DAVID 216RIVER AVENUE LAKEWOOD,NJ 08701 908-907-0953 ATTORNEY FORE DEFENDANTS
U.S. BANK NATIONAL ASSOCIATION ET AL,
SUPERIOR COURT OF JERSEY CHANCERY DIVISION OCEAN COUNTY CIVIL ACTION DOCKET NO.: F-F-28757-10
Plaintiff, v. BASHEVA TROP, ET AL, Defendants.
____________________________________________________ LEGAL MEMORANDUM IN OPPOSITION TO PLAINTIFF’S MOTION TO STRIKE ANSWER ____________________________________________________ Lakewood, NJ Earl David, Esq. On the Brief
LEGAL ARGUMENT I. PLAINTIFF’S MOTION TO STRIKE ANSWER SHOULD BE DENIED AND PLAINTIFF'S COMPLAINT SHOULD BE DISMISSED Plaintiff has filed a second Motion to Strike Defendant's answer which relies on factually inapplicable decisional law; ignores the threshold issue of legal standing; fails to justify the striking of Defendant's contesting Answer; and purports to be supported by a Certification of counsel for Plaintiff which is not made on personal knowledge and which is in fact based on incompetent hearsay. Plaintiff has failed to demonstrate the absence of genuine issues of material fact and has failed sustain its burden to be entitled to the striking of Defendant's answer. Plaintiff relies on the holding of Central Penn. Nat'l Bank v. Stonebridge, 185 N.J. 289, 309-310 (Ch. Div. 1982) in alleged support of its request to strike the contesting answer of the Defendants. A close reading of the Central Penn opinion reveals that Plaintiff’s reliance is misplaced, as that case deals with an application for a sheriff sale. Contrary to plaintiff attorney's statement that the only issues a Plaintiff must establish are the validity of the mortgage , the amount of the indebtedness, and the right to resort to the mortgaged premises for satisfaction of the debt is not the case in today's environment, especially , where the Supreme Court, sua sponte, issued an order requiring six banks and other lenders to show cause why foreclosures should not be halted in New Jersey based on the issues of document irregularities. See In the Matter of Residential Mortgage Foreclosure Pleading and Document Irregularities Superior Court of New Jersey, Chancery DivisionGeneral Equity Part, Mercer County Docket No. F-59553-10. This case is on the New Jersey Court web page in the public domain. Plaintiff counsel's argument that there are only three issues as a matter of fact, is misleading, especially in light of the fact that the
instant case has an assignment issued by Mortgage Electronic Registration Systems which is precisely an issue that the Court is attempting to scrutinize and rectify. Plaintiff Counsel's statement that Defendants answers are mere attempts to delay and are boilerplate is totally off the mark. First of all, before accusations are made, Plaintiff's Counsel should be above the board and look itself in the mirror. Moreover, a close look at it's complaints will clearly reveal boiler plate language in all of it's points. The only thing that is changed is the name of the mortgagor, mortgagee, physical address of the mortgage premises, the amount of debt, and dates of default. Everything else that Plaintiff files is boilerplate. Even the memos are boilerplate. Plaintiff's counsel quotes the same cases in every motion. I take issue with Counsel's unfounded assertions that Defendant is merely delaying the foreclosure. A foreclosure action is not an automobile repossession case where the creditor comes in with a tow truck and takes the car away. Foreclosure matters present complicated issues as noted by Judge Todd in Bank of New York v. Michael J. Raftogianis, Superior Court of New Jersey, Atlantic County, docket no. F7356-09. Answers are governed by Rule.4:6-2, that requires that every defense to an action, legal or equitable, in law or in fact, be asserted in an answer. Defendant's answers and counterclaims are germane. Defendant's have questioned Plaintiff's standing to institute this action and made specific denials in their answer. There is nothing boilerplate about that. The Courts of New Jersey have apparently not addressed the specific factual situation in this case. In instances where there is no New Jersey case “on point”, the Courts of New Jersey have utilized opinions from other jurisdictions for guidance. (See, e.g., Greate Bay Hotel & Casino, Inc. v. City of Atlantic City, 264 N.J.Super. 213, 217-218, 624 A.2d 102 (N.J. Super L. 1993)(analysis of treatment of business trusts as distinct legal entities by
various other jurisdictions including California, New York, and Michigan where no New Jersey case explicitly dealt with types of trusts in case); Gregory v. Allstate Insurance Company, 315 N.J.Super. 78, 82-83, 716 A.2d 573 (N.J.Super.L. 1997)(analyzing split of authority in jurisdictions which considered issue of whether victim of unintentional auto collision was covered by uninsured motorist coverage). The Courts of the State of New York have been repeatedly presented with the legal standing issues in foreclosure actions raised in this case, and have consistently held that when there is no proof that the foreclosing party had the requisite legal interest in the mortgage and note at the time that it filed the foreclosure action that dismissal of the action was proper. In mortgage foreclosure actions (as in all actions), the foreclosing party must have standing to bring the action: Standing to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is blocked, the pathway to the courthouse is blocked. …Standing to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request….If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. IndyMac Bank v. Bethley, 2009 NY Slip Op 50186(U)(N.Y.Sup.Ct. 2/6/2009), citing Saratoga County Chamber of Commerce, Inc. v. Pataki, 100 NY2d 801, 812 , cert denied 540 US 1017 ; Caprer v. Nussbaum, 36 AD3d 176, 181 [2d Dept 2006]; Stark v. Goldberg, 297 A2d 203 [1st Dept 2002]. Where there is no evidence that the plaintiff, prior to commencing a foreclosure action, is the holder of the mortgage and note or took physical delivery of the mortgage and note or that same were conveyed by written assignment, the plaintiff did not have standing to
institute the action. New Century Mortgage Corporation v. Durden et al., 2009 NY Slip Op 50175(U) (N.Y. Sup. Ct. 2/2/09), citing Deutsche Bank Trust Co. Ams. V. Peabody, 20 Misc. 3d 1108A (Sup.Ct. Saratoga County 2008) and Countrywide Home Loans, Inc. v. Taylor, 17 Misc. 3d 595 (Sup.Ct. Suffolk County 2007) and additional cases cited therein. A plaintiff has no foundation in law or fact to foreclose upon a mortgage in which the plaintiff has no legal or equitable interest, and where an assignment of the mortgage postdates the filing of the complaint, the plaintiff does not have the requisite ownership interest at the time of filing. As a foreclosure of a mortgage may not be brought by one who has no title to it and absent a legally effective transfer of the debt, the (post-filing) assignment of the mortgage is a legal nullity. U.S. Bank National Association v. Kosak et al., 2007 NY Slip Op 51680(U)(N.Y. Sup.Ct. 9/4/2007), citing Katz v. East-Ville Realty Co., 249 AD2d 243, 672 NYS2d 308 [1st Dept 1998] and Kluge v. Fugazy, 145 AD2d 537, 536 NYS2d 92 [2d Dpet 1988]. In Bethley, the Court held that Plaintiff IndyMac lacked standing to foreclose on the mortgage and note as it did not own the mortgage and note on the day that the Complaint was filed. IndyMac, as Plaintiff has done here, attempted to assign the mortgage and note two days after filing the foreclosure action. In the instant case, Plaintiff’s own submissions demonstrate that Plaintiff did not own the note and mortgage on December 24, 2007 (the day that the Complaint was filed), having only [purportedly] come into such ownership, at the earliest, some three days thereafter, that being on December 27, 2007 by virtue of the very Assignment attached as Exhibit “B” to the Plaintiff’s moving papers. As the subject Assignment was not even recorded by the Atlantic County Clerk until almost a year later on November 5, 2008, Plaintiff arguably had no interest in the mortgage until late 2008.
It is important to have this lawsuit dismissed, especially in light of the authoritative and controlling decision of Wells Fargo Bank , N.A. v Sandra A. Ford , A-3627-06T1, NJ Super (App. Div 2011), that was approved for publication on January 28, 2011, where the Court addressed important points such as the necessity of proof of ownership of the note for standing, proof of the holder of the note, proof of being a holder in due course, whether the original lender indorsed the instrument, and the dates of the endorsement and authentication of documents. Likewise, on the front page of the New Jersey Law Journal , dated February 1, 2011, it stated the following," PROOF OF POSSESSION OF MORTGAGE NOTE NEEDED FOR STANDING IN FORECLOSURES - Foreclosers trying to go after delinquent mortgagors will now have to contend with a precedential ruling that takes a strict line on proof of standing. The Appellate Division, in Wells Fargo Bank N.A. v. Ford, A-3627-06, held on Jan. 28 that a bank could not go ahead with a foreclosure on a Westwood home unless it proved it acquired ownership or control of the mortgage note from the original lender. Wells Fargo claimed it obtained the mortgage and accompanying $403,750 promissory note by assignment from original lender Argent Mortgage Co. The assignment had not been recorded, but Wells Fargo obtained summary judgment below based on a certification from someone who claimed knowledge of the amounts owed for principal, interest and other charges but who did not indicate the source of that knowledge. The appeals court reversed, finding authentication lacking." In our case, U.S. Bank of America has not even met the threshold of any of these requirements and that is precisely the reason why this case should be dismissed.
In the case at hand, Plaintiff allegedly was assigned the mortgage and note on May 20, 2010. A mere four days later , the complaint was filed. It seems incredulous that a lender is so quick to file a foreclosure action a mere four days after taking possession of the note. When did Plaintiff actually took possession of the note? Did they take possession of the note? The assignment was not even recorded at the time of the filing of the complaint. It was first recorded on June 18, 2010 as noted in the record. Moreover, Plaintiff is in violation of subsection g of Title 131 of the Truth and Lending Act as the Defendants were never notified of the assignment transfer. The Court must determine whether the note and mortgage were properly assigned as it is obvious from the record that Plaintiff's attorney prepared the assignment of the mortgage for the lawsuit as it was created within thirty days of the filing of the lawsuit . Is anything wrong with that? It is an issue with the Legal Services of New Jersey (LSNJ) who pointed it out in their brief to the Supreme Court of New Jersey, where they said the following, "typically at the time the lender makes a decision to foreclose it is not the record mortgagee. To correct the defect, the attorney for the foreclosing mortgagee or servicer of the loan will create an Assignment of Mortgage for the purposes of litigation which is in turn signed by a robosigner. Documents recorded with a public official are self executing and have special evidential status and therefore are especially pernicious." As noted above, this appears to be the same situation at the case at bar. The assignment was created for the lawsuit. The signer of the assignment, Judith T. Romano is listed as Assistant Secretary and Vice President. It appears that she is wearing two hats as a cursory search of her name reveals that she is employed for the same law firm that filed the lawsuit. This point was also addressed by LSNJ where they noted, " The signers do not identify themselves by their true title or as being an agent or employee of foreclosure related documents typical of their actual employer. Instead they hold themselves out as vice presidents…" The brief in it's entirety can be located on the New Jersey Courts website which is a matter of the public record.
As such, Plaintiff may have lacked legal standing to institute this mortgage foreclosure action ab initio. This issue of material fact warrants not only the denial of Plaintiff’s Motion to strike Defendant's answer, but it may even warrant a dismissal of the action. In cases where a suit is in an early state and not fully developed, the standard by which a court ought to review a judgment terminating it now is from the standpoint of whether there is any basis upon which the plaintiff should be entitled to proceed further. Velantzas, supra at 193, citing Bilotti v. Accurate Forming Corp., 39 N.J. 184, 193, 188 A.2d 24 (1963). As the Plaintiff herein may not have had the legal standing to institute this foreclosure action ab initio, Plaintiff’s Motion must be denied. Plaintiff also attempts to support its Motion with the Certification of Mr. Blake, Esq., who is counsel for the Plaintiff and who is not an officer or director of the Plaintiff. The subject Certification is not made on personal knowledge. As the Certification is not based on personal knowledge, the statements in the Certification can only be based on information and belief. Rule 1:6-6 requires that Certifications in support of Motions be made on personal knowledge. Personal knowledge excludes matters based on information and belief. See., e.g., Wang v. Allstate Ins. Co., 125 N.J. 2, 16 (1991); Lamb v. Global Landfill Reclaiming, 111 N.J. 134, 153 (1988). The Blake Certification, which is made by the attorney and not an officer of plaintiff who would have personal knowledge, is thus incompetent to support the Plaintiff’s Motion to strike Defendant's answer as a matter of law and New Jersey procedure. The Blake Certification also makes reference to and attaches the Assignment (Exhibit “D” to the Certification). This Assignment, which constitutes an admission by the Plaintiff, is the very document demonstrating that Plaintiff may have had no legal interest
or ownership in either the note or mortgage at the time that the Complaint was filed, and raises genuine issues of material fact as to when (if ever) Plaintiff came into any ownership rights of either the Note or the Mortgage. The notary on the assignment is suspect as it is done by a Pennsylvania notary on a New Jersey property. This is exactly the issue regarding notaries as noted by the Legal Services of New Jersey in their brief to the Court. In addition, the pooling agreement that is attached as Plaintiff's exhibit F only adds more questions to the equation such as where is the original note? who is the trustee? when was the mortgage actually assigned?, and was the mortgage/note properly transferred and assigned? Plaintiff’s Motion to strike Defendant's motion must be denied.
CONCLUSION Plaintiff has, by its very submissions, demonstrated that there are genuine issues of material fact as to when, if ever, Plaintiff came into any ownership interest in either the Note or Mortgage. Plaintiff’s submissions demonstrate that there is no genuine issue of material fact that Plaintiff did not have any legal interest in either the note or the mortgage at the time it filed this foreclosure action, and has thus demonstrated that it was without leg0al standing to institute this action. The motion striking Defendant's answer is wholly inappropriate. The motion to strike Defendant's answer is also improper at this time given that discovery is incomplete. The Blake certification, which consists of incompetent hearsay, is legally inadmissible and does not in any way support Plaintiff's motion. Plaintiff’s Motion to strike Defendants answer must be denied and Plaintiff's complaint must be dismissed as a matter of fact and as a matter of law. Respectfully submitted,
Earl David Counsel for Defendants