Court Opinion

ID: 4186219
Source: CourtListenerOpinion
Date Created: 2017-07-14 12:09:19.513986+00
Date Added: 2024-06-11T14:39:51.422435
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NOT FOR PUBLICATION WITHOUT THE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-2949-15T2
DEUTSCHE BANK NATIONAL TRUST
COMPANY as Trustee on behalf
of BCAP, L.L.C. Trust 2007-AA4,

        Plaintiff-Respondent,

v.

GRACE HWANG and ROBERT HWANG,

        Defendants-Appellants,

and

MORTGAGE ELECTRONICS REGISTRATION
SYSTEMS, INC. and TD BANK NORTH,
N.A.,

     Defendants.
____________________________________

              Argued June 6, 2017 – Decided          July 13, 2017

              Before Judges Suter and Grall.

              On appeal from the Superior Court of New
              Jersey, Chancery Division, Bergen County,
              Docket No. F-8076-09.

              Joseph A.       Chang     argued     the    cause    for
              appellants.

              Suzanne Q. Chamberlin argued the cause for
              respondent   (KML   Law  Group,   P.C.,   and
              Sandelands Eyet, L.L.P., attorneys; Robert D.
              Bailey, on the brief).
PER CURIAM

     Defendants    Grace    and   Robert       Hwang      (defendants)    appeal    a

February 5, 2016 order of the Chancery Division denying their

request to vacate a sheriff's sale of real property on which Grace

Hwang   (Grace)1   had    executed   a       note   and    mortgage,     and   later

defaulted.    We affirm substantially for the reasons expressed by

Judge Menelaos W. Toskos in his written opinion of the same date.

     In February 2007, Grace executed a $2.9 million dollar note

to Countrywide Bank N.A. (Countrywide) and a mortgage to the

Mortgage     Electronic    Registration         Systems,      Inc.     (MERS),     as

Countrywide's nominee.       She defaulted on the mortgage in April

2008 and did not make any payments thereafter.                 In February 2009,

MERS assigned the mortgage to plaintiff, Deutsche Bank National

Trust Co. as Trustee on behalf of BCAP, L.L.C. Trust 2007-AA4

(Deutsche Bank).    Deutsche Bank filed a complaint for foreclosure

in 2009, which named Grace and her husband, Robert, as defendants.

They did not answer within time and were defaulted. Grace's motion

to vacate the default was denied.            A final judgment of foreclosure

was entered in August 2010 with an amount due to Deutsche Bank of

$3.3 million.      Deutsche Bank sought to sell the property at a

sheriff's sale.

1
  We refer to the parties by their first names because they share
the same surname.

                                         2                                 A-2949-15T2
     Defendants were aware of the original date for the sheriff's

sale in December 2010 because, at their request, a stay of the

sale was granted to allow mediation, which was not successful.

The sheriff's sale "was adjourned numerous times over the course

of the next four years" because of "loss mitigation" efforts and

"multiple bankruptcy filings."

     Defendants were aware that a sheriff's sale was scheduled in

August 2013 because Grace again applied for a stay in order to

sell the property.       She acknowledged she could "no longer afford

to keep the property."        In her supporting certification, Grace

stated that she had exhausted the two statutory adjournments.2 Her

stay request was denied.

     The property was sold at a sheriff's sale on December 4,

2015.    Defendants contend they were not "notified by any means"

that the property would be sold on that date.             They thereafter

requested an extension of time to redeem the property.                Judge

Toskos   granted   the    request,   extending   the   ten-day   redemption

period from December 11, 2015 to January 6, 2016.

     Defendants filed a motion to vacate the sheriff's sale. Judge

Toskos denied the motion by order dated February 5, 2016, with a

written opinion.         Judge Toskos acknowledged his discretionary

2
 Reference is made to the adjournments allowed by N.J.S.A. 2A:17-
36.

                                      3                            A-2949-15T2
authority to vacate a sheriff's sale and recognized it should be

exercised "only in rare instances" to "remedy a plain injustice."

Although a party should have actual knowledge of an impending

sale, Judge Toskos found here that, although actual notice was

lacking, an extension of the redemption period was an appropriate

remedy, citing to First Mutual Corp. v. Samojeden, 214 N.J. Super.
122, 126-27 (App. Div. 1986).   Judge Toskos concluded his earlier

order, which had extended the time for redemption, "effectively

placed the [d]efendants on notice of the actions required by them

to avoid the sale from being finalized."

     The court was "not persuaded that defendants had no actual

notice" because there had been "numerous bankruptcies and loss

mitigation actions" taken, which made it unlikely they "were

engaging in these efforts without notice of the impending sale."

The court balanced the equities in denying defendants' motion to

vacate.

     Defendants appeal the February 5, 2016 order.   They contend

the appropriate standard for our review is de novo, citing to

United States ex rel. U.S.D.A. v. Scurry, 193 N.J. 492 (2008).

They assert that because they had no actual knowledge of the

sheriff's sale, we should vacate the sale and remand the case to

the trial court.

                                 4                        A-2949-15T2
      We review the February 5, 2016 order under an abuse of

discretion standard.      See id. at 502 ("[I]t has long been the law

of New Jersey that an application to open, vacate, or otherwise

set aside a foreclosure judgment or proceeding subsequent thereto

is   subject   to   an   abuse   of   discretion    standard."   (citation

omitted)).     We give substantial deference to the trial court's

determination and will not reverse it "unless it represents a

clear abuse of discretion."      DEG, L.L.C. v. Twp. of Fairfield, 198
N.J. 242, 261 (2009) (citation omitted).           An abuse of discretion

occurs when the decision of the trial court has "without a rational

explanation, inexplicably departed from established policies, or

rested on an impermissible basis." Flagg v. Essex Cty. Prosecutor,

171 N.J. 561, 571 (2002) (quoting Achacoso-Sanchez v. Immigration

and Naturalization Serv., 779 F.2d 1260, 1265 (7th Cir. 1985)).

The court did not abuse its discretion here.

      Rule 4:65-2 requires that "notice of the [sheriff's] sale

shall be posted in the office of the sheriff . . . where the

property is located, and also, in the case of real property, on

the premises to be sold . . . ."          Additionally, "at least [ten]

days prior to the date set for sale, [the party obtaining the

order or writ shall] serve a notice of sale by registered or

certified mail, return receipt requested," upon "every party who

                                      5                           A-2949-15T2
has appeared" and the "owner of record."                        Defendants do not

challenge the adequacy of the initial notice under Rule 4:65-2.

       Rule 4:65-4 addresses the sheriff's power to adjourn the

sale.     Under that Rule, "[t]he sheriff . . . may continue such

sale    by   public    adjournment,         subject     to   such    limitations         and

restrictions as are provided specifically therefor."                             This Rule

does not require that each adjourned sheriff's sale receive the

notices required by Rule 4:65-2.

       Under Samojeden, supra, 214 N.J. Super. at 125-26, where the

defendant     did     not   receive    notice      of   the   sheriff's          sale    and

continued to make monthly mortgage payments, we found that "actual

knowledge of the effective sale date" was implicit in Rule 4:65-

4's requirement that the adjournment of the sheriff's sale be made

public.      However, where there is a failure of actual notice, "the

appropriate relief will depend on the circumstances."                            N.B. Sav.

Bank v. Markouski, 123 N.J. 402, 425 (1991).

       In Scurry, supra, 193 N.J. at 506, the Court's remedy for a

notice failure included an extension of the redemption period.

The Court remanded the case for the trial court to determine a

"reasonable"     time       period    for    the   defendant        to    redeem     and    a

redemption amount, where the defendant's first notice of the

foreclosure sale was the writ of possession.                             Ibid.      If the

defendant were able to redeem, the court ruled "she is to be

                                             6                                     A-2949-15T2
afforded the opportunity she would have had if she properly had

been noticed of the sheriff's sale of the property: the opportunity

to purchase her property free and clear of all existing liens."

Id. at 506-07. However, should the defendant not be able to redeem

"within a reasonable period of time, . . . then there is no need

to vacate the sheriff's sale and title will remain with plaintiff."

Id. at 506.     Thus, extension of the redemption period would put

defendant in the same position she would have been in had she had

notice.     See Orange Land Co. v. Bender, 96 N.J. Super. 158, 164

(App. Div. 1967) (holding that where defendant did not receive

proper notice to redeem and had no knowledge of the sheriff's

sale, "the trial court could properly have set aside the sale or

ordered redemption").

     We agree with Judge Toskos that his order extending the

redemption period was an appropriate resolution and not an abuse

of discretion.     In this case, there was no proof defendants had

knowledge of the sheriff's sale on December 4, 2015.               However,

Grace admitted in 2013 that she could not afford to maintain the

payments.    There were multiple requests to stay the sheriff's sale

indicating    defendants    knew   it       was   progressing.   Defendants

requested to extend the redemption period, but were not able to

redeem the property.       No payments were made by defendants after

2008, in contrast to Samojeden, where the defendant continued to

                                        7                          A-2949-15T2
pay on the mortgage.   Thus, extension of the redemption period put

defendants in the same position they would have been in had there

been notice of the sheriff's sale.   We are satisfied there was no

abuse of discretion by the trial court in denying the motion to

vacate the sheriff's sale under these circumstances.

     Affirmed.

                                 8                         A-2949-15T2