HSBC BANK USA, ETC. VS. MICHAEL KEANE(F-019668-12, MONMOUTH 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NOT FOR PUBLICATION WITHOUT THE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-5346-15T4

HSBC BANK USA, NATIONAL
ASSOCIATION AS TRUSTEE
FOR NOMURA ASSET ACCEPTANCE
CORPORATION MORTGAGE PASS
THROUGH CERTIFICATES SERIES
2005-AR3,

Plaintiff-Respondent,

v.

MICHAEL KEANE,

Defendant-Appellant.
_________________________________

Submitted September 26, 2017 – Decided October 5, 2017

Before Judges Fasciale and Moynihan.

On appeal from Superior Court of New Jersey,
Chancery Division, Monmouth County, Docket No.
F-019668-12.

Joseph C. Lane, attorney for appellant.

Reed Smith, LLP, attorneys for respondent
(Henry F. Reichner, of counsel and on the
brief).

PER CURIAM

Michael Keane (defendant) appeals from a March 20, 2015 order

denying his motion "to vacate judgment and reinstate defendant's
answer, affirmative defenses, and counterclaims pursuant to R[ule]

4:50-1." The motion that led to the entry of the March 20, 2015

order was not one to vacate a default judgment, which the judge

subsequently entered in 2016. Instead, the March 20, 2015 order

denied defendant's attempt to seek reconsideration of an August

9, 2013 order, which had denied reconsideration of a previous

order suppressing his pleading. We affirm.

In February 2005, defendant obtained a note from Gateway

Funding Diversified Mortgage Services L.P. d/b/a Ivy Mortgage

(Gateway) with a $292,000 principal balance. As security for the

loan, defendant encumbered real property in Spring Lake. The

mortgage named Mortgage Electronic Registration Systems, Inc.

(MERS) as mortgagee in a nominee capacity for Gateway and its

assigns. Gateway endorsed the note in blank.

In April 2011, defendant failed to make the payment due. In

July 2011, HSBC Bank USA, National Association as Trustee for

Nomura Asset Acceptance Corporation Mortgage Pass Through

Certificates Series 2005-AR3 (plaintiff) sent defendant a Notice

of Intention to Foreclose by certified mail. In September 2011,

MERS assigned the mortgage to plaintiff.

In September 2012, plaintiff filed a complaint for

foreclosure. On March 14, 2013, the court issued an order

requiring that defendant apply for mediation within ten days, and

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that the parties exchange paper discovery by June 1, 2013, complete

depositions by June 15, 2013, and complete discovery by September

1, 2013.

On June 5, 2013, plaintiff filed a motion to suppress

defendant's answer, affirmative defenses, and counterclaims for

failure to provide discovery. On June 13, 2013, defendant filed

a motion to dismiss the complaint. On June 21, 2013, the judge

granted plaintiff's motion and suppressed defendant's pleading for

failure to provide discovery; and denied defendant's motion to

dismiss the complaint.

In July 2013, defendant filed a motion to reinstate his

answer, affirmative defenses, and counterclaims. This motion

essentially sought reconsideration of the judge's June 21, 2013

order suppressing defendant's pleading. On August 9, 2013, the

judge denied the reconsideration motion. On August 29, 2013,

defendant filed a Chapter 13 bankruptcy, which the bankruptcy

court dismissed on April 22, 2014. On November 6, 2014, the judge

entered default. Defendant filed a second petition for bankruptcy,

which the bankruptcy court dismissed on November 10, 2014.

On March 2, 2015, defendant filed his motion, which led to

the entry of the March 20, 2015 order. At this point, plaintiff

had not obtained a judgment. Instead, plaintiff had successfully

suppressed defendant's pleading for failure to provide discovery.

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Defendant's March 2, 2015 motion primarily sought reconsideration

of the August 9, 2013 order denying reconsideration of the June

21, 2013 order suppressing defendant's pleading. On March 20,

2015, the judge heard oral argument and denied defendant's motion,

treating it as a motion to reconsider the August 9, 2013 order.

On May 2, 2016, the judge entered final judgment against defendant.

On appeal, defendant argues for the first time that he is

entitled to relief from the May 2, 2016 default judgment pursuant

to Rule 4:50-1. Defendant contends that we should vacate the

final default judgment because he demonstrated mistake,

inadvertence, surprise "and/or" excusable neglect; he has shown a

meritorious defense; plaintiff's proofs were insufficient to

support final judgment; plaintiff lacked standing to foreclose;

and the judge was biased.

Defendant's Notice of Appeal and Case Information Statement

reflect, however, that defendant is appealing from the March 20,

2015 order, which the judge properly treated as a motion to

reconsider. In other words, defendant did not file a Rule 4:50-1

motion before the judge following the May 2, 2016 default judgment.

Nevertheless, defendant's merits brief makes Rule 4:50-1

arguments, focusing primarily on the default judgment and the

soundness of the final judgment.

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 As to defendant's March 2015 attempt seeking reconsideration

of the August 9, 2013 order denying reconsideration of the June

21, 2013 order, which suppressed defendant's answer, our court

rules do not provide for such an application. Even if they did,

defendant failed to seek reconsideration timely. Rule 4:49-2

required defendant to serve his motion for reconsideration twenty

days after service of the August 9, 2013 order. Pursuant to Rule

1:3-4(c), the twenty-day limitation shall not be enlarged.

Defendant served his reconsideration motion in March 2015, well

after the deadline expired.

We find no support whatsoever in the record for, and decline

to address, defendant's new arguments. Alloway v. Gen. Marine

Indus., L.P., 149 N.J. 620, 643 (1997); Nieder v. Royal Indem.

Ins. Co., 62 N.J. 229, 234 (1973). Nevertheless, we conclude

defendant's arguments are "without sufficient merit to warrant

discussion in a written opinion[.]" R. 2:11-3(e)(1)(E). We add

the following remarks.

Where, as here, "the court has entered a default judgment

pursuant to Rule 4:43-2, the party seeking to vacate the judgment

must meet the standard of Rule 4:50-1[.]" US Bank Nat'l Ass'n v.

Guillaume, 209 N.J. 449, 467 (2012). We will review the court's

decision whether to vacate or set aside the judgment under Rule

4:50-1 under an abuse of discretion standard. Ibid.

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 "The trial court's determination under [Rule 4:50-1] warrants

substantial deference, and should not be reversed unless it results

in a clear abuse of discretion[,]" namely where the "decision is

'made without a rational explanation, inexplicably departed from

established policies, or rested on an impermissible basis.'"

Guillaume, supra, 209 N.J. at 467-68 (quoting Iliadis v. Wal-Mart

Stores, Inc., 191 N.J. 88, 123 (2007)).

Most relevant to defendant's contentions is either Rule 4:50-

1(a) or (f). Under Rule 4:50-1(a), defendant must show excusable

neglect and a meritorious defense. Id. at 468. Rule 4:50-1(f)

is reserved for "exceptional situations" where "truly exceptional

circumstances are present." Hous. Auth. of Morristown v. Little,

135 N.J. 274, 286 (1994) (citations omitted). Defendant has failed

to satisfy either criteria, or any other section of the rule.

"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). "[W]e [have] held

that either possession of the note or an assignment of the mortgage

that predated the original complaint confer[s] standing."

Deutsche Bank Tr. Co. Americas v. Angeles, 428 N.J. Super. 315,

6 A-5346-15T4
318 (App. Div. 2012) (citing Deutsche Bank Tr. Co. Americas v.

Mitchell, 422 N.J. Super. 214, 216 (App. Div. 2011)).

Here, plaintiff was in possession of the note and mortgage

before filing the complaint and properly had standing to bring the

case. As the judge noted, defendant "does not controvert the

prima facie right to foreclose with any genuine material issue of

fact." Defendant refused to respond to plaintiff's discovery

requests in part because he claimed plaintiff was not the

"appropriate party" and thus he did not want to share confidential

information. In less than a page in his brief, defendant claims

he has a meritorious defense showing "significant violations of

the New Jersey Home Ownership Security Act." He argues generally

that the subprime loan crisis entitled him to relief from

voluntarily taking a loan that he later could not pay. Although

defendant may have been in financial distress, he does not present

any excusable neglect, meritorious defense, or other exceptional

circumstances to warrant any relief under Rule 4:50-1.

Assuming defendant filed the March 2015 reconsideration

timely, which is not the case, the judge also appropriately denied

defendant relief under the reconsideration standard. As an

appellate court, we review the denial of a motion for

reconsideration to determine whether the judge abused his

discretionary authority. Cummings v. Bahr, 295 N.J. Super. 374,

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389 (App. Div. 1996). "Reconsideration should be utilized only

for those cases which fall into that narrow corridor in which

either 1) the [c]ourt has expressed its decision based upon a

palpably incorrect or irrational basis, or 2) it is obvious that

the [c]ourt either did not consider, or failed to appreciate the

significance of probative, competent evidence." Id. at 384

(quoting D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div.

1990)). Additionally, the decision to deny a motion for

reconsideration falls "within the sound discretion of the [trial

court], to be exercised in the interest of justice." Ibid.

(quoting D'Atria, supra, 242 N.J. Super. at 401).

The judge reviewed the circumstances of the motion for

reconsideration on the record on March 20, 2015. The judge

recounted that she already reconsidered the striking of

defendant's answer, defenses, and counterclaims in August 2013,

after the original decision in June 2013. The judge noted that

she would have been willing to reinstate defendant's answer if he

had provided proof that he actually complied with discovery, but

he failed to provide any credible proof. The judge also noted

that defendant waited a year and a half from the first

reconsideration to file another motion. The judge's decision to

deny the motion for reconsideration was within her discretion.

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The judge properly denied the motion, regardless of whether it was

a motion for reconsideration or a motion to vacate judgment.

Finally, defendant's argument that the judge was biased is

without merit. Rule 1:12-1(g) states that a judge should be

disqualified on the court's own motion "when there is any other

reason which might preclude a fair and unbiased hearing and

judgment, or which might reasonably lead counsel or the parties

to believe so." Our Supreme Court has stated that the applicable

standard in determining whether disqualification is necessary is:

"Would a reasonable, fully[-]informed person have doubts about the

judge's impartiality?" DeNike v. Cupo, 196 N.J. 502, 517 (2008).

"[A] judge need not 'withdraw from a case upon a mere

suggestion that he is disqualified unless the alleged cause of

recusal is known by him to exist or is shown to be true in fact.'"

Chandok v. Chandok, 406 N.J. Super. 595, 603 (App. Div.) (quoting

Panitch v. Panitch, 339 N.J. Super. 63, 66 (App. Div. 2001)),

certif. denied, 200 N.J. 207 (2009). Moreover, "the mere

appearance of bias may require disqualification[,] . . . [h]owever,

before the court may be disqualified on the ground of an appearance

of bias, the belief that the proceedings were unfair must be

objectively reasonable." State v. Marshall, 148 N.J. 89, 279

(citations omitted), cert. denied, 522 U.S. 850, 118 S. Ct. 140,

139 L. Ed. 2d 88 (1997).

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 A reasonable, fully-informed person would not have doubts

about the judge's impartiality. Defendant argues the judge was

friendlier with plaintiff's counsel and claims that the judge made

a comment about defendant putting his arm around his wife during

proceedings, without any cite to the record. There is no

appearance of bias. The judge even stated that she would have

reinstated defendant's answer had he provided her with credible

proof he complied with discovery, but he did not provide any such

proof.

Affirmed.

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