WELLS FARGO BANK, N.A., ETC. VS. MURTAZA ALI KHAN (F-018496-18, MONMOUTH COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE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-0757-19
WELLS FARGO BANK, N.A.
as TRUSTEE FOR OPTION
ONE MORTGAGE LOAN
TRUST 2007-6 ASSET-
BACKED CERTIFICATES,
SERIES 2007-6,
Plaintiff-Respondent,
v.
MURTAZA ALI KHAN and
SYEDA SHAHNOOR KHAN,
Defendants-Appellants.
__________________________
Submitted January 6, 2021 – Decided April 15, 2021
Before Judges Geiger and Mitterhoff.
On appeal from the Superior Court of New Jersey,
Chancery Division, Monmouth County, Docket No. F-
018496-18.
Murtaza Ali Khan and Syeda Shahnoor Khan,
appellants pro se.
Stradley, Ronon, Stevens & Young, LLP, attorneys for
respondent (Len A. Fisher, on the brief).
PER CURIAM
Pro se defendants Murtaza Ali Khan 1 and Syeda Shahnoor Khan appeal
from a June 21, 2019 order granting summary judgment in favor of plaintiff
Wells Fargo Bank, N.A. as trustee for Option One Mortgage Loan Trust 2007-
6, Asset-Backed Certificates, Series 2007-6, and denying Ms. Khan's cross-
motion for summary judgment. We affirm.
On March 2, 2007, Murtaza Ali Khan executed and delivered a note in the
sum of $768,750 in favor of First Interstate Financial Corporation, its successors
and assigns. To secure payment on the note, Mr. Khan and his wife, defendant
Syeda Shahnoor Khan, executed a non-purchase money mortgage as co-
mortgagors to Mortgage Electronic Registration Systems, Inc., as nominee for
First Interstate Financial Corporation, its successors and assigns. Defendant was
a signatory to the mortgage, but not the note. Covenant thirteen of the mortgage
provides:
[A]ny Borrower who co-signs this Security Instrument
but does not execute the Note (a "co-signer"): . . . (c)
agrees that Lender and any other Borrower can agree to
1
Mr. Khan never appeared in the foreclosure action, and his first filing in this
action was his Notice of Appeal. Because he failed to enter an appearance or
raise any arguments or defenses up to and including at the summary judgment
stage, Mr. Khan is not a proper party to this appeal. Regardless, Mr. Khan
presents the same arguments for our consideration as his wife. Therefore, we
will address only Ms. Khan's arguments.
A-0757-19
2
extend, modify, forbear or make any accommodations
with regard to the terms of this Security Instrument or
the Note without the co-signer's consent.
On March 8, 2007, the mortgage was assigned to Option One Mortgage
Corporation. On October 27, 2009, the mortgage was assigned to plaintiff.
After defaulting on the loan, Mr. Khan and plaintiff executed a loan
modification and shared appreciation agreement in September 2016. The
amended terms lowered the interest rate, reduced monthly payments, and cured
Mr. Khan's default. The first payment under the modified agreement was due
on December 1, 2016. The agreement also required Mr. Khan to make a final
"balloon payment" for the full amount of the outstanding balance on July 1,
2037.
Mr. Khan, but not defendant, signed a disclosure of the balloon feature
explaining its terms. The disclosure did not list the amount that would be due
on the final balloon payment. A provision directly above the date and signature
lines on the disclosure reads:
*All individuals on the title (even if not a borrower on
the note) must sign this agreement. If there are more
than two title holders to this property, please have them
sign below.
The modification agreement was to supplement and amend the note
secured by the mortgage. Paragraph 4(E) of the agreement states:
A-0757-19
3
[A]ll terms and provisions of the Loan Documents,
except as expressly modified by this Agreement,
remain in full force and effect; nothing in this
Agreement shall be understood or construed to be a
satisfaction or release in whole or in part of the
obligations contained in the Loan Documents; and that
except as otherwise specifically provided in, and as
expressly modified by, this Agreement, the Servicer
and I will be bound by, and will comply with, all of the
terms and conditions of the Loan Documents.
Mr. Khan failed to make the monthly payment due on April 1, 2018, and
all payments thereafter. Consequently, plaintiff commenced foreclosure
proceedings on June 4, 2018. Mr. Khan was served with Notice of Intent to
Foreclose by regular and certified mail. On September 7, 2018, plaintiff filed a
foreclosure complaint. On November 12, 2018, defendant filed a certification
in lieu of an answer, requesting dismissal of plaintiff's complaint. On December
7, 2018, defendant filed an answer. Mr. Khan did not respond.
On January 16, 2019, a case management conference was held and a
discovery order was entered. The discovery order directed the parties to
exchange responses to written discovery requests by April 19, 2019. Defendant
alleges she received plaintiff's answers to interrogatories almost two weeks late.
Despite the late submission, defendant failed to file a motion to compel or to
extend discovery.
A-0757-19
4
On May 20, 2019, plaintiff moved for summary judgment with a return
date of June 21, 2019. On June 11, 2019, defendant filed a cross-motion for
summary judgment, with the return date of June 21, 2019, and waiving oral
argument. She did not, however, respond to plaintiff's statement of undisputed
facts.
With its motion for summary judgment, plaintiff submitted the
certification of Guirlene Dolcine, a Contract Management Coordinator for
plaintiff's loan servicer. The certification is based on Dolcine's personal review
of relevant business records and sets forth a factual basis for the note's
execution, chain of possession, assignment and recording history, and Mr.
Khan's default.
On June 18, 2019, plaintiff filed opposition to defendant's cross-motion.
Later that day, the trial judge's law clerk contacted defendant to inform her that
the hearing was rescheduled to June 20, 2019, and indicated that plaintiff had
filed its opposition to her cross-motion. On June 19, 2019, defendant faxed a
letter to the judge's chambers requesting an adjournment because she had not
yet received or reviewed plaintiff's opposition. 2 On the same day, the law clerk
2
Plaintiff produced a certification indicating its opposition to defendant's cross-
motion was sent via Federal Express to the mortgaged property on June 18,
2019.
A-0757-19
5
faxed a copy of plaintiff's opposition to the number defendant used to fax her
letter to the court. The trial judge granted defendant's request and adjourned the
hearing until June 21, 2019.
On June 20, 2019, the judge received a second letter from defendant,
requesting another adjournment to allow her to review the opposition and
possibly retain counsel. She argued that in light of plaintiff's late submission of
discovery materials, and its failure to serve her with its opposition, she should
be given more time to prepare a response. The trial judge denied the request
and confirmed the motion was scheduled on June 21, 2019.
On the return date, plaintiff appeared but defendant did not. On the
record, the judge explained that she denied defendant's request for an
adjournment for several reasons. First, Rule 1:6-3 does not permit a cross-
movant to submit a reply to the opposition of their cross-motion without leave
of the court. Second, although plaintiff allegedly did not timely respond to
defendant's request for answers to interrogatories, she received them well before
the close of discovery, giving her "plenty of time" to consider a response.
Additionally, defendant did not make any objection when she received the
discovery. Finally, the judge noted that during the January 16, 2019 case
management conference, she explained to defendant that plaintiff would almost
A-0757-19
6
certainly move for summary judgment. Therefore, the judge found defendant
had ample opportunity to retain counsel and another adjournment, requested on
the eve of the return date, was not appropriate.
In light of defendant's absence, the judge decided not to hear arguments
regarding plaintiff's right to foreclose and rendered her decision on the motion
papers. Relying on the Dolcine certification, the judge found plaintiff had
established a prima facie showing of its right to foreclose. She noted that
defendant did not address the foreclosure issue in her cross-motion. Rather, the
arguments she advanced related to the loan modification agreement's execution
without her consent. The judge found covenant thirteen of the mortgage allowed
Mr. Khan and the lender to execute the loan modification without defendant's
consent. Further, because she was not a party to the loan modification
agreement, plaintiff was not required to provide defendant with notice of the
balloon provision. Therefore, the judge found the loan modification agreement
was valid and that defendant failed to raise any genuine dispute regarding
plaintiff's right to foreclose. Accordingly, the judge granted plaintif f's motion
for summary judgment and denied defendant's cross-motion.
On appeal, defendant raises the following issues for our review:
POINT I
A-0757-19
7
THE TRIAL COURT ACTED UNFAIRLY AND
UNREASONABLY IN DENYING [DEFENDANT'S]
SHORT ADJOURNMENT REQUEST TO ALLOW
[HER] TO RECEIVE AND REVIEW PLAINTIFF'S
REPLY SUBMISSION TO THE COURT AND . . . TO
OBTAIN COUNSEL.
POINT II
THE TRIAL COURT ERRED IN AUTHORIZING
THE FORECLOSURE OF A MODIFIED
MORTGAGE [THAT] WAS NEVER EXECUTED BY
OR ASSENTED TO BY DEFENDANT . . . AND
WHICH [INCLUDED A] BALLOON FEATURE
[THAT] WAS NEVER LAWFULLY DISCLOSED TO
. . . MURTAZA ALI KHAN.
POINT III
THE TRIAL COURT FAILED TO READ ALL
INFERENCES IN FAVOR OF DEFENDANT AS
REQUIRED IN A MOTION FOR SUMMARY
JUDGMENT.
This court "review[s] 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) (citing Mem'l
Props., LLC v. Zurich Am. Ins. Co., 210 N.J. 512, 524 (2012)). A motion for
summary judgment should be granted "if the pleadings, depositions, answers to
interrogatories and admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact challenged and that the
A-0757-19
8
moving party is entitled to a judgment or order as a matter of law." R. 4:46-
2(c). The evidence must be viewed "in the light most favorable to the non-
moving party[.]" Mem'l Props., LLC, 210 N.J. at 524 (citing Brill Guardian Life
Ins. Co. of Am., 142 N.J. 520, 523 (1995)).
Defendant argues her request for an adjournment to review plaintiff's
opposition and possibly retain counsel was improperly denied. Because she
received the opposition on June 19, 2019, defendant had only two days to
prepare a response before the hearing. As English is her second language,
defendant contends she was unfairly prejudiced because she was not given
enough time to comprehend what was going to take place.
Initially, we note that defendant was not automatically entitled to file a
response to plaintiff's opposition. If a cross-motion is germane to the original
motion, a cross-movant may not file a reply to their adversary's opposition
without leave of the court. Pressler & Verniero, Current N.J. Court Rules, cmt.
2 on R. 1:6-3 (2021). She also waived oral argument. Thus, if defendant could
not file a reply and did not intend to argue her motion before the court, we are
perplexed as to how she was prejudiced.
Regardless, defendant's contentions are belied by the record which
suggests, in fact, the motion judge apprised defendant of all the facts necessary
A-0757-19
9
to make an informed decision regarding her representation. On January 16,
2019, during the case management conference, the judge warned defendant that
plaintiff would likely file a motion for summary judgment prior to the trial date.
On May 20, 2019, plaintiff moved for summary judgment. That provided more
than four months to retain counsel, which she chose not to do. Defendant has
participated in this litigation since November 2018. One day before the return
date of plaintiff's motion for summary judgment, which was likely dispositive
of the foreclosure action, defendant requested an adjournment to possibly retain
counsel. Under those circumstances, we find the request was properly denied.
Because defendant made a conscious decision to proceed as a pro se litigant, her
decision not to retain counsel earlier in the litigation is not grounds for an
adjournment, or reversal.
With regard to the modification agreement, defendant argues the motion
judge misapplied the law in two respects. First, defendant asserts the loan
modification agreement is invalid because it altered the terms of the mortgage
without her consent. That premise is incorrect. The loan modification
agreement amended only the repayment schedule of the loan secured by the
mortgage, it did not alter or amend the terms of the mortgage. Moreover, even
if the terms of the mortgage were modified, which they were not, covenant
A-0757-19
10
thirteen of the mortgage expressly authorized Mr. Khan, as the sole signatory of
the note, to "agree to extend, modify, forbear or make any accommodations with
regard to the terms of this Security Instrument or the Note without the co -
signer's consent." The mortgage agreement required defendant to forfeit her
interest in the mortgaged property if her husband did not make timely payments
on the note. Because the terms of the mortgage were not amended by the
modification agreement, defendant's rights were not affected by its execution.
Therefore, defendant is still bound by the terms of the mortgage.
Defendant also argues plaintiff violated certain provisions of the Truth in
Lending Act (TILA), 15 U.S.C. § 1601 to 1667f, which required plaintiff to
disclose the amount of the final balloon payment to Mr. Khan before executing
the loan modification. She also points to the clause directly above the signature
line on the balloon disclosure, which required the signature of all individuals on
the title to the mortgaged property. Defendant argues the alleged TILA violation
as well as plaintiff's failure to obtain her signature, renders the entire agreement
unenforceable.
The "TILA seeks to 'protect . . . consumer[s] against inaccurate and unfair
credit billing and credit card practices' and promote 'the informed use of credit'
by 'assur[ing] a meaningful disclosure' of credit terms." Vincent v. The Money
A-0757-19
11
Store, 756, F.3d 88, 105 (2d Cir. 2013) (alterations in original) (quoting 15
U.S.C. § 1601(a)); see also Strubel v. Comenity Bank, 842 F.3d 181, 186 (2d
Cir. 2016). Lenders must "provide borrowers with clear and accurate
disclosures of terms dealing with things like finance charges, annual percentage
rates of interest, and the borrower's rights." Beach v. Ocwen Fed. Bank, 523
U.S. 410, 412 (1998).
With regard to mortgages, the TILA promotes the informed use of credit
by requiring mortgage lenders to make certain disclosures to borrowers before
consummation of the transaction. 15 U.S.C. § 1638(a). If the terms of the loan
agreement require a balloon payment, defined as a payment that is more than
two times a regular periodic payment, a balloon disclosure is required. 12 C.F.R.
§ 226.18(s)(5)(i). A balloon disclosure requires lenders to list the estimated
amount that will be due on the final balloon payment. Ibid. Similar disclosures
are required when a consumer refinances their mortgage. 12 C.F.R. § 226.20(a).
"A refinancing occurs when an existing obligation that was subject to this
subpart is satisfied and replaced by a new obligation undertaken by the same
consumer." Ibid.However, "[a] reduction in the annual percentage rate with a
corresponding change in the payment schedule" is not "treated as a refinancing
A-0757-19
12
. . . ." 12 C.F.R. § 226.20(a)(2). In this case, the loan modification agreement
merely altered the interest rate, lowered monthly payments, and required a final
balloon payment. It did not result in the satisfaction of any obligation under the
original loan. Paragraph 4(E) of the modification agreement makes clear that
the obligations under the original note were not extinguished and remained in
full force and effect.
Because the loan modification agreement amended the terms of the
original note, it did not represent a new credit transaction triggering TILA
protections, therefore a balloon disclosure was not required. See Ryder v. J.P.
Morgan Chase Bank, 767 Fed. App'x 29, 31-32 (2d Cir. 2019) (holding loan
modification agreements, unlike mortgage refinances, do not require
supplemental TILA disclosures upon execution). Accordingly, plaintiff was not
obligated to provide defendant or husband with a balloon disclosure, and the
absence of her signature on the disclosure page is immaterial.
Lastly, defendant argues the motion judge incorrectly applied the
summary judgment standard in concluding plaintiff had established its right to
foreclose on the mortgaged property. Our review of the record, however, reveals
defendant failed to dispute any facts material to plaintiff's right to foreclose.
A-0757-19
13
"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). "[E]xecution, recording, and non-payment of the
mortgage" must be demonstrated by a party seeking to foreclose. Thorpe v.
Floremoore Corp., 20 N.J. Super. 34, 37 (App. Div. 1952). "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) (citing Claypotch
v. Heller, Inc., 360 N.J. Super. 472, 489 (App. Div. 2003)).
Preliminarily, we note defendant's failure to respond to plaintiff's
statement of undisputed facts in support of its motion for summary judgment.
Rule 4:46-2(b) requires a party opposing a motion to "file a responding
statement either admitting or disputing each of the facts in the movant's
statement." Unless specifically disputed in the responding statement, "all
material facts in the movant's statement which are sufficiently supported will be
deemed admitted . . . ." R. 4:46-2(b). As defendant did not provide a responding
statement, all supported facts in plaintiff's statement are deemed admitted.
A-0757-19
14
The record amply supports the motion judge's determination that plaintiff
was entitled to foreclose. Paragraph three of the Dolcine certification, the note,
and the mortgage establish execution of the note. Paragraphs six and seven of
the Dolcine certification list the chain of possession and recording history of the
note. The assignment and recording receipts were also attached as exhibits.
Paragraphs nine and eleven of the Dolcine certification establish non -payment
of the mortgage. Finally, paragraph one of the Dolcine certification indicates
all of the certified statements were based upon Ms. Dolcine's personal review of
business records.
Consequently, the Dolcine certification is sufficient, Wells Fargo Bank,
N.A., 418 N.J. at 599, to establish all of the necessary elements to a foreclosure
action. Thorpe, 20 N.J. Super. at 37. In her cross-motion for summary judgment
and on appeal, defendant does not challenge the execution or recording of the
note, or her husband's failure to make timely payments. Therefore, the motion
judge did not err in finding plaintiff had proven its right to foreclose.
Defendant's remaining arguments lack sufficient merit to warrant
discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
A-0757-19
15