Court Opinion

ID: 2641134
Source: CourtListenerOpinion
Date Created: 2013-11-05 01:09:47.315227+00
Date Added: 2024-06-11T12:59:59.042444
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                 APPROVAL OF THE APPELLATE DIVISION

                                    SUPERIOR COURT OF NEW JERSEY
                                    APPELLATE DIVISION
                                    DOCKET NO. A-1330-12T2

WILLIAM SUSER,

          Plaintiff-Appellant,
                                       APPROVED FOR PUBLICATION
    v.
                                           November 4, 2013

WACHOVIA MORTGAGE, FSB f/k/a              APPELLATE DIVISION
WORLD SAVINGS BANK, FSB, and
DEUTSCHE BANK NATIONAL TRUST
COMPANY, f/k/a WASHINGTON
MUTUAL BANK, FA,

          Defendants-Respondents,

    and

PORT IMPERIAL CONDOMINIUM
ASSOCIATION and UNITED STATES
DEPARTMENT OF THE TREASURY –
INTERNAL REVENUE SERVICE, and/or
his, her, their or its successor
in right, title and interest,

          Defendants.

___________________________________________________

          Submitted October 8, 2013 – Decided November 4, 2013

          Before Judges Fisher, Espinosa and O'Connor.

          On appeal from the Superior Court of New
          Jersey, Chancery Division, Hudson County,
          Docket No. C-25-12.

          Zwerling & Deshpande, LLC, attorneys for
          appellant (Shay S. Deshpande and David J.
          Zwerling, on the brief).
            Reed Smith, LLP, attorneys for respondent
            Wachovia Mortgage, FSB f/k/a World Savings
            Bank, FSB (Henry F. Reichner, of counsel;
            Kevin L. Jayne, on the brief).

            Bertone   Piccini,    LLP,   attorneys   for
            respondent Deutsche Bank National Trust
            Company, f/k/a Washington Mutual Bank, FA
            (Grace C. Bertone and Cristina Z. Sinclair,
            of counsel; Ms. Sinclair, on the brief).

    The opinion of the court was delivered by

FISHER, P.J.A.D.

    In      this       appeal,    we     consider       whether      the     trial    judge

correctly    granted       summary       judgment       in   this    convoluted      quiet-

title   action,        which     sought,       in    part,    to    remove    a   mortgage

because of alleged inadequacies in its assignment.

    Many     of     the    relevant          facts    are    undisputed.          Plaintiff

William    Suser       obtained        and    recorded,      on     July    29,    2006,    a

mortgage    on     a    West     New    York       condominium      unit    securing     his

$150,000 loan to the prior owner.                     Plaintiff later sued for and

obtained a foreclosure judgment and, after making a successful

$100 bid, obtained a sheriff's deed which acknowledged title was

subject to prior encumbrances.                       Plaintiff then commenced this

action seeking to quiet title through the removal of the two

prior mortgages on the property, one of which was recorded by

World     Savings       Bank,    FSB     (the        World   Savings       mortgage),      on

September 23, 2004, to secure a $200,000 loan to the original

owner, and the other recorded by Washington Mutual Bank, FA (the

                                               2                                   A-1330-12T2
WaMu mortgage), on October 8, 2004, to secure a $999,999 loan to

the   original    owner.      Defendant     Wachovia    Mortgage    FSB,    doing

business as Wells Fargo Bank, N.A. (Wells Fargo), appeared with

regard to the World Savings mortgage, and defendant Deutsche

Bank National Trust Company, as Trustee WAMU 2005-AR2 (Deutsche)

appeared to defend the WaMu mortgage.

      In his quiet-title complaint, plaintiff claimed the World

Savings and WaMu mortgages "should not be recognized in equity

because they have been satisfied, settled, obtained by mistake

and/or [sic] improperly encumber the subject premises without

legal     right   or   standing    to     enforce   same."        Despite    this

allegation's      broad    tone,    the     main    thrust   of     plaintiff's

arguments in the trial court related to defendants' standing to

seek foreclosure of the mortgages and not the validity of the

mortgages.

      After a discovery dispute between plaintiff and Deutsche

resulted in a protective order favorable to the latter, both

defendants moved for summary judgment, and plaintiff cross-moved

for   summary     judgment.       The   trial   judge   granted     defendants'

motions    and    denied   plaintiff's,      and    plaintiff     now   appeals,

arguing with respect to Deutsche that he was erroneously denied

discovery into the circumstances surrounding the assignment of

the WaMu mortgage and that both defendants should have been

                                        3                               A-1330-12T2
"estopped and barred from maintaining their liens on the subject

property under doctrines of laches and waiver."1                  We separately

consider plaintiff's arguments as to each defendant.

                                          I

    Plaintiff's        arguments      regarding     defendants'    standing      to

seek foreclosure – based on concerns of "robo-signing" in any

relevant assignments of a nature that led to the Supreme Court's

emergent amendments in December 2010 to Rule 4:64 – have no

bearing on Wells Fargo.          The record does not suggest that Wells

Fargo's    authority     to    seek   foreclosure     of   the    World   Savings

mortgage   was   based    on    an    assignment.      Instead,     Wells    Fargo

asserted, without substantial contradiction, that the original

mortgage holder – World Savings Bank, FSA – changed its name to

Wachovia Mortgage, FSB, effective December 31, 2007, and that

Wachovia was acquired by and merged into Wells Fargo effective

November 1, 2009.        It would appear that Wells Fargo's right to

enforce the mortgage arises by operation of its ownership of the

asset     through   mergers          or   acquisitions,     not     assignment.

Accordingly, plaintiff's assertions regarding standing have no

1
 Both Wells Fargo and Deutsche argue that plaintiff never
presented his laches and waiver arguments in the trial court and
that, as a consequence, they should not be considered now. The
record on appeal, however, is not sufficiently clear for us to
agree with that contention, so we have considered the merits of
plaintiff's equitable arguments.

                                          4                               A-1330-12T2
bearing on Wells Fargo; in addition, the discovery issue raised

by plaintiff relates only to Deutsche.

    As to Wells Fargo, plaintiff only argues that the World

Savings mortgage should not further burden his title because, in

plaintiff's view, Wells Fargo's failure to enforce its interest

equitably   bars   any    future     attempt     to    enforce   it.      In    this

regard, plaintiff alludes to the fact that in July 2008 Wells

Fargo commenced a foreclosure action which was dismissed without

prejudice a few months later when the prior owner cured the

default.    With       that   factual    event    as    background,      plaintiff

argues Wells Fargo has had "three previous bites at the apple,"

referring   to   the    undisputed      facts    that    Wells   Fargo    did    not

intervene in plaintiff's foreclosure action, did not bid at the

sheriff's sale, and did not commence its own foreclosure action

after the prior owner again defaulted.                   Absent evidence that

plaintiff obtained ownership of the property in the good faith

belief title was free and clear of the World Savings mortgage,

Wells   Fargo    was    under   no      obligation      to   commence    its    own

foreclosure action, join in another's, or bid at a sheriff's

sale to protect its interest.

    In support of his theory, plaintiff cites only Last v.

Audubon Park Assocs., 227 N.J. Super. 602 (App. Div. 1988).                     The

application of the doctrine of laches in Last, however, was

                                         5                                A-1330-12T2
necessary in light of the new owner's good faith belief that

senior mortgage rights had been cut off by a tax sale together

with the owner's investment of millions of dollars in a housing

project on the land that the mortgagee "silently observed . . .

from the sidelines" over a period of years.                     Id. at 608.      Those

compelling circumstances materially distinguish Last from the

case at hand.        And plaintiff has failed to demonstrate any other

compelling circumstances that warrant the extraordinary relief

of extinguishing a valid mortgage of which he was aware when he

took title.

       We    find    insufficient     merit    in   any    of   plaintiff's      other

arguments – to the extent they are intended as an attack on the

summary judgment entered in favor of Wells Fargo – to warrant

further discussion in a written opinion.                  R. 2:11-3(e)(1)(E).

                                          II

       Plaintiff's         argument   regarding     the    propriety     of   summary

judgment in favor of Deutsche is somewhat different.                            To be

sure, Deutsche's position is similar to Wells Fargo insofar as

it was stipulated between plaintiff and Deutsche that plaintiff

made   his    loan    to    the    original    owner   with     knowledge     of:   the

existence      of    the    WaMu   mortgage;    that      the   WaMu   mortgage     was

senior to plaintiff's; and that the interest conveyed by the

sheriff      to     plaintiff      remained    encumbered        by    all    "[p]rior

                                          6                                   A-1330-12T2
mortgage[s]       or     liens."          Plaintiff       claimed,           however,       that

Deutsche    lacks       standing     to     seek    foreclosure          based      upon    some

irregularity       in    the   assignment          to   Deutsche         –    a    fact    which

plaintiff    claims      warrants      removing         that   encumbrance           from    his

title to the property.

    In     examining       the     summary        judgment     entered         in    favor   of

Deutsche, we must assume the truth of plaintiff's assertion that

the assignment of the mortgage to Deutsche was defective or

otherwise precludes Deutsche from foreclosing on the mortgage

pursuant to the procedures contained in Rule 4:64.                                   Brill v.

Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).                                     The

fact that the trial judge barred discovery into the assignment

amplifies    the       importance      of    our    assumption       of       the    truth    of

plaintiff's       allegations.         See    Velantzas        v.    Colgate         Palmolive

Co., 109 N.J. 189, 193 (1988) (recognizing "it is especially

inappropriate       to    grant       summary       judgment        when      discovery       is

incomplete").          Because the suit was dismissed before the facts

were fully developed, we are required to review summary judgment

"from the standpoint of whether there is any basis upon which

plaintiff should be entitled to proceed further."                                   Bilotti v.

Accurate Forming Corp., 39 N.J. 184, 193 (1963).

    Notwithstanding            the    caution       militated       by       the    incomplete

record,     the     existing         evidence       permitted        an       inference       of

                                              7                                       A-1330-12T2
insufficiencies in the assignment of the WaMu mortgage.                       The

record    reveals     that   Deutsche   commenced    a    foreclosure      action

against the prior owner in July 2009, alleging its right to

foreclose the WaMu mortgage based on the following:

            [The WaMu mortgage] was assigned by an
            assignment dated 06/03/2009 from JPMORGAN
            CHASE BANK, NATIONAL ASSOCIATION to DEUTSCHE
            BANK NATIONAL TRUST COMPANY AS TRUSTEE WAMU
            2005-AR2,   plaintiff    herein,  which   is
            unrecorded at this time.

            The real party in interest in the proceeding
            is    JPMorgan     Chase   Bank,    National
            Association, as purchaser of the loan and
            other assets of Washington Mutual Bank,
            formerly known as Washington Mutual Bank, FA
            (the   "Savings   Bank") from   the   Federal
            Deposit Insurance Corporation, acting as
            receiver for the Savings Bank and pursuant
            to its authority under the Federal Deposit
            Insurance Act[,] 12 U.S.C. § 1821(d), as
            further   evidenced   by Affidavit   of   the
            Federal Deposit Insurance Corporation dated
            October 2, 2008, recorded in the office of
            the Director of Records and Licensing, King
            County, State of Washington on October 3,
            2008.

The absence of a recorded assignment and these other confusing

and otherwise unexplained allegations, which alone cast a shadow

over     Deutsche's    claim    of   standing   to       foreclose   the    WaMu

mortgage, were not tested or adjudicated in this earlier suit.

Instead,    Deutsche     dismissed   the    action   without    prejudice       in

September 2010 and, apparently, has made no attempt to enforce

its interest since.

                                        8                               A-1330-12T2
       Until discovery casts greater illumination on the subject,

we must conclude there is a legitimate dispute as to whether

Deutsche obtained an effective assignment of the WaMu mortgage.

And,   in   viewing   the    facts    and   inferences     in   the     light    most

favorable    to    plaintiff,      Brill,   supra,   142    N.J.      at    540,   we

proceed in determining the maintainability of this quiet-title

action on the assumption that the assignment did not validly

transfer the mortgage to Deutsche.             That does not, however, end

the    matter.      If     the    assignment   was   invalid       or      otherwise

defective,    it    does    not    automatically     follow     that       the   WaMu

mortgage must be extinguished.              A finding of a defect in the

assignment would simply mean that the right to foreclose would

reside with the assignor or some other entity.

       On the other hand, that the relief to which plaintiff may

be entitled is so limited does not mean plaintiff is barred from

pursuing this quiet-title action.              N.J.S.A. 2A:62-1 permits a

person "in the peaceable possession of lands" to bring an action

to "clear up all doubts and disputes" concerning some other

person's claim to "a lien or encumbrance thereon."                    Here, there

is no legitimate dispute that the WaMu mortgage was valid when

executed, has not been satisfied, and was recorded prior to

plaintiff's mortgage.             But there is a dispute about whether

                                        9                                   A-1330-12T2
Deutsche is the proper holder of the WaMu mortgage and that

question may be adjudicated in a quiet-title action.

      One of the purposes of N.J.S.A. 2A:62-1 is to permit a

landowner to sue for clarification of the validity or reach of

his title in circumstances that otherwise preclude a forum for

the resolution of such a dispute.            Albro v. Dayton, 50 N.J. Eq.

574, 575 (Ch. 1892).          Stated another way, a plaintiff in a

quiet-title action must show not only that there is no other

forum for an adjudication of the dispute but also that there is

no   other   adequate    remedy    at   law.2     Here,    plaintiff    has    not

claimed the WaMu mortgage is invalid or unenforceable,3 only that

Deutsche     has   no   standing   to   enforce    or     foreclose    the    WaMu

mortgage.      Although an adjudication of that question may not

2
 For example, if plaintiff challenged the legitimacy of the WaMu
mortgage, he could sue to quiet title without being required to
wait until the mortgage holder sued him.      Additionally, if a
plaintiff's interest in property could be adequately vindicated
through an ejectment action, the court need not invoke its
equitable jurisdiction to quiet title. The quiet-title action,
which, even though codified by statute retains its equitable
underpinnings, see Holland v. Challen, 110 U.S. 15, 24-25, 3 S.
Ct. 495, 500-01, 28 L. Ed. 52, 56 (1884); Estate of Smith v.
Cohen, 123 N.J. Eq. 419, 425 (E. & A. 1938); Brady v. Carteret
Realty Co., 70 N.J. Eq. 748, 754 (E. & A. 1906), is generally
appropriate only in the absence of an adequate remedy at law,
McGrath v. Norcross, 71 N.J. Eq. 763, 765 (E. & A. 1907).
3
 As mentioned – and rejected – earlier, plaintiff has argued that
neither Wells Fargo nor Deutsche may seek foreclosure based on
the doctrines of laches, estoppel and waiver. Plaintiff has not
otherwise argued that the World Finance or WaMu mortgages are
unenforceable or do not have priority over his interest.

                                        10                              A-1330-12T2
lead     to      the     relief     plaintiff         most    fervently        desires       –

extinguishment of the mortgage – he is certainly entitled to a

ruling      as   to      whether   Deutsche,      and     not     some    other     entity,

possesses the right to foreclose by way of a quiet-title action.

       As     the     record     demonstrates,        that    Deutsche     believes        it

possesses and may some day assert such a right is not illusory.

Deutsche has already sued on the mortgage; that Deutsche may in

the near or distant future hale plaintiff into court seeking

foreclosure of the WaMu mortgage is not inconceivable.                                  That

cloud    sufficiently           enshrouds   plaintiff's           title   as   to     permit

invocation          of    the    rights     provided         by    N.J.S.A.       2A:62-1.4

Plaintiff is entitled to an adjudication of Deutsche's right to

pursue such an action even though the outcome of that dispute

might only be that some other entity is found to be the proper

mortgage holder.

       Because the trial judge mistakenly precluded discovery into

the     circumstances            surrounding          Deutsche's      assignment          and

Deutsche's       entitlement        to    sue    on    the   mortgage,      we    find     it

4
 To be clear, although what constitutes a cloud on title has
always been broadly interpreted, see 65 Am. Jur. 2d, Quieting
Title § 13 (2011), we do not suggest every perceived or imagined
cloud on title is entitled to adjudication.     Courts need not
entertain doubts about title that are trifling or suggest only
immaterial damage. See Paternoster v. Shuster, 296 N.J. Super.
544, 559 (App. Div. 1997). Each case must be assessed in view
of its particular facts and the magnitude of the threat to the
plaintiff's title and use of the property.

                                            11                                      A-1330-12T2
necessary to: vacate the order denying plaintiff's motion for

summary   judgment   against   Deutsche;   vacate   the   order   granting

Deutsche's motion for summary judgment; reverse the protective

order;    and   remand   for   discovery   and   other    proceedings    in

conformity with this opinion.5

     Affirmed in part; vacated in part; reversed in part; and

remanded.   We do not retain jurisdiction.

5
 We do not suggest that summary judgment may not be appropriate
once discovery is complete.

                                    12                            A-1330-12T2