SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO . A

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U.S. BANK NATIONAL ASSOCIATION, 4787

- 16T2 AS INDENTURE TRUSTEE ON BEHALF OF AND WITH RESPECT TO AJAX MORTGAGE LOAN TRUST 2016

- C, MORTGAGE

- BACKED NOTES, SERIES 2016

- C, Plaintiff

- Respondent,

v. WILLIAM J. COLEMAN and MARILYN L. COLE MAN f/k/a MARILYN L. ROHREY, Defendants

- Appellants,
and WELLS FARGO BANK, Defendant.

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Submitted April 11, 2018

– Decided Before Judges Fuentes and Suter.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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 in ternet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36

- 3.

October 1, 20182 A

- 4787

- 16T2 On appeal from Superior Court of New Jersey, Chancery Division, Morris Count y, Docket No. F

0 18337

- 15. Ast & Schmidt, PC, attorneys for appellants (David A. Ast and Robert L. Schmidt, on the brief). Pluese, Becker, & Saltzman, LLC, attorneys for respondent (Stuart H. West, on the brief). The opinion of the court was delivered by
S UTER , J.A.D. Defendants William J. and Marilyn L. Coleman appeal the June 1, 2017 final judgment of foreclosure . They primarily challenge two discovery orders entered on Aug ust 5, 2016 and an order granting summary judgment on August 15, 2016 that refo rmed their mortgage to include a parcel of property that include d their residence. Defendants also appeal the October 31, 2016 order
that denied reconsideration. We affirm the trial court's orders and ent ry of the final foreclosure judgment. We relate th e facts from the summary judgment motions viewed in a ligh t most favorable to defendants. Defendants owned or had an interest in three tracks of land in Rockaway , New Jersey. Track one, comprised of lots twenty

five and twenty

- six in tax block 40401, is a largely unimproved 14,001 square foot parcel that contain s a driveway and an underground septic tank (the3 A

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driveway lot)

. Track two consists of lots six and twenty in the same tax block (t rack two)

. Defendants sold th is parcel in 1998. Track three, com pri sed of lot thirty

- six in the same tax block, is a 6700 square foot parcel with a house on it where defendants live , which fronts on a pond (the house lot). Defendants lease this parcel from Green Pond Corporation. On July 19, 2005, defendant William Coleman signed a $ 932,000 forty

year adjustable rate note in favor of Washington Mutual Bank, F.A. (WaMu) (the 2005 note) . On the same date, defendants secured the note by executing a mortgage to WaM u that listed two properties: the driveway lot and track two

. The note and mortgage also listed the street address for the house lot.
Th is mortgage was the ninth in a series of mortgages since defendants obtained the parcels in 1994. T he HUD

- 1 settlement statement from the 2005 loan origination file shows proceeds from the 2005 note and mortgage were used to pay

- off two earlier mortgages

. One mortgage f rom August 16, 2002 , was to Morgan Stanley Dean Witter Credit Corporation (Dean Witter) for $749,999 (the seventh mortgage) and the other from November 26 , 2003 , was to Discover Bank for 150,000 (eighth mortgage). Both of the se mortgages identified the4 A

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house lot as the encumbered property. 1 They did not list the driveway lot or track two as encumbered properties

. By 2009, defendants' note and mortgage were hel d by JP Morgan Chase Bank, N.A. (Chase) , which had acquired WaM u's assets. In early 2009, d efendants and Chase entered into a loan modification that changed the 2005 loan's principal balance to $ 1,0 66,773.57 and also changed its interest rate

. Th is
l oan modification expressly identified both the house lot 2 and track two as encumbered , even though defendants sold track two in 1998

. Defendants defaulted on the mortgage loan in November 2009

. In May 2015, plaintiff, U.S. Bank National Association , a s Indenture Trustee on behalf of and with respect to Ajax Mortgage Loan Trust 2016

- C, Mortga ge - Backed Notes, Series 2016

- C, filed a foreclosure complaint against
defendants seeking to foreclose defendants' interests in the house lot and the driveway lot. Count five of the foreclosure complaint requested reformation of the 2005 mortgage to correct an e rror . P laintiff wanted to reform the mortgage
to add the house lot because only the driveway lot and t rack two were mentioned

1 The August 16, 2002 mortgag e used a metes and bounds description of the house lot.

2 The reference is to "Lot thirty

- six [] , Block 40401

. "5 A

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by the mortgage in the legal des cription of the mortgaged property. Defendants filed a contesting answer and th e parties conducted discovery. They agreed to
dismis s the third and fourth counts of the compl ai nt

. Plaintiff filed a motion for summary judgment

. Victoria Shkutnik, a n
aut horized representative of plaintiff , certified based on her review of the
records relating to the defendants' loan , and her " personal knowledge of how [the records] are kept and maintained ," that plaintiff had possession of the 2005
note and that the mortg age was assigned to it

. She certified that defendants defaulted on the mortgage in November 2009 , and timely sent a notice of
intention to foreclose

. Further, plaintiff was "oblig ed to make all tax and property insurance payments" since the default.
De fendants opposed the summary judgment motion, claiming that only the driveway lot was encumbered because the house lot was subject to a land

lease. Defendants asserted the house lot was "never offered as collateral to the lender in connection with this mo rtgage refinance."
The court granted plaintiff's motion for summary judgment on counts one and two of the foreclosure complaint , striking defendants ' answer on those
counts . The court found "the elements of foreclosure for the plaintiff to succeed

are a ll there . The documents are genuine, there's been a default and the plaintiff6 A

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h as standing

. . . . " However, the court d enied the summary judgment motion

on count five of the compl ai nt without prejudice , saying " [ t ] he only remaining
issue is did the part ies intend for the mortgage to cover [the house lot] ." The
court note d that "logic suggests they must have" but declined to resolve the issue
t hat day " particular ly in the fac e of Mr. Coleman's certification that says he never intended that lot to be incl uded." The parties conducted additional discovery , including a deposition of plaintiff's representative Adam Simms and of defendant William Coleman. Plaintiff produced "all remaining documents contained in the origination file that were within [ p ] laintiff 's possession." When defendants served a subpoena for an additional deposition , plaintiff filed a motion to quash it because plaintiff's witness had been deposed a month earlier.
Plaintiff also filed a new motion for summary judgment , seeking judgment

on count five , to reform the 2005 mortgage to include the house lot. Defe ndants opposed both motions , cross - moved to compel additional discovery and for an order to prevent plaintiff from introducing documents at trial that it had produced in discovery afte r the deposition s . Defendants again claimed they had not offered the house lot as collateral for the WaMu loan , because defendants7 A

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were seeking financing to invest in their business , and not to refinance the existing primary mortgage.
On August 5 , 2016 , t he court granted plaintiff's motion to quash the deposition of plaintiff . It stated:

t he present dispute is limited to whether [the house lot] had or should have been encumbered by the mortgage when the loan was originated. The lack of post

origination d ocume ntation is no reason to compel [p] laintiff to appear for another deposition. The only relevant documents are those which relate to the original loan.
On August 15, 2016 , the trial court granted plaintiff's motion for summary judgment , reformed the mortgage to include the house lot and struck defendants '
answer to cou nt five of the complaint. The cou rt did not find that there were material facts in dispute because it was "clear" that "the intention of the parties, certainly the bank, was to prov ide a loan for both the front lot and the back lot. That's consistent with all the docum ents that have been submitted." The trial court observed that "[no lender is] going to loa n $900,000 to a driveway lot."
The court found the "loan was to cover the b ack l ot and the front lot." 3

3 The "back and front lot" were references to the house lot in the back and driveway lot in the front

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Defendant s sought reconsideration claiming the court erred because a material dispute exi s ted "as to the intent of the parties at the time of loan origination. " Th e y claimed the house lot was not offered as collateral becaus e it was subject to a ground lease. They contended that Chase acquiesced to this when it modified the mortgage in 2009. Defendants were critical of the
"unauthenticated" documents upon which plaintiff relied

. They also cl aimed that documents were altere d, the title polic y was fraudulent and others were forged. Defendants assert there was a conspiracy of sorts between the broker and the title company to earn certain fees.
The court denied defendants' motion for reconsideration , finding that lease

- hold mortgages were valid in general

. It also had the authority to correct draftsmen mistakes "in equity" because the house lot was intended to be included in the mortgage

. With respect to defendants' argument that they had new evidence, the court said that this "consist[ed] of speculation of conspiracies between the broker and title company, as well as alle gations of forged signatures." The court " refus e[d] to entertain specula tions unsupported by evidence." With defendants ' answer s tricken by the summary judgment order s , the

case proceeded as uncontested

. See R. 4:64

- 1(c). A final judgment of9 A

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foreclosure in favor of plaintiff was entered on June 1, 2017 , in the amount of $1,690,795.10. This included a schedule of payments made by plaintiff for real
esta te taxes and insurance premiums on defendants' property in Rockaway. On appeal, defendants argue the trial court applied the wrong standard when granting summary judgment because it did not draw inferences in favor of
the non

- moving party and relied on un authenticated documents , such as an appraisal of the property , which should have been barred

. Defendants claim the trial judge erred by reforming the mortgage to include the house lot because plaintiff failed to show that there was mutual mistake. Defend ants assert the re was a genuine issue of material fact about whether they intended to gra nt a mortgage on the house lot. They also argue that when they modified the loan , Chase acquiesced in the terms of the original mortgage. We find no merit in any of these issues. We review the trial judge 's order that granted summary judgment and reformed the mortgage under a de no vo standard o f review. Globe Motor Co. v. Igdalev , 225 N.J. 469, 479 (2016). The question is whether the evidence, when viewed in a light most favorable to the non

- moving party, raises genuinely disputed issues of fact sufficient to warrant resolution by the trier of fact, or whether "the evidence is so one

- sided that one party must prevail as a matter of10 A

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law." Brill v. Guardian Life Ins. Co. of Am. , 142 N.J. 520, 540 (1995); see also Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh , 224 N.J. 189, 199 (2016).
We first address the order that reformed the mortgage to include the house lot. "For a court to grant refo rmation there must be 'clear and convincing proof' that the contract in its reformed, and not original, form is the one that the contracting parties understood and meant it to be." Central State Bank v. Hudik

Ross Co. , 164 N.J. Super. 317, 323 (App. Div. 1978). "The traditional grounds justifying reformation of an instrument are either mutual mistake or unilateral mistake by one party and fraud or unconscionable conduct by the other." Dugan Constr . Co., Inc. v. N.J. Tpk. Auth. , 398 N.J. Super. 229, 242

- 2 43 (App. Div. 2008). "Reformation predicated upon mutual mistake requires that both parties are in agreement at the time they attempt to reduce their understanding to writing, and that the writing fails to express that understanding correctly." St. Pius X House of Retreats, Salvatorian Fathers v. Diocese of Camden , 88 N.J. 571, 579 (1982). Defendant s contend they did not intend to mortgage the house lot

. They argue that plaintiff should not have been permitted to rely on unauthenticated documents that we re produced after the first summary j udgment motion. They11 A

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claim there was some type of conspiracy be tween the broker t he y used and the title company, all app arently to generate fees. We have carefully reviewed the
record here and defendants have not pres ented any evidence to support or corroborate these contentions

. We agree with the trial judge that the 2005 mortgage should be reformed
to include the house lot

. The house lot had been mortgaged just a few years earlier under mortgages seven and eight fo r a combined amount of $ 899,999, which was very close in amount to the 2005 mortgage. There was no evidence presented by defendants that the unimproved driveway lot was comparab le
collateral to the house lot. Also, virtually every one of the mortgages fr om the time the property vested with defendants ' in 1994 to the time of the 2005 mortgage included the house lot either by express reference to lot thirty

- six or through a metes and bounds description for the house lot. The 2005 mortgage included track two as one of the mortgaged properties

. This showed unquestionably that both parties made a mistake on the 2005 mortgage because defendants sold this property in 1998. Defendants could not have intended in good faith to have include d it in the 2005 mortgage.
D efendants do not contest that the 2005 mortgage paid off two prior mortgage s or that both of those mortgages encumber ed the house lot

. When the12 A

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2005 mortgage did not list the house lot, but only the driveway lot and a lot defendants did not own, t he e ffect was to unencumber the house lot with little
or no real c onsideration for the bank in exchange

. Again, assuming good faith on the part of defendants, we cannot presume that either the bank or defendants intend ed this mutually mistaken result.
Defend ants contend the bank could not mortgage a leased property , but this is not supported by the 2005 mortgage . It provided that "[i]f this Security Instrument is on a leasehold, borrower shall comply with all the p rovisions of the lease."
We do not agree wit h defendants that the court improperly relied on unauthenticated documents provided in the se cond summary judgment motion.
Th e bank representative certified , based on her personal knowledge about the records, incl uding the loan origination file , that they were maintained by plaintiff in the course of its regularly conducted business. The certification complied with N.J.R.E. 803(c ) ( 6). See New Century Fin. Servs., Inc. v. Oughla , 437 N.J. Super. 299, 326 (App. Div. 2014 ) (citing State v. Martorelli , 136 N.J. Super. 449, 4 53 (App. Div. 1975). ("There is no requirement that the foundation witness [certifying that a record is a business record] possess any personal knowledge of the act or event recorded.") )

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D efendants were served with the loan originati on file as pa rt of the original discovery. That included the loan application where defendants noted the two prior mortgag es on the house lot and the HUD

- 1 , showing that those prior mortgages were paid off. There was no abuse of discretion by the court in denying plaintiff's request to compel discovery and in quashing the subpoena

. See State in Interest of A.B. , 219 N.J. 542, 554 (2014) (providing that "appellate review of a trial court's discovery order is governed by the abuse of discretion standard." ). The parties had already deposed a representative of the plaintiff and the issues were the

same . Much of the reliance was on recorded documents to which defen dants were signatories and had knowledge

. Defendants also appeal t he final judgment of foreclo sure. They raise no legal issues regarding the foreclosure judgment aside from the reformation of the mortgage that we already have addressed. Thus, we also affirm entry of the final judgment of foreclosure.
Affirmed.