WELLS FARGO BANK, N.A. VS. MOSHE BADOUCH (F-011303-18, OCEAN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon an y 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-1787-19T3

WELLS FARGO BANK, N.A.,

Plaintiff-Respondent,

v.

MOSHE BADOUCH,
MRS. MOSHE BADOUCH, his
wife,

Defendants,

and

MAIMON BADUSH,

Defendant-Appellant,

and

BANK OF AMERICA, N.A.,

Defendant-Respondent.
__________________________

Submitted December 15, 2020 – Decided January 07, 2021

Before Judges Mawla and Natali.
 On appeal from the Superior Court of New Jersey,
Chancery Division, Ocean County, Docket No. F-
011303-18.

Maimon Badush, appellant pro se.

Reed Smith LLP, attorneys for respondent Wells Fargo
Bank, N.A. (Henry F. Reichner, of counsel and on the
brief; David G. Murphy, on the brief).

PER CURIAM

Defendant Maimon Badush appeals from a January 25, 2019 order

denying his motion to vacate the entry of default, and a December 3, 2019 order

entering a final judgment of foreclosure. After carefully reviewing the record

and the applicable legal principles, we affirm.

I.

On January 17, 2003, defendant purchased property in Lakewood, New

Jersey.1 Approximately nine months later, defendant agreed to the terms of a

note with Wachovia Bank, N.A. (Wachovia) for a $41,000 home equity line of

credit with a twenty-year draw period. The note permitted defendant to "obtain

[a]dvances from [his a]ccount during the [d]raw [p]eriod" and provided that he

1
Defendant purchased the property with the assistance of a purchase money
mortgage that was refinanced and subsequently assigned to defendant Bank of
America, N.A. Neither Bank of America nor defendant Moshe Badouch,
identified in the complaint as having an interest in the property, have
participated in this appeal.
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would be deemed in default if he "fail[ed] to make [his] payments when they are

due." The note also contained a voluntary termination clause stating defendant

could "cancel [his a]ccount at any time by . . . sending [Wachovia] a signed

letter requesting that [it] cancel [his a]ccount."

To secure the note, defendant simultaneously granted a mortgage to

Wachovia.2 The mortgage provided that if defendant breached any provision of

the note, Wachovia reserved the right to declare "all of the sums secured . . .

immediately due" and invoke "the power of sale." In 2010, Wachovia merged

into plaintiff Wells Fargo Bank, N.A., and thereby assumed the mortgage.

On October 31, 2017, after defendant defaulted on the note, plaintiff sent

defendant two notice of intention to foreclose letters in accordance with the Fair

Foreclosure Act (FFA), N.J.S.A. 2A:50-53 to -68, "via certified mail, return

receipt requested, and regular mail" at the Lakewood property and defendant's

Brooklyn address that was on file with plaintiff.

2
Prior to and subsequent to this note, defendant encumbered his Lakewood
property with other mortgages or home equity lines of credit that were either
discharged or are not subject to this appeal. We note that in 2004, defendant
refinanced his purchase-money mortgage on the Lakewood property and used
part of the proceeds to pay off $40,671.67 from his account balance with
Wachovia. There is no indication in the record that defendant subsequently
closed this account, however. Rather, as detailed infra, defendant continued to
draw on the line of credit.
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 On May 7, 2018, plaintiff filed a foreclosure complaint alleging it was the

holder of the note and demanding full payment of all amounts due plus interest.

It also requested that the Lakewood property "be sold according to law to satisfy

the amount due."

After defendant failed to respond to the complaint, plaintiff moved for

entry of default under Rule 4:43-1, which the court granted on August 28, 2018.

In support of its application, plaintiff's counsel's legal assistant certified that a

private process server unsuccessfully attempted to serve defendant with the

complaint at the Lakewood property. Plaintiff's investigator thereafter

performed a "skip trace" and determined that defendant's mailing address was

in Brooklyn, New York. Plaintiff also concluded that defendant could not "be

personally served in the State of New Jersey."

The record contains an affidavit of service that establishes defendant was

successfully served with the complaint on June 14, 2018, by leaving a copy with

"Rachel – last name refused," a co-occupant at the Brooklyn residence. A

second affidavit indicates defendant was successfully served a second time on

July 13, 2018, by leaving a copy of the documents with "Mr. Badouch," another

co-occupant of defendant's Brooklyn residence.

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 Over three months later, defendant filed a motion to vacate under Rule

4:43-3. In support of his application, defendant vaguely certified that he

"learn[ed] of the [c]omplaint through mail solicitation, and [he] did not file an

[a]nswer because [he] thought the [c]omplaint was inadvertently filed since it

was not served on [him], and [p]laintiff voluntary[ily] dismissed [a] previous

complaint[.]"

Defendant's proposed answer also contained general and boilerplate

denials. He did, however, concede that he made payments on his mortgage "up

to October 2017, and none thereafter." Despite paying plaintiff on the note for

years, defendant nevertheless alleged that plaintiff lacked standing because it

was not "the holder, assignee, the owner of the alleged original [n]ote and

[m]ortgage, []or [the] possess[or of] merger documents" and it was

"intentionally withholding the identity of the actual lender."

The court denied defendant's motion in a January 25, 2019 order and

corresponding oral opinion. The court noted that defendant failed to establish

good cause to vacate the entry of default as he failed to raise a meritorious

defense. In this regard, the court found defendant was properly served both on

June 24, 2018, and July 13, 2018, and noted a "sheriff's return of service is

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presumed correct" unless rebutted by clear and convincing evidence, which the

court found defendant failed to establish.

The court also rejected defendant's claim that the note was previously

satisfied as defendant failed to cancel the note and as "a line of credit, . . . paying

it off [previously] only ha[d] the effect of making the line of credit available

again for withdrawal." Finally, the court found plaintiff had standing because

the "note was merged into plaintiff and ratified by defendant as evidenced by

[his] payment on the loan . . . for more than four years."

Plaintiff notified defendant on August 7, 2019, pursuant to the FFA, by

regular and certified mail to the Lakewood property and the Brooklyn residence ,

informing him that it intended to move for entry of final judgment. On

September 17, 2019, plaintiff moved for final judgment. In support, Keshia

Monique James, plaintiff's "Vice President [of] Loan Documentation,"

submitted a certification of proof of amount due pursuant to Rule 4:64-2(b) that

appended: 1) an amount due schedule, 2) a statement of amount due, 3) an

interest schedule, and 4) a monthly statement history dating to January 2005.

James certified she was "familiar with Wells Fargo's books and business

records" and that the records were:

made at or near the time by, or from information
provided by, persons with knowledge of the activity

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 and transactions reflected in such records, and are kept
in the course of business activity conducted regularly
by Wells Fargo. It is the regular practice of Wells
Fargo's mortgage servicing business to make these
records.

In her certification, James also stated defendant's default remained

uncured and that he owed $45,174.27. In this regard, the statement of amount

due indicated defendant had an unpaid principal balance of $39,501.32, accrued

interest of $5,664.28, and a late charge of $8.67 totaling $45,174.27. She also

certified that plaintiff, "directly or through an agent, has possession of the

[note]."

On October 17, 2019, defendant filed opposition to plaintiff's application

for final judgment in which he sought to "fix the amount due to $0.00 and

dismiss the [c]omplaint with prejudice." Defendant appended a "[p]artial

[p]ayment [h]istory" that detailed his account transaction history from April 28,

2011 to July 10, 2017, and showed multiple payments and advances taken on

the note during that period. Notably, the payment history stated that defendant

last made a payment under the note on May 17, 2017, for $500, and that

defendant had a remaining principal balance of $39,501.32 under the note.

Defendant also certified in conclusory fashion that documents relied upon

by James were based on a "fabricated . . . payment history." Finally, despite

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appending documentary evidence that showed a balance of $39,501.32 on the

note, defendant stated he "did not make any advances prior to May 2011 or

default[] after May 17, 2017[,]" because his "May 17, 2017 payment paid off

the account."

In a November 8, 2019 order, the court denied defendant's motion and

ordered that "[t]he previously filed default against the [d]efendant shall remain

in effect and the matter shall remain with the Office of Foreclosure as an

uncontested foreclosure." In its corresponding statement of reasons, the court

concluded that "plaintiff ha[d] established its prima facie right to foreclose"

because "plaintiff ha[d] provided proof of execution[,] . . . delivery of the

mortgage, [and] default." The court noted plaintiff submitted a certification and

corresponding competent business records that established plaintiff possessed

the note, defendant had made payments to plaintiff, and "defendant's default

remain[ed] uncured and . . . $45,174.27 [remained] due." Finally, the court

found "[d]efendant ha[d] not offered any evidence to contradict" plaintiff's

certifications.

The court issued final judgment on December 3, 2019. This appeal

followed.

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 II.

On appeal, defendant raises a single point in which he argues the court

abused its discretion in refusing to vacate the entry of default because he will be

prejudiced and "the default [did not] result from culpable conduct" by him. He

contends that he "did not know [about] the default" and had raised meritorious

defenses of "default and pre-filing notice." He further argues that "[he] denied

that he defaulted on the loan payment" and challenges plaintiff as the note holder

and the amount due claiming again that he satisfied all outstanding obligations

under the note in 2004. Finally, he maintains plaintiff "neglect[ed]" to give him

appropriate pre-filing notice "to thwart reinstatement . . . [and] to make

foreclosure more likely," and that "[p]laintiff provided no evidence of mailing."

We reject all these arguments.

We review the denial of a motion to vacate default based upon an abuse

of discretion standard. See U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449,

467 (2012). It is well-settled that "the requirements for setting aside a default

under Rule 4:43-3 are less stringent than . . . those for setting aside an entry of

default judgment under Rule 4:50-1." N.J. Mfr.'s Ins. Co. v. Prestige Health

Grp., 406 N.J. Super. 354, 360 (App. Div. 2009) (citation omitted). Under Rule

4:43-3, a court may vacate the entry of default upon "good cause shown."

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 In considering whether good cause exists to vacate the entry of default,

courts "typically cite three factors . . . [w]hether the default was willful or

culpable; [w]hether granting relief from the default would prejudice the

opposing party; and [w]hether the defaulting party has a meritorious defense."

10 James W. Moore, Moore's Federal Practice – Civil, § 55.70[2][a] (3d ed.

2020) (reviewing comparable Fed. R. Civ. P. 55(c), which states "[t]he court

may set aside an entry of default for good cause").

Here, the court did not find that defendant's conduct was willful or

culpable, or that plaintiff would have been prejudiced had the judge granted

defendant's motion to vacate default. Rather, the court focused on whether

defendant demonstrated any meritorious defenses. We are satisfied that the

court did not abuse its discretion in concluding that defendant failed to

demonstrate a meritorious defense. We add that plaintiff properly served

defendant in accordance with the Rules, contrary to defendant's contentions. See

Jameson v. Great Atl. & Pac. Tea Co., 363 N.J. Super. 419, 426 (App. Div. 2003)

(holding a service process that "indicates compliance with the pertinent service

rule" is "prima facie evidence that service was proper" (citing Garley v.

Waddington, 177 N.J. Super. 173, 180 (App. Div. 1981))).

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 The "showing of a meritorious defense is a traditional element necessary

for setting aside both a default and a default judgment." Pressler & Verniero,

Current N.J. Court Rules, cmt. on R. 4:43-3 (2020); see also O'Connor v. Altus,

67 N.J. 106, 128-29 (1975) (finding "good cause" under Rule 4:43-3 includes

"the presence of a meritorious defense"). As with a motion to vacate a default

judgment, there is no point in setting aside an entry of default if the defendant

has no meritorious defense. "The time of the courts, counsel[,] and litigants

should not be taken up by such a futile proceeding." Guillaume, 209 N.J. at 469

(quoting Schulwitz v. Shuster, 27 N.J. Super. 554, 561 (App. Div. 1953)). We

have noted that

[t]his is especially so in a foreclosure case where the
mere denominating of the matter as a contested case
moves it from the expeditious disposition by the Office
of Foreclosure in the Administrative Office of the
Courts, R. 1:34-6 and R. 4:64-1(a), to a more protracted
treatment by the Chancery Division providing
discovery and raising other problems associated with
trial calendars. If there is no bona fide contest, a
secured creditor should have prompt recourse to its
collateral.

[Trs. Loc. 478 Trucking & Allied Indus. Pension Fund
v. Baron Holding Corp., 224 N.J. Super. 485, 489 (App.
Div. 1988).]

A foreclosure action is "a quasi in rem procedure . . . to determine not

only the right to foreclose, but also the amount due on the mortgage." Assocs.

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Home Equity Servs., Inc. v. Troup, 343 N.J. Super. 254, 272 (App. Div. 2001)

(citations omitted). "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) (citations omitted). 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).

In addition, 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)).

Here, the record amply supports the motion court's determination that

defendant was in default under the note and lacked a meritorious defense. There

is no indication that defendant ever cancelled the note as required by the

voluntary termination clause. Further, in James's fully compliant Rule 1:6-6

certification, she certified to personally reviewing plaintiff's books and records

related to the note and attested to all elements necessary to establish the

documents as admissible business records under N.J.R.E. 803(c)(6). James's

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certification also confirmed that defendant never cured his default and plaintiff

remained the holder of the note.

In addition, the partial payment history produced with defendant's

certification evidenced that defendant continued to draw down the note's line of

credit and the principal balance on the loan totaled $39,501.32 as of July 10,

2017. And, by defendant's own admission, he stopped making payments on the

note in October 2017.

Moreover, defendant does not dispute that he properly executed a

mortgage that was subsequently recorded. As the court found, defendant's

payments to plaintiff since at least 2011 ratified it as the current holder of the

note and defendant has not cited any evidence to the contrary. See Thermo

Contracting Corp. v. Bank of N.J., 69 N.J. 352, 361 (1976) ("Ratification is the

affirmance by a person of a prior act . . . whereby the act, as to some or all

persons, is given effect as if originally authorized by him." (quoting Restatement

(Second) of Agency § 82 (1957))).

We also reject defendant's challenge to the amount due. Rule 4:64-2(b)

specifically delineates the required contents of the "affidavit of amount due" in

support of an entry of final judgment, which "may be supported by computer-

generated entries." Rule 4:64-2(c) requires the affiant to certify "that he or she

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is authorized to make the affidavit on behalf of the plaintiff or the plaintiff's

mortgage loan servicer;" "that the affidavit is made based on a personal review

of business records of the plaintiff or the plaintiff's mortgage loan servicer,

which records are maintained in the regular course of business;" "that the

financial information contained in the affidavit is accurate;" and "that the default

remains uncured." Any objections to the amount due must state "with specificity

the basis of the dispute." R. 4:64-1(d)(3). Here, defendant's submission failed

to comply with the specificity requirement. Contrariwise, James's certification

fully satisfied the Rules and was corroborated by plaintiff's business records.

We find no merit in defendant's claim that he was not in default under the

note because it was fully satisfied in 2004 by using a subsequent home equity

line of credit. We disagree with these contentions because, as the motion court

noted, defendant's note was not terminated after that transaction and plaintiff 's

business records indicate defendant continued to take advances under the note.

We are also not persuaded by defendant's argument that plaintiff failed to

comply with pre-filing notice requirements. Before a party can initiate

foreclosure on a residential mortgage, it is obligated under the FFA to "give a

notice of intention, which shall include a notice of the right to cure the default."

N.J.S.A. 2A:50-56(a). We are satisfied from our review of the record that

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plaintiff complied with the FFA and the Rules with respect to service of the

notice of intention and the complaint.

To the extent we have not addressed any of defendant's remaining

arguments it is because we have determined that they are without sufficient merit

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

Affirmed.

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