Court Opinion

ID: 4211885
Source: CourtListenerOpinion
Date Created: 2017-10-16 14:10:05.290238+00
Date Added: 2024-06-11T09:23:45.099061
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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.

                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-1006-16T1

THE BANK OF NEW YORK
MELLON, f/k/a THE BANK OF
NEW YORK, AS TRUSTEE
FOR THE BENEFIT OF THE
CERTIFICATEHOLDERS OF THE
CWABS, INC., ASSET-BACKED
CERTIFICATES, SERIES 2007-BC3,

        Plaintiff-Respondent,

v.

JEFFREY L. DAVIS, MRS.
JEFFREY L. DAVIS, his wife,
ELISSA M. DAVIS, MRS. DAVIS,
husband of ELISSA M. DAVIS,

        Defendants-Appellants,

and

STATE OF NEW JERSEY, UNITED
STATES OF AMERICA,

     Defendants.
———————————————————————————————————

              Argued September 26, 2017 – Decided October 16, 2017

              Before Judges Hoffman and Mayer.

              On appeal from Superior Court of New Jersey,
              Chancery Division, Burlington County, Docket
              No. F-027418-15.
              Louis A. Simoni          argued    the      cause     for
              appellants.

              Brian J. Yoder argued the cause for respondent
              (Phelan   Hallinan   Diamond   &  Jones,   PC,
              attorneys; Mr. Yoder, on the brief).

PER CURIAM

       Defendants Jeffrey L. Davis and Elissa M. Davis appeal from

the   April    29,   2016   Chancery    Division    order       granting   summary

judgment in favor of plaintiff on its foreclosure complaint, and

striking defendants' answer and counterclaim.1                    Defendants seek

reversal,      citing   multiple   genuine       issues    of     material     fact.

Following our review of the record, we vacate and remand.

                                            I.

       On March 26, 2007, defendants borrowed $347,000 from Decision

One Mortgage Company, LLC (Decision One) to refinance their home

in    Mount   Laurel,   secured    by   a    note   and    non-purchase        money

mortgage.2     On April 1, 2010, defendants defaulted on the loan.

       On November 9, 2011, MERS assigned the mortgage to plaintiff,

and on November 30, 2011, the Burlington County Clerk recorded the

1
  Defendants also appeal from the final judgment entered on
September 26, 2016; however, our reversal of the grant of summary
judgment makes it unnecessary to address defendants' challenge to
the final judgment.
2
 The mortgage named Mortgage Electronic Registration Systems, Inc.
(MERS) as the nominee for Decision One, its successors and assigns.

                                        2                                    A-1006-16T1
assignment.3     On February 23, 2015, plaintiff mailed defendants a

notice of intent to foreclose.          After defendants failed to cure

the default, plaintiff filed its foreclosure complaint on August

7, 2015.

      On September 21, 2015, defendants filed an answer, which

included     thirty-six    affirmative     defenses     and    a    six-count

counterclaim.     On October 26, 2015, plaintiff filed its answer to

defendants' counterclaim.

      On March 24, 2016, plaintiff moved for summary judgment.               In

support of its motion, plaintiff filed a certification signed by

Rebecca Anderson (the Anderson Certification) of Ditech Financial

LLC f/k/a Green Tree Servicing LLC (DiTech).            In her capacity as

a "Document Execution Specialist" for Ditech, Anderson described

Ditech as "attorney[-]in[-]fact for" plaintiff and certified she

has "complete access and authorization to review [plaintiff's]

business records, including computer records, logs, loan account

and related business records for and relating to the borrower's

loan."     Of note, the Anderson Certification provided no details

regarding the power of attorney document that authorized Ditech

to   act   as   attorney-in-fact   for    plaintiff   nor     did   plaintiff

otherwise provide a copy of the document with its motion papers.

3
  The record      lacks   documentation    evidencing    the   assignment's
recording.

                                    3                                 A-1006-16T1
       Defendants opposed plaintiff's motion on various grounds,

including    the     sufficiency         of    the    Anderson       Certification.

Defendants also challenged the validity of the assignment of

mortgage    and    note    since     plaintiff's     predecessor       in   interest,

Decision One, went out of business in 2007, four years prior to

the assignment.

       Following     oral       argument,      the    motion      judge      rejected

defendants' arguments, granting summary judgment in plaintiff's

favor and striking defendants' answer and counterclaim.                             In a

written    opinion,       the   judge    found      plaintiff    established         the

material facts demonstrating its right to foreclose, namely:                         (1)

the    Anderson    Certification        sufficiently        established     plaintiff

possessed the note prior to filing the foreclosure complaint; (2)

plaintiff    properly       served    defendants      a     notice    of    intent    to

foreclose;    (3)    and    defendants        defaulted      under    the    note    and

mortgage's terms.         The judge also held defendants' "affirmative

defenses . . . are nothing more than conclusory arguments devoid

of any factual support or reference."

                                              II.

       We apply the same standard as the trial court when reviewing

the disposition of a motion for summary judgment.                    W.J.A. v. D.A.,

210 N.J. 229, 237 (2012).             Summary judgment must be granted if

"the    pleadings,    depositions,        answers      to    interrogatories         and

                                          4                                    A-1006-16T1
admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact challenged

and that the moving party is entitled to a judgment or order as a

matter     of   law."     R.   4:46-2(c).       Without   making     credibility

determinations, the court considers the evidence "in the light

most favorable to the non-moving party" and determines whether it

would be "sufficient to permit a rational factfinder to resolve

the alleged disputed issue in favor of the non-moving party."

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

      In satisfying its burden, the non-moving party may not rest

upon mere allegations or denials in its pleading, but must produce

sufficient evidence to reasonably support a verdict in its favor.

R. 4:46-5(a); Triffin v. Am. Int'l Grp., Inc., 372 N.J. Super.

517, 523 (App. Div. 2004).           It is against these standards that we

evaluate defendants' substantive arguments.

      On   appeal,      defendants    argue   the    motion    record   fails    to

establish plaintiff's standing to foreclose, alleging deficiencies

in the Anderson Certification.           Specifically, they emphasize that

plaintiff failed to provide basic information, such as the note's

physical location, as well as who transferred the physical loan

documents, and the date of transfer.                 Defendants further argue

plaintiff failed to establish authorization for the issuance of

the   Anderson    Certification       because   it    failed    to   provide    any

                                         5                                A-1006-16T1
confirming evidence of DiTech's authority to serve as is its

attorney-in-fact.

      Plaintiff counters that Anderson had sufficient personal

knowledge to satisfy Rule 1:6-6 because she reviewed defendants'

loan file, which contained business records maintained during the

ordinary course of business, citing Wells Fargo Bank v. Ford, 418

N.J. Super. 592, 600 (App. Div. 2011) and N.J.R.E. 803(c)(6).

Furthermore, plaintiff states Anderson certified that plaintiff

acquired the note and mortgage in November 2011, prior to its

filing the foreclosure complaint, and because an endorsement in

blank permits the note to be transferred and negotiated by delivery

alone to a bearer, Bank of N.Y. v. Raftogianis, 418 N.J. Super.

323, 336 (Ch. Div. 2010), it demonstrated it was the holder of the

note and mortgage.         In the alternative, plaintiff argues it also

satisfies the requirements of a "non-holder in possession with the

rights of a holder."        See N.J.S.A. 12A:3-203(b).

      In order to have standing to foreclose a mortgage, a party

"must own or control the underlying debt."            Raftogianis, supra,

418 N.J. Super. at 327-28. To establish such ownership or control,

plaintiff must present properly authenticated evidence that it is

the holder of the note or a non-holder in possession with rights

of the holder under N.J.S.A. 12A:3-301.          Wells Fargo Bank, supra,

418   N.J.   Super.   at    597-99.   Transfer   of   possession   must   be

                                      6                            A-1006-16T1
"authenticated by an affidavit or certification based on personal

knowledge."   Id. at 600; see also R. 1:6-6.

     Following   our   review    of   the      motion   record,   we   conclude

plaintiff failed to establish, as a matter of law, that it acquired

ownership or control of the note to maintain the foreclosure

action.    Most notably, plaintiff failed to produce a power of

attorney document evidencing its legal relationship with DiTech.

See N.J.S.A. 46:2B-8.9 ("A power of attorney must be in writing,

duly signed and acknowledged in the manner set forth in [N.J.S.A.]

46:14-2.1.").    Furthermore, the Anderson Certification failed to

identify the note's physical location or state details concerning

the note's physical delivery.         See e.g., Raftogianis, supra, 418

N.J. Super. at 330-32 (describing how, in the absence of proof

that one is a note holder, a transferee could still "have the

right to enforce the note" through physical delivery).4

     Moreover,   plaintiff      failed    to    properly   authenticate      the

documents it relied upon to establish its status as a holder.                   A

certification will support the grant of summary judgment only if

4
  Because Decision One, as the payee of defendant's note, was a
holder, and it allegedly transferred the note to plaintiff without
an indorsement, plaintiff may have acquired the status of a
nonholder in possession of the note with the status of a holder.
See Wells Fargo Bank, supra, 418 N.J. Super. at 599 (citing 6B
Anderson on the Uniform Commercial Code §§ 3-203:4R, 5R, 9R, 10R,
11R (Lawrence ed., 3d ed. 2003)).

                                      7                                 A-1006-16T1
the material facts alleged therein are based, as required by Rule

1:6-6, on "personal knowledge."              See Claypotch v. Heller, Inc.,

360     N.J.     Super.   472,    489   (App.      Div.   2003).     Anderson's

certification does not allege she has personal knowledge that

plaintiff is the holder and owner of the note, and has possessed

the original note and mortgage since April 23, 2014.                Instead, the

basis    of    her    certification     is   "my    personal   review   of    the

[p]laintiff's        relevant    business    records,"    without   identifying

those records or how she acquired knowledge of plaintiff's record-

keeping practices.        The certification also does not indicate the

source of Anderson's alleged knowledge that "all of the documents

included" in plaintiff's summary judgment motion are "true and

correct copies," except to generally reference "my personal review

of the business records."

      Like Wells Fargo Bank, here "the purported assignment of the

mortgage, which an assignee must produce to maintain a foreclosure

action, see N.J.S.A. 46:9-9, was not authenticated in any manner;"

rather, it was attached to plaintiff's motion.                 The trial court

should     not     have   considered     this      document    unless   it    was

authenticated by an affidavit or certification based on personal

knowledge. See Celino v. Gen. Accident Ins., 211 N.J. Super. 538,

544 (App. Div. 1986).            As noted, the assignment was not made by

Decision One, as payee of the promissory notes secured by the

                                         8                               A-1006-16T1
mortgage, but rather by MERS, "as nominee for Decision One."

Although the mortgage appointed MERS as plaintiff's nominee, the

record contains evidence that Decision One ceased operating in

2007, long before the purported assignment of defendant's mortgage

on November 9, 2011.       Therefore, we question whether Decision

One's designation of MERS as its nominee remained in effect after

it ceased operations.     On remand, the trial court should address

the question of whether MERS remained the nominee of Decision One

or its successor as of the date of its purported assignment of

defendant's note and mortgage to plaintiff.

        Because plaintiff did not establish its standing to pursue

this foreclosure action by competent evidence, we vacate the order

granting summary judgment to plaintiff and remand the case to the

trial   court.   On   remand,   defendants    may   conduct    appropriate

discovery,   including    taking   the    deposition   of     Anderson   and

Dominique Johnson, the person who purported to assign the mortgage

to plaintiff on behalf of MERS.

     Accordingly, we vacate the summary judgment entered in favor

of plaintiff and remand to the trial court for further proceedings

in conformity with this opinion.         We do not retain jurisdiction.

                                    9                               A-1006-16T1