SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0063-15T1

U.S. BANK, N.A. as Successor 

Trustee for Bank of America as

Trustee for Thornburg Mortgage 

Securities Trust 2007-3,

Plaintiff-Respondent,

v.

DAVID E. WALSH and DEBORAH

WALSH,

Defendants-Appellants.

______________________________

Argued November 14, 2017 – Decided 

Before Judges Fasciale and Sumners. 

On appeal from Superior Court of New Jersey, 

Chancery Division, Somerset County, Docket No. 

F-009696-14.

David E. Walsh and Deborah Walsh, appellants,

argued the cause pro se. 

Dustin P. Mansoor argued the cause for 

respondent (Houser & Allison, APC, attorneys; 

Gary N. Smith, on the brief).

PER CURIAM

David and Deborah Walsh (defendants) appeal from a May 8, 

2015 order denying their motion to vacate default; and a July 10, 

NOT FOR PUBLICATION WITHOUT THE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.

November 30, 2017
2 A-0063-15T1

2015 order denying their motion to reconsider or vacate summary 

judgment previously entered in favor of U.S. Bank, N.A. 

(plaintiff). We affirm. 

Defendants executed a promissory note (the note) to Guardhill 

Financial Corp. (Guardhill) with an original principal balance of 

$1,950,000. Defendants secured the note with a mortgage against 

the property, naming Mortgage Electronic Registration Systems, 

Inc. (MERS) as nominee for Guardhill, and then recorded the 

mortgage. In May 2007, defendants entered into a modification 

agreement. 

MERS assigned the note and mortgage to TMST Home Loans, Inc. 

(TMST). TMST assigned the note and mortgage to Bank of America 

as Trustee for Thornburg Mortgage Securities Trust 2007-3 (Bank 

of America as Trustee). Bank of America as Trustee assigned the 

note and mortgage to plaintiff. 

In May 2009, defendants defaulted on the note and mortgage. 

In March 2014, plaintiff filed the foreclosure action. In 

September 2014, plaintiff filed an amended complaint addressing 

the May 2007 modification agreement. Defendants did not accept 

service of the amended complaint and the judge entered default. 

Although the judge did not vacate the default, the judge later 

substantively considered defendants' challenge to plaintiff's 

standing to proceed. 
3 A-0063-15T1

At the close of extensive discovery, plaintiff moved for 

summary judgment. On January 9, 2015, the judge granted 

plaintiff's motion for summary judgment and issued a comprehensive 

twenty-six page written opinion in which the judge concluded 

defendants lacked a meritorious defense to the foreclosure action. 

In May 2015, the judge entered final judgment. Defendants then 

moved to set aside or reconsider the order granting summary 

judgment. 

On appeal, defendants argue that they were entitled to relief 

under Rule 4:50-1; that they should have the right to challenge 

the mortgage and note assignments; and that plaintiff does not 

have standing for various reasons including an allegedly 

fraudulent allonge. 

We begin by addressing defendants' contention that the judge 

erred by denying their motion to vacate the order granting 

plaintiff summary judgment. On this point, defendants rely on 

Rule 4:50-1, which states that 

the court may relieve a party or the party's 

legal representative from a final judgment or 

order for the following reasons: (a) mistake, 

inadvertence, surprise, or excusable neglect; 

(b) newly discovered evidence which would 

probably alter the judgment or order and which 

by due diligence could not have been 

discovered in time to move for a new trial 

under [Rule] 4:49; (c) fraud (whether 

heretofore denominated intrinsic or 

extrinsic), misrepresentation, or other 
4 A-0063-15T1

misconduct of an adverse party; (d) the 

judgment or order is void; (e) the judgment 

or order has been satisfied, released or 

discharged, or a prior judgment or order upon 

which it is based has been reversed or 

otherwise vacated, or it is no longer 

equitable that the judgment or order should 

have prospective application; or (f) any other 

reason justifying relief from the operation 

of the judgment or order.

"The trial court's determination under [Rule 4:50-1] warrants 

substantial deference, and should not be reversed unless it results 

in a clear abuse of discretion," namely where the "decision is 

'made without a rational explanation, inexplicably departed from 

established policies, or rested on an impermissible basis.'" US 

Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467-68 (2012) (quoting 

Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123 (2007)). 

Defendants failed to satisfy this standard as to any subsection 

of Rule 4:50-1.

In particular, the most relevant sections applicable to 

defendants' contentions are Rule 4:50-1(b), (c), and (f). Under 

Rule 4:50-1(b), the newly discovered evidence subsection, "the 

party seeking relief must demonstrate 'that the evidence would 

probably have changed the result, that it was unobtainable by the 

exercise of due diligence for use at the trial, and that the 

evidence was not merely cumulative.'" DEG, LLC v. Twp. of 

Fairfield, 198 N.J. 242, 264 (2009) (quoting Quick Chek Food Stores 
5 A-0063-15T1

v. Twp. of Springfield, 83 N.J. 438, 445 (1980)). "Moreover, 

'newly discovered evidence' does not include an attempt to remedy 

a belated realization of the inaccuracy of an adversary's proofs."

Ibid. (quoting Posta v. Chung-Loy, 306 N.J. Super. 182, 206 (App.

Div. 1997), certif. denied, 154 N.J. 609 (1998)). Rule 4:50-1(c)

provides relief for fraud. Rule 4:50-1(f) is reserved for 

"exceptional situations" where "truly exceptional circumstances 

are present." Hous. Auth. of Morristown v. Little, 135 N.J. 274, 

286 (1994) (citations omitted). Defendants have failed to satisfy 

any of these criteria.

"The only material issues in a foreclosure proceeding are the 

validity of the mortgage, the amount of the indebtedness, and the 

right of the mortgagee to resort to the mortgaged premises." Great 

Falls Bank v. Pardo, 263 N.J. Super. 388, 394 (Ch. Div. 1993), 

aff'd, 273 N.J. Super. 542 (App. Div. 1994). We have held that 

"either possession of the note or an assignment of the mortgage 

that predated the original complaint confer[s] standing." 

Deutsche Bank Tr. Co. Ams. v. Angeles, 428 N.J. Super. 315, 318 

(App. Div. 2012) (citing Deutsche Bank Nat'l Tr. Co. v. Mitchell, 

422 N.J. Super. 214, 216 (App. Div. 2011)). If a plaintiff cannot 

establish it owned or controlled the underlying debt at the time 

the complaint is filed, it "lacks standing to proceed with the 

foreclosure action and the complaint must be dismissed." Wells 
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Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592, 597 (App. Div. 

2011). "If a debt is evidenced by a negotiable instrument, such 

as the note executed by [a] defendant," whether a plaintiff has 

established ownership or control over the note "is governed by 

Article III of the Uniform Commercial Code (UCC), N.J.S.A. 12A:3-

101 to -605, in particular N.J.S.A. 12A:3-301." Ibid.

There are "three categories of persons entitled to enforce 

negotiable instruments" as described in N.J.S.A. 12A:3-301. 

Mitchell, supra, 422 N.J. Super. at 222-23.

N.J.S.A. 12A:3-301 provides:

"Person entitled to enforce" an instrument 

means the holder of the instrument, a 

nonholder in possession of the instrument who 

has the rights of a holder, or a person not 

in possession of the instrument who is 

entitled to enforce the instrument pursuant 

to [N.J.S.A.] 12A:3-309 or subsection d. of 

[N.J.S.A.] 12A:3-418. A person may be a 

person entitled to enforce the instrument even 

though the person is not the owner of the 

instrument or is in wrongful possession of the

instrument.

Here, plaintiff had standing to pursue the foreclosure case 

against defendants. Plaintiff was in possession of the note before 

filing the complaint and the trial court repeatedly addressed and 

rejected defendants' standing argument. Plaintiff presented 

defendants with the original note and mortgage at a November 2013 
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conference and defendants confirmed their signatures on the 

instruments. 

Defendants allege that they have new evidence that the allonge 

was fraudulent, but offer no credible explanation as to why their 

due diligence did not uncover such purported evidence sooner, when 

they were in possession of the discovery. Furthermore, their socalled expert report and handwriting analysis, obtained after the 

court granted summary judgment to plaintiff, is inconclusive. 

Rather, the handwriting analysis reflects that there is

insufficient information to conclude whether the signature was 

valid. Furthermore, the Guardhill representative's email stating 

that Guardhill does not have an allonge on file does not disprove 

plaintiff's standing in this case. 

Although defendants recognize they do not have standing under 

New Jersey law to challenge a failure to comply with the trust 

agreement, they argue that the note and mortgage assignments were 

invalid. Defendants are not parties to or beneficiaries of the 

trust, and therefore lack standing to assert violations of the 

trust, and even if they did have standing, their assertions would 

be an insufficient defense to the foreclosure claim. See, e.g., 

Reinagel v. Deutsche Bank Nat'l Tr. Co., 735 F.3d 220, 228 (5th 

Cir. 2013) (explaining that even though the trust agreement was 

violated, the debtor could not enforce the terms of the trust 
8 A-0063-15T1

agreement unless the debtor is a third-party beneficiary, and even 

then, such an argument does not render the assignment void; it 

would just allow the debtor to sue for breach of the trust 

agreement). 

The judge also appropriately denied defendants relief under 

the reconsideration standard. As an appellate court, we review 

the denial of a motion for reconsideration to determine whether 

the trial court abused its discretionary authority. Cummings v. 

Bahr, 295 N.J. Super. 374, 389 (App. Div. 1996). Reconsideration 

should only be used "for those cases which fall into that narrow 

corridor in which either 1) the [c]ourt has expressed its decision 

based upon a palpably incorrect or irrational basis, or 2) it is 

obvious that the [c]ourt either did not consider, or failed to 

appreciate the significance of probative, competent evidence." 

Id. at 384 (quoting D'Atria v. D'Atria, 242 N.J. Super. 392, 401

(Ch. Div. 1990)). Additionally, the decision to deny a motion for 

reconsideration falls "within the sound discretion of the [trial 

court], to be exercised in the interest of justice." Ibid. 

(quoting D'Atria, supra, 242 N.J. Super. at 401).

Although the judge found the motion for reconsideration was 

not filed timely, he substantively addressed the motion. The 

judge reviewed defendants' submissions, mostly arguing the same 

standing issue, and found that defendants' argument was "a search 
9 A-0063-15T1

for technicalities that ignores the realities of the circumstances 

before the [c]ourt. [D]efendants admit they have not paid any 

princip[al], interest, real estate tax or insurance payments for 

the property since May 1, 2009. . . . [D]efendants admittedly and 

unabashedly continue to live in the premises at no charge." The 

judge's decision to deny the motion for reconsideration was within 

his discretion. He reviewed and analyzed the probative, competent 

evidence, along with non-probative and incompetent evidence 

presented by defendants. The judge properly denied both the motion 

for reconsideration and the motion to set aside summary judgment.

We conclude the remainder of defendants' arguments are 

without sufficient merit to warrant discussion in a written 

opinion. R. 2:11-3(e)(1)(E). 

Affirmed.