Opinion
DOCKET NO. A-0160-13T3
05-07-2015
THE BANK OF NEW YORK MELLON f/k/a THE BANK OF NEW YORK, AS TRUSTEE FOR THE HOLDERS OF THE CERTIFICATES, FIRST HORIZON MORTGAGE PASS-THROUGH CERTIFICATE SERIES FHAMS 2006-AA3, Plaintiff-Respondent, v. MICHAEL P. SCILLITANI, his/her heirs, devisees, and personal representatives, and his, her their or any of their successors in right, title and interest, Defendant-Appellant, and MRS. MICHAEL P. SCILLITANI, Defendant.
Ira J. Metrick argued the cause for appellant. Douglas J. McDonough argued the cause for respondent (Zucker, Goldberg & Ackerman, LLC, attorneys; Mr. McDonough, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Reisner and Higbee. On appeal from Superior Court of New Jersey, Chancery Division, Ocean County, Docket No. F-34323-08. Ira J. Metrick argued the cause for appellant. Douglas J. McDonough argued the cause for respondent (Zucker, Goldberg & Ackerman, LLC, attorneys; Mr. McDonough, of counsel and on the brief). PER CURIAM
In this residential foreclosure action, defendant, Michael P. Scillitani, appeals from the Chancery court's order denying a motion to vacate the default judgment entered in favor of the original plaintiff, First Horizon Home Loans, a Division of Tennessee Bank, NA (First Horizon). Defendant also appeals the court's order granting a motion by The Bank of New York Mellon f/k/a The Bank of New York as Trustee for the holders of Certificates, First Horizon Mortgage Pass Through Certificate Series FHAMS 2996-A A-3 (Mellon), to substitute in as plaintiff on the foreclosure judgment as a result of assignments between First Horizon and Mellon. We affirm.
The pertinent facts are as follows. On March 20, 2006, defendant executed a note for $350,000 in favor of First Horizon Home Loan Corporation, and a mortgage naming Mortgage Electronic Registration System, Inc. (MERS) mortgagee. MERS was acting solely as a nominee for the lender, First Horizon Home Loan Corporation. The mortgage was secured by real property located in Berkeley Township. Defendant stopped making payments on the mortgage in June 2008.
First Horizon filed a complaint for foreclosure against defendant on September 4, 2008. After the complaint was filed, the mortgage and note were assigned by First Horizon Home Loan Corporation to First Horizon, which had now become a division of Tennessee Bank through a merger. On December 3, 2008, the complaint was amended to include the assignment. On April 4, 2009, default was entered against the defendant for failure to file an answer.
In August 2009, defendant filed a pro se motion to set aside the default, arguing that there was a lack of service of the complaint. The motion was denied. On June 11, 2010, the court entered final judgment. Defendant did not file a timely appeal from that judgment.
In a document dated April 21, 2011, First Horizon assigned the mortgage and note to Mellon. On August 3, 2012, a "corrective assignment of mortgage" reflecting the assignment of the note and mortgage to Mellon was filed and recorded in the Ocean County Clerk's office.
On April 24, 2013, a motion was filed seeking to substitute the current plaintiff, Mellon, for the former plaintiff, First Horizon. This motion was uncontested and was granted on May 24, 2013. Defendant moved for reconsideration on June 26, 2013, and sought, in the alternative, to have the court vacate the default judgment which had been entered. On July 25, 2013, the court denied defendant's motion for reconsideration, and refused to vacate the default judgment. This appeal followed.
Defendant challenges the date of the assignment of the mortgage and note to Mellon. He claims that First Horizon did not have standing to file the complaint, either because Mellon acquired the mortgage before the complaint was filed, or because of some other defect in the assignment. In support of that argument, defendant points to a certification that describes the transferred pass-through certificates as Series FHAMS 2006-AA3, and then the certificates as FH06-AA3 in the subsequent order. Essentially, defendant argues on appeal that neither plaintiff properly proved it had standing to bring the action in light of the several transfers of the note and mortgage; and that the Chancery judge abused his discretion by refusing to vacate the default judgment pursuant to Rule 4:50-1, resulting in a denial of due process. We disagree.
In pertinent part, Rule 4:50-1 provides:
On motion, with briefs, and upon such terms as are just, the court may relieve a party or the party's legal representative from a final judgment or order for the following reasons: (a) mistake, inadvertence, surprise, or excusable neglect; . . . (d)
the judgment or order is void; . . . or (f) any other reason justifying relief from the operation of the judgment or order.
A trial judge's decision to grant or deny an application to vacate a default judgment is accorded substantial deference and will not be disturbed absent a "clear abuse of discretion." US Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467 (2012); Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994). A party seeking relief from a default judgment pursuant to Rule 4:50-1 must demonstrate both excusable neglect and a meritorious defense. Dynasty Bldg. Corp. v. Ackerman, 376 N.J. Super. 280, 285 (App. Div. 2005) (citing Marder v. Realty Constr. Co., 84 N.J. Super. 313, 318 (App. Div.), aff'd, 43 N.J. 508 (1964)). A claim that a judgment is void under Rule 4:50-1 does not, however, require a showing of excusable neglect, although it must still be filed within a reasonable time after the judgment is entered. Rule 4:50-1; M & D Assocs. v. Mandara, 366 N.J. Super. 341, 351-52 (App. Div.), certif. denied, 180 N.J. 151 (2004).
In Deutsche Bank Trust Company Americas v. Angeles, a defendant challenged the plaintiff's standing to bring a foreclosure action nearly three years after defaulting on the mortgage, two years after final judgment was entered, and more than a year after the sheriff's sale was conducted. 428 N.J. Super. 345, 316-17 (App. Div. 2012). There, we affirmed the Chancery judge's refusal to consider the issue because the defendant waited too long to raise the issue of standing or otherwise contest the foreclosure. Id. at 316; see also Deutsche Bank Nat'l Trust Co. v. Russo, 429 N.J. Super. 91, 101 (App. Div. 2012) (rejecting defendants' late objection to standing and noting that standing is not a jurisdictional issue in New Jersey).
Here, defendant defaulted on the loan, and failed to assert a timely defense to the foreclosure action. When his motion to vacate default was denied and final judgment was entered, he failed to appeal. In the years since 2008, defendant has made no payments on his debt. A balancing of the equities requires consideration of both plaintiff's and defendant's rights, and the Chancery judge properly rejected defendant's belated attempt to raise standing.
Having reviewed the record in light of the applicable law, we find there was no abuse of discretion by the Chancery judge, and no denial of due process.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION