LASALLE BANK N.A., ETC. VS. KELLEY A. SPEAR(F-017220-08, ESSEX COUNTY AND STATEWIDE)
A-5377-15T1
| N.J. Super. Ct. App. Div. | Oct 5, 2017Background
- In Jan 2006 Kelley A. Spear borrowed $225,000 secured by a recorded mortgage; she defaulted beginning Jan 1, 2008 and made no payments thereafter.
- LaSalle Bank (plaintiff) filed a foreclosure complaint May 1, 2008 and an amended complaint Aug 18, 2008; Spear did not answer, and default was entered Feb 10, 2009.
- A final judgment of foreclosure was entered Jan 5, 2010; Spear moved to vacate that judgment in Feb 2011 and Judge Levy denied the motion in June 2011.
- Plaintiff moved to amend the final judgment to update the payoff; an amended final judgment was entered Mar 15, 2016.
- Spear moved Apr 19, 2016 under R. 4:50-1(a), (d), and (f) to vacate the amended judgment, arguing plaintiff lacked standing; Judge Koprowski denied the motion June 28, 2016.
- On appeal the Appellate Division affirmed, holding Spear failed to show excusable neglect, that lack of standing did not render the judgment void in this context, and no exceptional circumstances justified relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether default judgment should be vacated for excusable neglect under R. 4:50-1(a) | Spear’s failure to answer was her own fault; no excusable neglect | Spear claimed failure to answer was excusable and she has a meritorious defense (lack of plaintiff standing) | Denied — no excusable neglect or meritorious defense shown |
| Whether the judgment is "void" because plaintiff lacked standing when complaint was filed (R. 4:50-1(d)) | Even if standing was imperfect at filing, plaintiff obtained necessary rights before judgment; standing is not jurisdictional | Plaintiff lacked the note/assignment at filing so judgment is void | Denied — standing defects do not make judgment void post-judgment and equity may bar belated challenges |
| Whether "any other reason" under R. 4:50-1(f) warrants relief (exceptional circumstances) | No exceptional or grave injustice shown; defendant made no payments since 2007 | Exceptional circumstances exist that justify vacatur | Denied — subsection (f) reserved for truly exceptional cases; none here |
| Whether prior denial of vacatur precludes relitigation of standing | Plaintiff relies on prior ruling and long delay | Spear renews standing claim as basis for relief | Denied — prior decision and lengthy, unexcused delay weigh against relief |
Key Cases Cited
- US Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449 (2012) (standard for vacating default judgment and R. 4:50-1 analysis)
- Mancini v. EDS, 132 N.J. 330 (1993) (definition and scope of excusable neglect)
- Deutsche Bank Nat'l Trust Co. v. Russo, 429 N.J. Super. 91 (App. Div. 2012) (standing defects after judgment do not render judgment void; equity may bar late challenges)
- Deutsche Bank Trust Co. Americas v. Angeles, 428 N.J. Super. 315 (App. Div. 2012) (equitable considerations apply to both plaintiffs and defendants in foreclosure actions)
- Hous. Auth. of Morristown v. Little, 135 N.J. 274 (1994) (R. 4:50-1(f) reserved for truly exceptional circumstances)