BANK OF NEW YORK AS TRUSTEE FOR CERTIFICATE HOLDERS CWABS, INC. v. CUPO No. A-1212-10T2.
BANK OF NEW YORK AS TRUSTEE FOR THE CERTIFICATE HOLDERS CWABS, INC., ASSET-BACKED CERTIFICATES, SERIES 2006-23, Plaintiff-Respondent, v. ALEXANDER T.J. CUPO, Defendant-Appellant, MRS. ALEXANDER T.J. CUPO, WIFE OF ALEXANDER T.J. CUPO AND CITIBANK SOUTH DAKOTA N.A., Defendants.
Superior Court of New Jersey, Appellate Division.
Decided February 28, 2012.
Kristina G. Murtha argued the cause for respondent.
Before Judges Fuentes, Graves and Koblitz.
NOT FOR PUBLICATION
In this mortgage foreclosure action, defendant Alexander Cupo appeals from the decision of the Chancery Division, General Equity Part, denying his motion to vacate default judgment and dismiss the complaint filed by plaintiff Bank of New York, as Trustees for the Certificate-Holders CWABS, Inc., Asset-Banked Certificates, Series 2006-23. Defendant argues that the trial court erred when it denied his motion because: (1) plaintiff did not have physical possession of the promissory note at the time it filed its complaint for foreclosure; (2) plaintiff did not have standing to prosecute the foreclosure because the original lender, Countrywide Home Loans, assigned the promissory note and mortgage to plaintiff thirty-nine days after the complaint was filed; and (3) both plaintiff and its assignor Countrywide Home Loans failed to satisfy the requirements under
After reviewing the record before us, we reverse and remand this matter to the General Equity Part for a hearing to determine whether plaintiff has standing to file the complaint. As we made clear in
The following facts will inform our analysis of the issues raised by the parties.
On December 22, 2006, defendant signed a promissory note to Countrywide Home Loans, Inc., memorializing a $245,000 loan. To secure payment of the note, defendant executed a mortgage to Mortgage Electronic Registration Systems, Inc. (MERS), acting solely as a nominee for Countrywide Home Loans, Inc. The mortgage was recorded on January 11, 2007. Defendant failed to make the first payment on the loan that was due on February 1, 2007. In fact, to date, defendant has not made any payments on the loan. Pursuant to the terms of the loan, defendant defaulted on March 1, 2007. Countrywide mailed defendant a notice of intent to foreclose dated March 5, 2007.
On May 10, 2007, plaintiff Bank of New York filed a complaint in foreclosure, seeking to sell the mortgaged lands to satisfy the amount due. The complaint indicated that "[b]y assignment of mortgage, Mortgage Electronic Registration Systems, Inc., acting solely as a nominee for Countrywide Home Loans, Inc. assigned its mortgage to Bank of New York as Trustee for the Certificateholders CWABS, Inc., Asset-Backed Certificates, Series 2006-03 which assignment has been sent for recording in the office of the clerk of Hudson County." Plaintiff served the summons and complaint on defendant on June 14, 2007.
The record shows that MERS assigned its mortgage to Bank of New York as Trustee for the Certificateholders CWABS, Inc., Asset-Backed Certificates, Series 2006-23, on June 19, 2007. The assignment was recorded on July 5, 2007. Plaintiff filed a request to enter default against defendant on August 20, 2007. Plaintiff mailed a notice of intent to enter final judgment on August 29, 2007. In this light, the matter was deemed uncontested and the court entered final judgment by default on November 15, 2007.
Despite the entry of final judgment, plaintiff and defendant continued to discuss a possible settlement of the suit. Sheriff sales were postponed a number of times during these negotiations.
We start our analysis by reaffirming certain bedrock principles of appellate review. The decision to vacate a judgment lies within the sound discretion of the trial court, guided by principles of equity.
The trial court's decision to vacate a judgment under
Here, defendant's argument challenges directly the power of the court to grant the relief requested by plaintiff. Defendant argues that the default judgment obtained by plaintiff is utterly void from its inception because plaintiff did not have standing to prosecute the case at the time it filed the foreclosure complaint.
A mortgagee may establish standing by showing "that it is the holder of the note and the mortgage at the time the complaint was filed."
Because the record before us does not include a certified copy of the original promissory note, we do not address plaintiff's potential standing under the provisions of the Uniform Commercial Code (UCC) governing the transfer of negotiable instruments.
Finally, defendant argues that plaintiff failed to provide notice, pursuant to
The plain language of the statute only requires inclusion of the right to transfer the real estate if the mortgagor actually has the right to transfer the real estate subject to the security interest. If the mortgage documents do not provide that right, the mortgagee does not have to include that language in its notice of foreclosure.
Here, defendant's mortgage states:
Thus, although the mortgage permits defendant to transfer the property, a nonconsensual transfer is treated as a default, authorizing plaintiff to accelerate the payment of the outstanding principal.
In this light, the trial judge gave the following explanation for rejecting defendant's argument:
We agree with the trial judge's analysis and ultimate conclusion.
Reversed on the issue of standing and remanded for such further proceedings as may be warranted. We do not retain jurisdiction.
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