DEUTSCHE BANK NATIONAL TRUST COMPANY, ETC. VS. NICHOLAS F. FERRARA, JR.(F-013909-09, MONMOUTH COUNTY AND STATEWIDE)
A-4200-15T3
N.J. Super. Ct. App. Div.Sep 28, 2017Background
- In 2004 the Ferraras executed an $806,000 note and mortgage to IndyMac; they defaulted in 2009 and made no payments thereafter.
- OneWest acquired IndyMac’s assets from the FDIC on March 19, 2009; OneWest filed the foreclosure complaint May 4, 2009 and obtained final judgment on November 18, 2010 after defendants did not answer.
- Assignments of the mortgage (FDIC→OneWest and OneWest→Deutsche Bank Trust) were recorded in December 2011; defendants point to a November 22, 2011 assignment to challenge standing.
- Defendants never answered or raised standing before judgment; they filed two bankruptcies during the litigation.
- On April 26, 2016 (more than five years after judgment) defendants moved to vacate the final judgment and dismiss the complaint, arguing fraud and lack of standing; the motion was denied May 13, 2016 and defendants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff committed fraud/misrepresentation by lacking ownership/control when complaint filed | OneWest owned/controlled the note by merger/acquisition from FDIC before filing and properly pled that fact | OneWest hid true ownership and misrepresented it; post-filing assignments show lack of ownership at filing | No fraud; plaintiff owned/controlled the debt when suit was filed and pled the merger publicly — no basis to vacate under R. 4:50-1(c) |
| Whether plaintiff lacked standing at time of filing so judgment is void | Plaintiff had standing by ownership/control of the debt via merger; formal recorded assignment not required | Defendants contend absence of recorded assignment at filing means no standing, so judgment is void under R. 4:50-1(d)/(f) | Standing is not jurisdictional; plaintiff had ownership/control at filing; lack of standing does not render judgment "void" and is not a meritorious post-judgment defense here |
| Whether relief should be granted under R. 4:50-1(f) (extraordinary relief) | No exceptional circumstances; denying relief avoids grave injustice | Seek vacation under ‘‘any other reason’’ provision due to alleged misconduct/standing defects | Subsection (f) applies only in truly exceptional cases; defendants did not show such circumstances |
| Whether the Rule 4:50 procedural/time limits bar relief | Plaintiff: motion is untimely — defendants waited years to raise defenses | Defendants: merit and voidness justify relief despite delay | Motion was time-barred under R. 4:50-2 (not within a reasonable time and >1 year for fraud claims); denial affirmed |
Key Cases Cited
- U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449 (discusses standards for relief from default judgments under R. 4:50-1)
- Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592 (holding plaintiff must own or control underlying debt as of complaint filing to have standing)
- Deutsche Bank Nat'l Trust Co. v. Russo, 429 N.J. Super. 91 (standing is not jurisdictional; post-judgment lack of standing does not render judgment void)
- Suser v. Wachovia Mortg., FSB, 433 N.J. Super. 317 (owner/control via merger/acquisition can confer right to enforce the mortgage)