NOT FOR PUBLICATION WITHOUT THE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-0008-18T4
WELLS FARGO BANK,
NATIONAL ASSOCIATION AS
TRUSTEE FOR MORGAN STANLEY
ABS CAPITAL I INC. TRUST 2007
HE-4 MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 2007-HE4,
Plaintiff-Appellant,
v.
NJ PROPERTY GROUP, LLC,
JOHN D. FLOOD, LAVALLET
CAPITAL, LLC, DANIEL E. STRAFFI,
and SM FINANCIAL SERVICES
CORPORATIONS,
Defendants.
________________________________
Submitted October 28, 2019 – Decided June 12, 2020
Before Judges Moynihan and Mitterhoff.
On appeal from the Superior Court of New Jersey,
Chancery Division, Morris County, Docket No. F-
031547-15.
Stradley Ronon Stevens & Young, LLP, attorneys for
appellant (Dustin Peter Mansoor, on the briefs).
Finestein & Malloy, LLC, attorneys for respondents
Raymond Cooper and Dara Ofner (Russell M.
Finestein, on the brief).
PER CURIAM
Plaintiff Wells Fargo Bank, National Association as Trustee for Morgan
Stanley ABS Capital 1 Inc. Trust 2007-HE4 Mortgage Pass-Through
Certificates, Series 2007-HE4 (Wells Fargo) appeals the July 20, 2018 order for
summary judgment entered by the trial court in favor of defendants Raymond
Cooper and Dara Offner. Plaintiff had filed a complaint seeking to foreclose on
real property, as to which it had previously possessed a mortgage. Prior to
plaintiff filing its complaint, ownership of the property had changed hands
several times after an allegedly fraudulent assignment and discharge of
plaintiff's mortgage. Title to the property was eventually deeded to defendants,
who executed a separate mortgage on the property. Defendants intervened in
the foreclosure action. The court granted summary judgment in favor of
defendants on the basis that plaintiff's claim was precluded by the doctrine of
laches. Having reviewed the record, and in light of the applicable law, we
affirm.
A-0008-18T4
2
I.
We discern the following facts from the record. Defendants Raymond
Cooper and Dara Offner acquired title to the subject property by deed dated
September 24, 2014 from NJ Property Group, LLC. Defendants obtained
purchase money financing from Weichert Financial Services in order to
purchase the property. Approximately one year after defendants purchased the
property, Plaintiff commenced this action to foreclose a mortgage that had been
discharged of record in 2013.
By way of background, on October 6, 2006, codefendant John D. Flood
executed an adjustable rate note in favor of WMC Mortgage Corp., securing a
loan for $304,000. Flood executed a corresponding mortgage, which
encumbered the subject property located on Pleasant Hill Road in Flanders in
favor of Mortgage Electronic Registration (MERS) as nominee for WMC
Mortgage. The mortgage was recorded on October 13, 2006. On September 12,
2007, MERS as nominee for WMC assigned the mortgage to plaintiff, and the
assignment was recorded on November 26, 2007. 1
1
A corrective assignment to plaintiff was executed on December 22, 2011 and
was recorded on January 3, 2012.
A-0008-18T4
3
On August 30, 2007, plaintiff through its counsel Zucker, Goldberg &
Ackerman commenced an action to foreclose its mortgage.
On August 2, 2012, plaintiff assigned its mortgage to JAMM Holdings
and Investments, LLC (JAMM), which assignment was recorded on January 2,
2013. Also on January 2, 2013, JAMM executed and recorded a discharge of its
mortgage. One month later, on February 4, 2013, plaintiff voluntarily dismissed
the 2007 foreclosure complaint without prejudice. The notice of dismissal
indicated that "[its] foreclosure action will be restarted."
After plaintiff's 2012 assignment of its mortgage to JAMM, ownership of
the property was transferred three times in less than six months. Flood deeded
the subject property to Zia Property Acquisitions, LLC on August 8, 2012, which
deed was recorded on December 28, 2012. Next, Zia deeded the subject property
to Floaters, LLC on November 12, 2012, which deed was recorded on January
23, 2013. Floaters deeded the subject property to NJ Property Group, LLC on
February 7, 2013, which deed was recorded on February 13, 2013. Finally, NJ
Property Group deeded the subject property to defendants on September 24,
2014 for a purchase price of $329,000, which deed was recorded on September
30, 2014. Defendants executed a corresponding purchase money mortgage with
Weichert Financial Services for $322,954.
A-0008-18T4
4
On September 16, 2015, more than eight years after it filed its initial
foreclosure complaint in 2007, and over two-and-a-half years after the voluntary
dismissal of its 2007 complaint, plaintiff filed the instant action to foreclose its
mortgage on the subject property.
It is indisputable that the mortgage as to which plaintiff seeks redress was
assigned and discharged of record on January 2, 2013. Plaintiff nonetheless
contends that both the assignment of its mortgage to JAMM and JAMM's
discharge of the mortgage were fraudulent.2 Plaintiff argues that summary
judgment was inappropriate because there are issues of material fact concerning
whether it knew about the assignment and discharge prior to defendants'
intervention in the instant foreclosure.
The record reveals, however, that on October 17, 2013, almost a year
before defendants acquired the subject property, Stephen Flatow of Vested
2
Plaintiff points to certain irregularities in connection with the assignment,
which it claims raise material issues of fact that would support its fraud
allegations. First, plaintiff notes that although the assignment was executed in
August 2012, the notarizing signature was dated "August 2010." Moreover, the
notarization does not indicate the specific day on which the assignment was
executed. In addition, there was a minor discrepancy between the listed assignor
for the JAMM assignment and the assignor listed in the prior assignment of the
mortgage. We do not find these alleged discrepancies to be material in light of
our conclusion that plaintiff knew or should have known of both the JAMM
assignment and discharge long before the property was conveyed by deed to
defendants.
A-0008-18T4
5
Title, the title insurer for NJ Property Group, sent an e-mail to Michael
Ackerman of Zucker, Goldberg & Ackerman, plaintiff's counsel in the first
foreclosure action. The e-mail stated that, as per the Morris County Clerk's
records, the mortgage was discharged of record. Ackerman responded on
October 18, 2013 that his firm was "showing the discharge," and "waiting to
hear back from [plaintiff] as to why the referral [was made]." Plaintiff argues,
without any supporting certification from a Wells Fargo representative, that this
knowledge by its attorney should not be imputed to Wells Fargo because it was
unclear if Ackerman was representing plaintiff in 2013.
Regardless, in June 2014, almost four months before the property was
conveyed to defendants, Phelan, Hallinan & Schmieg, LLP, then-acting counsel
for plaintiff, obtained a foreclosure information report from Altisource dated
June 4, 2014. This report indisputably disclosed the assignment of plaintiff's
mortgage from plaintiff to JAMM, as well as the various transfers of title that
followed. Notwithstanding its June 2014 receipt of documentation of the
assignment that plaintiff now claims was fraudulent, plaintiff failed to take any
action to vacate the assignment, and it delayed filing a new foreclosure action
A-0008-18T4
6
until September 16, 2015, more than fifteen months after learning of the JAMM
assignment.3
On March 1, 2018, defendants moved for summary judgment. In
response, plaintiff did not supply a certification from a representative of Wells
Fargo to counter plaintiff's statement of undisputed material facts.
On July 20, 2018, the motion judge entered an order granting defendants'
motion for summary judgment and dismissing plaintiff's complaint with
prejudice. The judge determined that Flood's mortgage had been discharged and
was thus null and void. The judge applied the doctrine of laches and determined
that records contained in the Registrar's Office of Morris County definitively
showed that "plaintiff's mortgage was officially discharged of record prior to
[defendants'] purchase of the subject property." The motion judge found that
although the signatory on the August 10, 2012 discharge, Earl David, was later
disbarred and pled guilty to fraud, "there [was] no evidence that the discharge
3
Plaintiff's counsel filed a certification in support of its February 7, 2017,
"Motion to Fix Terms of Lost Assignment," which was filed during the
pendency of this action. In the certification in support of the motion, plaintiff's
counsel certified that plaintiff had assigned the mortgage to JAMM Holdings
and Investments, LLC, and that it was plaintiff's intent that JAMM would assign
the mortgage back to plaintiff. By order dated April 3, 2017, the motion was
denied. On the same date of April 3, 2017, the court granted defendant's motion
to intervene in the matter.
A-0008-18T4
7
was forged . . . no evidence that the signatory was not in fact a bona fide
representative of [plaintiff] . . . [and] no evidence that JAMM intended to re-
assign the mortgage back to [plaintiff]."
The motion judge considered that plaintiff had "dismissed its foreclosure
suit without prejudice one month after the mortgage was discharged of record
and never took any action to challenge the alleged fraudulent discharge until
after [defendants] acquired the property." The judge concluded that plaintiff's
inaction "substantially prejudiced [defendants]," and applied the doctrine of
laches "to prevent further injury to [defendants]." Thus, summary judgment was
granted in favor of defendants. This appeal ensued.
On appeal, plaintiff raises the following arguments:
I. THIS COURT SHOULD REVERSE THE
SUMMARY JUDGMENT ORDER.
A. STANDARD OF REVIEW.
B. THE TRIAL COURT IGNORED EVIDENCE
CREATING TRIABLE ISSUES OF FACT
REGARDING THE APPLICATION OF
LACHES.
1. [PLAINTIFF] DID NOT HAVE
KNOWLEDGE OF THE FRAUDULENT
DISCHARGE UNTIL [DEFENDANTS]
ATTEMPTED TO INTERVENE IN THE
SECOND FORECLOSURE ACTION.
A-0008-18T4
8
2. THERE WAS NO UNREASONABALE
DELAY BY WELLS FARGO.
3. [DEFENDANTS] HAVE NOT BEEN
PREJUDICED.
II.
"[W]e review the trial court's grant of summary judgment de novo under
the same standard as the trial court." Templo Fuente De Vida Corp. v. Nat'l
Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016).
[W]hen deciding a motion for summary judgment under
Rule 4:46–2, the determination whether there exists a
genuine issue with respect to a material fact challenged
requires the motion judge to consider whether the
competent evidential materials presented, when viewed
in the light most favorable to the non-moving party in
consideration of the applicable evidentiary standard,
are sufficient to permit a rational factfinder to resolve
the alleged disputed issue in favor of the non-moving
party.
[Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520,
523 (1995).]
In reviewing a grant of summary judgment, we consider "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." Id. at 536
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)). If
there is no issue of fact, we give no special deference to the trial court's rulings
A-0008-18T4
9
on matters of law. Templo Fuente, 224 N.J. at 199 (citing Manalapan Realty,
L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).
"[C]onclusory and self-serving assertions by one of the parties are
insufficient to overcome [a summary judgment] motion." Puder v. Buechel, 183
N.J. 428, 440-41 (2005); see R. 4:46-5(a) ("an adverse party may not rest upon
the mere allegations or denials of the pleading . . . [to show] that there is a
genuine issue for trial."). "[W]here the party opposing summary judgment
points only to disputed issues of fact that are 'of an insubstantial nature,' the
proper disposition is summary judgment." Brill, 142 N.J. at 529 (quoting Judson
v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67, 75 (1954)). "Competent
opposition requires 'competent evidential material' beyond mere 'speculation'
and 'fanciful arguments.'" Hoffman v. Asseenontv.com, Inc., 404 N.J. Super.
415, 426 (App. Div. 2009) (quoting Merchs. Express Money Order Co. v. Sun
Nat'l Bank, 374 N.J. Super. 556, 563 (App. Div. 2005)).
The doctrine of laches "[denies] a party enforcement of a known right
when the party engages in an inexcusable and unexplained delay in exercising
that right to the prejudice of the other party." Knorr v. Smeal, 178 N.J. 169,
180-81 (2003). "Laches may only be enforced when the delaying party had
sufficient opportunity to assert the right in the proper forum and the prejudiced
A-0008-18T4
10
party acted in good faith believing that the right had been abandoned." Id. at
181. "Generally speaking, laches is not imputed to one who had no knowledge,
or means of acquiring knowledge, of the facts giving rise to his cause of action."
Heagen v. Borough of Allendale, 42 N.J. Super. 472, 485 (App. Div. 1956)
(emphasis added).
"The time constraints of laches, unlike the periods prescribed by the
statute of limitations, are not fixed but are characteristically flexible." 4 Lavin v.
Bd. of Educ., 90 N.J. 145, 151 (1982). Whether a delay is unreasonable depends
upon the circumstances of a particular case. Allstate Ins. Co. v. Howard Sav.
Inst., 127 N.J. Super. 479, 489 (Ch. Div. 1974). "The length of delay, reasons
for delay, and changing conditions of either or both parties during the delay are
the most important factors that a court considers and weighs. The length of the
delay alone or in conjunction with the other elements may result in laches." Fed.
4
At the time plaintiff filed its second foreclosure complaint in September 2015,
the statute of limitations for foreclosing on residential mortgages was twenty
years from the date of default. N.J.S.A. 2A:50-56.1. Because this action arises
in equity, however, we are free to evaluate whether laches applies to bar
plaintiff's claim. See Fox v. Millman, 210 N.J. 401, 420 (2012) ("if the subject
matter in controversy in a Court of Chancery is of an equitable nature, not
cognizable in a court of law, statutes of limitations although not ignored have
no obligatory application, but the court will instead apply the doctrine of
laches." (quoting Hyland v. Simmons, 152 N.J. Super. 569, 576 (Ch. Div. 1977),
aff'd, 163 N.J. Super. 137 (App. Div. 1978))).
A-0008-18T4
11
Deposit Ins. Corp. v. Rosen, 188 N.J. Super. 230, 237 (App. Div. 1983).
"Implicit in the concept of inexcusable delay is the ability of the party against
whom laches is asserted to . . . previously assert the claim which is now alleged
to be barred. The party . . . cannot assert ignorance of the facts if such ignorance
is a result of his own culpable neglect." Talcott Fromkin Freehold Assocs. v.
Freehold Tp., 383 N.J. Super. 298, 320 (Law Div. 2005).
With these governing principles in mind, we agree with the trial court's
conclusion that, even setting aside the issue of laches, plaintiff failed to raise an
issue of material fact for trial. In that regard, plaintiff's claim that its assignment
to JAMM and JAMM's subsequent discharge were fraudulent is utterly
unsupported by anything other than bald assertions. See Puder, 183 N.J. at 440.
In that regard, plaintiff failed to provide a rebutting certification from a Wells
Fargo representative in opposition to summary judgment in support of its claims
of fraud. In fact, the only certification submitted by its counsel in this action
averred that plaintiff volitionally assigned its interest to JAMMS in 2012 with
the expectation that JAMMS would reassign its interest to plaintiff at an
unspecified date in the future. The judge correctly concluded that "there [was]
no evidence that the discharge was forged . . . no evidence that the signatory was
not in fact a bona fide representative of [plaintiff] . . . [and] no evidence that
A-0008-18T4
12
JAMM intended to re-assign the mortgage back to [plaintiff]." Thus, the
mortgage having been discharged in 2013, plaintiff's mortgage was null and void
and it lacked standing to foreclose. Regardless, we also affirm the trial court's
holding that plaintiff's action is barred by the doctrine of laches. There was a
significant delay between the voluntary dismissal of plaintiff's 2007 foreclosure
action in 2013 (one month after the JAMM discharge) and its reinstitution of the
action in 2015. In the interim, the property had been sold to defendants, who
obtained financing for the purchase and thereafter made improvements to the
property. The records contained in the Registrar's Office of Morris County
definitively showed that "plaintiff's mortgage was officially discharged of
record prior to [defendants'] purchase of the subject property." Thus, defendants
had no notice of any defect in title. On the other hand, plaintiffs exercising due
diligence between the 2012 discharge of the mortgage and its 2015 renewal of
its foreclosure certainly knew or should have known of the JAMM assignment .
Defendants' baseless assertions of ignorance do not excuse them from the
laches bar. Talcott, 383 N.J. Super. at 320. In that regard, it is well settled that
"knowledge on the part of the attorney for a purchaser of land, or a judgment
creditor, of a defect in title is imputed to the client." Colegrove v. Behrle, 63
A-0008-18T4
13
N.J. Super. 356, 364 (App. Div. 1960). The imputation doctrine, derived from
the common law, rests upon the premise that "a principal is deemed to know
facts that are known to its agent." NCP Litig. Tr. v. KPMG LLP, 187 N.J. 353,
366 (2006). The Restatement (Third) of Agency [Restatement] 5.03 (2006) sets
forth the common law rule: "For purposes of determining a principal's legal
relations with a third party, notice of a fact that an agent knows or has reason to
know is imputed to the principal if knowledge of the fact is material to the
agent's duties to the principal[.]" Ibid.
At the very latest, we conclude that plaintiff was on notice of the
fraudulent assignment on June 4, 2014, when Phelan Hallinan & Schmieg, its
then-attorneys, received the results of a title search indicating that plaintiff had
assigned the mortgage to JAMM. See Colegrove, 63 N.J. Super. at 364; KPMG,
187 N.J. at 366; Cox, 164 N.J. at 496. Notwithstanding, plaintiff never took
action to challenge the assignment. Plaintiff never filed a lis pendens. It took
no legal action until it filed its second complaint to foreclose on the property on
September 16, 2015. In the interim, defendants purchased the property on
September 24, 2014 for $329,000, and executed a mortgage for $322,954. Had
plaintiff timely sought to enforce its rights, defendants would have been on
notice of an alleged defect in title.
A-0008-18T4
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We also reject plaintiff's claim that defendants have not been prejudiced
by plaintiff's inexplicable delay in challenging the allegedly fraudulent
assignment and discharge. "The primary factor to consider when deciding
whether to apply laches is whether there has been a general change in condition
during the passage of time that has made it inequitable to allow the claim to
proceed." Nw. Covenant Med. Ctr. v. Fishman, 167 N.J. 123, 141 (2001).
"Inequity, more often than not, will turn on whether a party has been misled to
his harm by the delay." Rosen, 188 N.J. Super. at 237 (quoting Lavin, 90 N.J.
at 152-53).
In this case, there is no question that equity demands plaintiff's claim be
barred. At the time defendants purchased the property, the discharge was filed
as of record in 2013. Contrary to plaintiff's claims, defendants had no reason to
know of any alleged defect in title. Defendants obtained financing to purchase
the property and thereafter spent money to improve the property. Plaintiff, who
had constructive knowledge of the fraudulent mortgage in June 2014, failed to
take any action until after defendants had already assumed significant financial
commitments. As the trial court found, the dismissal of plaintiff's claims was
warranted to avoid further prejudice to defendants.
A-0008-18T4
15
To the extent that we have not addressed the parties' remaining arguments,
we conclude that they lack sufficient merit to warrant discussion in a written
opinion. R. 2:11-3(e)(1)(E).
Affirmed.
A-0008-18T4
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WELLS FARGO BANK, NATIONAL ASSOCIATION, ETC. VS. NJ PROPERTY GROUP, LLC (F-031547-15, MORRIS COUNTY AND STATEWIDE)
Combined Opinion