U.S. BANK NATIONAL ASSOCIATION, ETC. VS. GUADALUPE BERNARDEZ-HICKS (F-038588-14, ESSEX COUNTY AND STATEWIDE) ( 2020 )

NOT FOR PUBLICATION WITHOUT THE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-4458-17T4
U.S. BANK NATIONAL
ASSOCIATION, as Indenture
Trustee on Behalf of and with
Respect to Ajax Mortgage
Loan Trust 2016-C,
Mortgage-Backed
Notes, Series 2016-C,
Plaintiff-Respondent,
v.
GUADALUPE
BERNARDEZ-HICKS,
a/k/a GUADALUPE B. HICKS,
her heirs, devisees, and personal
representatives and his/her,
their, or any of their successors
in right, title and interest,
BERNARD E. HICKS, her
husband, his heirs, devisees,
and personal representatives and
his/her, their, or any of their
successors in right, title
and interest, and BONNIE L.
ARUNHAMMER,
Defendants-Appellants.
________________________________
Telephonically argued June 3, 2020 –
Decided July 15, 2020
Before Judges Koblitz, Whipple and Mawla.
On appeal from the Superior Court of New Jersey,
Chancery Division, Essex County, Docket No. F-
038588-14.
Michael Roland Curran argued the cause for appellant.
Michael D. Mezzacca, Bourne, Noll, & Kenyon, and
Jeanette J. O'Donnell, Powers Kirn, LLC, argued the
cause for respondent (Bourne, Noll, & Kenyon, and
Powers Kirn, LLC, attorneys; Michael D. Mezzacca,
of counsel and on the brief; Jeanette J. O'Donnell, on
the brief).
PER CURIAM
Defendants Guadalupe Bernardez-Hicks (G. Hicks) and Bernard E. Hicks
(B. Hicks) appeal from a September 1, 2017 foreclosure judgment entered in
favor of plaintiff U.S. Bank National Association as Indenture Trustee on behalf
of and with respect to Ajax Mortgage Loan Trust 2016-C, Mortgage-Backed
Notes, Series 2016-C (U.S. Bank).1 Defendants' arguments center on allegations
1
In their amended notice of appeal, defendants specified that they were
appealing from six orders entered by three judges, in addition to the judgment
of foreclosure. In their brief, they discuss four orders, granting summary and
final judgment and denying reconsideration, which we consider in this opinion.
Any issues with other orders not briefed are deemed waived. Sklodowsky v.
Lushis, 417 N.J. Super. 648, 657 (App. Div. 2011).
A-4458-17T4
2
of forgery of the mortgage and defective assignments. The trial court found that
defendants failed to prove the signature of B. Hicks on the mortgage was forged
and failed to establish a genuine issue of material fact regarding plaintiff's prima
facie right to foreclose. We affirm.
I.
This matter, as many foreclosures, has a complicated procedural history.2
We relate the most significant parts. On July 27, 1994, defendants purchased a
residence in Bloomfield as a married couple. Defendants filed for Chapter 7
bankruptcy in March 2000 with the United States Bankruptcy Court, which was
terminated in December 2000. The parties divorced in October 2000.
On November 6, 2006, according to plaintiff's documents, G. Hicks
executed a note in favor of Gateway Funding Diversified Mortgage Services
L.P. DBA Ivy Mortgage (Gateway Funding) in the amount of $226,751. On that
same day, both defendants executed a mortgage on the Bloomfield property, in
favor of Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for
Gateway Funding, which was recorded on November 29, 2006.
2
We have considered only documents available to the trial court as set forth
in our September 20, 2019 order.
A-4458-17T4
3
Prior to the filing of the foreclosure complaint, MERS, as nominee for
Gateway Funding, assigned the note and mortgage on September 26, 2011, to
Bank of America, N.A., successor by merger to BAC Home Loans Servicing,
LP f/k/a Countrywide Home Loans Servicing, LP, (Bank of America), which
was recorded on October 20, 2011. Bank of America assigned the note and
mortgage on February 7, 2014, to the Secretary of Housing and Urban
Development (HUD), which was recorded on May 9, 2014. HUD subsequently
assigned the note and mortgage to Bayview Loan Servicing, LLC (Bayview),
the original plaintiff, which was recorded on June 17, 2014.
G. Hicks defaulted on the $1377.77 monthly payment due August 1, 2010.
Defendants claim, without documentary evidence, to have sent further payments
totaling $8000, but the checks were "lost" by Bank of America. Plaintiff mailed
G. Hicks a notice of intent to foreclose dated April 18, 2014.
After the foreclosure complaint was filed on September 16, 2014,
Bayview assigned the note and mortgage to Bayview Dispositions, IIIa LLC,
which was recorded on December 3, 2014. Bayview Dispositions then assigned
the note and mortgage to Great Ajax Operating Partnership L.P. (Great Ajax),
which was also recorded on December 3, 2014. Shortly thereafter, Great Ajax
assigned the note and mortgage to U.S. Bank National Association, as Indenture
A-4458-17T4
4
Trustee on behalf of and with respect to Ajax Mortgage Loan Trust 2014-B,
Mortgaged-Backed Notes, Series 2014-B, (U.S. Bank N.A., as Trustee Series
2014-B), which was recorded on December 9, 2014. U.S. Bank N.A., as Trustee
Series 2014-B, assigned its interest in the note and mortgage to plaintiff U.S.
Bank, by assignment dated November 14, 2016 and recorded in Essex County
on November 29, 2016.
On September 16, 2014, Bayview filed a foreclosure complaint against
defendants. On February 19, 2015, the court denied defendants' motion to
dismiss and ordered counsel to accept service for B. Hicks, and denied
Bayview's cross-motion for order to substitute plaintiff without prejudice.
Defendants' motion for reconsideration was denied on June 11, 2015. On
March 4, 2016, Bayview filed a motion to substitute plaintiff and motion for
summary judgment with attached certifications and exhibits from Nicole
Whitmer, Linda Percoco, Michael D. Mezzacca, and Rebecca Giudici.
Defendants filed a cross motion for summary judgment, partial summary
judgment and various forms of relief. On May 5, 2016, Bayview filed
supplemental certifications and exhibits from Naomi Hernandez, Paige Bellino,
and Mezzacca.
A-4458-17T4
5
The court issued an order and written opinion on June 27, 2016, granting
Bayview's motion for summary judgment, denying defendants' cross-motion,
and granting substitution of Bayview with U.S. Bank N.A., as Trustee Series
2014-B. Defendants filed an unsuccessful motion for reconsideration.
On January 19, 2017, the court entered an order substituting U.S. Bank
N.A., as Trustee Series 2014-B with current plaintiff U.S. Bank. Defendants
filed other unsuccessful motions in January and February 2017. The final
judgment and writ of execution were entered on September 1, 2017.
A stay of the sheriff sale was granted five times. Defendants' final
application for a stay was denied on June 4, 2018, and they subsequently
unsuccessfully sought to set aside the sheriff's sale.
II.
We review a trial court's decision to grant or deny a motion to dismiss de
novo. Smith v. Datla, 451 N.J. Super. 82, 88 (App. Div. 2017). We review a
grant of summary judgment applying the same standard used by the trial
court. Steinberg v. Sahara Sam's Oasis, LLC, 226 N.J. 344, 366 (2016).
"Summary judgment is appropriate where the evidence fails to show a genuine
issue as to any material fact challenged and the moving party is entitled to
judgment as a matter of law." Allstate Ins. Co. v. Fisher, 408 N.J. Super. 289,
A-4458-17T4
6
299 (App. Div. 2009). In reviewing summary judgment motions, we "view the
'evidential materials . . . in the light most favorable to the non-moving party.'"
Cortez v. Gindhart, 435 N.J. Super. 589, 605 (App. Div. 2014) (quoting Brill v.
Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995)). However, "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." R. 4:46-5(a).
A trial judge's evidentiary decisions made in the context of a summary
judgment application are reviewed under the abuse of discretion standard.
Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 383-84 (2010).
"A certification will support the grant of summary judgment only if the material
facts alleged therein are based, as required by Rule 1:6-6, on 'personal
knowledge.'" Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592, 599 (App.
Div. 2011).
"As a general proposition, a party seeking to foreclose a mortgage must
own or control the underlying debt" in order to have "standing to proceed with
the foreclosure action." Deutsche Bank Nat'l Tr. Co. v. Mitchell, 422 N.J. Super.
214, 222 (App. Div. 2011) (quoting Ford, 418 N.J. Super. at 597). However,
"either possession of the note or an assignment of the mortgage that predated
A-4458-17T4
7
the original complaint confer[s] standing." Deutsche Bank Tr. Co. Americas v.
Angeles, 428 N.J. Super. 315, 318 (App. Div. 2012).
III.
Defendants argue that plaintiff should have been denied relief due to: "(a)
a forged mortgage; (b) an invalid set of assignments (2011-2014); (c) non-
possession of the note; (d) conflicts in the transfers; and (e) false certifications."
The trial court made the following finding on the record:
I don't find any basis under Rule 4:6-2 or otherwise to
dismiss the complaint. . . .
Plaintiff's complaint in short alleges a cause of
action for foreclosure sufficient to survive this motion
to dismiss. It sets forth the information required by
Rule 4:64-1B. It alleges facts that if proven will
establish plaintiff's prima facie right to foreclose that a
note and mortgage were executed. That there was a
default under the terms of the loan. That plaintiff has
possession of the note and assignment of mortgage and
that notice requirements of the Fair Foreclosure Act
have been complied with. This is enough under
[Printing Mart-Morristown v. Sharp Electronics Corp.,
116 N.J. 739, 746 (1989)].
Now, assuming for purposes of this motion only that
[B. Hick's] signature on the mortgage and perhaps
various other documents was forged this would not
render the note and mortgage void as they pertain to [G.
Hicks]. She admits executing both documents. The
defendants apparently became tenants in common after
their divorce and what we can tell through counsel they
remain such. A tenant in common does have the right
A-4458-17T4
8
to encumber his or her interests and even transfer same
without consent. But, of course we . . . realize that
when a mortgage loan is made a lender [wants] to
assure itself that it has . . . a lien that is good with
respect to the entire property[. T]he validity of the loan
documents cannot be adjudicated today. I cannot do
that as a matter of law and therefore, there is no way I
would dismiss the complaint. These are obviously
hotly contested facts. If . . . there was a forgery, yes the
instrument is void ab initio. But . . . it is no more than
a defense at this point. And it will have to be
demonstrated.
The motion court properly found that plaintiff's complaint was sufficient to
establish a prima facie case although a number of factual contentions were in
dispute.
Defendants argue that the January 26, 2015 certification of co-counsel
Michael Mezzacca was defective because it was not certified "under penalties
of perjury" or "with normal language in a New Jersey certification." In addition
to the certification, defendants also argue that the complaint was defective
because it was "written in a style that no pro se party could comprehend," it did
not contain the value or amount of the debt involved, and was not in compliance
with the requirements of Rule 4:64-1(b)(10) detailing the contents of mortgage
foreclosure complaint.
A-4458-17T4
9
Defendants claim that there is "one key assignment" allegation in the
complaint that is invalid on its face: the September 26, 2011 assignment. The
complaint states:
4. The Plaintiff is the holder of the obligation, and the
mortgage referred to in paragraph 2 above was assigned
as follows:
4-a. [MERS] as nominee for [Gateway Funding]
assigned its mortgage to [Bank of America] by
assignment recorded on October 20, 2011 in
Assignment Book 12332 at page 5996 in the aforesaid
office.
The assignment of mortgage dated September 26, 2011, states:
For [v]alue [r]eceived, the undersigned holder of a
[m]ortgage (herein "Assignor") whose address is 3300
S.W. 34TH AVENUE, SUITE 101 OCALA, FL 34474
does hereby grant, sell, assign, transfer and convey unto
[BANK OF AMERICA], whose address is 400
NATIONAL WAY, SIMI VALLEY, CA 93065 all
beneficial interest under that certain [m]ortgage
described below together with the [n]ote(s) and
obligations therein described and the money due and to
become due thereon with interest and all rights accrued
or to accrue under said [m]ortgage.
MERS is listed as the undersigned and Gateway Funding is listed as the original
lender.
Defendants argue that the original assignment neither states that "[Bank
of America], etc. is the assignee," nor that "MERS is assigning 'solely as
A-4458-17T4
10
nominee' of Gateway, which is fatal to the legal effect of the assignment, making
the complaint allegation and all else false." They assert that the September 2011
assignment should have been signed by a MERS "officer" on behalf of " [MERS]
solely as nominee for [Gateway Funding]" instead of having MERS alone as the
assignor. Defendants argue that while the court acknowledged this defect and
advised that it should be corrected, the court only denied the motion to substitute
without prejudice instead of dismissing the case.
The court properly found, as it did during the initial denial of defendants'
motion to dismiss, that issues of fact regarding standing, fraud and forgery
claims needed to be explored in discovery. The court stated:
Plaintiff is not required to conclusively prove it
has standing when filing the complaint or on a motion
to dismiss for failure to state a claim. All that is
required is that the facts alleged in the complaint, the
validity, execution and delivery of the documents, the
default and the right to foreclose. The complaint here
included all of the necessary elements for a foreclosure
complaint as set forth in Rule 4:64-1(b)(1) [to] (13). It
complied with the court rule. A court should accept all
factual assertions made in the complaint as true and
give every reasonable inference to the complainant.
According to Smith v. SBC Communications, 178 N.J.
265, 268 (2004).
I mean in short there really is no basis to
reconsider or to dismiss a complaint even if there is a
legitimate issue about fraud and/or forgery, or whether
there is a legitimate issue about standing. That is
A-4458-17T4
11
properly dealt with once an answer has been filed.
Discovery is undertaken as part of case management
and a motion for summary judgement is made. That's
the first time the court really gets a chance to vet those
issues. . . . There's no new evidence sufficient to require
reconsideration and there's nothing further for the
[c]ourt to reexamine from the last time.
The court did not abuse its discretion in denying defendants' motion for
dismissal, nor in denying reconsideration.
IV.
Defendants argue that plaintiff's March 4, 2016 motion for summary
judgment was defective because the material presented was "almost wholly
concerned with the irrelevant child support obligations of [B. Hicks], failed to
adequately cite the record and had blank spaces left to fill in, in the form of the
identity of who was going to be certifying certain evidence," and failed to meet
Rule 4:46-2(a) and (b). They assert that plaintiff did not submit any "real facts"
and the court was "entirely dismissive of the importance of this defect and made
an inaccurate assessment."
Defendants argue that the court first erred by accepting an August 27,
2015 certification, which failed to satisfy Rule 4:64-2(c), from a witness in
Oregon on March 4, 2016, and then subsequently erred by permitting plaintiff
to submit an undated certification by another witness on May 3, 2016, to replace
A-4458-17T4
12
the previous certification. They argue that, other than these "hearsay
certifications," there was "no evidence that non-appearing Gregory Funding
serviced the loan."
Defendants assert that on three court dates, November 10, 2014, January
27, 2015, and March 4, 2016, the "affiants" were alleged as employees for
Gregory Funding, appearing for U.S. Bank, although Bayview was still the
alleged party and substitution had not occurred yet. Defendants argue that the
"use of an agent for a non-substituted party was void."
The court made the following finding with regard to the certifications:
Both of these certifications comply with [Rule] 1:6-6
and the business records exception to hearsay.
However, for purposes of this motion, the [c]ourt will
rely on the Hernandez [c]ertification because it is
"sworn to not more than 90 days prior to its presentation
to the court" in accordance with [Rule] 4:64-2(c). The
Hernandez [c]ertification clearly provides competent
evidence in support of [p]laintiff[']s summary judgment
motion. Hernandez certifies that she is a [l]itigation
[s]pecialist for Gregory Funding and that Gregory
Funding is U.S. Bank's servicer with access to the loan
files and records of U.S. Bank. . . . Hernandez further
certifies that Gregory Funding, on behalf of U.S. Bank,
keeps and maintains its loan files and records during the
regular course of its business. . . . In addition,
Hernandez, in compliance with [Rule] 1:6-6, certifies
that she has personally reviewed the records in this case
and has personal knowledge of the relevant facts based
on her review of U.S. Bank's business records. . . .
Hernandez further explains that Gregory Funding's
A-4458-17T4
13
records were integrated with the prior servicer (and
original [p]laintiff), Bayview Loan Servicing, and thus
she has access to Bayview's records as well.
Accordingly, the [c]ourt finds that the Hernandez
[c]ertification complies with the requirements of [Rule]
1:6-6, and satisfies the business records exception.
Defendants dispute the accuracy of the following statement from the
court's written opinion: "Accordingly, [d]efendants have produced no original
signature exemplars that predate this controversy, or other documents which
were signed by [B. Hicks] in connection with this loan or other loans, from
which this [c]ourt would have the ability to make a finding of fact."
After analyzing the evidence brought forth by defendants, the court
determined that defendants "failed to produce any evidence during discovery to
support their claim that [B. Hicks'] signature was forged." The court pointed
out that when plaintiff requested signature exemplars from B. Hicks, he did not
provide a sample and instead, referred plaintiff to a signature at the end of
defendants' response to interrogatories and in photocopies on other documents.
Citing N.J.S.A. 2A:82-1, the court found that B. Hicks' signature on the
interrogatories or on a photocopy form would be inadmissible because they were
not "original signature exemplars that predate[d] this controversy." As a result,
the court concluded that defendants failed to provide the "requisite proofs to
establish a forgery."
A-4458-17T4
14
Furthermore, defendants argue that the court "sidestepped the
questionable notarization on the mortgage without holding a hearing," and its
assessment was erroneous. They argue that the March 4, 2016 certification was
unsigned and "vague and ambiguous" as to the notary's memory of what had
happened. Defendants claim that the notary's stamp was used to notarize the
mortgage when the notary was not present.
In response to this argument, the court cited to the notary requirements set
forth under N.J.S.A. 46:14-2.1 and the presumption of validity once the notary
signs the certificate of acknowledgement. The court found that defendants failed
to rebut the presumption of validity as to the notarized signature and the
argument was "pure speculation."
Defendants also question the authenticity of the note. The court made the
following finding:
Defendants claim that there are different versions
of the [n]ote and thus the [c]ourt cannot rely on the
[n]ote presented with this motion. However, after
considering the arguments made by both parties, it is
apparent that [d]efendants' claim is unsupported by the
facts in the record. Defendants were clearly provided
with copies of the [n]ote at different stages of its
possession. A review of these copies show that one
contained the indorsement of only the original lender
while the other versions contain additional
indorsements but not the allonge. However, [p]laintiff
corrected this problem by clarifying that the original,
A-4458-17T4
15
complete [n]ote does contain an allonge, and have
submitted a complete version with the allonge attached
along with its moving papers and the Hernandez
[c]ertification. . . . Defendants have inspected the
original [n]ote with the allonge and [p]laintiff has also
brought it into this [c]ourt for further inspection by
[d]efendants. There is a presumption of validity as to
these documents. Garden State Bank v. Graef, 341 N.J.
Super. 241, 245 (App. Div. 2001). None of the other
"versions" of the [n]ote provided by [d]efendants differ
on their face from the copy plaintiff submitted. Thus,
it is reasonable to conclude that the different version of
the [n]ote are from various stages of assignment of the
loan. In fact, it is also reasonable to conclude that the
allonge was omitted from the discovery submission.
When the [c]ourt observed the original [n]ote submitted
by [p]laintiff at oral argument, this version too had an
allonge attached. Accordingly, there is no material
question of fact that the [n]ote submitted by [p]laintiff
in support of its motion for summary judgment is the
original and only [n]ote in connection with this loan.
The court provided a thorough analysis of the issues raised by defendants
in a lengthy thirty-two-page opinion. The court's findings of fact are supported
by the record and it did not err in granting plaintiff's motion for summary
judgment. We affirm substantially for the reasons set forth in that September 1,
2017 opinion.
Affirmed.
A-4458-17T4
16