U.S. BANK TRUST, N.A., ETC. VS. KONSTANTINE MITSEL (F-050132-14, HUDSON COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-2975-17T3

U.S. BANK TRUST, N.A., as
trustee for LSF9 MASTER
PARTICIPATION TRUST,

Plaintiff-Respondent,

v.

KONSTANTINE MITSEL,

Defendant,

and

JENNIFER MITSEL,

Defendant-Appellant.
___________________________

Argued June 4, 2019 – Decided June 19, 2019

Before Judges Gilson and Natali.

On appeal from Superior Court of New Jersey,
Chancery Division, Hudson County, Docket No. F-
050132-14.

Elias L. Schneider argued the cause for appellant.
 Nicole M. Savage argued the cause for respondent
(Phelan, Hallinan, Diamond & Jones, PC, attorneys;
Sonya Gidumal Chazin, on brief).

PER CURIAM

In this residential foreclosure action, defendant Jennifer Mitsel appeals

from the February 26, 2018 final judgment of foreclosure. 1 We affirm.

On December 22, 2011, Konstantine Mitsel executed a $298,455.00

promissory note to Quicken Loans, Inc. (Quicken). As security for repayment,

he and defendant executed a mortgage in the same amount to Mortgage

Electronic Registration Systems, Inc., (MERS) as nominee for Quicken.

Defendant defaulted on the loan by failing to make the monthly payment

due on June 1, 2014, and thereafter. Consequently, on September 30, 2014, and

in accordance with the Fair Foreclosure Act, N.J.S.A. 2A:50-53 to -68, Quicken

sent defendant a notice of intention to foreclose. On October 27, 2014, MERS

assigned the mortgage to Quicken, who filed a foreclosure complaint on

December 1, 2014.

On August 25, 2015, Quicken assigned the mortgage to the United States

Department of Housing and Urban Development (HUD), who assigned the

1
The February 26, 2018 order also named Konstantine Mitsel, defendant's
former husband, as a defendant. He has not appealed from the court's order.
A-2975-17T3
2
mortgage to plaintiff U.S. Bank Trust, N.A., as Trustee for LSF9 Master

Participation Trust (U.S. Bank or plaintiff) a year later, on August 25, 2016.

Quicken filed a motion on September 22, 2016, to amend the complaint in

accordance with Rule 4:34-3 to substitute U.S. Bank as plaintiff. Quicken

supported its motion with a September 19, 2016 certification attesting to the

assignments from Quicken to HUD and from HUD to U.S. Bank, and appended

copies of those assignments to the certification. The court granted the motion

on October 13, 2016, and entered default against defendant on January 20, 2017,

as a result of her failure to answer the complaint.

On May 9, 2017, defendant moved to vacate the default, for summary

judgment under Rule 4:46-2(c), and to dismiss the complaint pursuant to Rule

4:6-2(e).2 Defendant maintained she was not served with a copy of the motion

to substitute, and that she had a meritorious defense to the foreclosure action

because plaintiff lacked standing to foreclose the mortgage. In addition,

defendant asserted that the court lacked jurisdiction because the complaint as

amended does not satisfy Rule 4:64-1(b)(10), which requires a plaintiff who "is

2
At a June 9, 2017 hearing, the court noted that defendant's May 9, 2017 notice
of motion did not expressly include a request to vacate the default, but upon
defense counsel's oral application at the hearing, the court amended the motion
to include that request.
A-2975-17T3
3
not the original mortgagee or original nominee mortgagee" to state in the

foreclosure complaint "the names of the original mortgagee and a recital of all

assignments in the chain of title . . . ." See R. 4:64-1(b)(10).

In its opposition, U.S. Bank argued that Rule 4:34-3 permitted it to

prosecute the foreclosure by amending the name of the original plaintiff, and

that it had standing to foreclose the mortgage pursuant to N.J.S.A. 12A:3 -3013

and N.J.S.A. 12A:3-205(b).4 In a June 14, 2017 order and accompanying

statement of reasons, Judge Barry P. Sarkisian granted defendant's motion to

vacate the default, but denied her motions for summary judgment and to dismiss.

As to defendant's standing argument, the court concluded that plaintiff had

"standing to foreclose . . . as it [was] the holder of the note pursuant to N.J.S.A.

12A:3-301."

3
N.J.S.A. 12A:3-301 defines a "'[p]erson entitled to enforce' an instrument" as
"the holder of the instrument, a nonholder in possession of the instrument who
has the rights of a 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 N.J.S.A.
12A:3-418(d).
4
N.J.S.A. 12A:3-205(b) defines a "blank indorsement" as one that "is not a
special indorsement," and provides that instruments bearing blank indorsements
"may be negotiated by transfer of possession alone until specially indorsed." In
turn, N.J.S.A. 12A:3-205(a) provides that an indorsement that "identifies a
person to whom [the instrument] is payable . . . is a 'special indorsement.'" Thus,
a blank indorsement is one that does not identify the person to whom the
instrument is payable. N.J.S.A. 12A:3-205(a)-(b).
A-2975-17T3
4
 With respect to defendant's jurisdictional argument, Judge Sarkisian

acknowledged that defendant was "correct in stating that [Rule] 4:64-1(b)(10)

requires a foreclosure complaint to . . . include a recital of all the assignment in

the chain of title," but explained that Rule 4:34-3 permits a "foreclosure action

to proceed in the name of the original plaintiff when there has been an

assignment . . . after the filing of the complaint" and also "permits . . . [a]

substituted [p]laintiff to continue the prosecution of the action."

Finally, the court denied defendant's motion to dismiss for plaintiff's

failure to serve her with the motion to substitute. The court, relying on Rule

1:5-1, concluded service of the motion on defendant was not required because

she originally failed to appear and the application did not assert any "new or

additional claims for relief" against her. See Rule 1:5-1.

On November 9, 2017, defendant renewed her summary judgment motion,

contending again that the complaint violated Rule 4:64-1(b)(10). Plaintiff

opposed defendant's application and filed a cross-motion for summary

judgment.

The court denied defendant's motion for the reasons stated in the court's

June 14, 2017 statement of reasons, granted plaintiff's cross-motion, and

returned the matter to the Office of Foreclosure as an uncontested matter. As to

A-2975-17T3
5
plaintiff's application, the court concluded that plaintiff "established a prima

facie right to foreclose" as U.S. Bank was "in possession of the [original] no te

and mortgage," and defendant was in default for failing to make the payments

required by the mortgage documents.

On appeal, defendant raises the same jurisdictional arguments rejected by

the trial court. Specifically, defendant claims that because U.S. Bank failed to

amend the complaint to comply with Rule 4:64-1(b)(10) by specifically pleading

the Quicken and HUD assignments, the court was divested of the jurisdiction it

initially possessed when Quicken filed the complaint. Defendant also maintains

that the court's October 13, 2016 order permitting U.S. Bank to substitute for

Quicken did not cure the aforementioned defect. Finally, defendant argues,

without any legal support, that "any requested relief should apply to [a]

defaulted co-defendant." We are unpersuaded by these arguments and affirm

substantially for the reasons expressed in Judge Sarkisian's November 17, 2017

and June 14, 2017 written decisions. We add the following brief comments.

Our review of a ruling on summary judgment is de novo, applying the

same legal standard as the trial court. Townsend v. Pierre, 221 N.J. 36, 59

(2015). "Summary judgment must be granted if 'the pleadings, depositions,

answers to interrogatories and admissions on file, together with the affidavits, if

A-2975-17T3
6
any, show there is no genuine issue as to any material fact challenged and that

the moving party is entitled to a judgment . . . as a matter of law.'" Town of

Kearny v. Brandt, 214 N.J. 76, 91 (2013) (quoting R. 4:46-2(c)). We accord no

special deference to the trial judge's conclusions on issues of law. Nicholas v.

Mynster, 213 N.J. 463, 478 (2013).

"The only material issues in a foreclosure proceeding are the validity of

the mortgage, the amount of the indebtedness, and the right of the mortgagee to

resort to the mortgaged premises." Great Falls Bank v. Pardo, 263 N.J. Super.

388, 394 (Ch. Div. 1993), aff'd, 273 N.J. Super. 542 (App. Div. 1994). A party

seeking to foreclose must demonstrate "execution, recording, and non-payment

of the mortgage." Thorpe v. Floremoore Corp., 20 N.J. Super. 34, 37 (App. Div.

1952). Further, the foreclosing party must "own or control the underlying debt."

Deutsche Bank Nat'l Tr. Co. v. Mitchell, 422 N.J. Super. 214, 222 (App. Div.

2011) (quoting Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592, 597 (App.

Div. 2011)). In Mitchell, we held that possession of the note or an assignment

of the mortgage predating the original complaint conferred standing. Id. at 225.

Both in the trial court below, and before us, defendant has not challenged

U.S. Bank's right to foreclose the mortgage. Indeed, defendant concedes that

U.S. Bank "own[s]" the mortgage, and submits that she "has never challenged

A-2975-17T3
7
the propriety of the assignment of the mortgage" to U.S. Bank and that she "is

not challenging" plaintiff's "standing" or "right to file" a lawsuit. Further,

defendant does not dispute that she signed the mortgage, defaulted on the

payment, and has not paid the mortgage since June 2014.

We reject defendant's claim that U.S. Bank's failure to amend the

complaint to recite the Quicken and HUD assignments in accordance with Rule

4:64-10(b) provides a valid defense to the foreclosure. Defendant's argument

ignores the principle that foreclosure is a "discretionary remedy." See

Brunswick Bank & Tr. v. Heln Mgmt. LLC, 453 N.J. Super. 324, 330 (App. Div.

2018). "Because the pursuit of that remedy summons the court's equity

jurisdiction, the court may, through the imposition of flexible remedies, adjust

the parties' rights, with regard to the facts, to achieve a fair and just result." Id.

at 330-31. "[E]quity must be applied to plaintiffs as well as defendants" in

foreclosure matters. Angeles, 428 N.J. Super. at 320.

As Judge Sarkisian explained, U.S. Bank was authorized to prosecute the

complaint under Rule 4:34-3. Further, defendant did not dispute in the trial

court, or before us, that in addition to possessing the original note, U.S. Bank

received a valid assignment from HUD. "Because foreclosure proceedings seek

primary or principal relief which is equitable in nature, a complaint in

A-2975-17T3
8
foreclosure is properly cognizable in the General Equity part of the Chancery

Division." U.S. ex rel. U.S. Dep't of Agric. v. Scurry, 193 N.J. 492, 502 (2008);

see R. 4:3-1(a)(1) (providing that "[a]ctions in which . . . the principal relief

sought is equitable in nature . . . shall be filed and heard in the Chancery

Division, General Equity"). Here, the complaint properly was filed and heard

in the General Equity part of the Chancery Division in Hudson County, the

county in which the mortgaged premises is situated.

In addition, the June 1, 2017 certification submitted by plaintiff in

opposition to defendants May 9, 2017 summary judgment motion recited, and

appended, all three assignments. Thus, as of June 2017, at the latest, defendant

was in possession of all facts related to the chain of title. Accordingly, we

discern no prejudice to defendant as a result of plaintiff's failure to strictly

comply with Rule 4:64-1(b)(10) as she possessed all the information regarding

the August 25, 2015 and August 25, 2016 assignments that she maintains U.S.

Bank fatally omitted from the complaint.

To the extent not addressed, defendant's remaining arguments lack

sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.

A-2975-17T3
9