NATIONSTAR MORTGAGE, L.L.C., Plaintiff-Respondent, v. MAXWELL J. BROTHERS, Defendant-Appellant, and BARBARA J. BROTHERS, HIS WIFE, AND MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR QUICKEN LOANS, INC., Defendants.
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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.
PER CURIAM.
Defendant Maxwell Brothers appeals from a March 16, 2016 order denying his emergent application to stay the sheriff's sale of property in Ewing Township. We affirm.
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Plaintiff Nationstar Mortgage, L.L.C.[1] filed a foreclosure complaint against defendants Maxwell Brothers, his wife, Barbara Brothers, and Quicken Loans on June 8, 2009. No defendant filed an answer, and default was entered May 18, 2011. Defendant, Maxwell Brothers, filed an emergent application for a stay on March 16, 2016, the day of the scheduled sheriff's sale. The trial court heard argument and considered defendant's emergent application that day. Defendant argued he was not served with the foreclosure complaint. The judge denied the application, relying on the court's JEFIS[2] record indicating defendant was served with the complaint in 2009. This appeal followed.
On appeal, defendant argues the trial court's order should be reversed because he was never served with the foreclosure complaint. We disagree.
Rule 4:4-3(a) provides, If personal service cannot be effected after a reasonable and good faith attempt, . . . service may be made by mailing a copy of the summons and complaint by registered or certified mail, return receipt requested, to the usual place of abode of the defendant or a person authorized by rule of law to accept service for the defendant or, with postal instructions to deliver to addressee only, to defendant's place of business or employment. If the addressee refuses to claim or accept delivery of registered or certified mail, service may be made by ordinary mail addressed to the defendant's usual place of abode. The party making service may, at the party's option, make service simultaneously by registered or certified mail and ordinary mail, and if the addressee refuses to claim or accept delivery of registered mail and if the ordinary mailing is not returned, the simultaneous mailing shall constitute effective service.
The trial judge addressed the issue of service when denying the emergent application. During the hearing, defendant testified the property was his residence, but he was never served with the foreclosure complaint.
A review of the transcript reveals the judge referred to the court's JEFIS file and discovered plaintiff provided proof to the court it served defendant by both certified and regular mail. Plaintiff provided certifications, which stated service had been completed by certified and regular mail as confirmed by the United States Postal Service, on December 28, 2009. Plaintiff also included the appropriate electronic confirmation the certified mail was "unclaimed" and the regular mail was not returned. The court was satisfied plaintiff established proper service under Rule 4:4-3.
Moreover, the trial judge advised defendant he had recourse to seek two statutory adjournments pursuant to the sheriff's directive about the sale, which defendant had not attempted to do. We discern no error in the trial judge's finding defendant was properly served with the complaint. Defendant's chief argument is the court erred in relying upon the allegedly false submissions of plaintiff regarding service but provides no demonstration of error beyond his dissatisfaction with the outcome.
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To the extent defendant makes any other arguments, we find they lack merit and do not warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
[1] The original plaintiff in this matter was BAC Home Loans Servicing, L.P. Nationstar Mortgage, L.L.C. was substituted as plaintiff by the court in an order dated January 10, 2014.
[2] JEFIS stands for Judiciary Electronic Filing and Imaging System. Defendant asserts he was not shown the JEFIS file in court but looked at it a few days later.
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PER CURIAM.
Defendant Patrice Springette appeals from an order dated December 16, 2011, denying her motion to return this foreclosure case to mediation, and a February 7, 2012 order, denying an application for a stay of eviction from the foreclosed premises.[1] For the reasons that follow, we affirm.
In 2005, Springette and her then-fiancé (defendants) obtained a $371,250 loan, secured by a mortgage on their home. They defaulted on the loan in 2006. Plaintiff filed its foreclosure complaint on December 18, 2006. On January 25, 2007, defendants filed a "cross-complaint" asserting that some of their mortgage payments were misapplied. However, their pleading did not deny that they were in default. Springette and her fiancé both signed the cross-complaint. On July 20, 2007, the trial court granted summary judgment striking the answer and defenses. A final judgment of foreclosure was entered on December 4, 2007, and the property was sold at a sheriff's sale on August 19, 2009.
On August 24, 2009, defendants filed a motion to vacate the foreclosure judgment and to vacate the sheriff's sale, alleging that Springette was not served with the foreclosure complaint and defendants were not served with notice of the sheriff's sale.
By order dated November 6, 2009, Judge Glenn Berman denied the motion, noting that both defendants were served with the complaint by mail and filed an answer, and that notice of the sheriff's sale was posted on the premises. Defendants did not appeal from that order. Instead, on January 27, 2010, they filed another motion to vacate the sheriff's sale, this time contending that they had been making mortgage payments pursuant to a forbearance agreement. Judge Berman denied that motion by order dated March 19, 2010. However, he also ordered the parties to participate in mediation. Defendants did not appeal from that order either.
After the case was not resolved at mediation, Springette filed a motion to require continued mediation based on her claim that plaintiff failed to fully participate in the mediation. Her motion was supported by a certification from an attorney who had not participated in any of the mediation sessions and had no personal knowledge about those sessions. Plaintiff filed opposition, supported by a certification of counsel attesting that either he or one of the firm's associates had attended the mediation sessions and that the mortgage company's representative had been available to participate by telephone. Judge Berman denied the motion by order dated December 16, 2011.
On this appeal, Springette argues that the trial court should have vacated the final judgment of foreclosure and the sheriff's sale. Those arguments are not properly before us, because she did not file a timely appeal from the trial court's orders denying that relief. However, they are also without merit for the reasons stated by Judge Berman. Springette further argues that the trial court should have ordered continued mediation, because plaintiff failed to "meaningfully" participate in the prior mediation process. Plaintiff presented evidence that its counsel attended all eight mediation sessions and that a representative of the mortgage company was available by telephone for those sessions. Based on the record presented to us, we find no abuse of Judge Berman's discretion in denying the motion to continue the mediation. See U.S. Bank Nat. Ass'n v. Williams, 415 N.J. Super. 358 (App. Div. 2010).
Affirmed.
[1] The February 7 order stayed the eviction until February 17 but denied any further stay. On February 16, 2012, we denied Springette's application for a stay of eviction pending appeal. She has not briefed the validity of the February 7, 2012 order and we will not address it here. According to plaintiff's brief, Springette is still living in the foreclosed premises, although the loan has been in default since 2006. This appeal was referred to the Civil Appeals Settlement Program, but no settlement was reached.
GREAT FALLS BANK, PLAINTIFF-RESPONDENT, v. JOSEPH PARDO, DEFENDANT-APPELLANT, AND FRANK PAPARATTO, MARIA PAPARATTO AND SAMUEL PETRACCA A/K/A/ SAM PETRACCA & SAMUEL S. PETRACCA, AND MARIA PETRACCA, A/K/A/ MARIA D. PETRACCA, JOHN F. KENNEDY MEDICAL CENTER AND THE STATE OF NEW JERSEY, DEFENDANTS.
Aldan O. Markson, argued the cause for appellant Joseph Pardo (Mr. Markson, on the brief).
Cheryl H. Burstein argued the cause for respondent Great Falls Bank (Williams, Caliri, Miller & Otley, attorneys; Ms. Burstein, of counsel and on the brief).
In 1987, Frank Paparatto, Ciro Spinella and Samuel Petracca entered a joint venture to build two-family houses on a parcel of land in North Arlington. To finance the venture, they personally executed a promissory note for a $350,000 loan Great Falls Bank ("plaintiff") made to their corporation. When they could not make payments, Paparatto and Petracca induced Pardo ("defendant") to acquire a 14% interest in the venture in exchange for $176,000 and execution on January 6, 1989 of a guaranty of the debt. On June 16, 1989 defendant also executed a mortgage to secure the guaranty in exchange for release by plaintiff of Paparatto's certificate of deposit previously given as security. Defendant contends that the mortgage was prepared by the bank's vice president, Glen Durr, but that he (defendant) had no direct communication with the 544bank or Durr. The mortgage was witnessed and notarized by Petracca. According to defendant's certification in opposition to plaintiff's motion for summary judgment, "[a]lthough my signature appears on the mortgage, I have no recollection of ever signing the mortgage ... I was not aware that I had signed a mortgage until many months after June 16, 1989." Defendant, a janitor who cannot read or write English, claims he never understood that he executed a mortgage to secure his guaranty and that he was fraudulently induced to do so by his "partners."[2]
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On January 21, 1990 the four partners executed a renewal promissory note which facially changed defendant's obligation from that of guarantor to principal. When the obligors did not make timely interest payments, plaintiff commenced a suit in August 1990 against Paparatto, Spinella, Petracca and defendant. Incident to a settlement and dismissal of that litigation, the four "partners" executed another extension of the $350,000 loan. Defendant simultaneously executed a Mortgage Modification and Extension Agreement to secure the debt. Both the note and agreement provided that plaintiff could release any party or collateral without affecting the liability of any other debtor or mortgagor. About seven months later, plaintiff released Spinella and discharged his mortgage in exchange for 25% of the amount due under the loan. Because the remaining balance was not paid when due, plaintiff instituted this foreclosure action. Thereafter, plaintiff's motion for summary judgment was granted, and defendant's motion for reconsideration was denied. Great Falls Bank v. Pardo, 263 N.J. Super. 388, 622 A.2d 1353 (Ch.Div. 1993).
Defendant appeals and contends that the court erred by granting summary judgment. He argues that there are material facts in dispute which, if resolved favorably to him, support his claim that (1) plaintiff, as a third party beneficiary of his promises to his 545 "partners," stands in the shoes of the promisees and is therefore subject to the defense of fraud that he asserts against his "partners" in a related action; (2) his mortgage is void because it did not secure a valid, subsisting debt; (3) his original guaranty is unenforceable because plaintiff released a principal obligor on the debt;[3] (4) his guaranty and mortgage are unenforceable for lack of consideration, and (5) the trial judge improperly denied him a hearing on his request that the foreclosure sale of his mortgage be stayed until plaintiff could litigate his claims against his partners and require the plaintiff to satisfy his obligation against them before resorting to the foreclosure sale of his mortgage.
The judgment is affirmed substantially for the reasons expressed by Judge Boyle in his written opinion, Great Falls Bank v. Pardo, 263 N.J. Super. 388, 622 A.2d 1353 (Ch.Div. 1993), together with the following. It is uncontested before us that defendant was named as a defendant in the action filed in August 1990 based on the January 21, 1990 note executed by Paparatto, Petracca, Spinella and defendant, and that the suit was dismissed incident to execution by the same four individuals on November 14, 1990 of a new $350,000 promissory note, together with guaranties executed by the wives of Paparatto, Petracca and Spinella, and the Mortgage Modification and Extension Agreement signed by defendant (and apparently separate such agreements by Petracca 546*546 and Spinella as well). These items were submitted to the plaintiff by counsel for defendants in the 1990 action.[4] In fact, counsel witnessed and notarized defendant's signature on the modification agreement, and defendant simultaneously executed an affidavit of title to his mortgaged property. If nothing else, dismissal of the 1990 complaint and renewal of the loan in November of that year provided consideration for the new obligation defendant undertook, and plaintiff could fairly rely on these documents sent to the bank by defendant's counsel.[5]
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We do not believe that the bank had an independent obligation in these circumstances to scrutinize the relationship between the individuals who each appeared to have an interest in the entity for whose benefit the loan was made, or to question if there was a conflict among obligors (or obligors and guarantors), or in their joint representation. As Judge Boyle stated in his opinion, "any fraud perpetrated by the partners is of no moment unless Great Falls had knowledge thereof or participated therein...." Great Falls v. Pardo, supra, 263 N.J. Super. at 398, 622 A.2d 1353. There was an insufficient showing of such knowledge, which defendant claims to flow from Durr's prior close relationship with one of the "partners" and his personal lawyer. Moreover, as defendant acknowledged in the November 1990 Mortgage Modification and Extension Agreement that the 1989 mortgage "shall continue to secure repayment" of the borrowers' obligation to repay the loan simultaneously renewed and extended, and acknowledged the "obligation" under his original guaranty, defendant cannot now deny the validity of the 1989 mortgage. We therefore reject his contention that there are factual issues related to the execution of the mortgage which would preclude summary judgment in this foreclosure action.
547Before us defendant claims for the first time the Mortgage Modification and Extension Agreement signed by defendant is unenforceable because it was not executed by the plaintiff. Hence, defendant asserts he did not consent to the release of Spinella as a principal obligor, thereby adversely affecting defendant's guaranty. However, independent of whether defendant was then a principal obligor protecting his own investment, the modification agreement was signed by defendant, "the party to be charged." N.J.S.A. 25:1-5. The fact the bank may not have executed the modification does not control.
As we disagree with defendant on the merits, we see no reason to further consider whether a stay should have been granted pending resolution of his cross-claims against the other defendants in a related action. Generally, the bank can proceed directly against a guarantor. Delaware Truck Sales, Inc. v. Wilson, 131 N.J. 20, 32-33, 618 A.2d 303 (1993); Summit Trust v. Willow Business Park, supra, 269 N.J. Super. at 445-46, 635 A.2d 992. In any event, we have been told that the premises have not yet been the subject of a foreclosure sale as plaintiff was, in fact, permitted to proceed only to one foreclosure sale and elected to proceed against Petracca (with whom it subsequently settled) and is awaiting this opinion before taking further action.
Affirmed.
[1] The case was originally submitted on May 3, 1994.
[2] In a certification defendant described Paparatto, who he "trusted ... implicitly," as "my long-standing and intimate friend and next-door neighbor" and "godfather of one of my children, my best man at my wedding, and ... related to me through marriage."
[3] Because of contested issues of fact, the trial judge "assume[d] that Pardo remained at all times only a guarantor and that Paparatto and Petracca fraudulently induced Pardo to execute the guaranty and mortgage." Great Falls Bank v. Pardo, supra, 263 N.J. Super. at 394, n. 3, 622 A.2d 1353. Despite execution of the January and November 1990 documents as principal, we will also proceed on that assumption principally because the Mortgage Modification and Extension Agreement expressly provided that
[t]his Agreement is intended by the parties to be an extension and renewal of the loan obligation of the Borrowers as set forth in the Note dated January 21, 1990 and obligation of Pardo under the Note and Guaranty Agreement dated June 8, 1988. It is not a termination or release of the existing loan obligation of the Borrowers or Pardo as Guarantor.
See Summit Trust Co. v. Willow Business Park, L.P., 269 N.J. Super. 439, 443-44, 635 A.2d 992 (App.Div.), certif. denied, 136 N.J. 30, 641 A.2d 1041 (1994).
[4] The 1990 pleadings were not submitted to us.
[5] There was no assertion that the attorney had a conflict of interest, did not represent defendant, or the like.
On appeal from Superior Court of New Jersey, Chancery Division, Essex County, Docket No. F-045130-08.
Dunne, Dunne & Cohen, LLC, attorneys for appellants (Frederick R. Dunne, III, of counsel and on the brief).
Knuckles Komosinski & Manfro, LLP, attorneys for respondent (John E. Brigandi, on the brief). Before Judges Hoffman and Gilson.
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.
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PER CURIAM.
Defendants Gina and Frank Genello (defendants) appeal from an October 21, 2016 Chancery Division order denying their motion to vacate the sheriff's sale of their home, which occurred on September 13, 2016. Because they did not receive notice of the adjourned date of the sheriff's sale, defendants argue the trial court decision constituted an abuse of discretion and resulted in "a miscarriage of justice." We affirm.
On May 31, 2007, Gina Genello executed a promissory note to plaintiff Emigrant Mortgage Company (Emigrant) for $383,500, and defendants secured the loan with a non-purchase money mortgage on their home in West Caldwell. Beginning in June 2008, defendants stopped making their monthly payments under the note and mortgage. Emigrant filed a foreclosure action on November 13, 2008, after defendants failed to cure their default. Defendants filed an answer and counterclaim.
On September 16, 2010, the parties entered into a forbearance agreement, whereby defendants withdrew their answer and counterclaim with prejudice, allowing the foreclosure to proceed uncontested in exchange for a six-month stay of the foreclosure proceedings. The agreement provided for an additional three-month stay if defendants found a buyer for their home. The agreement did not require defendants to make regular monthly payments, only monthly escrow payments. Thereafter, the court dismissed the case, assuming it had settled.
Emigrant then filed a motion to restore the action. Defendants opposed the motion, which the court granted on March 21, 2016, but on the condition that Emigrant not seek default interest when it applied for final judgment.
On December 4, 2014, Emigrant filed a motion for final judgment. On July 22, 2015, the court entered final judgment against defendants for $673,220.99 and ordered the sale of the property. Defendants filed a motion for reconsideration, which the court denied on August 7, 2015. Defendants appealed from the final judgment and order denying reconsideration, and we affirmed. Emigrant Mortg. Co. v. Genello, No. A-0292-15 (App. Div. Dec. 2, 2016).
On May 26, 2014, Emigrant sent correspondence to defendants advising of the sheriff's sale date. Defendants requested two adjournments pursuant to N.J.S.A. 2A:17-36, which postponed the sale until July 5, 2016. On that date, defendants filed a Chapter 7 bankruptcy petition, resulting in another postponement of the sheriff's sale. A lack of supporting documentation lead to the dismissal of defendants' bankruptcy proceeding, and the rescheduling of the sheriff's sale for September 13, 2016. Emigrant did not notify defendants of the new sale date.
On September 13, 2016, Emigrant purchased the property at the sheriff's sale for $100. Upon learning of the sale, defendants filed a motion to vacate the sale on September 22, 2016, arguing the sale was unfair and prejudicial absent further notice by Emigrant. The judge denied defendants' motion but extended their redemption period to November 1, 2016. Defendants now appeal on the same grounds.
On appeal, defendants seek reversal of the order denying their motion to vacate the sheriff's sale, arguing that our decision in First Mutual Corp. v. Samojeden, 214 N.J. Super. 122 (App. Div. 1986) requires this result. In Samojeden, we held that our court rules, "as a matter of fundamental fairness[,] . . . must be construed as entitling interested parties to actual knowledge of the adjourned date upon which the sale actually takes place." Id. at 123. We review the trial court's denial of defendants' motion to vacate the sheriff's sale under an abuse of discretion standard. U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467 (2012). The Court finds an abuse of discretion when a decision is "made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis." Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123 (2007) (quoting Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571 (2002)).
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We recognize that a court of equity may set aside a sale and provide the defendant with notice of another sheriff's sale. First Trust Nat'l Ass'n v. Merola, 319 N.J. Super. 44, 49 (App. Div. 1999). "The general rule is that when insufficient notice of a sheriff's sale is given, the preferred remedy is that which restores the status quo ante to the greatest extent possible." New Brunswick Sav. Bank v. Markouski, 123 N.J. 402, 425 (1991). The court may void the sale if the party promptly seeks relief, was unaware of the pending sale, and no innocent third parties would be prejudiced. Ibid. (citation omitted).
However, the remedy to void the sale requires "some evidence of actual prejudice to an interested party." G.E. Capital Mortg. Servs., Inc. v. Marilao, 352 N.J. Super. 274, 283 (App. Div. 2002). The power to void the sale is "discretionary and must be based on considerations of equity and justice." First Trust Nat'l Ass'n, 319 N.J. Super. at 49. We defer to that exercise of discretion, absent a mistake of law or an abuse of discretion. Ibid.
Independent of statutes or court rules, the court may grant equitable relief to set aside a sheriff's sale or to order redemption when irregularities occur in the conduct of the sale, such as fraud, accident, mistake or surprise. Orange Land Co. v. Bender, 96 N.J. Super. 158, 164 (App. Div. 1967). While we held in Samojeden that fundamental fairness entitles all "interested parties to actual knowledge of the adjourned date upon which the sale actually takes place," we did not hold that the absence of such notice requires the court to vacate the sale in every case. 214 N.J. Super. at 123.
Here, the trial court carefully exercised its discretion by crafting a remedy of extending the redemption period by ten days rather than vacating the sheriff's sale. The court balanced the equities of the parties, noting the lengthy history of this matter, where defendants had not made any mortgage payments in over eight years, while Emigrant "paid the taxes . . . paid the insurance," without "access to the collateral" securing its mortgage loan. In addition, the court noted, "There's no . . . evidence to indicate . . . there was going to be a purchase at the sale or [that] some modification . . . was underway." The court further noted that defendants were effectively on notice that the sheriff's sale would be rescheduled after the bankruptcycourt dismissed their petition. In essence, the court found that Emigrant's failure to provide formal notice did not prejudice defendants. Indeed, the court gave defendants ten days to redeem the property, but they failed to make the redemption. On this record, we find no abuse of discretion in the trial court's decision.
