant filed an appeal to the Pennsylvania Superior Court. Id. at 12.

On June 30, 2020, that court affirmed the trial court's decision denying

defendant's request to have the judgment marked satisfied and discharged. Id.



 1 On December 23, 2019, Autumn Lane sold the property to an unrelated
company named Autumn Lane EHT, LLC.
                                                                              A-1986-20
                                         3
at 1. It also vacated the deficiency judgment after finding that "the trial court

did not have the statutory authority to determine the fair market value of the Egg

Harbor Township, New Jersey property in this case or whether a deficiency

existed with regard thereto." Id. at 25.

      On December 28, 2020, defendant filed a motion in the Atlantic County

foreclosure action seeking to set aside the May 29, 2014 sheriff's sale.

Defendant alleged that because Fulton Bank had assigned its interests to Autumn

Lane prior to the sale, the sale should not have been conducted. Defendant

argued that if there was no valid sale, Autumn Lane should be barred from

attempting to collect on its judgment "in any court of competent jurisdiction"

until a new sale was held.

      Following oral argument, Judge Michael J. Blee denied defendant's

motion. In his concise oral opinion, the judge considered and rejected the same

arguments defendant raises on appeal. Rule 4:65-5 states that objections to a

sheriff's sale must be filed within ten days after the sale. Here, defendant had

notice of both the foreclosure action and the May 29, 2014 sheriff's sale.

However, he did not file his objection to the sale until December 28, 2020. Thus,

even if a court could deem the sale voidable because Autumn Lane, rather than

Fulton Bank, possessed the note, the mortgage, and the judgments at the time of


                                                                            A-1986-20
                                           4
the sale, the judge concluded defendant failed to make a timely request for this

relief. Because the sheriff's sale could not be set aside, Judge Blee also found

there was no basis for an order barring Autumn Lane from pursuing recovery on

its existing judgment against defendant.

      Defendant now repeats the same contentions he unsuccessfully raised in

the Chancery Division. We have considered defendant's arguments in light of

the record and applicable legal principles, and conclude they are without

sufficient merit to warrant discussion in a written opinion.        See R. 2:11-

3(e)(1)(E). We add the following brief comments.

      A motion to vacate a sheriff's sale is governed by Rule 4:65-5, which

states that any objection to the sale must be served within the ten days following

the sale or before delivery of the deed, whichever is later. Defendant waited

over six years to file a motion seeking to void the May 29, 2014 sheriff's sale .

Under these circumstances, we discern no basis for disturbing Judge Blee's

denial of defendant's motion.

      Because the sheriff's sale could not be voided, there were also no grounds

for barring Autumn Lane from attempting to recover on its judgment.             In

addition, this is a commercial foreclosure case and, therefore, Autumn Lane is




                                                                            A-1986-20
                                        5
permitted to attempt to collect on its judgment even though it foreclosed on the

property. See  N.J.S.A. 2A:50-2.3(a).

      Affirmed.




                                                                          A-1986-20
                                       6