Court Opinion

ID: 4641420
Source: CourtListenerOpinion
Date Created: 2020-12-10 15:08:17.655584+00
Date Added: 2024-06-11T08:00:21.722299
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NOT FOR PUBLICATION WITHOUT THE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-3766-18T1
                                                                   A-0094-19T1

EQUITY TRUST COMPANY
CUSTODIAN FBO DARLENE
DIETZEL IRA #Z093579 AS TO
A 65% INTEREST & EQUITY
TRUST COMPANY CUSTODIAN
FBO ORVAL W. DIETZEL IRA
#Z100780 AS TO A 35% INTEREST,

          Plaintiff-Respondent,

v.

KEITH HINTON II,

          Defendant-Appellant,

and

HINTON RENOVATIONS, LLC,

     Defendant.
________________________________

                   Submitted November 2, 2020 – Decided December 10, 2020

                   Before Judges Sabatino and DeAlmeida.
            On appeal from the Superior Court of New Jersey,
            Chancery Division, Essex County, Docket No. F-
            011172-17.

            Keith Hinton II, appellant pro se.

            Fein, Such, Kahn & Shepard, PC, attorneys for
            respondent (Ashleigh L. Marin, on the briefs).

PER CURIAM

      Defendant Keith Hinton II appeals from two orders of the Chancery

Division in these foreclosure appeals which were calendared back-to-back: (1)

the April 16, 2019 order denying Hinton's motion to vacate a final judgment of

foreclosure and writ of execution; and (2) the August 28, 2019 order denying

his motion to vacate the Sheriff's sale of the subject property. We affirm.

                                       I.

      The following facts are derived from the record. On October 12, 2015,

defendant Hinton Renovations, LLC (Renovations) executed a note to Secured

Investment High Yield Fund, LLC (Secured Investment) in the amount of

$115,000. On the same day, in order to secure the note, Renovation executed a

mortgage in favor of Secured Investment for property located in East Orange.

The note and mortgage were personally guaranteed by Hinton.

      On November 20, 2015, Secured Investment assigned the mortgage to

plaintiff Equity Trust Company Custodian FBO Darlene Dietzel IRA #Z093579

                                                                         A-3766-18T1
                                       2
as to a 65% Interest & Equity Trust Company Custodian FBO Orval W. Dietzel

IRA #Z100780 as to a 35% Interest (Equity Trust). On December 14, 2015, the

mortgage was recorded with the Essex County Clerk.

      On May 4, 2017, Equity Trust filed a foreclosure complaint in the

Chancery Division against defendants, alleging a November 30, 2016 default in

the note and mortgage. Defendants were served with the complaint on May 20,

2017 and did not file an answer. On July 19, 2017, the trial court entered a

default against defendants.

      On April 30, 2018, the court entered final judgment in favor of Equity

Trust. A Sheriff's sale of the subject property was scheduled for October 16,

2018. Defendants used their two statutory adjournments, resulting in the sale

being scheduled for November 13, 2018.

      On November 13, 2018, Hinton filed Chapter 13 bankruptcy. Equity Trust

filed a motion in the Bankruptcy Court to confirm the absence of the automatic

stay and allow the foreclosure to continue. On January 30, 2019, the motion

was granted.

      On January 25, 2019, Hinton filed a motion in the trial court to vacate the

final judgment and writ of execution. The trial court denied Hinton's motion

and issued the following written statement of reasons:

                                                                         A-3766-18T1
                                       3
            Defendant fails to address Rule 4:50-1, the relevant
            court rule. Defendant's moving papers do not discuss
            excusable neglect for failure to file a timely answer or
            articulate a meritorious defense.          Furthermore,
            standing, which is the core of Defendant's argument, is
            not a basis to vacate judgment in a foreclosure matter.
            Deutsche Bank Nat'l Trust Co. v. Russo, 429 N.J.
            Super. 91 (App. Div. 2012).

An April 16, 2019 order memorializes the court's decision.

      Hinton subsequently appealed the April 16, 2019 order. While the appeal

was pending, on June 18, 2019, the subject property was sold at a Sheriff's sale.

Equity Trust was the successful bidder.

      On June 28, 2019, Hinton filed a motion to vacate the Sheriff's sale. On

August 28, 2019, the trial court denied Hinton's motion. The court found that

            defendant does not provide an explanation for his
            theory that there were alleged irregularities in the sale,
            nor does he present any facts demonstrating any
            irregularities in the sale. Rather[,] the substance of
            defendant's motion essentially challenges the plaintiff
            and the sheriff to provide evidence of a lack of
            irregularity in the sale. However, it is the defendant's
            burden to demonstrate such an irregularity.

An August 28, 2019 order memorializes the court's decision.

      Hinton subsequently appealed the August 28, 2019 order. He argues that

the trial court erred when it denied his motion to vacate the foreclosure judgment

because the record does not establish Equity Trust had standing to pursue

                                                                          A-3766-18T1
                                        4
foreclosure. In addition, Hinton argues that the trial court erred when it denied

his motion to vacate to the Sheriff's sale because Equity Trust did not produce

an affidavit from the Sheriff that the sale was conducted without irregularities.

                                       II.

      When a court has entered a final default judgment, the party seeking to

vacate the judgment must do so pursuant to Rule 4:50-1. U.S. Bank Nat'l Ass'n

v. Guillaume, 209 N.J. 449, 467 (2012). Rule 4:50-1 provides:

            [o]n motion, with briefs, and upon such terms as are
            just, 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
            for which by due diligence could not have been
            discovered in time to move for a new trial under R.
            4:49; (c) fraud (whether heretofore denominated
            intrinsic or extrinsic), misrepresentation, or other
            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 rule is designed "to reconcile the strong interests in finality of judgments

and judicial efficiency with the equitable notion that courts should have

                                                                          A-3766-18T1
                                        5
authority to avoid an unjust result in any given case." Mancini v. EDS, 132 N.J.
330, 334 (1993).

      "A defendant seeking to set aside a default judgment must establish that

his failure to answer was due to excusable neglect and that he has a meritorious

defense." Goldhaber v. Kohlenberg, 395 N.J. Super. 380, 391 (App. Div. 2007).

"'Excusable neglect' may be found when the default was 'attributable to an

honest mistake that is compatible with due diligence or reasonable prudence.'"

Guillaume, 209 N.J. at 468.

      Additionally, Rule 4:50-2 requires that all motions seeking relief from a

judgment be filed "within a reasonable time." Motions based on subsections (a),

(b), and (c) are barred if filed "more than one year after the judgment, order or

proceeding was entered or taken." R. 4:50-2.

      An order deciding "an application to open, vacate or otherwise set aside a

foreclosure judgment or proceedings subsequent thereto is subject to an abuse

of discretion standard." United States v. Scurry, 193 N.J. 492, 502 (2008)

(citations omitted). We find an abuse of discretion when a decision is "'made

without a rational explanation, inexplicably departed from established policies,

or rested on impermissible bias.'" Guillaume, 209 N.J. at 467 (quoting Illiadis

v. Wal-Mart Stores, Inc., 191 N.J. 88, 123 (2010)).

                                                                         A-3766-18T1
                                       6
      As was the case in the trial court, Hinton's brief does not address Rule

4:50-1 or identify the subsection of the rule on which he relies. He provides no

explanation for his failure to answer the complaint or the nearly nine-month

delay in seeking relief from the April 30, 2018 final foreclosure judgment. We

agree with the trial court's conclusion that Hinton did not establish that he was

entitled to relief under the rule.

      We also agree with the trial court's conclusion that Hinton's motion, filed

on the eve of the Sheriff's sale, was substantively meritless. Defenses to a

foreclosure are narrow. "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" foreclose on the property. Great Falls Bank v. Pardo, 263
N.J. Super. 388, 394 (Ch. Div. 1993), aff'd, 273 N.J. Super. 542, 547 (App. Div.

1994). Hinton argues, as he did in the trial court, that Equity Trust did not prove

that it had standing to foreclose on the subject property when it filed its

complaint. As the trial court noted, however, standing is not a meritorious

defense to a foreclosure action post-judgment. Russo, 429 N.J. Super. at 101.

We find in the record no basis to reverse the April 16, 2019 order.

      We turn to Hinton's appeal of the August 29, 2019 order denying his

motion to vacate the Sheriff's sale. It is well-settled that the court has the

                                                                           A-3766-18T1
                                        7
authority to set aside a Sheriff's sale and order a resale of the property. First

Trust Nat'l Ass'n v. Merola, 319 N.J. Super. 44, 49 (App. Div. 1999). "The

exercise of this power is discretionary and must be based on considerations of

equity and justice." Ibid. "[A] judicial sale may be set aside 'by reasons of

fraud, accident, surprise, or mistake, irregularities in the conduct of the sale'"

and the like. Ibid. (quoting Karel v. Davis, 122 N.J. Eq. 526, 528 (E.&A. 1937)).

We accord deference to such decisions in the absence of a misconception of

applicable law. O'Neill v. City of Newark, 304 N.J. Super. 543, 550 (App. Div.

1997).

      Our review of the record reveals the trial court acted within its discretion

when denying Hinton's motion to vacate the Sheriff's sale. As the trial court

aptly concluded, Hinton produced no evidence of an irregularity in the sale or

other grounds for relief. In light of the paucity of evidence produced by Hinton,

Equity Trust had no obligation to produce an affidavit from the Sheriff attesting

to the regularity of the sale.

      Affirmed.

                                                                          A-3766-18T1
                                        8