BANKRUPTCY ARTICLE - LAWYER IN HACKENSACK NEW JERSEY (201) 646-3333

  

LILIANA WILSON, Plaintiff-Respondent,
v.
JAMES WILSON, Defendant-Appellant.No. A-3867-10T2.Superior Court of New Jersey, Appellate Division.Argued December 13, 2011.Decided October 23, 2012.

Jack Dashosh argued the cause for appellant.

Tadd J. Yearing argued the cause for respondent (Townsend, Tomaio & Newmark, L.L.C., attorneys; Mr. Yearing, on the brief).

Before Judges Carchman and Nugent.

NOT FOR PUBLICATION

PER CURIAM.

Defendant James Wilson appeals from parts of a January 28, 2011 Family Part order that: adjudicated defendant in violation of litigant's rights because of his partial non-compliance with the parties' Supplemental Judgment of Divorce (SJOD); compelled him to make certain payments to plaintiff as required by the SJOD and previous court orders; entered judgment against him for counsel fees that the court had previously ordered him to pay to plaintiff; and required him to communicate with plaintiff about certain issues concerning their child. Defendant also appeals from the denial of his motion for reconsideration. The parties' dispute concerning the building in Romania appears to be moot as the result of bankruptcy proceedings. Otherwise, we affirm.

The parties married on October 23, 1993, and were divorced on April 14, 2009, when the court entered a Final Judgment of Divorce. The court entered a SJOD on June 1, 2010. Among its terms, the SJOD required the parties to continue to attempt to sell a boat they had listed for $139,900, and to divide the net proceeds upon its sale; provided that defendant would sell his business and its European counterparts, and, upon its sale, pay to plaintiff thirty-five percent of the net proceeds; and required that defendant sell a commercial building in Romania and pay to plaintiff an equal share of the net sale proceeds. The SJOD also required defendant to pay plaintiff annual alimony of $30,000 for seven years, provided that the parties would share joint legal custody of their child, denoted defendant as the parent of primary residence, and established a parenting time schedule, as well as child support obligations.

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On October 23, 2009, after considering cross-motions the parties had filed, the trial court found defendant in violation of litigant's rights for not adhering to the parenting time schedule. Among other forms of relief, the court directed defendant to pay $7,075 representing plaintiff's counsel fees.

Additional motion practice ensued. In December 2010, plaintiff filed another motion to enforce litigant's rights. The court granted that motion in an order entered on January 28, 2011, supported by a written statement of reasons. Defendant filed a motion for reconsideration, which the court denied on March 18, 2011. Defendant appealed from those orders.

Following the filing of defendant's notice of appeal, plaintiff filed a Chapter 7 bankruptcy petition. It appears that during the bankruptcy proceeding, the trustee accepted defendant's offer to pay $35,000 to buy out plaintiff's interest in the building in Romania.^[1]

Defendant raises the following issues on appeal:

THE COURT ERRED BY NOT DELETING THE FOLLOWING PARAGRAPHS OF ITS JANUARY 28, 2011 ORDER, SPECIFICALLY:

1) PARAGRAPH 1 OF THE ORDER WHICH FOUND DEFENDANT IN VIOLATION OF LITIGANT'S RIGHTS FOR FAILURE TO COMPLY WITH THE SUPPLEMENTAL JUDGMENT OF DIVORCE (SJOD) FILED ON JUNE 1, 2010, AND THE COURT ORDERS OF OCTOBER 23, 2009, MARCH 12, 2010 AND JUNE 28 2010, WHICH REQUIRED DEFENDANT TO NOTIFY PLAINTIFF IN WRITING OF THEIR SON[`s] EXTRA CURRICULAR SCHOOL ACTIVITIES WITHOUT ANY FACTUAL BASIS FOR THE SAME.

2) THE PORTION OF PARAGRAPH 3 THAT REQUIRED DEFENDANT TO PROVIDE PLAINTIFF WITH AN UPDATED CASE INFORMATION STATEMENT INCLUDING HIS 2010 W-2'S, 1099'S AND 2009 FEDERAL, STATE AND BUSINESS TAX RETURNS DESPITE THE FACT THAT COMMENCING FEBRUARY 11, 2011 DEFENDANT HAS PAID PLAINTIFF THE SUM OF $2,000 PER MONTH TOWARD THE $49,919.45 THE COURT AWARDED PLAINTIFF AS HER SHARE OF DEFENDANT'S BUSINESS.

3) PARAGRAPH 4 OF THE ORDER WHICH REQUIRED DEFENDANT TO PURCHASE PLAINTIFF'S INTEREST IN THE ROMANIAN REAL ESTATE AND WHICH REQUIRED DEFENDANT TO PROVIDE AN UPDATED CASE INFORMATION STATEMENT.

4) PARAGRAPH 8 OF THE ORDER WHICH REQUIRED DEFENDANT TO REIMBURSE PLAINTIFF THE SUM OF $4,000 REPRESENTING ONE-HALF OF THE TOTAL COST PAID BY THE PARTIES TO ATTEND THE OVERCOMING BARRIERS PROGRAM IN JULY 2010.

5) PARAGRAPH 9 OF THE ORDER WHICH REQUIRED DEFENDANT TO PAY PLAINTIFF THE SUM OF $7,075 IN COUNSEL FEES AWARDED TO HER IN THE OCTOBER 23, 2009 COURT ORDER DESPITE THE FACT THAT THERE WAS NO STATEMENT REGARDING THE BASIS FOR AWARDING THE SAME AND CONTRARY TO THE SUPPLEMENTAL JUDGMENT OF DIVORCE WHICH WAIVED ALL OF THE PARTIES' CLAIMS FOR LEGAL FEES.

6) PARAGRAPH 13 OF THE ORDER WHICH DIRECTS DEFENDANT TO NOTIFY PLAINTIFF WITHIN MINUTES OF MEDICAL EMERGENCIES INVOLVING [A.] AND THAT DEFENDANT REFRAIN FROM MAKING NEGATIVE COMMENTS TO [A.] REGARDING PLAINTIFF WITHOUT ANY FACTUAL BASIS FOR THE SAME.

7) THE COURT IMPROPERLY DETERMINED THAT PLAINTIFF IS ENTITLED TO RECEIVE ONE-HALF THE VALUE OF THE ROMANIAN REAL ESTATE AS OF APRIL 14, 2009 BECAUSE OF DEFENDANT'S FAILURE TO LIST THE PROPERTY FOR SALE, WHICH WAS FACTUALLY INCORRECT AND IS CONTRARY TO THE JUNE 1, 2010 JUDGMENT OF DIVORCE.

We first address the effect of the bankruptcy proceeding on the issue raised by defendant concerning plaintiff's interest in the building in Romania. Under federal law, when a debtor files a bankruptcy petition, an estate is created and the estate includes "all legal or equitable interests of the debtor in property as of the commencement of the case." 11 U.S.C.A. § 541(a)(1). Thus, plaintiff's equitable interest in the building in Romania was part of the bankruptcy estate. See Reid v. Reid, 310 N.J. Super. 12, 20 (App. Div.), certif. denied, 154 N.J. 608 (1998); Colucci v. Colucci, 251 N.J. Super. 73, 78 (Ch. Div. 1991). Generally, "[t]he trustee, after notice and a hearing, may... sell... property of the estate...." 11 U.S.C.S. § 363(b)(1). That is precisely what happened in this case. The sale appears to render moot defendant's issue concerning plaintiff's interest.

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In her supplemental brief, plaintiff argues that the bankruptcy trustee sold her equitable interest in the building in Romania for considerably less than its actual value. Plaintiff has not argued that she was denied a fair opportunity in the bankruptcy proceeding to contest the sale of her interest or challenge the building's value, however. Nor has she attempted to demonstrate how the outcome of the bankruptcy proceeding would have differed had her interest been sold for a greater sum. Under those circumstances, we deem the narrow issue raised by defendant on this appeal — that the trial judge erred by requiring defendant to purchase plaintiff's interest in the Romanian real estate — moot.

After considering defendant's remaining arguments in light of the record and applicable law, we affirm, substantially for the reasons explained by the trial court in the written statements supporting the January 28 and March 18, 2011 orders.

In summary, we deem the issue concerning defendant buying out plaintiff's interest in the Romanian real estate to be moot. We affirm in all other respects.

[1] During oral argument we permitted plaintiff to submit a supplemental letter brief to address the effect of the bankruptcy proceedings on plaintiff's right to equitable distribution of the property in Romania. Plaintiff and defendant both submitted supplemental letter briefs. Although it appears that the bankruptcy trustee disposed of plaintiff's interest in the property, the documents submitted by the parties are uncertified and incomplete.

MORTGAGE ARTICLE - BANKRUPTCY ATTORNEY IN HUDSON COUNTY NJ (201) 646-3333

 

EMC MORTGAGE CORPORATION, Plaintiff-Respondent,
v.
MATTHEW FITZROY, Defendant, and
PATRICE SPRINGETTE, Defendant-Appellant.No. A-2884-11T1.
Superior Court of New Jersey, Appellate Division.

Argued telephonically September 23, 2013.Decided September 30, 2013.

David M. Schlachter argued the cause for appellant (Law Offices of David M. Schlachter, LLC, attorneys; Mr. Schlachter, on the brief).

Sanjay Ibrahim argued the cause for respondent (Parker Ibrahim & Berg LLC, attorneys; Anthony Del Guercio and Melinda Colón Cox, on the brief).

Before Judges Reisner and Carroll.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

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.

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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.

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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.

WAGE GARNISHMENT ARTICLE - BANKRUPTCY ATTORNEY IN NEW JERSEY (201) 646-3333

 

LAMAR ENTERPRISES, LLC, Plaintiff-Respondent,
v.
SES PROPERTIES, LLC and WILLIAM SPENCER, t/a SMOOTHIE FACTORY, Defendants-Appellants.No. A-4976-11T4.
Superior Court of New Jersey, Appellate Division.

Submitted March 19, 2013.Decided April 30, 2013.

Ryan A. Dornish, attorney for appellants.

Clifford J. Weininger, attorney for respondent.

Before Judges Alvarez, Waugh and St. John.

NOT FOR PUBLICATION

PER CURIAM.

On July 22, 2011, plaintiff Lamar Enterprises, LLC, obtained a judgment by default in the amount of $108,804.51 against its former tenant SES Properties, LLC, and William Spencer, trading as Smoothie Factory. The judgment was docketed on August 17, 2011, and a writ of execution issued October 20, against Spencer. Defendants filed a motion objecting to the garnishment, seeking a stay of execution, and a hearing to address the amount of the judgment. The court denied the application and the subsequent motion for reconsideration. We affirm for the reasons stated by Judge Robert J. Brennan in his well-reasoned analysis rendered from the bench. We add the following very brief comments.

Spencer, in addition to his wages, operates two businesses and owns a commercial building. He nets $4068.96 per month (calculated on 4.3 weeks each month) from his salary at a full-time job. Pursuant to the terms of his divorce, he pays limited duration alimony, child support, and equitable distribution in the amount of $3947.66 monthly. He is current on that obligation. It is not paid by garnishment, or even through the probation department.

At the beginning of oral argument on the motion, defendants' attorney advised the court that Spencer was available by phone to testify. Judge Brennan declined the offer pursuant to Rule 1:6-2, which requires facts not of record, or cognizable by judicial notice, to be submitted on motions in affidavits or certifications.

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On reconsideration, defendants argued that the court erred by refusing to allow Spencer to participate via telephone. Defendants raise the same arguments on appeal as they did before the trial court. They are:

POINT 1

PLAINTIFF HAS FAILED TO MITIGATE DAMAGES SO THE WAGE EXECUTION SHOULD BE DISMISSED

POINT 2

DEFENDANTS CANNOT AFFORD THE WAGE EXECUTION AND THEREFORE IT SHOULD BE MODIFIED AND/OR DISMISSED

POINT 3

A PERSON CANNOT BE SUBJECT TO MORE THAN ONE WAGE GARNISHMENT AT A TIME. N.J.S.A. 2A:17-52(a)

POINT 4

THE JUDGE ERRED IN MAKING FACTUAL AND LEGAL FINDINGS

Judge Brennan correctly noted that defendants could not, post-judgment, directly attack the merits of the judgment. Defendants had an opportunity to file an answer, or take an appeal, and did neither. Having failed to avail themselves of those options, they did not even file a motion to set aside the judgment pursuant to Rule 4:50-1. The court therefore correctly refused to entertain the argument.

The trial judge also observed that Spencer's asserted inability to afford the amount of the wage execution was not clearly established. Mathematically, it is reasonable to conclude that Spencer has other substantial income from which he is maintaining his divorce obligations. Spencer operates a septic pump business, a snow removal business, and owns a commercial building, in addition to holding down a job. Furthermore, the wage deductions from his employment were not proven to be involuntary in nature. His pay stub included deductions totaling $903.14 for health contributions, pension, loans, dues, and credit union. Therefore, Spencer's proofs simply failed to demonstrate any inequity in the wage garnishment.

Judge Brennan did not credit Spencer's argument that he was being subjected to a "de facto" second wage garnishment because of his matrimonial obligations. That argument is so lacking in merit as to warrant no further discussion in a written opinion. R. 2:11-3(e)(1).

Finally, we find no error in the judge's rejection of Spencer's motion for reconsideration, premised on the notion he should have been allowed to testify telephonically with regard to his pay and income. As the judge pointed out, on motions, Rule 1:6-2 does not permit facts to be established other than through an affidavit or certification. Hence the judge did not err in declining to allow Spencer's telephonic participation to answer questions that might arise during the hearing.

"A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). In this instance, the trial court's reasoned conclusion, in our view, correctly applied the law to established facts. Motions for reconsideration will be granted only where the court has failed to consider evidence, has rendered a decision based on plainly incorrect reasoning, or failed to correctly apply the law. See Fusco v. Bd. of Educ. of Newark, 349 N.J. Super. 455, 462 (App. Div.), certif. denied, 174 N.J. 544 (2002). The court in this case considered the evidence, analyzed the matter fairly, and correctly applied the law.

Affirmed.

FORECLOSURE ARTICLE - BANKRUPTCY LAWYER IN NEW JERSEY (201) 646-3333

 196 A.3d 121 (2018)

456 N.J. Super. 546

DEUTSCHE BANK TRUST COMPANY AMERICAS, AS TRUSTEE FOR RESIDENTIAL ACCREDIT LOANS, INC., Mortgage Asset-Backed Pass-Through Certificates, Series 2005-QSI4, Plaintiff-Respondent,

v.

Debbie A. WEINER and Clifford R. Weiner, Defendants-Appellants.

DOCKET No. A-2110-17T4.

Superior Court of New Jersey, Appellate Division.

Submitted October 23, 2018.Decided November 8, 2018.

On appeal from Superior Court of New Jersey, Chancery Division, Somerset County, Docket No. F-026288-16.

Christopher D. Ferrara LLC, attorneys for appellants (Christopher D. Ferrara, on the brief).

Blank Rome LLP, attorneys for respondent (Michael P. Trainor, on the brief).

Before Judges Fisher, Geiger and Firko.

122*122 The opinion of the court was delivered by

FISHER, P.J.A.D.

For many years, New Jersey lacked a statute of limitations for residential foreclosure actions. Instead, for more than a century, our courts applied the time-bar used in adverse possession actions: twenty years. See Depew v. Colton, 60 N.J. Eq. 454, 464, 46 A. 728 (E. & A. 1900); Security National Partners L.P. v. Mahler, 336 N.J. Super. 101, 106-07, 763 A.2d 804 (App. Div. 2000). In 2009, the Legislature made up for lost time and enacted N.J.S.A. 2A:50-56.1, which codified Security National Partners^[1] by declaring that a residential foreclosure action "shall not be commenced following the earliest of" three points in time:

• Six years from "the date fixed for the making of the last payment or the maturity date set forth in the mortgage or the note," N.J.S.A. 2A:50-56.1(a);

• Thirty-six years from the date the mortgage was recorded or, if not recorded, from the date of execution, N.J.S.A. 2A:50-56.1(b); and

• Twenty years from the date of a default that "has not been cured," N.J.S.A. 2A:50-56.1(c).^[2]

Defendants' contention that N.J.S.A. 2A:50-56.1(a)'s six-year time-frame applies and bars this foreclosure action, which was filed seven years after their uncured default, is without merit.

FORECLOSURE ARTICLE - BANKRUPTCY ATTORNEY IN HACKENSACK NEW JERSEY (201) 646-3333 - YouTube

The record reveals that defendant Debbie A. Weiner borrowed $657,500 from Weichert Financial Services in 2005 and then executed in Weichert's favor a promissory note that required monthly payments, 123 the last of which was scheduled for June 2035. To secure the note's repayment, both defendants executed a mortgage that was recorded in 2005 and ultimately assigned to plaintiff Deutsche Bank Trust Company Americas.^[3]

There is no dispute that defendants failed to make a scheduled August 2009 payment and all later monthly payments. After four discontinued suits, Deutsche Bank commenced this foreclosure action in September 2016, more than seven years after defendants' uncured default.

The parties eventually cross-moved for summary judgment. The judge granted Deutsche Bank's motion, denied defendants' motion, and later denied defendants' motion for reconsideration. Once final judgment was entered in December 2017, defendants filed this timely appeal, arguing: (1) summary judgment should not have been entered because discovery was incomplete and there were genuine disputes about Deutsche Bank's claim, its standing to sue, and its status as a holder; (2) their answer should not have been stricken; and (3) the complaint was barred by the statute of limitations. We reject these arguments and affirm.^[4]

In arguing the action was time-barred, defendants claim the six-year time frame in subsection (a) was triggered in 2009 when their default triggered the loan's acceleration. We disagree. Subsection (c) specifically provides a time frame to be considered upon an uncured default. To interpret subsection (a) as triggering the same event encompassed by subsection (c) would wreak havoc with the clearly delineated provisions of N.J.S.A. 2A:50-56.1. We refuse to inject such confusion into what the Legislature carefully planned when it adopted this multi-part statute of limitations.

Defendants' interpretation would also require that we ignore subsection (a)'s plain language. That provision declares that the six-year period runs from the date of the last payment or the maturity date "set forth in the mortgage or the note." N.J.S.A. 2A:50-56.1(a). June 1, 2035 was the date "set forth" in the note and mortgage here, and that date is the one and only date that triggers the six-year period in subsection (a). There is no ambiguity; that conclusion is what the plain language of the statute compels. See DiProspero v. Penn, 183 N.J. 477, 492, 874 A.2d 1039 (2005). Any other conclusion would mangle the Legislature's carefully phrased statute. State v. Clarity, 454 N.J. Super. 603, 608, 186 A.3d 919 (App. Div. 2018).

CHAPTER 7 ARTICLE - BANKRUPTCY ATTORNEY IN NEW JERSEY 07601 - (201) 646-3333 - YouTube

In short, the three events described in subsections (a), (b), and (c) of N.J.S.A. 2A:50-56.1, were scheduled to occur in 2041 (six years after the 2035 maturity date), 2041 (thirty-six years after the 2005 recording of the mortgage), and 2029 (twenty years from defendants' uncured 124*124 default), respectively. Since the earliest has yet to occur, this suit, commenced in September 2016, was not time-barred.^[5]

Affirmed.

[1] See Assemb. Fin. Insts. & Ins. Comm. Statement to S. No. 250 — L. 2009, c. 105 (Oct. 6, 2008).

[2] For brevity's sake, we have omitted statutory language from the descriptions of each subsection that has no bearing here.

[3] The mortgage was first assigned to Deutsche Bank Trust Company Americas, as trustee for certain certificate holders, in 2009, and later assigned to Deutsche Bank, as trustee for Residential Accredit Loans, Inc., 2005-QS14, the plaintiff here, in 2013. The assignments were duly executed and recorded.

[4] We find insufficient merit in defendants' first two points to warrant further discussion in a written opinion. R. 2:11-3(e)(1)(E). We add only as to the first that, in moving for summary judgment, Deutsche Bank provided undisputed evidence that it was in possession of the note, which was endorsed to it, and that the mortgage assignments were duly executed and recorded. See Deutsche Bank Trust Co. v. Angeles, 428 N.J. Super. 315, 318, 53 A.3d 673 (App. Div. 2012).

[5] Although not raised, we assume N.J.S.A. 2A:50-56.1 applies to defendants' argument that Deutsche Bank's suit was untimely even though the statute did not become effective until August 6, 2009, approximately the same time as defendants' default. Even if the statute had no application here, the result would be the same, since the pre-statute twenty-year time-bar described in Colton and Security National Partners would allow for the maintenance of this suit.

MORTGAGE ARTICLE - BANKRUPTCY LAWYER IN HACKENSACK NEW JERSEY (201) 646-3333

 273 N.J. Super. 542 (1994)

642 A.2d 1037

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.

Superior Court of New Jersey, Appellate Division.

Argued May 10, 1994.Decided May 26, 1994.

543Before Judges STERN and KEEFE.

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).

Argued (telephonically)^[1] May 10, 1994.

PER CURIAM.

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 544 bank 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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My name is Marco Santucci. Rafael Gomez representing me just now, he did a really great job. I thought I was going to lose my license today and he amended my charges and he brought belief to me when I thought I had none. So I thank him.

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.

FORECLOSURE ARTICLE - BANKRUPTCY ATTORNEY IN HACKENSACK NEW JERSEY (201) 646-3333

 

EDWIN L. SIEGEL, Plaintiff-Appellant,
v.
LEONARD BLASUCCI, Defendant.No. A-0998-12T3.Superior Court of New Jersey, Appellate Division.

Argued September 11, 2013.Decided February 21, 2014.

Arnold G. Shurkin argued the cause for appellant.

Robert L. Grundlock, Jr., argued the cause for respondent Venkat Gourkanti (Rubin, Ehrlich & Buckley, P.C., attorneys; Mr. Grundlock, on the brief).

Before Judges Grall, Nugent and Accurso.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

PER CURIAM.

Plaintiff Edwin L. Siegel appeals from the denial of his application pursuant to Rule 4:59-1(d)(1) for an order permitting the sale of real property for satisfaction of a judgment debt. The property he desired sold no longer belonged to the judgment debtor, Leonard Blasucci, but to Venkat Gourkanti, who acquired it from sellers who purchased the property at sheriff's sale following foreclosure of Blasucci's mortgage. We affirm.

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The essential facts are undisputed. Blasucci and his wife took title to the residential property in 1976. The Blasuccis gave a first mortgage to First Fidelity Bank in 1986 and a second mortgage to Washington Savings Bank in 1987. Washington Savings instituted a foreclosure action against the Blasuccis in May 1990 and obtained final judgment of foreclosure the following October. First Fidelity and Washington Savings subsequently assigned their mortgages to Martin Tave and the Sylvia T. Cohen Revocable Trust (Tave and Cohen). The property was sold at sheriff's sale in June 1994 to Tave and Cohen, who took subject to the First Fidelity mortgage which they held and subsequently discharged. Tave and Cohen conveyed the property to Gourkanti in October 1997.

Siegel did not obtain his default judgment against Blasucci until July 1992, almost two years after the entry of the foreclosure judgment. Siegel claims that his judgment, docketed in July 1992 and revived in November 2011, was a lien against Blasucci's real property that was not extinguished by the

October 1990 foreclosure judgment and subsequent sheriff's sale. He contends that either Washington Savings or Tave and Cohen was required to amend the foreclosure complaint to include him as a subsequent encumbrancer in order to bind him to the foreclosure judgment. We disagree.

We addressed this issue in Morsemere Fed. Sav. & Loan Ass'n v. Nicolaou, 206 N.J. Super. 637 (App. Div. 1986). Morsemere, a foreclosing mortgagee, obtained final judgment of foreclosure against Nicolaou. Id. at 640-41. After entry of the foreclosure judgment, DiPrima obtained a default judgment against Nicolaou. Id. at 641. DiPrima subsequently purchased the property at sheriff's sale. DiPrima then filed a motion to intervene in the foreclosure action and for payment of surplus funds. Ibid.

We held that a lien claimant such as DiPrima cannot be made a party to a foreclosure suit after entry of final judgment. Morsemere, supra, 206 N.J. Super. at 641-42. We reasoned that N.J.S.A. 2A:50-30, which operates to bind the holders of unrecorded interests existing at the filing of the foreclosure to the judgment and allows those holding such interests to intervene as of right upon recording, did not apply "because DiPrima's lien did not exist `at the time of the filing of the complaint' or even at the time the foreclosure judgment was entered." Ibid. Instead, we held that N.J.S.A. 2A:50-37 was controlling, and thus a creditor who obtains a money judgment subsequent to entry of the foreclosure judgment "may participate in any surplus after prior claiming lienholders (at the time of the foreclosure judgment) have been paid or satisfied." Morsemere, supra, 206 N.J. Super. at 642-43.

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Siegel, who obtained his judgment after Washington Savings obtained its foreclosure judgment against Blasucci, is in the same position as was DiPrima in Morsemere. The lien of his judgment only allowed him to participate in any surplus remaining after sheriff sale. The holding is in accord with the general rule "that surplus funds take on the character of the land, at least with respect to junior encumbrancers whose liens existed at the time of the foreclosure." Ibid.

Because Siegel's remedy was limited to participation in any surplus funds arising from the sheriff's sale, the trial court correctly denied his motion for sale of Gourkanti's property to satisfy Siegel's 1992 judgment against Blasucci. Siegel's remaining arguments relating to the priority of his judgment and the conduct of the sheriff's sale conducted in 1994 are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.