Court Opinion

ID: 8211564
Source: CourtListenerOpinion
Date Created: 2022-10-04 14:05:43.667753+00
Date Added: 2024-06-11T16:42:04.143386
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NOT FOR PUBLICATION WITHOUT THE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-2822-20

DEUTSCHE BANK NATIONAL
TRUST COMPANY, as
trustee for GSAA HOME
EQUITY TRUST 2007-5,
ASSET-BACKED CERTIFICATES,
SERIES 2007-5,

          Plaintiff-Respondent,

v.

SANJAY PUROHIT,

          Defendant-Appellant,

and

SHALINI PUROHIT,
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS,
INC., as nominee for
GREENPOINT MORTGAGE
FUNDING, INC.,

     Defendants.
______________________________

                   Submitted September 14, 2022 – Decided October 4, 2022
            Before Judges Gooden Brown and DeAlmeida.

            On appeal from the Superior Court of New Jersey,
            Chancery Division, Mercer County, Docket No.
            F-020204-19.

            Sanjay Purohit, appellant pro se.

            Robertson, Anschutz, Schneid, Crane & Partners,
            PLLC, attorneys for respondent (Brandon Pack, on the
            brief).

PER CURIAM

      In this residential foreclosure matter, defendant Sanjay Purohit appeals

from the May 28, 2021 Chancery Division order denying his motion to vacate

the April 12, 2021 final foreclosure judgment in favor of plaintiff Deutsche

Bank National Trust Company. Because the record does not establish that

plaintiff complied with the Fair Foreclosure Act (FFA), N.J.S.A. 2A:50-53 to -

68, by mailing a Notice of Intent to Foreclose (NOI) as required by N.J.S.A.

2A:50-56(a) to (b), we reverse the final judgment and order that the

foreclosure complaint be dismissed without prejudice.

      We glean these facts from the record. In December 2006, defendant

borrowed $600,000 from Greenpoint Mortgage Funding, Inc. by executing a

thirty-year note and non-purchase money mortgage on his home in West

Windsor Township to Mortgage Electronic Registration Systems, Inc.

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(MERS), as nominee for Greenpoint.          On September 4, 2009, MERS, as

nominee for Greenpoint, assigned the mortgage to plaintiff, which assignment

was recorded on September 21, 2009.

      Despite executing subsequent loan modification agreements, defendant

defaulted on the loan by failing to make the required payment due February 1,

2019, and thereafter. As a result, plaintiff exercised its option to accelerate the

loan and, on October 29, 2019, mailed a NOI to defendant at the property

address. After defendant failed to cure the default, plaintiff filed a foreclosure

complaint on December 11, 2019.

      Despite being personally served with the summons and complaint on

December 17, 2019, defendant did not file a responsive pleading. After the

time for serving an answer expired, plaintiff requested that default be entered

for defendant's "failure to plead or otherwise defend." Default was entered as

requested. Additionally, on March 2, 2020, plaintiff mailed a Notice to Cure

(NOC) to defendant at the property address. Over a year later, on March 5,

2021, plaintiff filed an uncontested motion for final judgment, which the trial

court granted in an April 12, 2021 order.

      On May 11, 2021, defendant filed a pro se motion to vacate the final

judgment and entry of default. In support, defendant submitted a certification

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in which he averred that although he "reside[d] at [the] subject property," he

never "received a [NOI] nor a [NOC]."          Plaintiff opposed the motion and

submitted a copy of the October 29, 2019 NOI, which included a printed

notation that read, "Sent via Certified Mail," along with a tracking number.

Additionally, plaintiff submitted an attorney certification averring that on

March 2, 2020, the NOC was sent to defendant at the property address via

"certified and regular mail." A tracking printout from the United States Postal

Service (USPS) confirmed the mailing and showed that the certified mail was

unclaimed.

      In a May 28, 2021 order, the judge denied defendant's motion to vacate

the final judgment and default.      In an accompanying written statement of

reasons, the judge explained:

             Plaintiff's counsel establishe[d] that the . . . [NOI] was
             sent via regular and certified mail on October 29,
             2019. In the present application, [d]efendant has not
             set forth any allegations that would constitute a reason
             to vacate under Rule 4:50-1. Plaintiff had standing to
             foreclose as the holder of the [n]ote and the
             [m]ortgage, and was the assignee of the latter, when
             the [c]omplaint was filed on December 11, 2019.

      In this ensuing appeal, defendant argues the judge "erred and abused

[his] discretion by not vacating the [f]inal [j]udgment and [e]ntry of [d]efaul t"

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because plaintiff failed to serve him with the NOI and the NOC as required by

the FFA.

      "Our Rules prescribe a two-step default process, and there is a

significant difference between the burdens imposed at each stage." US Bank

Nat'l Ass'n v. Guillaume, 209 N.J. 449, 466 (2012). "When nothing more than

an entry of default pursuant to Rule 4:43-1 has occurred, relief from that

default may be granted on a showing of good cause." Guillaume, 209 N.J. at

466-67 (citing R. 4:43-3). "When the matter has proceeded to the second stage

and the court has entered a default judgment pursuant to Rule 4:43-2, the party

seeking to vacate the judgment must meet the standard of Rule 4:50-1."

Guillaume, 209 N.J. at 467.

      In pertinent part, Rule 4:50-1 permits a court to vacate a final judgment

on the following grounds:

            (a) mistake, inadvertence, surprise, or excusable
            neglect; (b) newly discovered evidence . . . ; (c)
            fraud . . . ; (d) the judgment or order is void; (e) the
            judgment or order has been satisfied, released or
            discharged . . . ; or (f) any other reason justifying
            relief from the operation of the judgment . . . .

            [R. 4:50-1.]

Rule 4:50-1 is "designed to reconcile the strong interests in finality of

judgments and judicial efficiency with the equitable notion that courts should

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have authority to avoid an unjust result in any given case." Guillaume, 209

N.J. at 467 (quoting Mancini v. EDS, 132 N.J. 330, 334 (1993)).

      "The trial court's determination under the rule warrants substantial

deference, and should not be reversed unless it results in a clear abuse of

discretion." Ibid. "An abuse of discretion 'arises when a decision is made

without a rational explanation, inexplicably departed from established policies,

or rested on an impermissible basis.'" Kornbleuth v. Westover, 241 N.J. 289,

302 (2020) (quoting Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571

(2002)).

      The FFA provides that prior to commencing a residential foreclosure

action, a lender must provide an NOI to the debtor "at least [thirty] days . . . in

advance." N.J.S.A. 2A:50-56(a). The NOI must be "in writing" and "sent to

the debtor by registered or certified mail, return receipt requested, at the

debtor's last known address, and, if different, to the address of the property

which is the subject of the residential mortgage."         N.J.S.A. 2A:50-56(b)

(emphasis added). Further, the notice is "effectuated on the date the notice is

delivered in person or mailed to the party." Ibid.

      The FFA also requires a lender to send a NOC to the debtor, which must

include the lender's contact information and "the amount required to cure the

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default," at least fourteen days before applying for entry of final judgment.

N.J.S.A. 2A:50-58(a)(1). The mailing requirements for the NOC are the same

as those for the NOI. Ibid.

      In Guillaume, our Supreme Court held that when a properly served NOI

does not satisfy the requirements of N.J.S.A. 2A:50-56(c)(11), which requires

the NOI to include the lender's contact information, a court may "dismiss the

action without prejudice, permit a cure or impose such other remedy as may be

appropriate to the specific case." Guillaume, 209 N.J. at 458. The Court

explained:

             Under the FFA, service of a [NOI] . . . must be
             effected thirty days "before any residential mortgage
             lender may . . . commence any foreclosure or other
             legal action to take possession of the residential
             property which is the subject of the mortgage." The
             Legislature did not expressly require dismissal, or
             otherwise prescribe a remedy, in the event that a
             notice of intention is timely served but is
             noncompliant with one or more of the eleven
             subsections set forth in N.J.S.A. 2A:50-56(c).

             [Id. at 476 (emphases added) (citation omitted)
             (quoting N.J.S.A. 2A:50-56(a)).]

      Thus, courts may impose equitable remedies if the contents of an NOI

fail to comply with N.J.S.A. 2A:50-56(c). Ibid. However, failure to timely

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serve the NOI in compliance with the FFA cannot be similarly remedied.

EMC Mortg. Corp. v. Chaudhri, 400 N.J. Super. 126, 139 (App. Div. 2008).

      In Guillaume, the defendants/homeowners argued, among other things,

that "the default judgment entered against them should be declared void under

Rule 4:50-1(d) because [the plaintiff] failed to comply with the FFA." Id. at

483. The Court disagreed, finding "no basis to declare the default judgment

void" because "the omission of information required by N.J.S.A. 2A:50-

56(c)(11) from a properly served notice of intention does not deprive the court

of jurisdiction to consider a foreclosure action." Ibid. (emphasis added).

      In GE Capital Mortgage Services, Inc. v. Weisman, 339 N.J. Super. 590,

592 (Ch. Div. 2000), a Chancery Division judge found the plaintiff could not

demonstrate compliance with the FFA's notice requirements by merely

submitting "an internal copy of the NOI allegedly sent." Because the pla intiff

could not produce "(1) a Postal Service certified mail receipt indicating that

plaintiff ha[d] sent the NOI via certified mail to [the] defendants; (2) a Postal

Service return receipt verifying that the defendants received the NOI; or (3) a

certification of mailing signed by the bank employee who mailed the NOI," the

judge required the plaintiff to remedy the deficiency by mailing a new NOI to

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the defendants and allowing the defendants thirty days from the date of the

new mailing to cure the default. Id. at 595.

      In Chaudhri, we agreed with the judge's determination that the plaintiff

in GE Capital did not demonstrate "compliance with the FFA notice

requirements" but "disapprove[d] of the remedy employed in that case."

Chaudhri, 400 N.J. Super. at 139 (citing GE Cap. Mortg. Servs., Inc., 339 N.J.

Super. at 592, 595). We stressed that "[t]he Legislature specifically intended

that lenders faithfully comply with the FFA provisions" and stated that the

foreclosure complaint should have been dismissed without prejudice because

although "the lender claimed compliance with the FFA notice requirements,

. . . it was unable to produce proof."         Ibid.     We noted that "the notice

provisions are mandatory" and "courts are not free to deviate from the

unambiguous statute." Ibid. (citing Cho Hung Bank v. Kim, 361 N.J. Super.

331, 343 (App. Div. 2003)).

      Here, defendant certified he never received the NOI.             In response,

plaintiff submitted a copy of the NOI purportedly sent with a certified mail

tracking number printed on the document.               Plaintiff did not submit any

confirmatory documents from the USPS or certification of mailing averring

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                                      9
that the NOI was sent via certified mail, return receipt requested, as mandated

in N.J.S.A. 2A:50-56(b).

      "Return receipt service is not automatically part of certified mail service

but rather is an optional service." Green v. East Orange, 21 N.J. Tax 324, 334

(2004). When the Legislature chooses to impose a requirement to use the

return-receipt-request option for certified mail, as it did in the FFA, we must

assume that the requirement is significant and cannot be disregarded.

Moreover, we expect that financial institutions would have little difficulty

complying with this requirement, and later proving that they had done s o by

simply retaining the USPS receipt indicating that this option had been

purchased. That receipt would satisfy the service requirements of the FFA

even in cases where the return is not signed by the addressee. However, partial

compliance by using certified mail without the return-receipt-requested option

does not satisfy the statutory requirement.

      Here, the unverified certified mail tracking number printed on the copy

of the NOI submitted by plaintiff in opposition to defendant's motion is

insufficient proof that plaintiff sent the NOI in accordance with the FFA's

service requirements. Absent from the record is any indication that plaintiff

used the requisite return-receipt-requested mailing option. Because plaintiff

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                                     10
did not establish it sent a timely NOI, see N.J.S.A. 2A:50-56(a), the judge

lacked jurisdiction to consider the foreclosure action and the judgment is

therefore void pursuant to Rule 4:50-1(d).

      "A Rule 4:50-1(d) motion, based on a claim that the judgment is void,

does not require a showing of excusable neglect but must be filed within a

reasonable time after entry of the judgment." Deutsche Bank Nat'l Tr. Co. v.

Russo, 429 N.J. Super. 91, 98 (App. Div. 2012). Defendant's motion was filed

one month after final judgment was entered. Because we conclude the judge

mistakenly exercised his discretion by denying defendant's timely motion, we

reverse the decision, vacate the final judgment, and remand for the entry of an

order dismissing the foreclosure complaint without prejudice. We note th at

this remedy "has no effect on the underlying contractual obligations of the

parties," Chaudhri, 400 N.J. Super. at 140, and our ruling "does not bar

reinstitution of the same claims in a later action." Ibid. (quoting Woodward-

Clyde Consultants v. Chem. & Pollution Scis., Inc., 105 N.J. 464, 472 (1987)).

      Reversed and remanded for entry of an order consistent with this

opinion. We do not retain jurisdiction.

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