HSBC BANK USA, ETC. VS. MICHAEL KEANE(F-019668-12, MONMOUTH COUNTY AND STATEWIDE)
A-5346-15T4
| N.J. Super. Ct. App. Div. | Oct 5, 2017Background
- In 2005 Keane borrowed $292,000 secured by a Spring Lake mortgage; Gateway endorsed the note in blank and MERS was the nominee mortgagee. Plaintiff (HSBC as trustee) obtained the mortgage and note before filing suit.
- Plaintiff sent a Notice of Intention to Foreclose in 2011 and filed a foreclosure complaint in September 2012.
- The court ordered discovery and mediation deadlines in March 2013. Keane failed to comply with discovery.
- On June 21, 2013 the court suppressed Keane’s answer, affirmative defenses, and counterclaims for failure to provide discovery; Keane’s motion to dismiss was denied.
- Keane sought reconsideration in August 2013 (denied) and again in March 2015 (denied by the court as untimely and on the merits). Final default judgment was entered May 2, 2016.
- Keane raised Rule 4:50-1 grounds and bias arguments primarily on appeal, but the appeal was taken from the March 20, 2015 order denying reconsideration (not from a post-judgment 4:50-1 ruling). The Appellate Division affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the March 2015 motion to reinstate pleadings/reconsider the 2013 orders was timely | Motion was untimely and properly treated as a reconsideration motion; court has discretion to deny | Motion sought relief from suppression and later from default; timely or excusable neglect | Denial was proper: reconsideration under Rule 4:49-2 required service within 20 days; Keane filed well after the deadline |
| Whether Keane established grounds to vacate the default judgment under Rule 4:50-1 | Plaintiff argued Keane didn’t show excusable neglect, meritorious defense, or exceptional circumstances | Keane argued mistake/inadvertence/excusable neglect, meritorious defenses (including HOSEA violations), and insufficient plaintiff standing | Court declined to consider new Rule 4:50-1 arguments raised on appeal from the 2015 order; even on merits Keane failed to show excusable neglect, meritorious defense, or exceptional circumstances |
| Whether plaintiff had standing to foreclose | Plaintiff had possession of the note and mortgage before filing; therefore had standing | Keane disputed standing and refused discovery on that basis | Plaintiff had standing; Keane did not create any genuine material factual issue to rebut prima facie right to foreclose |
| Whether judicial bias required disqualification | Judge acted within normal judicial demeanor and explained willingness to reinstate if discovery compliance proven | Keane claimed judge showed friendliness to plaintiff’s counsel and referenced an off‑record comment | No objectively reasonable doubt of impartiality; bias claim rejected |
Key Cases Cited
- US Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449 (discusses Rule 4:50-1 standard and abuse of discretion review)
- Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88 (defines abuse of discretion framework)
- Hous. Auth. of Morristown v. Little, 135 N.J. 274 (describes Rule 4:50-1(f) exceptional circumstances standard)
- Great Falls Bank v. Pardo, 263 N.J. Super. 388 (identifies material issues in foreclosure proceedings)
- Deutsche Bank Tr. Co. Americas v. Angeles, 428 N.J. Super. 315 (standing through note possession or mortgage assignment)
- DeNike v. Cupo, 196 N.J. 502 (standard for judicial disqualification — whether a reasonable, fully informed person would doubt impartiality)
- Cummings v. Bahr, 295 N.J. Super. 374 (reconsideration is narrow and reviewed for abuse of discretion)