BANK OF AMERICA, N.A. VS. PIL S. OHÂ (F-41618-13, OCEAN COUNTY AND STATEWIDE)
A-2163-15T3
N.J. Super. Ct. App. Div.Aug 21, 2017Background
- In 2008 Pil S. Oh and Jeoung Ok Oh executed a $385,000 promissory note secured by a mortgage; MERS was the nominee on the recorded mortgage.
- The mortgage was assigned by MERS to BAC Home Loans Servicing, L.P. (BAC) on April 28, 2011; that assignment was recorded August 16, 2011. BAC merged into Bank of America on July 1, 2011.
- The note contains an allonge showing indorsements from APB to Countrywide Bank FSB and to bearer by indorsement in blank. Plaintiff (Bank of America) produced testimony that it (or BAC) has possessed the note since 2008.
- Defendants defaulted in December 2010; Bank of America filed a foreclosure complaint in November 2013. Defendants asserted counterclaims under the New Jersey Consumer Fraud Act and Truth in Lending Act, which the motion judge dismissed.
- At trial the court deemed defendants’ answer uncontested, admitted business records via testimony, referred the matter to the Office of Foreclosure, and entered final judgment for plaintiff on December 18, 2015.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing/authority to foreclose | Bank of America is the holder of the note (BAC merged into Bank of America) and MERS validly assigned the mortgage to BAC | Assignment invalid; MERS lacked authority because original lender no longer existed; plaintiff not authorized to foreclose | Bank of America was the holder; assignment valid; plaintiff had standing to foreclose |
| Sufficiency/authentication of transfer evidence | Indorsement and witness testimony showing possession and chain of title sufficed; records authenticated under business-records exception | Documents were unauthenticated hearsay and insufficient to prove transfer | Trial testimony and business-records exception adequately authenticated documents; no reversible error |
| Dismissal/striking of counterclaims and defenses | Defendants failed to prove fraud or support counterclaims/defenses with credible evidence | Judge erred in dismissing counterclaims and striking defenses | No abuse of discretion; counterclaims/defenses lacked clear and convincing proof |
| Admission of witness testimony/business records (hearsay) | Witness qualified; records made in ordinary course of business admit under N.J.R.E. 803(c)(6) | Testimony allowed inadmissible hearsay that prejudiced defendants | No plain error; business-records exception applied and admission was proper |
Key Cases Cited
- Deutsche Bank Trust Co. Americas v. Angeles, 428 N.J. Super. 315 (App. Div. 2012) (appellate review accords substantial deference to trial judge’s foreclosure findings)
- U.S. Bank Nat'l Assoc. v. Guillaume, 209 N.J. 449 (2012) (standard for abuse of discretion and deference to trial court)
- Deutsche Bank Nat'l Tr. Co. v. Mitchell, 422 N.J. Super. 214 (App. Div. 2011) (holder/possession rules for enforcing negotiable instruments)
- Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592 (App. Div. 2011) (standing requires ownership or control of the debt; authentication of assignments)
- Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88 (2007) (abuse-of-discretion standard explained)
- Nieder v. Royal Indem. Ins. Co., 62 N.J. 229 (1973) (appellate review limits on issues not raised below)