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WELLS FARGO BANK, N.A. VS. MARCIA A. HARRIS (F-046925-10, BERGEN COUNTY AND STATEWIDE)

Court: New Jersey Superior Court Appellate Division
Date filed: 2018-07-09
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                        NOT FOR PUBLICATION WITHOUT THE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-5611-15T3

WELLS FARGO BANK, N.A.,

        Plaintiff-Respondent,

v.

MARCIA A. HARRIS, her heirs,
devisees, and personal
representatives and his/her,
their, or any of their
successors in right, title
and interest,

        Defendant-Appellant,

and

MR. HARRIS, HUSBAND OF MARCIA A.
HARRIS, his heirs, devisees, and
personal representatives and
his/her, their, or any of their
successors in right, title and
interest and UNITED STATES OF
AMERICA,

     Defendants.
___________________________________

              Submitted December 11, 2017 – Decided July 9, 2018

              Before Judges Ostrer and Whipple.

              On appeal from Superior Court of New Jersey,
              Chancery Division, Bergen County, Docket No.
              F-046925-10.
          Joshua L. Thomas, attorney for appellant.

          Reed Smith LLP, attorneys for respondent
          (Henry F. Reichner, of counsel; Siobhan A.
          Nolan, on the brief).

PER CURIAM

     In this mortgage foreclosure case, defendant Marcia Harris

appeals from (1) the trial court's order conditionally reinstating

the complaint of plaintiff Wells Fargo Bank, N.A., after it had

been dismissed for failure to prosecute; and (2) the trial court's

order granting summary judgment in Wells Fargo's favor.     As the

trial court did not abuse its discretion in reinstating the action,

and no genuine issues of material fact preclude Wells Fargo's

right to foreclose, we affirm.

     On May 22, 2006, Harris borrowed $543,000 from World Savings

Bank, FSB, to purchase a residential property in Englewood.      The

thirty-year note was secured by a mortgage on the property.      The

following year, Harris borrowed an additional $150,000 from World

Savings, on a home equity line of credit, secured by a mortgage

on the Englewood property.

     That same year, the federal Office of Thrift Supervision

confirmed in correspondence that World Savings amended its bylaws

and charter to change its name to Wachovia Mortgage, FSB, effective

December 31, 2007.   Almost two years later, Wells Fargo acquired


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Wachovia.     The acquisition was confirmed in a January 7, 2013

letter from the United States Comptroller of the Currency.

     Harris    provides   no   competent    evidence   to   dispute     Wells

Fargo's contention that both obligations have been in default

since August 15, 2009.    Wells Fargo served its notice of intention

to foreclose in a timely manner.           The matter was automatically

stayed from July 27, 2011, until February 8, 2012 by Harris's

Chapter 13 bankruptcy proceeding.          On March 14, 2012, after the

automatic stay was lifted as to Wells Fargo's secured interest,

Harris filed an answer to the foreclosure complaint alleging that

Wells Fargo lacked standing because it was neither the original

mortgagee nor an assignee of the mortgage.

     Wells Fargo then moved for summary judgment, which the trial

court granted on August 24, 2012, finding no genuine factual issues

about either Wells Fargo's standing or Harris's default status.

The trial court also instructed that Wells Fargo could request an

entry of final judgment through the Office of Foreclosure on an

uncontested basis.    However, Wells Fargo failed to request final

judgment and the Office of Foreclosure dismissed the case for lack

of prosecution on December 20, 2013.

     On March 20, 2015, Wells Fargo moved for reinstatement,

arguing that changes to Rule 4:64, establishing new certification

requirements, took time to implement firm wide.         Despite Harris's

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opposition, the trial court reinstated the action under Rule 4:64-

8 after finding that Wells Fargo established good cause and Harris

was not prejudiced since she was living in the home rent free.

     But, Wells Fargo failed to move for final judgment.       Again

over Harris's opposition, the court on October 9, 2015, gave Wells

Fargo another 120 days to move for final judgment.       Wells Fargo

failed to act within the allotted time, and requested yet another

extension on February 19, 2016. Harris opposed the motion, arguing

the case should be dismissed since all the delays were Wells

Fargo's fault.   As to good cause, Wells Fargo argued it had yet

to finalize the certification of amount due.         In granting the

motion, the judge reasoned that forcing Wells Fargo to start over

was too harsh a remedy.      The judge granted Wells Fargo a one

hundred day extension to move for final judgement.

     Finally, Wells Fargo complied and moved for final judgment

on April 8, 2016, seeking $989,974.47 as the total amount due.

Over Harris's objection, the trial court entered final judgment,

specifying that Harris owed $543,000 as the principal due on the

first mortgage, $150,000 on the home equity line of credit, plus

$7,500 in attorney's fees, combined with interest, for a total

amount due of $989,974.47.   This appeal followed.

     We review de novo the trial court's grant of summary judgment,

applying the same familiar standard that governs the trial court,

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Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010), but

we deferentially review the trial court's discretionary decision

to grant a motion to reinstate a complaint, and will act only to

prevent an injustice, St. James AME Dev. Corp. v. City of Jersey

City, 403 N.J. Super. 480, 484 (App. Div. 2008).

     Reinstatement of a foreclosure action following a dismissal

for failure to prosecute "may be permitted only on motion for good

cause shown."    R. 4:64-8.   We have found no reported decision that

explains the "good cause" requirement, but the rule's language

"generally follows Rule 1:13-7."        See Pressler & Verniero, Current

N.J. Court Rules, cmt. 1 on R. 4:64-8 (2018).       However, Rule 1:13-

7 grants a party ninety days to seek reinstatement for "good

cause,"   after     which     the   party    must   show   "exceptional

circumstances."    By contrast, Rule 4:64-8 includes no such ninety-

day period.     Nonetheless, as for the meaning of "good cause," we

may presume that the Rule's drafters "used the word in the later

[rule] in the same sense as in the . . . earlier [rule]."            Bank

of Montclair v. McCutcheon, 107 N.J. Eq. 564, 567 (Prerog. Ct.

1930) (referring to statutory interpretation).

     Rule 1:13-7 is an "administrative rule designed to clear the

docket of cases that cannot, for various reasons, be prosecuted

to completion."     Mason v. Nabisco Brands, Inc., 233 N.J. Super.

263, 267 (App. Div. 1989).      "Notwithstanding the adoption of the

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good cause standard, absent a finding of fault by the plaintiff

and prejudice to the defendant, a motion to restore under the rule

should be viewed with great liberality."     Ghandi v. Cespedes, 390

N.J. Super. 193, 197 (App. Div. 2007).

     The delay in filing the final judgment with the Office of

Foreclosure was clearly attributable to Wells Fargo.       The court

allowed reinstatement of the complaint on the theory that Harris

would not suffer any prejudice.       The court reasoned that Harris

was living rent free in the home while the foreclosure proceedings

continued.     Additionally, dismissing the action would not have

secured any property rights for Harris; the residence would have

remained encumbered, and the mortgage would have remained in

arrears.     Wells Fargo apparently would have had every right to

reinstitute the foreclosure action since Harris does not argue

that the statute of limitations has run.    See N.J.S.A. 2A:50-56.1.

Thus, the trial court did not abuse its discretion in reinstating

the complaint.

     As for the multiple extensions of time, "[a] court may

exercise broad discretion in controlling its calendar."     State v.

Kates, 426 N.J. Super. 32, 45 (App. Div. 2012), aff'd o.b., 216

N.J. 393 (2014).     We will not disturb the discretionary ruling

unless it was "clearly unreasonable" and "prejudice[ed] . . . the

rights of the party complaining."     Smith v. Smith, 17 N.J. Super.

                                  6                          A-5611-15T3
128, 133 (App. Div. 1951).            The trial judge determined that

judicial economy warranted an extension of time, rather than

dismissal of the case without prejudice and returning a six-year

litigation    back   to   square    one.    This    was   not    an   abuse    of

discretion,    particularly        since   Harris   did    not    suffer      any

prejudice.

     We turn next to Harris's substantive arguments.                  "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).           Harris presents no competent

evidence to contest the first two elements.               Rather, she argues

Wells Fargo lacks standing because World Savings, not Wells Fargo,

is the original mortgagee; therefore, only World Savings has

standing to foreclose.

     The legal effect of a merger between two banking institutions

is that "the property and rights of [the] merging bank . . . vest

in the receiving bank without further act or deed," and "the rights

and obligations of [the] merging bank shall become the rights and

obligations of the receiving bank."          N.J.S.A. 17:9A-139(1), (3).

     We specifically addressed the merger between Wachovia and

Wells Fargo in Suser v. Wachovia Mortg., FSB, 433 N.J. Super. 317,

                                       7                                A-5611-15T3
321 (App. Div. 2013).       The plaintiff sought to quiet title by,

among other things, removing a mortgage recorded by World Savings.

Id. at 320. We rejected the plaintiff's challenge to Wells Fargo's

standing, stating:

            Wells Fargo's authority to seek foreclosure
            of the World Savings mortgage was [not] based
            on an assignment.      Instead, Wells Fargo
            asserted, without substantial contradiction,
            that the original mortgage holder World
            Savings Bank, FSA changed its name to Wachovia
            Mortgage, FSB, effective December 31, 2007,
            and that Wachovia was acquired by and merged
            into Wells Fargo effective November 1,
            2009. . . .   Wells Fargo's right to enforce
            the mortgage arises by operation of its
            ownership of the asset through mergers or
            acquisitions, not assignment.     Accordingly,
            plaintiff's assertions regarding standing
            have no bearing on Wells Fargo . . . .

            [Ibid.]

     Here    as   well,   Wells    Fargo      has   provided   sufficient    and

undisputed    documentation       that       it   acquired   and   merged   with

Wachovia, formerly World Savings.                 Therefore, Wells Fargo has

standing to foreclose without proof of a formal assignment.

     Harris argues for the first time on appeal that the final

judgment of foreclosure should be vacated under Rule 4:50-1(a),

(b), and (c), because Wells Fargo's calculations of the final

amount due were incorrect.        As Harris could have raised this issue

before the trial court, and the issue does not involve the trial

court's jurisdiction or a significant public policy matter, we

                                         8                              A-5611-15T3
decline to address it.   See Nieder v. Royal Indem. Ins. Co., 62

N.J. 229, 234 (1973).

    Harris's remaining argument regarding rescission of the loan

under the Truth in Lending Act, 15 U.S.C. § 1601 to § 1667, lacks

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

    Affirmed.




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