Joshua Denbeaux Denbeaux & Denbeaux 366 Kinderkamack Road Westwood, New Jersey 07675 (201) 664-8855/ Fax

: (201) 666-8589 Attorneys for Defendants

r·DE·uTs·cHE"BANK·NATIONAL··· ..··..···········SUPERIOR

~ LOAN TRUST 2006-5 Plaintiff, vs.


DOCKET NO.: F-01322-l0 A Civil Action

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This matter having come before the Court upon application of Denbeaux & Denbeaux, counsel for defendants, upon notice to all counsel, and the Court having considered the moving papers submitted, having heard oral argument of counsel and the


parties, if any, and having considered sCW1e, for good cause shown; and
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day of

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It is, on this


1..( tty

'1,2011, hereby ORDERED, as follows:


1. Plaintiff's Motion for Summary Judgment is denied.
2. 3. The Bates Certification and Exhibit "I" are hereby stricken. Defendant's granted. Notice of Cross Motion to Dismiss Plaintiff's Complaint is hereby


4. A copy of the within Order shall be served on all parties within_l_ of this Order.

days of the date






MOTION DISPOSITION SHEET CASE NAlvffi: Deutsche Bank National Trust Company Miguel Dominguez, et aL DOCKET NO.: F-1322-10




MAY - 6



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ORDER: Attached



Plaintiff in this foreclosure action seek partial summary judgment dismissing defendants' Counterclaim on the grounds that there are no issues of material fact and that defendants' claim under the Truth in Lending Act (TILA) is time-barred. Defendant has filed a Cross-Motion to strike the Certification of Donna M. Bates and Exhibit I as inadmissible hearsay and to dismiss the Complaint. Rule 4:46-2(c) provides that summary judgment shall be entered if the pleadings, depositions, answers to interrogatories and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law. An issue ... . .~ oUacLis_genuine..-onLy-jf,-cQnsidering__the-b.urden.--oLpersuasion._at__trial. __ th.e_e.Yiden¥'ce...__ submitted by the parties on the motion, together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact. See Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 538 (1995); Judson v. People's Bank & Trust Co. of Westfield, 17 N.J. 67, 73--75 (1954). In determining whether a genuine issue of material fact exists, a trial judge should engage in a weighing process, one that is essentially the same as that used in motions for judgment under Rule 4:37-2(b) (involuntary dismissal at trial), Rule 4:40-1 (motion for _


and Rule 4:40-2


for judgment




Shelcusky v. Garjulio,

172 N.J. 185, 200 (2002).

The standard is "whether the


competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational fact finder to resolve the alleged disputed issue in favor of the non-moving party." Brill, supra, 142 N.J. at 540. A party may defeat a motion for summary judgment by demonstrating that the evidence relied upon by the moving party, considered in light of the applicable burden of proof, raises sufficient credibility issues "to permit a rational fact finder to resolve the alleged disputed issue in favor of the non-moving party." rd. at 523. "When the

evidence 'is so one-sided that one party must prevail as a matter of law,' ... the trial ~ourt should not hesitate to grant summary judgment." .__ ._ Lobby, Inc., 477 U.S. 242,252 (,--1_98_6~). rd. at 540 (quoting Anderson v. Liberty .~ _

Similarly, in deciding a Rule 4:40-1 motion for judgment the court must accept as true all the evidence which supports the position of the non-moving party, according him or her the benefit of all legitimate inferences, and if reasonable minds could differ, the motion must he denied. Pressler, Current N.J. Court Rules, comment 1 on R. 4:40 at

1620 (2010); Lewis v. Am. Cyanamid Co., 155 N.J. 544, 567 (1998). It has long been recognized that the three issues which the Court should determine in a foreclosure action are: (1) the validity of the mortgage documents; (2) whether the loan is in default; and (3) the right of the plaintiff to foreclose and hence take the subject property to sale to satisfy the mortgage debt. Great Falls Bank v. Pardo,

.·----------·-263--N:-1:-Super-:-:388-(Gh:-Biv-;--1-993}---8ee-also;Gentr-al Penn National Bank--v-o--Stonebridg Limited, 185 N.J.Super. 289 (Ch. Div. 1982). If the defendant's Answer fails to

challenge the essential elements of the foreclosure action, plaintiff is entitled to strike defendant's answer as a non-contesting answer. Old Republic Ins. Co. v. Currie, Trust Co. v. Sternberg, 238

284 N.J.Super. 571, 574 (Ch. Div. 1995); Somerset

N.J. Super. 279, 283 (Ch. Div. 1989). Moreover, Rule 4:46-5(a) provides that when a motion for summary judgment is made and supported as provided by the Rule, an adverse party may not rest upon the mere allegations or denials of the pleadings, but must respond by affidavits setting forth specific facts showing that there is a genuine issue for trial.

(,'TILA"). However, "An obligor's right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property ... notwithstanding the fact that the information and forms required under this section or any other disclosures required under this part have not been delivered to the obligor." 15 U.S.C.A. § 1635 (f). The mortgage was executed on May 2,2006. "§ 1635(f) completely extinguishes the right of rescission at the end of the 3-yearperiod." Beach v. Dcwen Fed. Bank, 523 U.S.

410,412, 118 S. Ct. 1408, 1409, 140 L. Ed. 2d 566, 569 (1998). There is a one year statute oflimitations for monetary damages. 15 U.S.C. 1640(e). The defendants specifically cite 15 U.S.C. 1640 in paragraph 3 of Count I of the Counterclaim. Defendants argue that their claim for monetary damages is not barred, as the statute of limitations applies to affirmative actions, but permits a borrower to assert a right of recoupment, citing Beneficial Finance Co. of Atlantic City v. Swaggerty, 86 N.J. 602 (1981). In Swaggerty, the New Jersey Supreme Court found that a creditor could assert a TILA defense, to reduce recovery, beyond the one-year statute oflimitations.

"Recoupment is distinguishable from setoff in that the latter involves an affirmative recovery on a claim that may be independent of the transaction upon which the plaintiffs claim is based. While recoupment may be utilized only to reduce or extinguish the plaintiffs recovery, setoff may be awarded for any amount to which the defendant is entitled. rd. at 609. ~-~-tAlrecoupmenrdefense·does-norinvalidate1he-plaintiff's -claim-but+ merely reduces the amount that the plaintiff may recover on that claim." rd. at 611. Accordingly, to the extent defendants are seeking only recoupment, defendants' Counterclaim is not barred by the statute oflimitations While plaintiff's applicable to TILA.

arguments seeking dismissal of the Counterclaim based upon a

statute of limitations defense can be determined to be a matter of law for the purpose of adjudicating this motion, the same cannot be said for the remaining grounds for dismissal asserted by the plaintiff. Those arguments are based on plaintiff s factual contentions that defendants were provided accurate information
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with the proper number of Notices of Cancellation



the finance charges. As such, the validity of such


isJ~gely __epe!!q~_!!:!. d upon the information contained in the loan documents, -'------~---.---~~~-. counsel, Donna M. Bates, Esq. For

which are appended to the Certification of plaintiffs

the reasons which follow, the Court finds that Ms. Bates is not a proper witness to authenticate the loan documents. Although plaintiff in its Reply has attempted to cure the deficiency by submitting the Reply Certification of the mortgage servicer, BAC, and even if for purposes of this motion the Court accepts Ms. Chatman as a qualified witness, the Court is still left with contested issues of material fact which preclude an award of summary judgment. It appears that the parties agree that the borrowers' signature on the Notice of Right to Cancel creates a rebuttable presumption that they were provided with the proper number of disclosures at closing. However, they have certified that they turned .........-.- ... ---- ·~-·over-all-the-·documents-which-·-they_reeeived-at-eI0sing-to-their-·attomey,whiGh-reGords------

only included one copy. Hence, this case is clearly distinguishable

from other cases

wherein the borrowers simply state in a conclusory fashion that they either did not receive or do not recall receiving the required number of copies. Hence the Court finds that the statements contained in Patricia Dominguez's Certification do, at this juncture, give rise to a contested issue of material fact. Also, with respect to the disputed finance charges, defendant calculates they were under-disclosed by $430.66. Plaintiff in its reply submits that defendants have failed to recognize a reimbursement made to them of

$170.00 following closing when the precise recording fees were ascertained. Even if, for --------purposes

Oftl1e motion, llie Court concludes that such relITIbursement was properly made,

that would then reduce the amount of the alleged under-disclosure to $260.66, which still exceeds the $100.00 statutory tolerance. Accordingly, for the reasons stated above, the plaintiffs motion for partial

summary judgment dismissing the defendants' Counterclaim is denied. Defendants seek by way of Cross-Motion to strike the Certification of Ms. Bates and certain exhibits attached thereto as it constitutes inadmissible hearsay. The Court agrees that Ms. Bates' Certification is insufficient to establish proof of the facts contained

therein. R. 1:6-6 expressly requires that if a motion is based upon facts not appearing of record or not judicially noticeable, that the affidavits which support it must be based on personal knowledge. Affidavits by attorneys of facts not based on their personal

knowledge but related to them by and within the primary knowledge of their clients constitute objectionable hearsay. See Murray v. Allstate Ins. Co .. 209 N.J. Super. 163, 169 (App.Div. 1986). Simply put, Ms. Bates lacks personal knowledge regarding the substance of tins motion, such as the possession and regularity of the loan documents, the

payment history and default, and the sending of the Notices of Intent to Foreclose. Since these proofs are insufficient and Ms. Bate's Certification constitutes inadmissible

hearsay, that portion of defendant's Cross-Motion which seeks to strike it is granted. Defendants further cross-move to dismiss plaintiff's Complaint for failure to state a claim upon which relief can be granted, lack of standing and refusal to comply with discovery demands. A motion to dismiss for failure to state a claim under R. 4:6-2(e) "should be granted only in the rarest of instances." Banco Popular North America v. Gandi, 184 N.J. 161. 165 (2005) (quoting Printing Mart-Morristown v. Sharp Electronics, 116 N.J. 739 (1989). Moreover, in deciding whether a pleading is adequate. the test is "whether a cause of action is suggested by the facts." Velantzas v. Colgate-Palmolive Co .• 109 N.J. 189. 192 (1988). The "inquiry is confined to a consideration of the legal sufficiency of the alleged facts apparent on the face of the challenged claim." Rieder v. State Dep't of Transp .• 221 . . N.J. Super.547,55.2_{App_.J2iy, l_2._8._'l). Furthermore, the CQurt shopld "se,=ar=c=h,-"t1=le~ complaint in depth and with liberality to ascertain whether the fundament of a cause of action may be gleaned even from an obscure statement of claim. opportunity being given to amend if necessary." Di Cristofaro v. Laurel Grove Mem'! Park, 43 N.J. Super. 244, 252 (App. Div. 1957). Having reviewed plaintiff s Complaint in light of the standards as set forth above, the Court finds that the allegations contained therein are sufficient to state a cause of action in this mortgage foreclosure action and defendants' Cross-Motion to dismiss on such basis is denied. _



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As indicated, defendants' also Cross-move to dismiss plaintiff's Complaint, arguing that plaintiff lacks standing to foreclose because (a) it did not have physical possession of the note when it filed for foreclosure, and (b) it did not comply with the Fair Foreclosure Act. The Court rejects the first grounds because the Reply Certification of Jennifer Chatman is arguably sufficient to authenticate the documents upon which plaintiff relies. However. as to the second basis, plaintiff has completely failed to offer any competent testimonial or documentary evidence demonstrating compliance with the Fair Foreclosure Act. Nowhere in Ms. Chatman's Certifications or in plaintiff's reply memorandum is this issue even addressed. N.J.S.A. 2A:50-56 requires that a notice of
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intent to accelerate and foreclose be provided by the lender to the mortgagor 30 days

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prior to the commencement of any foreclosure action. Such notice provisions have been construed as mandatory, not advisory. See EMC Mortgage Corporation v. Chaudhri. 400 N.J. Super. 126, 139 (App.Div.2009). In the present case there is a complete absence of any competent proof that the lender complied with the Fair Foreclosure Act by sending any notice, be it proper or defective. While plaintiff attempted to correct this deficiency

in a late supplemental reply memorandum and Certification of Thomas Brodowski, Esq.,
such attorney's Certification regarding any mailing of the Notice of Intent by the lender is invalid as not based on personal knowledge as required under R. 1:6-6. Even were the



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Court to accept it, a copy of the Notice of Intent is no where included in plaintiff s




submission. Accordingly. in the absence of such proof, defendant's Cross-Motion is granted on this basis and the action is dismissed without pro ejudice. Dated: May 6, 2011 ~ Han. H~OI1' . J.S.C.


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