SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO . A

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PENNYMAC LOAN SERVICES, LLC, Plaintiff

- Respondent,

v. DINA A. CRUZ, her heirs, devisees, and personal representatives and his/her, their, or any of their successors in right, title and interest, MR. CRUZ, husband of DINA CRUZ, his heirs, devise es, and personal representatives and his/her, their, or any of their successors in right, title and interest, CHRISTOPHER KOHATSU, his heirs, devisees, and personal representatives and his/her, their, or a ny of their successors in right, title and interest, MRS. KOHATSU, wife of CHRISTOPHER KOHATSU, her heirs, devisees, and personal representatives , and his/her, their, or any of their successors in right, title and interest,
Defend ant s .

____________________________________

Submitted November 27, 2018

– Decided

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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

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February 28, 20192 A

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0 32997

- 16. Kenneth A. Wanio, attorney for appellant Mohamed Aly. Blank Rome, LLP, attorneys for respondent (Matthew M. Maher, on the brief).
PER CURIAM Appellant Mohamed Aly was a successful bidder at a sheriff's sale that the Ch ancery Division ordered in this foreclosure a ction filed by plaintiff PennyMac Loan Services, LLC . Aly, however , did not complete the purchase of the subject property because of a mistake. He now appeals from the C hancery Divis i on's October 4, 2017 order holding him responsible for the deficiency b etween his bid and the property's ultimate sales price and its November 30, 2017 order denying his motion for reconsider ation. On appeal, Aly contends that the orders were entered in error as he was not a defaulting buyer and therefore should not held liable for damages. We disagree and affirm substantially fo r the reasons stated by Judge Thomas J. LaConte in his oral decisions addressing Aly's motions.3 A

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The facts are not disputed and are summarized as follows . The property Aly bid on was a residential two

- family home. At the s heriff' s s ale, w hen Aly
bid $156,000 to purchase the p roperty , it was his understanding that he was bidding on th e entire p roperty

. As it turned out , the property consisted of two condomi ni um units , and the foreclosure and resulting sheriff's sale only related to one of the units. According to Aly, had he known the foreclosed property was only one unit, he would not have bid.
Al y filed a motion to vacate the bid, explaining his mista k e in a supporti ng certification. He stated that looking at the notice of sale's description o f the property and photographs of the building on it, there was no w ay to discern that only one unit was bei ng auctioned, although he conceded that "there [was] language that mi ght indicate a condominium feature to th[e] pr o p er ty[.]" He al s o stated that he "underst[ood] that there may be costs associated with [his] mistake." Plaintiff opposed the motion to reli e ve Aly of his obligations by arguing that he did not establish his entitlement to relief and, even if he did, Aly should be held liable for any deficiency after a subs equent sale. On October 4, 2017, Judge LaConte considered the parties ' oral arguments and written submissions before vacating Aly's bid but holding him liable for any deficiency. In his oral decision, the judge ackno wledged that Aly made a good4 A

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faith mistake. He next addressed the issue of Aly's monetary l i ability , noting that Aly himself recognized there would be costs associated wit h his error. Aly's counsel deferred to the judge on the issue and waived any argument about t he proposed form of order being submitted by plaintiff's counsel for the judge's entry at tha t time

. Judge LaCo nte entered two orders at the conclusion of the hearing. The first o rder was in the form prop osed by Aly that stated he was "released from his bid ," which was "vacated." The second order, which is the subject of this appeal, was the one proposed by plainti ff's counsel. That order state d that t h e sheriff's sale of t h e pro perty at whi ch Aly bid was "set aside," and a new sale would be scheduled. The order also addressed Aly's liability by stating that afte r the new sale, the sheriff would be able to ded u c t from Aly's bid dep osit "all costs and expenses in curred from said s ale, and [the sheriff ] shall also deduct and pay to the Plaintiff any deficiency between the bid at the second sale and the bid at th e first sale." The remainder of Aly's deposit , if any, was to be retu r ned to him. The order also barred Aly from bidding at the new sale.
A ly immediately filed a "motion for reconsideration or clarification ." His motion was supported by a letter from counsel in which counsel stated that he
and Aly were "under the impression" that Aly was only to reimburse plaintiff5 A

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through Aly's deposit for costs ass o ci a ted with running the property from the d ate of the original sheriff 's sale to the new one, but not for any deficiency "between [Aly's] bid and whatever the second bid may be." Counsel contended Aly was not a "defaulting buy er" because he was reli e ved fr o m his bid due to a mistake and, in any event, "there must be some mini m um upset price in the
second sale to prevent unfair bidding or non

- bidding by the Plaintiff at their option ." Plaintiff opposed Aly's motion, arguing tha t regardless of Aly's good faith error, he remained a defaulting buyer, j u s t i fying the earlier order's entry. Judge LaCo nte considered the mat t er on the pa pers submitted and placed his decision denying Aly's motion on the record on November 30, 2017. In his decision, the judge stated that he considered the law applicable to reconsideration motions, found that A ly did not advance any evidence or law
that the judge overlooked when reaching his October 4 decision , and noted that the issue was addressed at the time when he was presented with plaintiff's
prop o sed form of order. The judge observed that considering th e "the objective
of [ a sheriff ' s] sale is not only to secure the highest and best price for the interested parties, but also to achieve finali ty in the sale process," and concluded that case law confirmed that the or d er "conf orm[ ed ] with the standard measure6 A

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of damages ," to which plaintiff was entitled under the circumstances . This appeal followed. On appeal, Aly asserts the same argument mad e to the trial judge. He contends that the judge should have reconsider e d his decision to hold Aly liable because he was not in d e fault and although he could be held liable for costs, he should not be liable for any deficiency. We disagree.
W e review the court's denial of reconsideration only for abuse of discretion. Cummings v. Bahr , 295 N.J. Super. 374, 389 (App. Div. 1996). Reconsideration is "a matter within the sound discretion of the Court, to be exercised in the interest of justice." Palombi v. Palombi , 414 N.J. Super. 274, 288 (App. Div. 2010) (quoting D'Atria v. D'Atria , 242 N.J. Super. 392, 401 (Ch. Div. 1990)). Governed by Rule 4:49

- 2, reconsideration is appropriate for a "narrow corridor" of cases in which either the court's dec ision was made upon a "palpably incorrect or irrational basis," or where "it is obvious that the Court either did not consider, or failed to appreciate the significance of probative, competent evidence." Ibid. (quoting D'Atria , 242 N.J. Super. at 401). Ap plying our limited standard of review, we conclude that the court did not abuse its discretio n by denying plaintiff's reconsideration motion because Aly did not satisfy his burden by coming forward with any facts or law that the7 A

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judge overlooked . T he judg e's O c tober 4, 2017 order was legally correct and it s entry constituted a proper exercise of the judge's discretion. At the outset, we observe that "[a]s a general rule, courts exercising their equitable powers are charged with formulating fair and pract ical remedies appropriate to the specific dispute." Kaye v. Rosefielde , 223 N.J. 218, 231 (2015). " While equitable discretion is not governed by fixed principles and definite rules, '[i]mplicit [in the exercise of equitable discretion] is conscientious j udgment directed by law and reason and looking to a just result.'" Ibid. (quoting In re Estate of Hope , 390 N.J. Super. 533, 541 (App. Div. 2007 ) ) (alteration in original)

. Courts of equity have the power to vacate foreclosure sales based on considerations of equity and justice. Crane v. Bielski , 15 N.J. 342 , 349 (1954). "[T]he exercise of this power is discretionary.

. . ." First Tr

. Nat 'l Assoc. v. Merola , 319 N.J. Super . 44, 49 (App. Div. 1999) (citing Crane , 15 N.J. at 349). The power to vacate a foreclosure sale is limited to situations where there is "fraud, accident, surprise, irregularity in the sale, and the like, making confirmation inequitable and unjust to one or more parties." Crane , 15 N.J. at 346 (quoting Karel v. Davis , 122 N.J. Eq. 526, 530 (E. & A. 1937)). "[A] judicial sale is not ordinarily vacated 'on the ground of mistake flowing from [a moving party's] own culpable negligence.'" Merola , 319 N.J. S uper. at 498 A

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(quoting Karel , 122 N.J. Eq. at 528). A purchaser at a sheriff's sale is bound despite his or her mistake because "a foreclosure sale [ continues to be] subject to the doctrine of caveat emptor

. . . [,] " Summit Bank v. Thiel , 325 N.J. Super. 532, 538 (App. Div. 1998), except for certain situations involving clouds on title. See N.J.S.A. 2A:61

- 16 (providing relief from a bid if there is a " substantial defect in or cloud upon the title of the real estate sold, which would render such title unmarketable, or

. . . [due to] the existence of any lien or encumbrance" which was not appropriately disclosed prior to, or at, the sale). Removing the

c ondition of caveat emptor from judicial sales would have a significant effect on the mortgage industry, real estate investors, and our county sheriffs. See Midfirst Bank v. Gra ves , 399 N.J. Super. 228, 235 (Ch. Div. 2007) ( refus ing to grant a successful b idder relief after it discovered significant vandalism to the property upon ins pection two days after the sale). Here, because a bidder is held responsible for his own mistakes , Aly

r emained a defaulting buyer. Although the judge equitably reli e ved him of his obligation to complete the purchase, he pro per ly exercised his discretion and subjected Aly to a n equitable remedy. See Inv'rs & Lenders v. Finnegan , 249 N.J. Super. 586, 592 (Ch. Di v. 1991) ("[t] he measure of damages is the deficiency between the bid at the second sale and the bid at the first, plus the9 A

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costs of the first sale including the sheriffs fees for that sale"). There was no abuse of the judge's discretion.
Affirmed.