The Bank of New York Mellon v. Marianne Corradetti .)

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office
of the Clerk for the convenience of the reader. It has been neither reviewed nor approved
by the Court. In the interest of brevity, portions of any opinion may not have been
summarized.)

     The Bank of New York Mellon v. Marianne Corradetti (A-81-19) (084029)

(NOTE: The Court did not write a plenary opinion in this case. Instead, the Court
reverses the judgment of the Appellate Division substantially for the reasons
expressed in Judge Accurso’s dissenting opinion, which is published at ___ N.J.
Super. ___, ___ (App. Div. 2020) (Accurso, J.A.D., dissenting).)

Argued January 5, 2021 -- Decided February 4, 2021

PER CURIAM

      In this appeal, the Court considers the trial court’s determination that a note,
mortgage, and HUD-1 Settlement Statement -- which together reflected a $1,779,000
mortgage loan on the Ocean City property of defendants Anthony and Marianne
Corradetti -- were invalid because the defendants’ signatures were forged.

      Plaintiff Bank of New York Mellon filed a foreclosure complaint against
defendants in 2014, claiming the Corradettis had been in default on the $1,779,000
mortgage loan they had received from plaintiff’s predecessor in interest, Countrywide
Home Loans, Inc. (Countrywide) since April 2009.

       In opposition, defendants claimed that the mortgage documents plaintiff presented
were forged: The documents were purportedly signed, and the mortgage was notarized,
on September 25, 2006 -- although the HUD-1 form states it was “Printed on 09/26/2006
at 15:52.” Defendants produced proof that they were in Croatia on that day and did not
return to the United States until September 26, 2006; they thus could not have signed the
documents on September 25.

        In October and November 2006, two mortgages on defendants’ properties were
fully satisfied for $407,000 and $1,352,059.25, respectively. Defendants admitted the
HUD-1 “reflects” that proceeds from the disputed loan were “allegedly used” to satisfy
those earlier loans, as well as back taxes, but they denied signing the HUD-1 or being
aware of any payment made by Countrywide to the holders of those earlier mortgages.
At the bench trial, Marianne Corradetti testified that she was aware of the larger of the
two earlier mortgages but had no knowledge as to how it was paid. She denied making
any of the 29 payments on the Countrywide loan that were made between 2006 and 2009.
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       The trial court found that defendants had “provided clear, satisfactory and
convincing evidence to overcome any presumption of authenticity offered by the notarial
seal” on the mortgage and that the documents were therefore void as forgeries. In
reaching its holding, the court found “[Marianne] Corradetti’s testimony with regard to
her not signing the subject [mortgage loan documents] on September 25, 2006 to be
credible”; however, the court found “her testimony not credible” “as to what other
documents were signed or not signed by her and her husband.”

        The court rejected plaintiff’s argument that the payment history for the 2006 loan
establishes a ratification of the mortgage, noting that plaintiff had failed to prove it was
defendants who actually made the purported payments on that loan. The court reasoned
that whoever forged the mortgage documents may have made the payments to cover up
the forgeries. The court also found plaintiff failed to present any evidence -- other than
the forged and therefore invalid HUD-1 statement -- that the September 2006 loan
proceeds were actually used to satisfy the two earlier mortgages. The court found that
plaintiff had provided evidence that those earlier mortgages were satisfied, but not by
whom, and it rejected plaintiff’s reliance on a letter purportedly sent by defendants in
response to plaintiff’s request for entry of a final judgment in the 2009 foreclosure action.
Plaintiffs argued that the letter constituted an admission that plaintiff had a valid
mortgage on the property, but the court found that the letter, even if written by defendants
-- which Marianne Corradetti disputed -- challenged entry of a final judgment and
therefore did not constitute an admission of validity. The court further rejected plaintiff’s
arguments in favor of enforcing the mortgage under equitable doctrines.

        A majority of the Appellate Division panel affirmed that decision but remanded on
“the issue of plaintiff’s entitlement, if any, to the sums it paid on defendant’s behalf.”
___ N.J. Super. ___, ___ (App. Div. 2020) (slip op. at 34-35).

       Judge Accurso dissented. Id. at ___ (slip op. at 1) (Accurso, J.A.D., dissenting).

        After reviewing the reasons for which the record is thin in this case, id. at ___ (slip
op. at 1-3), and Marianne Corradetti’s testimony, id. at ___ (slip op. at 1-6), the dissent
stressed the trial court’s determination that only Corradetti’s denial of signing the
September 2006 loan documents was credible, id. at ___ (slip op. at 6-7). The dissent
found inexplicable the trial “court’s leap from those findings to its conclusion that the
loan documents” are forgeries, explaining that “a finding that a document was not signed
on the day it’s dated does not ineluctably lead to the conclusion the document was
forged.” Id. at ___ (slip op. at 7-9).

        Noting the trial court’s focus on what was missing from the record, id. at ___ (slip
op. at 9-10), the dissent listed the record evidence that did support the existence of an
agreement between defendants and Countrywide, id. at ___ (slip op. at 10-11).

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        In the dissent’s view, the trial “court’s finding of forgery, for which the only
support in the record is that the documents were not signed on the day they are dated,
infected its other findings.” Id. at ___ (slip op. at 11). The dissent canvassed examples
of the trial court’s “suspect” and “seriously flawed” findings, see id. at ___ (slip op. at
11-15), focusing in particular on “[t]he court’s conclusions as to the letter purportedly
sent by the Corradettis . . . in response to the bank’s motion for final judgment,” see id. at
___ (slip op. at 15-16). The dissent (1) viewed the trial court’s reliance on Marianne
Corradetti’s testimony that she did not sign that letter to clash with its adverse credibility
determination, noted above; and (2) considered it implausible that “typical homeowners”
would respond to a motion for the foreclosure of a mortgage they do not recognize with
“the three-line letter the Corradettis wrote.” Id. at ___ (slip op. at 17-18). In the dissent’s
view, the letter “obviously does not square” with the defense that the foreclosure is a
fraud. Id. at ___ (slip op. at 18). “Reasoned fact finding requires the trier of fact to
weigh conflicting evidence, not explain it away by refusing to acknowledge its import for
proof of a proposition or its defense,” the dissent stated. Id. at ___ (slip op. at 18).

        The dissent explained that, to demonstrate entitlement to foreclose on the
Corradetti’s mortgage, plaintiff “had to prove based on all of the evidence in the record,
fairly considered, that it was more likely than not that the Corradettis replaced [their two
earlier mortgages] with the . . . Countrywide mortgage,” on which they later defaulted.
Id. at ___ (slip op. at 19). Instead, the dissent noted, the trial court came to the
“extraordinary conclusion” that it was “more likely that someone forged the Corradettis’
signatures on the loan documents,” paid the closing fees for the 2006 mortgage, paid off
the Corradettis’ two earlier mortgages, “made payments on the fraudulent mortgage for
the next two-and-a-half years to cover their tracks,” and then forged the three-line letter
when the Corradettis discovered the fraud. Id. at ___ (slip op. at 19-20).

       Emphasizing the trial court’s credibility determination and concluding that its
overall decision was not supported by adequate, substantial and credible evidence in the
record, the dissent would have reversed. Id. at ___ (slip op. at 20-21).

       Plaintiff appealed as of right, and the Court granted plaintiff’s supplementary
petition for certification,  243 N.J. 518 (2020).

HELD: The judgment of the Appellate Division is reversed substantially for the reasons
expressed in Judge Accurso’s dissenting opinion. The Court remands for a retrial.

       REVERSED and REMANDED for a retrial.

CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, FERNANDEZ-
VINA, SOLOMON, and PIERRE-LOUIS join in this opinion. JUSTICE
PATTERSON did not participate.

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       SUPREME COURT OF NEW JERSEY
             A-
81 September Term 2019
                       084029


           The Bank of New York Mellon,
           f/k/a The Bank of New York, as
            Trustee (CWALT2006-36T2),

                 Plaintiff-Appellant,

                          v.

              Marianne Corradetti and
              Anthony Corradetti, h/w,

              Defendants-Respondents,

                         and

                 State of New Jersey,

                     Defendant.

 On appeal from and certification to the Superior Court,
   Appellate Division, whose opinion is reported at
       ___ N.J. Super. ___ (App. Div. 2020).

       Argued                       Decided
   January 5, 2021              February 4, 2021


Michael R. O’Donnell argued the cause for appellant
(Riker Danzig Scherer Hyland & Perretti and KML Law
Group, attorneys; Michael R. O’Donnell, of counsel, and
Ronald Z. Ahrens, on the briefs).




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            Randolph C. Lafferty argued the cause for respondents
            (Cooper Levenson, attorneys; Jennifer B. Barr, on the
            briefs).


                                PER CURIAM


      The judgment of the Superior Court, Appellate Division is reversed

substantially for the reasons expressed in Judge Accurso’s dissenting opinion,

reported at ___ N.J. Super. ___ (App. Div. 2020) (Accurso, J.A.D.,

dissenting). We remand for a retrial.



     CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN,
FERNANDEZ-VINA, SOLOMON, and PIERRE-LOUIS join in this opinion.
JUSTICE PATTERSON did not participate.




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