WELLS FARGO BANK, N.A. VS. MARY ELLEN UGACTZ-GONZALEZ, Â(F-031505-14, ESSEX COUNTY AND STATEWIDE)
A-3258-15T2
| N.J. Super. Ct. App. Div. | Aug 8, 2017Background
- In 2007 Mary Ellen Ugactz-Gonzalez and her husband borrowed $512,000 from World Savings and executed a note and mortgage on their Verona home; mortgage recorded in Essex County.
- World Savings later changed names/merged into Wachovia, which merged into Wells Fargo; Wells Fargo served as document custodian and possessed the original note.
- Defendants defaulted after failing to make the December 23, 2013 payment; Wells Fargo filed a foreclosure complaint on August 1, 2014.
- Defendants answered and counterclaimed, sought production/inspection of the original note (inspected at a May 6, 2015 status conference).
- On June 12, 2015 the Chancery judge granted Wells Fargo summary judgment, struck defendants’ answer/counterclaim, and referred the matter to Foreclosure Unit; Final Judgment entered December 14, 2015.
- Defendants’ motion to vacate under R. 4:50-1 (arguing lack of standing, fraud, procedural defects) was denied April 25, 2016; appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to foreclose / entitlement to enforce the note | Wells Fargo possessed the original note and, via merger history, was holder entitled to enforce under UCC and banking-merger law | Defendants denied executing/delivering the note and contended Wells Fargo lacked the original note/standing | Court held Wells Fargo had possession/ownership via merger and was a person entitled to enforce the note; summary judgment proper |
| Sufficiency of evidence to defeat summary judgment | Plaintiff relied on undisputed documents, possession of note, and custody certifications | Defendant offered only bare denials and no competent evidence creating a genuine factual dispute | Court found defendant's bare allegations insufficient; no genuine issue of material fact existed |
| Motion to vacate final judgment under R. 4:50-1 | Plaintiff argued judgment valid; lack of notice did not establish meritorious defense | Defendant argued excusable neglect, fraud, lack of standing and other defenses meriting vacatur | Court found excusable neglect (lack of notice) but denied vacatur because defendant failed to show a meritorious defense |
| Burden of proof / requirement of original note endorsement | Plaintiff argued UCC and merger law permit enforcement without physical indorsement and possession satisfied requirements | Defendant argued plaintiff must possess an original indorsed note, not a photocopy or cancelled indorsement | Court applied N.J.S.A. 12A:3-301 and N.J.S.A. 17:9A-139, concluding Wells Fargo’s possession and merger status sufficed; no error in treating Wells Fargo as holder |
Key Cases Cited
- U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449 (2012) (requirements for vacatur under R. 4:50-1 include excusable neglect plus meritorious defense)
- Deutsche Bank Nat'l Trust Co. v. Mitchell, 422 N.J. Super. 214 (App. Div. 2011) (standing to foreclose determined by UCC person entitled to enforce the note)
- Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592 (App. Div. 2011) (party seeking foreclosure must own or control debt when complaint is filed)
- Miller v. Bank of Am. Home Loan Servicing, L.P., 439 N.J. Super. 540 (App. Div. 2015) (bare denials unsupported by competent evidence do not defeat summary judgment)
- Brae Asset Fund, L.P. v. Newman, 327 N.J. Super. 129 (App. Div. 1999) (bare conclusions without competent proof insufficient to defeat summary judgment)
- Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366 (1995) (standards for appellate review of summary judgment)