Opinion
DOCKET NO. A-5220-14T1
01-09-2017
EMIGRANT MORTGAGE COMPANY, INC., Plaintiff-Respondent, v. JAMES R. AVELLA, Defendant-Appellant, and MARIA AVELLA, Defendant.
Lance D. Brown argued the cause for appellant (Lance Brown and Associates, LLC, attorneys; Mr. Brown, of counsel and on the briefs). Michel Lee argued the cause for respondent (Knuckles, Komosinski & Elliott LLP, attorneys; Mr. Lee, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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. Before Judges Fuentes, Carroll and Gooden Brown. On appeal from the Superior Court of New Jersey, Chancery Division, Ocean County, Docket No. F-14481-09. Lance D. Brown argued the cause for appellant (Lance Brown and Associates, LLC, attorneys; Mr. Brown, of counsel and on the briefs). Michel Lee argued the cause for respondent (Knuckles, Komosinski & Elliott LLP, attorneys; Mr. Lee, on the brief). PER CURIAM
In this foreclosure matter, defendant James R. Avella appeals from a June 12, 2015 Chancery Division order that denied his second motion to vacate a final judgment of foreclosure entered on April 28, 2014. We affirm.
Although James and his wife, Maria Avella (Maria), are named as defendants, only James appeals the June 12, 2015 order.
We discern the following facts and procedural history from the record on appeal. On June 8, 2007, defendant executed a note in the principal amount of $250,000 to plaintiff Emigrant Mortgage Company, Inc. Maria was not a signatory to the note. The note provided that interest would be charged at an adjustable rate. It further provided that if defendant defaulted, he would have to pay an additional three percent interest rate in addition to the interest rate being charged under the note. Defendant also executed a non-purchase money mortgage to plaintiff, secured by a property on Joseph Street in Dover Township (the property). Pertinent to this appeal, the mortgage contained a rider that provided:
At closing, $125,000 from the proceeds of the loan shall be placed in an interest bearing escrow/pledge account to be maintained with Emigrant Savings Bank which will further collateralize the loan. . . .
Provided that all payments on the loan have been timely received within the grace period (a payment received after the grace period is a default) and provided that no
default under the Note or Security Instrument has occurred, Lender will release the funds held in escrow/pledge upon Borrower's satisfaction of the following:
1. Completion of alterations and renovations to the subject property and submission of any required updated [certificates of occupancy].
. . . .
If any event of default occurs, Lender, at its sole discretion, may apply the funds held in escrow/pledge toward the principal balance of the loan, and/or use the escrow/pledge towards the payment of taxes, common charges and/or interest due on the loan.
On March 18, 2009, plaintiff filed a complaint for foreclosure, alleging that defendant defaulted under the note and mortgage by failing to make payments due on October 1, 2008, and thereafter. Defendant did not file an answer or otherwise respond to the complaint. Consequently, a final judgment of foreclosure was entered against him on October 19, 2010.
After defendant retained counsel, plaintiff consented to vacate the default judgment and grant defendant additional time to answer. Defendant filed his answer on May 24, 2011, and asserted counterclaims against plaintiff alleging violation of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -204, and the Fair Foreclosure Act, N.J.S.A. 2A:50-53 to -68, and breach of contract. All three counterclaims related to the $125,000 escrow account. Essentially, defendant asserted that plaintiff improperly entered judgment based on the full $250,000 loan amount without disclosing the $125,000 in escrow that defendant had never received, and without crediting defendant for that amount.
Following a period of discovery, on March 2, 2012, the court granted summary judgment in favor of plaintiff striking defendant's answer and counterclaims, entering default against him, and directing that the matter be referred to the Office of Foreclosure as an uncontested matter. R. 4:64-1(d). On February 12, 2014, plaintiff moved for entry of final judgment and on April 28, 2014, final judgment was again entered. On September 16, 2014, the property was sold at a sheriff's sale.
In November 2014, defendant moved to vacate the final judgment. Defendant contended that plaintiff failed to properly serve the motion for final judgment and the notice of sale, failed to demonstrate the existence of the $125,000 escrow, and should have applied the escrow amount toward the loan balance. Finding no merit to defendant's service argument, the court denied the motion without prejudice on January 23, 2015, and scheduled a case management conference (CMC) to further review the escrow issue.
We note that defendant has failed to include in his appendix either this motion or the subsequent motion to vacate upon which the present appeal is based, in contravention of Rule 2:6-1(a) (the appendix must contain parts of the record "essential to the proper consideration of the issues."). We cull the relevant arguments and the court's reasons for denying the motions largely from the motion transcripts.
No record of this subsequent CMC is included by way of transcript or appendix reference. Plaintiff in its brief represents that the denial of the motion was affirmed at the CMC. Defendant does not challenge this representation in his reply brief. Additionally, in the June 12, 2015 transcript, the judge noted that the first judge "declined to disturb" his January 23, 2015 order at the CMC.
Defendant subsequently filed a second motion to vacate the final judgment, which was assigned to a different judge. At oral argument, defense counsel conceded "[t]here's no dispute that there was, in fact, a default in this case." Counsel argued that it was "commercially unreasonable" for plaintiff to have charged defendant interest on the $125,000 he had never received. Defense counsel additionally contended that plaintiff had improperly calculated the amount due on the loan. The judge noted this "appear[ed] to be the identical motion" that was previously denied, and treated it as a motion for reconsideration. Finding that defendant had presented "nothing different" in his moving papers that would warrant reconsideration, the court denied the motion in an order dated June 12, 2015. This appeal followed.
Defendant also does not appear to deny that he failed to satisfy the conditions precedent to the release of the escrow account.
The only order that is on appeal before us is the order of June 12, 2015. Defendant identified that order as the order he was appealing from in his notice of appeal. Accordingly, that is the only order that is subject to review on appeal. See 1266 Apartment Corp. v. New Horizon Deli, Inc., 368 N.J. Super. 456, 459 (App. Div. 2004) (explaining that "it is only the judgment or orders designated in the notice of appeal which are subject to the appeal process and review") (citing Sikes v. Township of Rockaway, 269 N.J. Super. 463, 465-66 (App. Div.), aff'd o.b., 138 N.J. 41 (1994)). --------
Well-settled principles govern defendant's appeal. Relief from a judgment may be sought pursuant to Rule 4:50-1, upon motion with briefs. The decision whether to grant a motion to vacate a judgment pursuant to Rule 4:50-1 "is left to the sound discretion of the trial court, and will not be disturbed absent an abuse of discretion." Mancini v. EDS ex rel. N.J. Auto. Full Ins. Underwriting Ass'n, 132 N.J. 330, 334 (1993). See also US Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467 (2012) (stating decision on motion to vacate default judgment "should not be reversed unless it results in a clear abuse of discretion").
Defendant first argues that he is entitled to relief pursuant to Rule 4:50-1(f) "in order to achieve equity and justice." Referring to the escrow account, defendant contends that "[p]laintiff has been allowed to continue an illegal practice of charging interest on loaned money that was never actually given to [d]efendant or set aside on his behalf." Defendant cites no law to support this contention. Moreover, as plaintiff points out, defendant's argument ignores the unambiguous terms of the note that provide for the monthly assessment of interest on the entire principal of $250,000.
Defendant further contends that plaintiff has failed to demonstrate that it ever actually deposited the $125,000 into an escrow account, nor has plaintiff established the accuracy of the redemption amount. However, plaintiff's "Amount Due Schedule," upon which its foreclosure judgment is based, indicates that $318,520.74 was due on the loan through May 31, 2013. This sum clearly includes a $125,000 credit to defendant for the escrow, which plaintiff applied toward the amounts defendant owed for principal, interest, default interest, late charges, and taxes, insurance, and other items advanced by plaintiff.
Moreover, even if defendant is entitled to an additional credit for any interest that may have accrued on the escrow account, as he contends, he has nonetheless failed to establish that such additional credit would have appreciably reduced the $318,520.74 loan balance to an amount that he had the financial ability to redeem. It is well settled that a person who seeks to redeem the mortgaged property must pay the entire amount secured by the mortgage. See First Nat'l Bank and Trust Co. v. MacGarvie, 41 N.J. Super. 151, 157 (Ch. Div.), modified, 22 N.J. 539 (1956); Ghee v. Davenport, 2 N.J. Super. 532 (Ch. Div.), modified, 4 N.J. Super. 518 (App. Div. 1949). See also United States v. Scurry, 193 N.J. 492, 506 (2008). In his November 14, 2014 certification, apparently submitted in support of his first motion to vacate the final judgment, defendant merely states, "I have the ability to pay $125,000 to refinance the property and might have the ability to pay more." Said $125,000 figure is a far cry from the amount necessary for redemption.
We therefore conclude that defendant is not entitled to relief pursuant to Rule 4:50-1(f). Subsection (f) permits a judge to vacate a judgment for "any other reason justifying relief from the operation of the judgment or order," and "is available only when truly exceptional circumstances are present." Guillaume, supra, 209 N.J. at 484 (internal quotation marks omitted). The applicability of this subsection is limited to "situations in which, were it not applied, a grave injustice would occur." Ibid. (internal quotation marks omitted). On this record, defendant has not shown any such "exceptional circumstances." We also note that defendant is now concededly in default on the loan for more than eight years. We have recognized that a plaintiff suffers prejudice from delay. See Deutsche Bank Trust Co. Ams. v. Angeles, 428 N.J. Super. 315, 320 (App. Div. 2012) (stating that "equity must be applied to plaintiffs as well as defendants").
Alternatively, defendant argues that he is entitled to relief under Rule 4:50-1(d) because the judgment is void due to "defective service." Specifically, in his brief, defendant contends that neither he nor his counsel were served with the motion for final judgment, nor was he provided ten days' advance notice of the sheriff's sale as required by Rule 4:65-2.
Initially we note that, while the service issue was argued at the first motion to vacate, the record is far from clear whether defendant again raised this argument in the second motion that is the subject of this appeal. In any event, the only factual support for defendant's argument that appears in the appellate record is contained in defendant's November 14, 2014 certification in which he states, "I never received notice of the final writ of execution." This statement hardly supports defendant's claim that he was not served with the motion for final judgment or the notice of sheriff's sale. It also fails to provide competent proof that his attorney was not served with the motion for final judgment. See R. 1:6-6. Consequently, we conclude that defendant's bald statement is insufficient to contradict the numerous affidavits and certifications filed by plaintiff confirming proper service and notice of these procedural events. Thus, on the record before us, we have no basis to disturb the judgment due to defendant's claimed lack of proper service.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION