NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R.1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1667-15T3
U.S. BANK NATIONAL ASSOCIATION,
AS TRUSTEE FOR SASCO MORTGAGE
LOAN TRUST 2006-WF3,
Plaintiff-Respondent,
v.
KARIN POLHEMUS, HER HEIRS,
DEVISES AND PERSONAL
REPRESENTATIVE AND HIS/HER
THEIR, OR ANY OF THEIR
SUCCESSORS IN RIGHT, TITLE
AND INTEREST, MR. POLHEMUS,
HUSBAND OF KARIN POLHEMUS,
Defendant-Appellant.
______________________________
Submitted February 15, 2017 – Decided June 16, 2017
Before Judges Simonelli and Carroll.
On appeal from the Superior Court of New
Jersey, Chancery Division, Passaic County,
Docket No. F-010769-14.
Joseph A. Chang & Associates, LLC, attorneys
for appellant (Joseph A. Chang, of counsel and
on the brief; Jeffrey Zajac, on the brief).
Reed Smith LLP, attorneys for respondent
(Henry F. Reichner, of counsel and on the
brief).
PER CURIAM
In this foreclosure matter, defendant Karin Polhemus appeals
from the June 30, 2015 Chancery Division order, which granted
summary judgment to plaintiff U.S. Bank National Association, and
from the November 5, 2015 final judgment. For the following
reasons, we affirm.
I.
We derive the following facts from evidence submitted by the
parties in support of, and in opposition to, the summary judgment
motion, viewed in the light most favorable to the non-moving party.
Angland v. Mountain Creek Resort, Inc., 213 N.J. 573, 577 (2013)
(citing Brill v. Guardian Life Ins. Co., 142 N.J. 520, 523 (1995)).
On May 24, 2006, defendant executed a note to American
Financial Resources, Inc. (AFR) in the amount of $210,000. To
secure payment of the note, defendant executed a mortgage to
Mortgage Electronic Registration Systems, Inc. (MERS), as nominee
for AFR, on her property located in Bloomingdale. On May 24,
2006, AFR executed an allonge to the note making it payable to
Wells Fargo Bank, N.A. (Wells Fargo). On June 7, 2006, the
mortgage was recorded with the Clerk of Passaic County.
On June 14, 2006, Wells Fargo acquired the loan by purchase,
took possession of the original note, and began servicing the
loan. Wells Fargo thereafter indorsed the note in blank.
2 A-1667-15T3
On September 1, 2006, Structured Asset Securities Corporation
(as Depositor), plaintiff (as Trustee), Wells Fargo (as Securities
Administrator, Servicer, Originator, and Trustee Document
Custodian), and Aurora Loan Services LLC (as Master Servicer),
entered into a pooling and servicing trust agreement governing
Structured Asset Securities Corporation Mortgage Pass-Through
Certificates Series 2006-WF3 (the PSA). The PSA provided for the
formation of the relevant Trust, the conveyance of a pool of
mortgages to plaintiff as Trustee, the issuance of mortgage-backed
securities representing interests in the pooled loans, and the
servicing of the pooled loans by Wells Fargo. The PSA had a cut-
off date of September 1, 2006, but permitted mortgage loans to be
added to the pool of loans backing the certificates issued by the
Trust for a two-year period following the cut-off date, or by
September 1, 2008.
Defendant defaulted on January 1, 2008. On March 26, 2008,
MERS, as nominee for AFR, executed an assignment of mortgage,
which assigned the mortgage to plaintiff as Trustee for Structured
Asset Securities Corporation Trust 2006-WF3. On November 7, 2008,
the assignment was recorded with the Clerk of Passaic County.
On June 14, 2012, MERS, as nominee for AFR, executed a second
assignment of mortgage, which assigned the mortgage to plaintiff
as Trustee for SASCO Mortgage Loan Trust 2006-WF3. The only change
3 A-1667-15T3
between this assignment and the first assignment was the shortening
of Structured Asset Securities Corporation to SASCO. The reason
for the second assignment was so that the name of the assignee
would match that of the plaintiff ultimately filing the foreclosure
action against defendant. On June 15, 2012, the second assignment
was recorded with the Clerk of Passaic County.
An authorized representative from Wells Fargo confirmed in a
supplemental certification with supporting documents that as of
December 11, 2013, Wells Fargo, as Trustee Document Custodian
under the PSA, held possession of the original note as plaintiff's
agent. On January 3, 2014, Wells Fargo, as servicer of the loan,
sent defendant a notice of intent to foreclose (NOI). The NOI
identified the lender as plaintiff as Trustee for SASCO Mortgage
Loan Trust 2006-WF3. On September 8, 2014, Wells Fargo transferred
the original note to plaintiff's attorney for purposes of
litigation.
On March 21, 2014, plaintiff, as Trustee for SASCO Mortgage
Loan Trust 2006-WF3, filed a complaint for foreclosure against
defendant. Defendant filed an answer. Both parties filed motions
for summary judgment. Defendant did not dispute that she signed
the note and mortgage and was in default. Rather, she argued that
plaintiff lacked standing to foreclose because it did not own the
note and mortgage prior to filing the complaint. Defendant
4 A-1667-15T3
challenged plaintiff's ownership of her loan, asserting that
plaintiff failed to comply with the terms of the PSA because the
mortgage was not timely assigned by the cut-off date of September
1, 2006. Plaintiff countered that defendant lacked standing to
raise this challenge.
In a June 30, 2015 written opinion, the trial court relied
on HSBC Bank USA v. Gomez, A-4194-11 (App. Div. Jan. 10, 2013),
to find that defendant lacked standing to challenge plaintiff's
ownership of the mortgage based on alleged noncompliance with the
terms of the PSA. The court also found that plaintiff, as Trustee
for SASCO Mortgage Loan Trust 2006-WF3, had a prima facie right
to foreclose because: (1) defendant executed the note and mortgage
on May 24, 2006, and was in default; (2) the mortgage was validly
assigned to plaintiff prior to filing the complaint; and (3)
plaintiff was the holder of the note and mortgage. The court
entered an order on June 30, 2015, granting summary judgment to
plaintiff, striking defendant's answer, and referring the matter
to the Office of Foreclosure. On November 5, 2015, the court
entered final judgment. This appeal followed.
Our review of a ruling on summary judgment is de novo,
applying the same legal standard as the trial court. Templo Fuente
De Vida Corp. v. Nat'l Union Fire Ins. Co., 224 N.J. 189, 199
(2016) (citation omitted). Thus, we consider, as the trial judge
5 A-1667-15T3
did, "whether the evidence presents a sufficient disagreement to
require submission to a jury or whether it is so one-sided that
one party must prevail as a matter of law." Liberty Surplus Ins.
Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007) (quoting
Brill, supra, 142 N.J. at 536). Summary judgment must be granted
if "the pleadings, depositions, answers to interrogatories and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact challenged
and that the moving party is entitled to a judgment or order as a
matter of law." Templo Fuente, supra, 224 N.J. at 199 (quoting
R. 4:46-2(c)). If there is no genuine issue of material fact, we
must then "decide whether the trial court correctly interpreted
the law." Massachi v. AHL Servs., Inc., 396 N.J. Super. 486, 494
(App. Div. 2007), certif. denied, 195 N.J. 419 (2008). We review
issues of law de novo and accord no deference to the trial judge's
conclusions on issues of law. Nicholas v. Mynster, 213 N.J. 463,
478 (2013). Applying these standards, we discern no reason to
reverse the grant of summary judgment and entry of final judgment.
II.
Defendant contends that the court erred in holding she
lacked standing to challenge plaintiff's ownership of the mortgage
6 A-1667-15T3
based on alleged noncompliance with the terms of the PSA.1 Relying
on Bank of N.Y. v. Ukpe, A-2209-11 (App. Div. Aug. 20, 2014), and
Yvanova v. New Century Mortg. Corp., 365 P.3d 845 (Cal. 2016),
plaintiff argues that she had standing to assert a violation of
the PSA and is a valid third-party beneficiary of the PSA.
However, unpublished opinions, such as Upke, do not constitute
precedent and are not binding on us, Trinity Cemetery Ass'n v.
Twp. of Wall, 170 N.J. 39, 48 (2001); R. 1:36-3, and we are not
bound by opinions from other jurisdictions.2 See Lipkowitz v.
Hamilton Surgery Ctr., LLC, 415 N.J. Super. 29, 36 (App. Div.
2010); Young v. Prudential Ins. Co. of Am., 297 N.J. Super. 605,
622 (App. Div.), certif. denied, 149 N.J. 408 (1997).
Nevertheless, neither Upke nor Yvanova support defendant's
position. In Upke, we did not discuss whether a borrower may
challenge compliance with a PSA, let alone hold or even suggest
that a borrower has standing to do so. In Yvanova the Supreme
Court of California merely held that a borrower who suffered a
non-judicial foreclosure could sue for wrongful foreclosure when
1
We decline to address defendant's public policy argument that
banks and lending institutes developed a complex securitization
scheme behind which they should not be permitted to "hide."
2
Defendant also relies on opinions from other jurisdictions to
argue that recent trends in those jurisdictions provide strong
support for her position. However, as we have stated, we are not
bound by opinions from other jurisdictions.
7 A-1667-15T3
an assignment is void, as opposed to voidable. Yvanova, supra,
365 P.3d at 848. The Supreme Court of California repeatedly
stressed it was expressing no opinion on whether a mortgage
assignment made after the closing date of a New York securitized
trust was void or voidable. Id. at 853.
That being said, the PSA is governed by New York law. Under
New York law, a person not a party to a PSA or specifically
included in the PSA as a third-party beneficiary, such as defendant
here, lacks standing to challenge any alleged violation of a PSA.
Rajamin v. Deutsche Bank Nat'l Trust Co., 757 F.3d 79, 88 (2d Cir.
2014); see also Wells Fargo Bank, N.A. v. Erobobo, 127 A.D.3d
1176, 1178 (N.Y. App. Div. 2015) (holding that "a mortgagor whose
loan is owned by a trust, does not have standing to challenge the
plaintiff's possession or status as assignee of the note and
mortgage based on purported noncompliance with certain provisions
of the PSA"); Bank of N.Y. Mellon v. Gales, 116 A.D.3d 723, 725
(N.Y. App. Div. 2014) (finding the mortgagor "did not have standing
to assert noncompliance with the subject lender's [PSA]"); In re
Richmond, 534 B.R. 479, 491 (Bankr. E.D.N.Y. 2015) (noting "[i]t
is well established that a non-party to a [PSA] lacks standing to
assert non-compliance with the terms of that agreement as a defense
to enforcement of a note and mortgage by a trust"); In re Estate
of McManus, 390 N.E.2d 773, 774 (N.Y. 1979) (holding that those
8 A-1667-15T3
not beneficially interested in a trust "lack standing to challenge
the actions of its trustee"). See also Restatement (Third) of
Trusts § 94(1) (2012) ("A suit against a trustee of a private
trust to enjoin or redress a breach of the trust or otherwise to
enforce the trust may be maintained only by a beneficiary or a co-
trustee, successor trustee, or other person acting on behalf of
one or more beneficiaries"). Thus, regardless of whether the
mortgage assignments complied with the PSA in this case, defendant
lacked standing to advance such a challenge.
In any event, there was no violation of the PSA. The PSA
permitted mortgage loans to be added to the pool of loans backing
the certificates issued by the Trust for a two-year period
following the cut-off date, or by September 1, 2008. On March 26,
2008, MERS, as nominee for AFR, assigned the mortgage to plaintiff
as Trustee. Thus, the assignment complied with the terms of the
PSA.
III.
Defendant contends that the court erred in holding that
plaintiff proved it possessed the note and mortgage. We disagree.
Under the Uniform Commercial Code (UCC), a "'[p]erson
entitled to enforce' an instrument" includes a holder of the
instrument and such a person is "entitled to enforce the instrument
even though the person is not the owner of the instrument[.]"
9 A-1667-15T3
N.J.S.A. 12A:3-301. See also N.J.S.A. 12A:3-302 (defining "holder
in due course"). That is, under the UCC, the enforcing party must
be a holder or non-holder in possession of the rights of the
holder. The UCC does not specify that physical possession is
necessary for a holder to enforce an instrument and courts
recognize that delivery of the instrument to an agent of the owner
can constitute constructive delivery or possession. N.J.S.A.
12A:3-301; Bank of N.Y. v. Raftogianis, 418 N.J. Super. 323, 331,
339 (Ch. Div. 2010) (citations omitted). Under New York law,
"constructive delivery may be accomplished through the vehicle of
an agent." Corporacion Venezolana de Foments v. Vintero Sales
Corp., 452 F. Supp. 1108, 1117 (S.D.N.Y. 1978).
"As a general proposition, a party seeking to foreclose a
mortgage must own or control the underlying debt." Deutsche Bank
Nat'l Trust Co. v. Mitchell, 422 N.J. Super. 214, 222 (App. Div.
2011) (citations omitted). "[E]ither possession of the note or
an assignment of the mortgage that predated the original complaint
confer[s] standing." Deutsche Bank Trust Co. Americas v. Angeles,
428 N.J. Super. 315, 318 (App. Div. 2012) (citing Mitchell, supra,
422 N.J. Super. at 225). Consistent with this principle, "there
can be constructive delivery or possession, through the delivery
of the instrument to an agent of the owner" and "the actual
delivery of the notes to [the trust's] custodian, would presumably
10 A-1667-15T3
constitute constructive delivery to the [trustee]." Raftogianis,
supra, 418 N.J. Super. at 331, 339.
The evidence in this case clearly established that plaintiff
had standing when it filed the foreclosure complaint. Plaintiff
had constructive possession of the original note through its agent,
Wells Fargo, as well as a valid assignment of the mortgage that
pre-dated the complaint. Defendant's argument that the evidence
was insufficient to prove plaintiff's possession of the note and
mortgage lacks sufficient merit to warrant discussion in a written
opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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