Download - ARGUMENT+ +Standing,+Certification+on+Info+&+Belief,+When+No+Caselaw+Exists+to+Support+Argument
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(address of local counsel)
Atlantic City, NJ (609)
DEUTSCHE BANK TRUST COMPANY AMERICA,
Plaintiff,
v.
(borrowers),
Defendants
SUPERIOR COURT OF NEWJERSEY CHANCERY
DIVISION ATLANTIC COUNTY
CIVIL ACTION
DOCKET NO.:
____________________________________________________
LEGAL MEMORANDUM IN OPPOSITION TO
PLAINTIFFS MOTION FOR SUMMARY JUDGMENT
____________________________________________________
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Atlantic City, NJ
WILLIAM J. BARNES, ESQ. (admitted pro hac vice)
On the Brief
LEGAL ARGUMENT
I. PLAINTIFFS MOTION FOR SUMMARY JUDGMENT
SHOULD BE DENIED AND SUMMARY JUDGMENT SHOULD BE ENTERED
IN FAVOR OF THE DEFENDANTS ON THEIR COUNTERCLAIM
Plaintiff has filed a Motion for Summary Judgment which relies on factuallyinapplicable decisional law; ignores the threshold issue of legal standing; fails to justify
the striking of Defendants contesting Answer; and purports to be supported by aCertification of counsel for Plaintiff which is not made on personal knowledge and which
is in fact based on incompetent hearsay. Plaintiff has failed to demonstrate the absence ofgenuine issues of material fact and has failed sustain its burden to be entitled to the entry
of summary judgment.
Plaintiffs own submissions and admissions therein demonstrate that theDefendants are entitled to the entry of summary judgment on their Sixth Separate
Defense and their Counterclaim as a matter of law, and pursuant to their Cross-Motion
for Summary Judgment filed separately but simultaneously herewith.
Plaintiff relies on the holding of Somerset Trust Co. v. Sternberg, 238 N.J. Super
279 (Ch.Div. 1989) in alleged support of its request to strike the contesting answer of theFairhurst Defendants. A close reading of the Sternberg opinion reveals that Plaintiffs
reliance is misplaced, as the cited portion plainly states that the pattern involves asituation where the mortgagor fails to respond [to the summary judgment motion]. It is
of record that the Fairhurst Defendants have responded to Plaintiffs summary judgmentmotion.
The second cited portion of the Sternberg opinion states that many of the
answers and defenses proffered are legally insufficient as they fail to challenge theessential elements of the mortgagees right to foreclosure and fail to interpose a validlyrecognized defense in foreclosure suits. It is of record that the Defendants have
challenged the Plaintiffs very standing to foreclose and thus its right to seek the remedyof foreclosure ab initio and as set forth more fully herein.
Plaintiffs view of the scope of Chancery litigation is as wrongfully narrow as that
found by the court in Leisure Technology-Northeast, Inc. v. Klingbiel Holding Company,
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137 N.J.Super. 353, 349 A.2d 96 (N.J. Super A.D. 1975), wherein it was held that R.4:6-2 requires that every defense to an action legal or equitable, in law or in fact be asserted
in an answer, and that one of the purposes of the adoption of the Judicial Article of the1947 Constitution was to permit the resolution of all aspects of a controversy between
parties to be resolved in a single forum, whether the claims be legal or equitable in
nature. 137 N.J.Super. at 357. These defenses include what are termed as germanecounterclaims in foreclosure actions. Such counterclaims are germane if they arise outof the subject matter of the mortgage transaction, and discovery is permitted on such
counterclaims. 137 N.J.Super. at 358 (reversing order striking defendants firstaffirmative defense, severing counterclaim, and transferring to Law Division).
The sixth Separate Defense of the Defendants states that Plaintiff was not, at thetime of the filing of the Complaint and in view of the admissions in paragraph 4(a)
thereof, in possession of any legal interest in the mortgage sufficient to institute aforeclosure. The First Count of the Counterclaim of the Defendants requests the entry of
a Declaratory Judgment for dismissal of the foreclosure complaint based on the absence
of the necessary and proper proofs to satisfy the legal standing requirements to institute aforeclosure. The Second Count of the Counterclaim requests the entry of InjunctiveRelief prohibiting the entry of a judgment of foreclosure and the sale, conveyance, or
transfer of the real property the subject of this action based on the lack of legal standingof the Plaintiff/Counter-Defendant to institute a foreclosure. The Sixth Separate Defense
and Counterclaim are germane to the foreclosure action as they arise out of the subjectmatter of the mortgage transaction, going to the threshold issue of the legal standing of
the Plaintiff to institute this foreclosure action. As such, the contesting Answer should notbe stricken; discovery should be permitted; and Plaintiffs Motion for Summary
Judgment should be denied.
Plaintiff has failed to cite a single case which precludes the assertion of anequitable counterclaim for declaratory and injunctive relief which challenges the very
legal standing of a plaintiff to institute a foreclosure action, and has also failed to cite asingle case which permits a plaintiff to institute a foreclosure action when it has no legal
interest in the mortgage and note at the time of the filing of the foreclosure action.Plaintiffs Motion for Summary Judgment should thus be denied as being unsupported by
any decisional law on the specific facts of this case.
The Courts of New Jersey have apparently not addressed the specific factualsituation in this case. In instances where there is no New Jersey case on point, the
Courts of New Jersey have utilized opinions from other jurisdictions for guidance. (See,
e.g., Greate Bay Hotel & Casino, Inc. v. City of Atlantic City, 264 N.J.Super. 213, 217-218, 624 A.2d 102 (N.J. Super L. 1993)(analysis of treatment of business trusts asdistinct legal entities by various other jurisdictions including California, New York, and
Michigan where no New Jersey case explicitly dealt with types of trusts in case); Gregoryv. Allstate Insurance Company, 315 N.J.Super. 78, 82-83, 716 A.2d 573 (N.J.Super.L.
1997)(analyzing split of authority in jurisdictions which considered issue of whethervictim of unintentional auto collision was covered by uninsured motorist coverage). The
Courts of the State of New York have been repeatedly presented with the legal standing
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issues in foreclosure actions raised in this case, and have consistently held that whenthere is no proof that the foreclosing party had the requisite legal interest in the mortgage
and note at the time that it filed the foreclosure action that dismissal of the action wasproper.
In mortgage foreclosure actions (as in all actions), the foreclosing party must havestanding to bring the action:
Standing to sue is critical to the proper functioning of the judicial system. It is a
threshold issue. If standing is blocked, the pathway to the courthouse is blocked.Standing to sue requires an interest in the claim at issue in the lawsuit that the
law will recognize as a sufficient predicate for determining the issue at thelitigants request.If a plaintiff lacks standing to sue, the plaintiff may not
proceed in the action.
IndyMac Bank v. Bethley, 2009 NY Slip Op 50186(U)(N.Y.Sup.Ct. 2/6/2009),
citing Saratoga County Chamber of Commerce, Inc. v. Pataki, 100 NY2d 801,812 [2003], cert denied 540 US 1017 [2003]; Caprer v. Nussbaum, 36 AD3d 176,181 [2d Dept 2006]; Stark v. Goldberg, 297 A2d 203 [1st Dept 2002].
Where there is no evidence that the plaintiff, prior to commencing a foreclosureaction, is the holder of the mortgage and note or took physical delivery of the mortgage
and note or that same were conveyed by written assignment, the plaintiff did not havestanding to institute the action. New Century Mortgage Corporation v. Durden et al.,
2009 NY Slip Op 50175(U) (N.Y. Sup. Ct. 2/2/09), citing Deutsche Bank Trust Co. Ams.V. Peabody, 20 Misc. 3d 1108A (Sup.Ct. Saratoga County 2008) and Countrywide Home
Loans, Inc. v. Taylor, 17 Misc. 3d 595 (Sup.Ct. Suffolk County 2007) and additional
cases cited therein.
A plaintiff has no foundation in law or fact to foreclose upon a mortgage in which
the plaintiff has no legal or equitable interest, and where an assignment of the mortgagepost-dates the filing of the complaint, the plaintiff does not have the requisite ownership
interest at the time of filing. As a foreclosure of a mortgage may not be brought by onewho has no title to it and absent a legally effective transfer of the debt, the (post-filing)
assignment of the mortgage is a legal nullity. U.S. Bank National Association v. Kosak etal., 2007 NY Slip Op 51680(U)(N.Y. Sup.Ct. 9/4/2007), citing Katz v. East-Ville Realty
Co., 249 AD2d 243, 672 NYS2d 308 [1st
Dept 1998] and Kluge v. Fugazy, 145 AD2d537, 536 NYS2d 92 [2d Dpet 1988].
In Bethley, the Court held that Plaintiff IndyMac lacked standing to foreclose on
the mortgage and note as it did not own the mortgage and note on the day that theComplaint was filed. IndyMac, as Plaintiff has done here, attempted to assign the
mortgage and note two days after filing the foreclosure action. In the instant case,Plaintiffs own submissions demonstrate that Plaintiff did not own the note and mortgage
on December 24, 2007 (the day that the Complaint was filed), having only [purportedly]come into such ownership, at the earliest, some three days thereafter, that being on
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December 27, 2007 by virtue of the very Assignment attached as Exhibit B to thePlaintiffs moving papers. As the subject Assignment was not even recorded by the
Atlantic County Clerk until almost a year later on November 5, 2008, Plaintiff arguablyhad no interest in the mortgage until late 2008.
As such, Plaintiff lacked legal standing to institute this mortgage foreclosureaction ab initio. This issue of material fact warrants not only the denial of Plaintiffs
Motion for Summary Judgment, but also supports the entry of summary judgment infavor of the Fairhurst Defendants on their Sixth Separate Defense and their Counterclaim.
In addition to the disputed issues of material fact set forth in the Defendants
Statement of Material Facts filed separately but simultaneously herewith, the Defendantshave propounded a First Request for Production, First Request for Admissions, and First
Set of Interrogatories upon Plaintiff, none of which have been responded to as of the dateof this Response. These discovery requests seek information as to the Plaintiffs legal
standing including the chain of title to the mortgage and note which are factual issues
material to not only the Plaintiffs claim but also the Counterclaim of the Defendants. Asthere is a dispute as to the absence of factual issues at this early stage of the proceedingswhere the case is not fully developed, summary judgment is inappropriate. Velantzas v.
Colgate-Palmolive Company, Inc., 109 N.J. 189, 193, 536 A.2d 237 (N.J. 1987):
Generally, we seek to afford every litigant who has a bona fide cause of action ordefense the opportunity for full exposure of his case, and When critical facts
are peculiarly within the moving partys knowledge, it is especially inappropriateto grant summary judgment when discovery is incomplete.
109 N.J. at 193, citing United Rental Equip.Co. v. Aetna Life and Casualty Ins.
Co., 74 N.J. 92, 99, 376 A.2d 1183 (1977)(citing Robins v. Jersey City, 23 N.J.229, 240-41, 128 A.2d 673 (1957), and Martin v. Educational Testing Serv., Inc.,179 N.J. Super 317, 326, 431 A.2d 868 (Ch.Div.1981).
In cases where a suit is in an early state and not fully developed, the standard by
which a court ought to review a judgment terminating it now is from the standpoint ofwhether there is any basis upon which the plaintiff should be entitled to proceed further.
Velantzas, supra at 193, citing Bilotti v. Accurate Forming Corp., 39 N.J. 184, 193, 188A.2d 24 (1963). As the Plaintiff herein did not have the legal standing to institute this
foreclosure action ab initio, Plaintiff cannot proceed any further, and thus PlaintiffsMotion for Summary Judgment must thus be denied.
Plaintiff also attempts to support its Motion for Summary Judgment with the
Certification of Richard P. Haber, Esq., who is counsel for the Plaintiff and who is not anofficer or director of the Plaintiff. The subject Certification is not made on personal
knowledge, and admits that it is based on a review of the computerized records of theplaintiff. As the Certification is not based on personal knowledge, the statements in the
Certification can only be based on information and belief.
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Rule 1:6-6 requires that Certifications in support of Motions be made on personalknowledge. Personal knowledge excludes matters based on information and belief. See.,
e.g., Wang v. Allstate Ins. Co., 125 N.J. 2, 16 (1991); Lamb v. Global LandfillReclaiming, 111 N.J. 134, 153 (1988). The Haber Certification, which is based on a
review of computerized records (which are per se incompetent hearsay) by someone
without personal knowledge, is thus incompetent to support the Plaintiffs Motion forSummary Judgment as a matter of law and New Jersey procedure.
The Haber Certification also makes reference to and attaches the Assignment
(Exhibit B to the Certification). This Assignment, which constitutes an admission bythe Plaintiff, is the very document demonstrating that Plaintiff had no legal interest or
ownership in either the note or mortgage at the time that the Complaint was filed, andraises genuine issues of material fact as to when (if ever) Plaintiff came into any
ownership rights of either the Note or the Mortgage. Plaintiffs Motion for SummaryJudgment must thus be denied, and summary judgment should be entered in favor of the
Fairhurst Defendants on their Sixth Separate Defense and their Counterclaim.
CONCLUSION
Plaintiff has, by its very submissions, demonstrated that there are genuine issuesof material fact as to when, if ever, Plaintiff came into any ownership interest in either the
Note or Mortgage. Plaintiffs submissions demonstrate that there is no genuine issue ofmaterial fact that Plaintiff did not have any legal interest in either the note or the
mortgage at the time it filed this foreclosure action, and has thus demonstrated that it waswithout legal standing to institute this action. Summary judgment for Plaintiff is thus
inappropriate.
Summary Judgment is also improper at this time given that discovery isincomplete. The Haber Certification, which consists of incompetent hearsay, is legallyinadmissible and does not in any way support the entry of summary judgment for
Plaintiff. If anything, the Haber Certification supports the entry of summary judgment infavor of the Defendants on their Sixth Separate Defense and their Counterclaim.
Plaintiffs Motion for Summary Judgment must thus be denied, and summary
judgment in favor of the Defendants on their Sixth Separate Counterclaim should begranted pursuant to the Cross-Motion for Summary Judgment filed by the Defendants.
Respectfully submitted,
(counsel)