Opinion
DOCKET NO. A-4574-14T2
09-12-2016
PENNYMAC LOAN SERVICES, LLC, Plaintiff-Respondent, v. DORIS VERMEYCHUK and DANIEL VERMEYCHUK, Defendants-Appellants.
Brian J. Smith and Associates, PC, attorneys for appellants (Brian J. Smith, Joseph A. Diorio and Michael Di Girolamo, on the brief). Phelan Hallinan Diamond & Jones, PC, attorneys for respondent (Brian J. Yoder, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Hoffman and Currier. On appeal from Superior Court of New Jersey, Chancery Division, Cape May County, Docket No. F-013649-14. Brian J. Smith and Associates, PC, attorneys for appellants (Brian J. Smith, Joseph A. Diorio and Michael Di Girolamo, on the brief). Phelan Hallinan Diamond & Jones, PC, attorneys for respondent (Brian J. Yoder, on the brief). PER CURIAM
In this mortgage foreclosure case, defendants Doris and Daniel Vermeychuk appeal from a May 11, 2015 judgment of foreclosure in favor of plaintiff PennyMac Loan Services, LLC. Defendants challenge the trial court's denial of their motion to dismiss for failure to comply with discovery, as well as the trial court's finding that plaintiff possessed standing and had established its prima facie right to foreclose. We find no merit to defendants' arguments and affirm, essentially for the reasons expressed by Judge Raymond A. Batten in his oral decision issued from the bench on March 30, 2015.
We derive the underlying facts from the record. On June 30, 2004, defendants executed a promissory note to Washington Mutual Bank, FA (Washington Mutual) to secure the sum of $435,000 to purchase property in Avalon. To secure payment of the note, defendants executed a non-purchase money mortgage to Washington Mutual, which was recorded in the Office of the Clerk of Cape May County on July 14, 2004. On January 1, 2009, defendants and Washington Mutual entered into a loan modification agreement. Following Washington Mutual's insolvency, the Federal Deposit Insurance Corporation assigned the mortgage to plaintiff. On August 22, 2012, the assignment was recorded in the Office of the Clerk of Cape May County.
The mortgage was initially assigned to JPMorgan Chase Bank, NA. However, in March 2015, the loan was transferred to PennyMac Loan Services, LLC, which was the servicer at the time of trial. --------
Defendants defaulted on their payments in June 2010. After plaintiff filed a foreclosure complaint in April 2014, defendants filed a contesting answer alleging that plaintiff was not the real party in interest and lacked standing. On July 10, 2014, Judge Batten ordered that discovery be propounded by August 14, 2014. Notwithstanding, defendants alleged that plaintiff failed to comply with two requests for discovery — on July 17 and October 30, 2014 — and they accordingly filed a motion to dismiss pursuant to Rule 4:23-5 for failure to comply with discovery on February 4, 2015.
On March 30, 2015, the parties appeared before the Chancery Division for trial. Judge Batten first denied defendants' motion to dismiss. While acknowledging that certain responses were late and in violation of his case management orders, Judge Batten reasoned that "once even late discovery is provided . . . dismissal without prejudice[] ought not be entered." Following conclusion of trial that same date, Judge Batten found that plaintiff had proven its prima facie entitlement to foreclosure. He specifically found that "the mortgage and loan documents are valid, the mortgage loan is and remains in default and plaintiff has demonstrated its contractual right to resort to the mortgage premises in satisfaction of the debt." The court accordingly entered partial judgment as to plaintiff's prima facie entitlement to foreclose, and deemed the matter uncontested and returned the file to the Office of Foreclosure to proceed. This appeal followed.
When reviewing foreclosure judgments, as a general proposition the law requires the party initiating foreclosure must "own or control" the underlying debt obligation at the time an action is initiated to demonstrate standing to foreclose a mortgage. Deutsche Bank Nat'l Trust Co. v. Mitchell, 422 N.J. Super. 214, 222 (App. Div. 2011). Absent a showing of such ownership or control, a plaintiff "lacks standing to proceed with the foreclosure action and the complaint must be dismissed." Ibid. (quoting Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592, 597 (App. Div. 2011)).
Based on the record before us, plaintiff is clearly "a nonholder in possession of the instrument who has the rights of a holder." Ford, supra, 418 N.J. Super. at 598 (quoting N.J.S.A. 12A:3-301). Specifically, satisfactory proof required by N.J.S.A. 12A:3-301 includes properly authenticated evidence showing plaintiff is in possession of defendant's original note and mortgage, and acquired ownership through a valid assignment of the mortgage, together with the note described in the mortgage, "with all interest, all liens, and any rights due or to become due thereon." Ford, supra, 418 N.J. Super. at 598-99; see also Deutsche Bank Trust Co. Ams. v. Angeles, 428 N.J. Super. 315, 318 (App. Div. 2012) ("[E]ither possession of the note or an assignment of the mortgage that predated the original complaint confer[s] standing." (citation omitted)). Authentication requires "personal knowledge" of the facts. Ford, supra, 418 N.J. Super. at 599 (citation omitted).
The record reveals the assignment of the mortgage to plaintiff was executed on June 26, 2012, and properly recorded on August 22, 2012, well over nineteen months before the filing of the April 8, 2014 foreclosure complaint. Plaintiff also had physical possession of the endorsed in-blank promissory note as of the filing of the complaint. See Angeles, supra, 428 N.J. Super. at 318 (stating that standing is conferred by "either possession of the note or an assignment of the mortgage that predate[s] the original complaint" (citation omitted)).
Following our review, we find no flaw in Judge Batten's conclusion that assignment of defendant's note and mortgage to plaintiff was valid and executed prior to filing the complaint establishing plaintiff's standing to pursue the foreclosure action, see ibid., and we affirm substantially for the reasons set forth in his thorough oral opinion.
Defendants also argue the trial court abused its discretion when it denied their motion to strike the complaint for failure to comply with discovery. We again see no error. We will not interfere with the exercise of discretion by a trial judge in discovery matters unless the judge mistakenly exercised his or her discretion. Abtrax Pharm., Inc. v. Elkins-Sinn, Inc., 139 N.J. 499, 513-14 (1995). Simply stated, discovery "sanctions will not be disturbed on appeal provided they are just and reasonable under the circumstances." Grubbs v. Knoll, 376 N.J. Super. 420, 435 (App. Div. 2005) (quoting Aetna v. Imet Mason Contractors, 309 N.J. Super. 358, 365 (App. Div. 1998)). The record reveals that Judge Batten acknowledged plaintiff's failure to comply timely with case management orders regarding discovery; however, he concluded that defendants' requested relief was not warranted. We agree with plaintiff that his decision was not an abuse of discretion, and affirm as to that issue.
To the extent not addressed here, defendants' remaining arguments are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION