NOT FOR PUBLICATION WITHOUT THE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-3258-15T2
WELLS FARGO BANK, N.A.
Plaintiff-Respondent,
v.
MARY ELLEN UGACTZ-GONZALEZ,
Defendant-Appellant,
and
JUAN A. GONZALEZ, KEVIN HAGER
and CRESCENT RECOVERY, LLC,
Defendants.
__________________________________
Submitted June 6, 2017 – Decided August 8, 2017
Before Judges Fasciale and Sapp-Peterson.
On appeal from Superior Court of New Jersey,
Chancery Division, Essex County, Docket No.
F-031505-14.
Mary Ellen Ugactz-Gonzalez, appellant pro se.
Reed Smith, LLP, attorneys for respondent
(Henry F. Reichner, of counsel and on the
brief).
PER CURIAM
In this mortgage foreclosure case, pro se defendant Mary
Ellen Ugactz-Gonzalez, appeals from a June 12, 2015 order, granting
plaintiff, Wells Fargo Bank, N.A. (Wells Fargo) summary judgment.
This order also struck the answer and counterclaim filed by
defendant and her spouse, Juan A. Gonzalez,1 directed the Clerk
of the Court to enter default as though no answering pleading had
been filed, and referred the matter to the Office of Foreclosure
for further proceedings and the entry of final judgment as an
uncontested matter. Defendant also appeals the December 14, 2015
entry of Final Judgment by the Office of Foreclosure, and the
April 25, 2016 order, denying her motion to vacate the entry of
final judgment.2 We affirm.
The facts are undisputed. On August 31, 2007, defendant and
her husband borrowed $512,000 from World Savings Bank, FSB (World
Savings). To secure the note, they executed a note and purchase
1
Although defendant's spouse has not appealed the order under
review, for ease of reference, we refer to defendant and her
spouse, collectively as "defendants."
2
Defendant's notice of appeal references the December 14, 2015
order as being appealed. However, defendant's Civil Case
Information Statement references the summary judgment motion and
her brief addresses the denial of her motion to vacate the entry
of final judgment.
2 A-3258-15T2
money mortgage on their residence in Verona Township. The mortgage
was duly recorded on September 17, 2007, in the Office of the
Clerk of Essex County.
Three months after recording the mortgage, World Savings
amended its charter and bylaws to change its name to Wachovia
Mortgage, FSB (Wachovia). In 2009, Wachovia converted into a
national bank and merged with and became Wells Fargo.
Wells Fargo indorsed the note defendants executed to the Bank
of New York as Trustee. Wells Fargo, as legal successor to World
Savings, served as the document custodian for the Bank of New York
as Trustee and maintained possession of the note continuously
thereafter. It subsequently cancelled the indorsement on the note
from World Savings to Bank of New York as Trustee and did so prior
to filing the underlying foreclosure complaint against defendants.
Defendants defaulted under the terms of the note and mortgage
by failing to make the December 23, 2013 monthly payment. On
August 1, 2014, Wells Fargo filed a foreclosure complaint against
defendants, who thereafter filed an answer and counterclaim.
Following motion practice, plaintiff filed a motion for summary
judgment. Defendants cross-moved for summary judgment and
production of documents. As part of her request for the production
of documents, defendant sought leave to inspect the original note.
3 A-3258-15T2
She was afforded that opportunity on May 6, 2015, during a status
conference with the court.
On June 12, 2015, the court conducted oral argument on the
motions and on that same date rendered an oral decision granting
plaintiff's motion and denying defendant's motion. The court
found defendant's denial in her answer that she executed and
delivered a note to World Savings securing borrowed funds, was not
supported by any competent evidence and that her mere denial would
not defeat summary judgment. The court next found that plaintiff
was in possession of the original note. Finally, the court was
satisfied plaintiff demonstrated its standing to foreclose. The
matter was transferred to the Foreclosure Unit, where the Office
of Foreclosure entered final judgment on December 14, 2015.
On January 25, 2016, defendant filed a motion seeking to
vacate the December 14, 2015 entry of final judgment. Defendant
argued that she was entitled to relief based upon "extrinsic
intrinsic fraud, lack of standing, inadvertence,
misrepresentations, negligence and judgment is void." By order
dated April 25, 2016, the court denied the motion. In a statement
of reasons appended to the order, the court first found that
defendants "were unaware of Plaintiff's motion to enter final
judgment" and that their failure to contest the amount due was not
"attributable to any fault on their part but instead resulted from
4 A-3258-15T2
their lack of notice of the proceeding." Thus, the court found
that defendants satisfied the first prong for relief from judgment
pursuant to Rule 4:50-1 (the Rule), excusable neglect.
Nonetheless, the court denied the motion because defendant failed
to satisfy the second prong for relief under the Rule, namely, a
meritorious defense. Citing Deutsche Bank National Trust Company
v. Mitchell, 422 N.J. Super. 214, 222 (App. Div. 2011), the court
observed that the record established plaintiff's right to
foreclose based upon plaintiff's "possession of the Note and
Mortgage predate the filing of the Complaint on August 1, 2014."
The present appeal followed.
On appeal, defendant urges that there were genuinely disputed
issues of material fact, which precluded the grant of summary
judgment, and plaintiff's proofs established that it lacked
standing to foreclose. Defendant also contends plaintiff
presented flawed, contradictory certifications, and erroneous due
diligence. She further argues the court erred when it ruled that
a photocopied note was the original note and failed to acknowledge
that plaintiff was required to possess the original note, "not
just a copy," in order to enforce the note, and improperly shifted
the burden of proof. Defendant additionally contends the court
failed to acknowledge the existence of defendants' defenses and
counterclaims. Finally, defendant alleges the court failed to
5 A-3258-15T2
afford defendants "proper access to the courts and displayed
judicial bias/abuse of judicial discretion which violated
defendants' NJ constitutional rights."
Based on our review of the record and applicable law, we are
not persuaded by any of these arguments.
Under the Rule, the grounds for relief from judgment include
excusable neglect, which the motion judge found defendant
established. However, as the motion judge observed, a party
seeking relief must do more than establish excusable neglect. U.S.
Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 466-69 (2012) (holding
a party seeking relief under the Rule must also demonstrate the
existence of a meritorious defense, either to the underlying cause
of action, or, if liability is undisputed, to the amount of damages
determined).
The Rule is "designed to reconcile the strong interests in
finality of judgments and judicial efficiency with the equitable
notion that courts should have authority to avoid an unjust result
in any given case." Id. at 467 (quoting Mancini v. EDS, 132 N.J.
330, 334 (1993)). Furthermore, this Rule "provides for
extraordinary relief and may be invoked only upon a showing of
exceptional circumstances." Baumann v. Marinaro, 95 N.J. 380, 393
(1984).
6 A-3258-15T2
We review the trial court's denial of defendants' motion to
vacate the final judgment of foreclosure under an abuse of
discretion standard. Guillaume, supra, 209 N.J. at 467; United
States v. Scurry, 193 N.J. 492, 502-03 (2008). In Guillaume,
supra, our Supreme Court recently reiterated the standard of review
of a trial court's determinations on a motion to vacate a default
judgment under the Rule 4:50-1 as follows:
The trial court's determination under the rule
warrants substantial deference, and should not
be reversed unless it results in a clear abuse
of discretion. See DEG, LLC v. Twp. of
Fairfield, 198 N.J. 242, 261 (2009); Hous.
Auth. of Morristown v. Little, 135 N.J. 274,
283 (1994). The Court finds an abuse of
discretion when a decision is "'made without
a rational explanation, inexplicably departed
from established policies, or rested on an
impermissible basis.'" Iliadis v. Wal-Mart
Stores, Inc., 191 N.J. 88, 123 (2007) (quoting
Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561,
571(2002)).
[209 N.J. at 467-68.]
On this record, we find no abuse of discretion in the motion
court's decision.
The crux of defendant's arguments attacks the finding by the
summary judgment motion judge that plaintiff was entitled to
foreclosure, as a matter of law, because defendant failed to raise
any genuinely disputed issue of fact sufficient to defeat
plaintiff's summary judgment motion. Although we owe no deference
7 A-3258-15T2
to the motion judge's conclusion, Manalapan Realty, L.P. v. Twp.
Comm fof Manalapan, 140 N.J. 366, 378 (1995), we are in agreement
with the decision.
A trial court must grant a summary judgment motion 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." R. 4:46-2(c). "An issue of fact is genuine only if,
considering the burden of persuasion at trial, the evidence
submitted by the parties on the motion, together with all
legitimate inferences therefrom favoring the non-moving party,
would require submission of the issue to the trier of fact."
Ibid.; see also Brill v. Guardian Life Ins. Co. of Am., 142 N.J.
520, 540 (1995). On appeal, we follow that same summary judgment
standard. Townsend v. Pierre, 221 N.J. 36, 59 (2015).
Defendant contested her execution of the loan documents.
However, she offered nothing more than her bare allegations. See
Miller v. Bank of Am. Home Loan Servicing, L.P., 439 N.J. Super.
540, 551 (App. Div.) certif. denied, 221 N.J. 567 (2015); see also
Brae Asset Fund, L.P. v. Newman, 327 N.J. Super. 129, 134 (App.
Div. 1999)(that bare conclusions unsupported by competent evidence
will not defeat a summary judgment motion).
8 A-3258-15T2
"[A] party seeking to foreclose a mortgage must own or
control the underlying debt" at the time the foreclosure complaint
is filed. Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592,
597 (App. Div. 2011) (quoting Bank of N.Y. v. Raftogianis, 418
N.J. Super. 323, 327-28 (Ch. Div. 2010)). If a plaintiff cannot
establish ownership or control, it "lacks standing to proceed with
the foreclosure action and the complaint must be dismissed." Ford,
supra, 418 N.J. Super. at 597. "If a debt is evidenced by a
negotiable instrument, such as the note executed by [a] defendant,"
whether a plaintiff has established ownership or control over the
note "is governed by Article III of the Uniform Commercial Code
(UCC), N.J.S.A. 12A:3-101 to -605, in particular N.J.S.A. 12A:3-
301." Ibid.
Here, Wells Fargo had to show it fell within one of the "three
categories of persons entitled to enforce negotiable instruments"
as described in N.J.S.A. 12A:3-301. Deutsche Bank Nat'l Trust Co.
v. Mitchell, 422 N.J. Super. 214, 222-23 (App. Div. 2011).
N.J.S.A. 12A:3-301 provides:
"Person entitled to enforce" an instrument
means the holder of the instrument, a
nonholder in possession of the instrument who
has the rights of the holder, or a person not
in possession of the instrument who is
entitled to enforce the instrument pursuant
to [N.J.S.A.] 12A:3-309 or subsection d. of
[N.J.S.A.] 12A:3-418. A person may be a person
entitled to enforce the instrument even though
9 A-3258-15T2
the person is not the owner of the instrument
or is in wrongful possession of the
instrument.
Additionally, under the Banking Act of 1948, N.J.S.A. 17:9A-1 to
-467, when two or more banks merge, "the corporate existence of
each merging bank shall be merged into that of the receiving bank,
and the property and rights of each merging bank shall thereupon
vest in the receiving bank without further act or deed[.]"
N.J.S.A. 17:9A-139(1) (emphasis added).
Here, the motion judge credited the evidence presented by
Wells Fargo regarding its merger history and concluded Wells Fargo
had standing and properly held the note without any endorsement.
We see no error in the judge's determination, particularly given
the undisputed merger and acquisition history of World Savings,
Wachovia Mortgage, and Wells Fargo.
Consistent with N.J.S.A. 17:9A-139(1) and the requirements
set forth in N.J.S.A. 12A:3-301, Wells Fargo was the "holder of
the instrument." Having presented undisputed evidence before the
motion judge that it was the holder of the note and the mortgage
at the time of the complaint, it had standing to commence the
foreclosure action against defendants. Mitchell, supra, 422 N.J.
Super. at 224-25 (citation omitted).
10 A-3258-15T2
The remaining arguments advanced by defendant are without
sufficient merit to warrant further discussion in a written
opinion. R. 2:11-3(e)(1)(E).
Affirmed.
11 A-3258-15T2