Bank of America v. Limato

8/6/2019 Bank of America v. Limato

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FAX COVER SHEET

DATE 4 /25111

FROM Peter E. Doyne, A.l.S.C. FAX # ( 20 1 ) 371- 1110

TO Anne Walters, Esq.TO Adam Deutsch, Esq.

FAX # 856-857-1166FAX # 201-666-8589

RE: BOA v. Limato _

DOCKET#__ ------ __

Please contact CecyJia Hahn with any questions at 201-527-2268.

NUM BER O F PAGES INCLUDING CO VER SHEET _;_ ;2 rJ )


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ti l ~ .'

J os hu a Denbe a u xDenbeaux & Denbeaux3 66 K in de rk am a ck R oa dW e stw ood , N ew Je rse y '0 767 5( 201 ) 664 -8855 IFa x: (2 01 ) 666-8589Attorneys for Defendants

FILEOA P R is 2 0 1 1

" ' " E . n o ' D e . AJ . S . G.~ ttt ___ I ~ , .. 1 1 _ ~ i , ~l Bank of Amer ica, NA , ; SUPERIOR COURT OF NEW JERSEY: CHANCERY DMSION: BERGENi Plaintiff, COUNfY.,! DOCKET NO .: F -6 18 80 -0 ~Vs.!I Melissa Limato,! Defendant.~_ _ " If _ ,.,.t _._ ~..........................................

A Civil ActionORDER

This matter having come before the Court upon application of Denbeaux &Denbeaux, counsel for defendants, upon notice to all counsel, and the Cou rt havin~ /. tJ~ I " , , " : . . 2consid ere d the m oving pap ers su bm itte d, hav ing he ard oral a rgu m ent o f cou nse l and tfte ~pilfliCll, if.aay, and h~idered same, and fu , good cause shown; e I ! > I - -~(j\It is. on this day of~ 2011~ hereby ORDERED, as follows:

1. Plaintiffs Motion for Summary Judgment is denied ..2. Defenda.Iit's Notice of Cross Motion for Summary Judgment is grante~ and + h e

U ( ! . . f i L ' t f t \5' d l ' 5 f t l \ $ : ) ( & v . . , i t l " O J . t v fI 2 . 5 w ! i C e .3. The Vlaltels Gertification is striekM.4. A copy of the within Order shall be served on all parties within_1__ da.ys of the date

of this Order.

(v ) OPPOSED( ) UNOPPOSED1


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B ANK OF AMERICA v. LIM A TO , ET A L.DOCKET No. BER-F-61880-09

RIDER TO ORDER DATED APRIL 25, 20llBefore the cour t is a m otion file d on be half of the plaintiff; B ank of Am e rica, NA ,

("BOA" or "plaintiff'), seeking summary judgment and to strike the contesting answer . Across-motion for summary judgment was filed by counsel for Melissa G. Limato(,Melissa") on February 16,2011. A reply was filed on March 11,2011. Oral argumentwas entertained on March 18, 2011. The matter was continued to April 21, 20 I 1 .1

Plaintiff's motion is denied; defendant's cross-motion is granted.~alld Procedural Posture

A. The note and the mortgageOn July 1,2004, Melissa and John P. Lirnato (,Melissa" and "John" when

referenced individually; "defendants" when referenced jointly) executed and delivered afixed/adjustablerate note (the "note") in the sumcof-$532,OOO-to-Aroedca!s-Mortgage---------Outsource Program ("America's Mortgage"). Defendants were directed to makepa ym e nts to W e lls F argo B an k, N .A . ("W ells Fa rg o" ). The note contained two apparentlyseparate indorsements.i One indorsement w a s inblank f orm p ay ab le to bearer by WellsF arg o d oin g b u sin e ss as ( '"d/b/a") America's Mo rtg ag e a nd the other indorsement waspayable to, what appeared to be , W ells Fargo. T he n ote provided for a change from afixed-interest rate to an adjustable interest rate. The note obligateddefendants to make

IA t o ra l a rg um e nt o n M a rch ) 8 ,2 01 1, th e c ou rt p erm itte d p la in tiff's' counsel to mak e addi ti on a lsubmissions regarding po ss e ss ion o fth, e not e w i th in te n days. Me li ss a's c ou n se l th en h ad seven days torespond. The court's ord er se tting forth th e su pp le m enta l brie fin g sch ed ule w as on th e re cord o nly . O ra largumen t continued on April 2 1, 2011.Z A t o ra l a rg um e nt, plaintiffs co un se l w a s unable to a nsw e r th e cou r t's i nqu i ry regarding w he n th ein do rs emen ts w e re made .


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initia l m onth ly installm e nt paym e nts of $3 .0 62 .50 on th e first of e ach m onth comm e ncingo n S e pte m be r 1.2004. The in itia l in te re st ch arg ed o n u np aid p rin cip al w as 5 .6 25 '% p eran num . T he inte re st rate was sch ed ule d to ch an ge (1 ) on A u gu st 1 ,2014 and (2 ) on thefirst e ve ry 1 2m o nth s thereafter. B efore th e ch ange d ate , th e inte re st rate was to becalcu la te d by a dd ing tw o and th re e-q ua rte rs pe rce ntage points (2 .7 50%) to th e th encu rre nt ind ex .' T he " note hold er') w ou ld the n rou nd the re su lt of the ad dition to thene are st one -e igh th of one pe rce nta ge point (0 .1 25% ). T he inte re st rate a t th e first ch anged ate cou ld not be gre ate r th an 1 0.62 5% o r le ss th an 2 .7 50% . T he re afte r, th e inte re st " (atew ou ld ne ve r incre ase or d ecre ase on any s in gle c ha ng e d a te by mo re th an tw o p erc en ta gepoints (2 .0 00% ) from th e ra te of inte re st paid for th e pre ce ding 1 2 m onth s. T he inte re strate cou ld ne ve r be gre ate r than 1 0.62 5% . A ny u npaid am ou nts w ou ld be d ue infu ll onA ugu st 1 .2034. The note provide d for a late charge of 5.000% for any paym ent notr ec eiv e d w ith in f if te e n (IS) d ays from the d ue d ate .

T o se cu re pa ym e nt on th e note , d efe nd ants sim u lta ne ou sly e xe cu te d a m ortga ge( th e "m ortg ag e" ) to Am e rica 's Mo rtg ag e. T he mo rtg ag e d ire cte d a fte r re co rd atio n itshou ld be re tu rne d to W ells F argo. W e lls Fargo w as alle ge dly the se rvice r of them ortgage pu rsu an t to an a gre em e nt (th e " se rvicing a gre em e nt" ) e x ecu te d on A u gu st 2 3,2004 by BOA a nd W e lls F argo. S ection 2 .0 1 of th e se rvicing agre em e nt state d, W e llsF argo " doe s h ere by se ll, tra nsfe r, a ssign, se t ove r a nd conv ey to [BOA ], w ith ou t re cou rse... all th e r ig h t, ti tle and inte re st of [W ells F argo] in and to the M ortgage Loans." T hese rv ic in g a gre em en t d e fin ed mo rtg ag e lo an s as a "Mo r tg ag e Loan ... id e ntifie d o n th eJ T he " ind ex " is d efine d u nd er the n ote a s " the av erage w ee kly y ie ld on U nite d S ta te s tre asu ry se cu ritie sa dju ste d t o a constant maturity of o ne year, as made ava il ab le by the Fed e ra l R e s e rv e Board." The "currentindex:" is th e "most r e cen t [iln de i( fig ure a va ila ble a s o f th e d ate 4 5 d ay s b efo re e ac h [c [h an ge [d ja te ."

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KX u at a/ J ine HJ-If.!-c3-cDlllMDN) 08 : 37 F a x : P . 0 0 5A p r 2 5 2 0 1 1 O B : 3 5 a m P 0 0 5 / 0 2 6Re: Bank of America, NA v. Limato, et al.

Docket No. BER-F-61 880-09Rider to Order Dated April 25,2011

Mortgage Loan Schedule," butthe mortgage loan schedule was blank. Melissa's counselunderstandably questioned the applicability of the servicing agreement to the note on theground the servicing agreement was executed in 2004 whereas the assignment of the noteto BOA, discussed below, was executed in2009.

The mortgage was recorded July 27,2004 inBook 13705 of Mortgages on Page763. On November 18. 2009, America's Mortgage assigned the mortgage.and note toBOA. Wells Fargo, d/b/a America's Mortgage "attested" to the assignment. Theassignment was recorded on December 18, 2009 i~ Book 00317 ~n Page 1997,4Defendants argue there are no competent proofs plaintiff was the present holder of thenote. While plaintiff stated it was the present holder p u rs u an t to the indorsement and theassignment and certified it had actual possession of the note on the date the foreclosurecomplaint was filed, Melissa',s counsel countered there is no competent evidence the notewas ever physically transferred to plaintiff nor is there any evidencethat it had been lost.

Defendants apparently executed a "truth inlending disclosure statement" (the"disclosure statement") on July 1,2004, acknowledging receipt of the statement. Thedisclosure statement conveyed the following: (1) the lender was America's Mortgage,(2) defendants wer~ the borrowers, (3) the property address was listed as the mortgagedpremises, (4) the loan amount was $532,000, (5) the initial interest rate was 5.625%, (6)the payment schedule, (7) the Joan contained a variable rate feature, (8) security interest

~Me liss a's c ou n se l d isp ut ed p la in tif f's a lle ga tio n Am e ric a's Mo rtg ag e a ss ig ne d th e n ote a nd mo rt ga ge toBOA . S pe cif ic ally , c ou ns el c la im e d th ere w as n o a dm iss ib le e vid e nc e proving th e a ssig nm e nt o f m o rtg ag e;a nd , a s to a ssig nm e nt o f the n ote , co unse l a sse rte d a n a ssig nm e nt o f m ortga ge d id no t h ave a ny' e ffe ct 00th e note a s a n ote ca nn ot b e a ssig ne d bu t ra th er m u st b e n ego tia te d or tra nsfe rre d WIder th e vec pursuantto NJ,SA 1 2A :3 -3 01 . A lte rn ativ ely , c ou ns el n ote d th e a ssig nm e nt o f th e m o rt ga ge tra ns pire d aft er th eal leged default d ate d Ju ly 1,20 09. Se e below f or a f ulle r d isc uss io n re ga rd in g t he d e fa ult .3


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Re : Bank of A merica , NA v: L im a to, e t a l,D o ck et No . BER-F- 61 88 0- 09R id er to O rd er D ate d A pril 2 5.2 01 1

w as give n in re al property. (9) a ssu m ption of th e loan by another w as possible, (10) therew ou ld be no pre paym e nt pe na lty or re fu nd s of pre paid pa ym e nts, and (11) hazardin su r an ce wa s r eq u ire d . S

A summ ary of d isclosu re s of th e a nnu al pe rce nta ge rate s ch arge d inconnect ionw ith th e loan ( "APR'" a nd "APR d isclo su re sta te m ent" ) pre pa re d on O ctobe r 7 , 2 01 0 byru nning a so ftw are p ro gram a pp are ntly m a de a va ila ble to th e 'p u blic by th e gov e rnmen t,indicated th e amou nt fin anc ed w as $ 52 7,4 57 .1 0; th e " d is clo se d " e stim a te d A PR was5.1 67 0% a nd " disclose d" fina nce ch arge w as $494,7 49.3 5. T he se figu re s w e re liste d a s" origin al" loan inform a tion. T he A PR d isclosu re sta te m ent th en liste d th e sam e a m ou ntfina nce d, bu t th e fina nce ch arge w as now liste d as $494,9 44.67 ; th e tota l of paym e nts(whic h wa s lis te d inth e la tte r se ction for th e first tim e ) liste d a n am ou nt of$ 1,0 2 2 ,4 01 .7 7 ; a nd th e APR w as liste d a s 5.2 11 6% . A ccord ing to th e A PR d isclosu resta te m e nt, th e fin an ce c ha rg e v io la tio n w as $ 19 5.3 2. P la in tiff d isp ute d th e APRdisclosure sta te m e nt o n th e ground it wa s in adm i ss ib le evidence,

T he note containe d a n a gre em e nt ifa ny in sta llm e nt p aym en t sh ou ld rem ainu npaid for 3 0 d ays afte r the sam e sha ll fa ll d ue , the w hole principal su m , w ith all u npa idprincipa l a nd Inte re st, sh ou ld , at th e option of pla intiff be com e imm e dia te ly d ue a ndpayable .

A c co rd in g to th e ce rtifica tio n o f p la in tiff's c ou nse l, A n ne E . W a lte rs ("W alte rs"a nd th e "W alte rs C ert." ), d efe nd ants d efau lte d u nd er th e te rm s and cond itions of th e no teby failing to m a ke m onth ly installm e nt paym e nts " as re qu ire d." T he W alte rs C ert. faile d, In ad dition to the truth in le nd in g d isclo su re sta te m en t o f Ju ly 1 , 2 00 4, a no the r su ch sta te m ent w ase x ecu te d o n M ay 4,' 2 00 4 a nd con ta in ed d iffe re nt va ria ble s th an tho se co nta in ed in the Ju ly 1, 20 04statement.

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to spe cify th e d ate of th e a lle g ed default , b ut sta te d th e pa ym e nts re m aine d u npa id .Plaintiffs c omp la in t in dic ate d th e d e fa u lt o cc ur re d onJuly 1, 2 00 9, a nd d efe nd an ts fa ile d

'. .. J ".-

to m ake any paym ents be com ing d ue thereaft~r.~:D~fe~~ant5'd ispu te d th e d efa ult o n : ~h ~. .b as is p la in tiff fa ile d to p ro du c e e vid e nc e in su p po rt o f th ea lle ga tio n; a lte rn ativ ely .defendants a rgued p la in ti ff was n ot a pa rty entitled to e nforce the note . D efe nd ants d id ,however, concede they failed to m ake a paym ent u nd er the note d uring the su mm er of2009 , speci fi ca ll y inor a bo ut A u gu st 2 00 9, a nd p re sum ably th ere afte r.

B. TheNOrP ursu ant to th e F air F ore closu re A ct, W ells F argo m aile d notice of inte ntion to

f or ec lo se to defendants.i One notic e ("NOr 1" ), d ate d Fe bru ary 15.2 00 9, w as m aile d toJohn at 52 2 We llin gto n D riv e, Wyck of f) N J ( th e "mo rtg ag ed premises"). A se con d n otice(" 'N OI 2 "), d ate d A u gu st 30 ,2 00 9, w as also mailed to .Joh n a t th e mortgaged prem ise s. A

. .t hi rd no ti ce ("NOr 31) , dated Se pte mbe r I 4~ 2009, w as m aile d to M elissa at the mort~agepre mise s. N Or's ad dre sse d to John and to Melissa, se pa ra te ly , w e re re ce ive d o nS epte m be r 1 9,2 00 9; ce rtifie d m a il re ce ipts sign ed by Jo hn in dic ate d d e liv ery : o f th eNOPs w as acce pte d.i A lthou gh de fe nd ants claim ed the y w ere not se rve d the notice of .intent to fore close , the F FA d oe s not contain su ch a re qu ire m ent. S ee N .J.S .A . 2 A:50w56.9D efe nd ants fu rthe r state d none of the thre e notice s of inte nt to fore close w ere frm n the

" le nd er" a nd th ere fore pla in tiff w as in v iola tio n o f the FFA.6 D eta ils o f th e c om pla in t a re se t fo rth b elo w,7 N J.S .A . 2 A:50 -5 3 to :5 0-6 8 is he re in afte r re fe rre d to a sth e " FFA."S P la in tif f c ertif ie d T hem a il re ce ip ts w e re tru e a nd c orre ct c op ie s.9 "N otic e o f intention to ta ke a ct io n [to f ore clo se ) sh all b e in writing, sent t(J th e d e bt or by r eg is te r ed o rc ert if ie d m a il, re tu rn re ce ip t re q ue st ed , a t t he d e bto r's la st k nown a dd re ss, a nd , if d iffe re nt, to th e a dd re ss o fthe p ro pe rty w hich is th e su bje ct o f th e re sid en tia l m ortg ag e. T he n otice is d ee m ed to h av e b ee n e ffe ctu ate do n th e d ate th e n otice is d eliv ere d inpe rson or m ailed to the party." N J.S.A , 2A :50-56(b). .

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Re : Bank of A me rica , NA v. L im ato, e t al.Docke t No . BER-F -61880 -09R ide r to O rde r D ate d A pril 25, 2011

C. PleadingsO n N ovem be r 2 4, 2 00 9, a com pla int for fore closu re wa s in it ia te d ag ai ns t t he

d e fe n da nts listin g p la in tif f a s th e p arty in interest.O n Ju ly 20 ,2 010 , cou nse l on be half of M elissa file d an answ er and

counterclaim. 10 T he answ er ad m itte d e xe cu tion of the note a nd m ortga ge . Inre sp on se top la in tiff's a lle ga tio n o f d efa ult, th e a nsw e r d en ie d p la in tiff h ad th e rig ht to e nfo rce th eno~ e a nd /or m ortga ge a nd the re fore la cke d the right to d eclare the note in d efa ult; butn onpa ym e nt w as conce de d. T he a nsw er asse rte d se ve nte en affirm a tive d efe nse s a nd ac ou n te rc la im a lle gin g v io la tio n o f th e Truth i n L endi ng Act (" TILA "). N o o th erd efe nd an t file d a n a nsw e r, II

Pla in tiff file d a n a nsw er to the cou nte rcla im on A u gu st 3 1, 2 01 0, N ine te ena ffirm a tiv e d efe nse s to th e co un te rc la im w e re liste d.

D . Su mmary ju dgm e nt m otionsC ou nse l o n b eh alf o f p la in tiff file d th e in sta nt m o tio n fo r summa ry ju d gm e nt.a nd

to strike conte sting a nsw er o n F ebru ary 1 , 2 01 1. In su pp ort of the m otion plaintiffsu bm itte d a m e morandu m of law and theWalte rs C ertY T he W alte rs Celt con ta in ed t hef ollow in g e x hib its: ( 1) c omp la in t to f ore clo se ; (2) a nswe r, a ff irma tiv e d e fe ns es , a ndc ou nte rcla im ; (3 ) a nsw e r to c ou nte rcla im a nd a ffirm a tiv e d ef en se s; (4 ) th e n ote ; (5) themo rtg ag e; (6 ) th e a ssig nm e nt; (7 ) NOr 1 ,Nor 2 , and NOr 3 ; (8) the cove r she et to the

10 A t oral a rg um e nt o n M arch 1 8,2 01 1, M e lissa 's cou nse l info rm e d the a nsw er w as file d o n M e lissa 'sbe half only as John is d ece ase d. The d ate of d eath w as not state d., I O th er tha n M e lissa , Joh n a nd F irst H orizon H om e L oan s w ere na me d d efe nd an ts to th e fo re clo su reaction in th e c omp la in t. .12 The s ta tem e nt o f fa cts , a s re qu ire d b y.R : 4 :4 6- 2( a) , w as s ubm itte d within the W alte rs C ert. Su ch ap rac ti ce i s d is favor ed.

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R e:' H ank of Am e rica, N A v. Lim ato, e t al.Dock e t No . BER~Fw6188 0- 09R id er to O rd er D ate d A pril 2 5. 2 01 1s e rv ic in g ag re emen t; and (9) the disclosure statement. P la in tif f a rg u e d it ha d not violatedthe FFA as W ens Fargo w as the se rvice r of th e lo an ; n or h ad it viola te d T IL A a s th en e ce ss ary d is clo su re s w e re p re se n te d .

C ou nse l on be ha lf of Melissa file d on F ebru ary 1 6, 2 0 II a cross-m otion forsu mm ary ju dgm e nt a nd to strike the Wa lte rs C e rt .. T he cro ss-m otio n co nsiste d o f asta t ement of m ate rial facts, a brie f, and a ce rtification of M e U ssa's cou nse l A damDeutsch, Esq., ("D eu ts ch " a nd th e "D eu ts ch C e rt, " ). T he a rg um e nts 'W e rep la in tiff lackeds ta nd in g to f ore clo se , p la in tiff v io la te d th e FFA and TILA , and W alte rs w as anincom pe te nt w itne ss to adm it th e e xh ibits attach ed to th e W alte rs C ert.

C ou nse l on be ha lf of plaintiff su bm itte d a re ply on M arch II, 2 01 1. T he re plyconsisted of a letter brie f and a re ply certification by Yolanda T. Will iams ("Wi ll iams"a nd the "Wi l l i ams Ce rt. " ), W illiam s c ertifie d sh e was employed by Wells F arg o H om eMo rtg ag e ( "WFHM '') ) a d iv isio n of~ells F argo, a nd w as " ve ry fam ilia r a nd personallyk nowle dg ea ble re ga rd in g th e d oc um e nts th at [were] kept inconnection with resident ialmo rtg ag e s." S he asserts sh e h ad pe rsonally re vie we d th e note and m ortga ge . T heWill iams Celt. con si ste d o f th e fo ll owing exh ib it s: (1) th e note (ind orse d); (2 ) th em o rtg ag e, ( 3) th e a ssig nm e nt, ( 4) NOr 2 a nd NOI 3 , (5) tracking confirm a tions of Nor 2and Nor 3 , (6) tw o " tru th inlending d isclo su re sta te m e nts" e x ecu te d p rio r to th e truth inle nd in g d isc lo su re sta te m e nt. C ou nse l a rg ue d p la in tiff h ad sta nd in g, p la in tiff w as incompliance with the FF A and T IL A, and the W illiam s C ert. and a ttache d e xh ibits werea dm is sib le a nd re nd ere d th e a rg um e nt in th e c ro ss-m otio n re ga rd in g a dm issib ility m o ot.

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Re: Bank of America, NA v. Limato, et al,Docket No. ;SER~F~61880~09Rider to Order Dated Apri125, 2011

On March 28,2011, plaintiffs counsel filed a supplemental brief addressing theissue of possession of th e note and provided a certification by Kyle N. Campbell("Campbell" and the "Campbell Cert."), default litigation specialist for Wells Fargo. 13Campbell certified he was "very familiar and personally knowledgeable' regarding thedocuments that are kept inconnection with residential mortgages." The Campbell Cert.conta ine d (1 ) t h e servicing agreement, (2) th e re tu m receipt of NO I 2, and (3 ) th e re tu rnreceipt of NO! 3. Counsel argued the Campbell Celt. demonstrated plaintiff had actualpossession of the note on the date the foreclosure action was commenced.

On April 7, 2011 .counsel for Melissa filed a reply brief addressing the issue ofpossession of the note and the mortgage. Additionally, counsel submitted argumentspertaining to the competence of Williams and Campbell as witnesses, the admissibility oftheir certifications, and, the negotiation of the note.

A. StandingAs the Honorable Stephen Skillman, PJ.A.D., recently highlighted in Wells Fargo

Bank, N.A. v. Ford, _ N.J. Super. _, _ (App, Div. 2011) (slip op. at 8), in NewJe rse y, " [a]s a general proposition, a party seeking to foreclose a mortgage must own orcontrol the underlying debt." Also see Bank 'ofN.Y. v. Rafiogianis, 418 N.J. S~peT.323,327-28 (Ch, Div, 2010). However, when a debt is evidenced by a negotiable instrument,

13 A s ind ica te d a bov e, th e cou rt pe rm lu ed su pple m enta l b rie fs on th e issu e o f po sse ssio n. A t ora l a rgu m en t,t he c ou rt a sk ed p la in tiff 's c ou nse l why B c er ti fi ca ti on wa s n ot p ro vi de d by a r e pr es e nt at iv e o f p la in ti ffi nd ic atin g p la in tif f h ad p oss essi on . C ou nse l's a ns we re d th e p la in tiff w a s s atisf ie d th e d oc um e nts it .pro vid ed w e re w e re su fficie nt to d em on stra te pla in tiff h ad p hy sica l p osse ssio n o f th e no te . T his 'fa sp ar tic ula rly su rp risin g a s th e mo ti on w a s c ar rie d sp eci fic ally to p ro vid e p la in tif f with t he o pp or tu nity tocure its de f ic ie n cy r ega rd ing po ss e ss ion .

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Re: Bank of America, NA v. Limato, et aI .Docket No. BER-F-61S80w09,Rider to Order Dated April 25, 2011

"Article III of the Uniform Commercial Code (DeC), N.J.S.A. 12A:3wlOl -605, inparticular N.1.S.A. 12A:3-30l," governs. Wells Fargo Bank, N.A.. supra. at *8. Underthe applicable statute:

"Person entitled to enforce" an instrument means [1] theholder of the instrument, [2] a nonholder in possession ofthe instrument who has the rights of the holder, or [3] aperson not inpossession of the instrument who is entitled toenforce the instrument pursuant to [N.l.S.A.] 12A:3-309 orsubsection d. of [N.J.S.A.] 12A:3-418.

N.l.S.A. 12A:3-301.Under the first circumstance provided by N.J.S.A. 12A:3~301, a person who

qualifies as "the hoJder of the instrument" is entitled to foreclose on a negotiated debt. Aholder is defined as "the person in possession if the instrument is payable to bearer or, inthe case of an instrument payable to an identified person, if the identified person is inpossession." NJ,S.A. 12A: 1-201. See also N.J.S.A. 12A:3-20 1(a) (A "holder" is theperson who has physical possession of the negotiated instrument). In order to transfer"holder" status to a third party, a negotiation must take place whereby the transferringholder indorses th e instrument and then physically transfers possession of the instrumentto the transferee. N.l.S.A. 12A:3:'201(b). Only once the negotiation has occurred) will thethird party become the new "holder" and be entitled to foreclose upon the debt. Ibid.

Second. a person has standing to foreclose on a negotiated debt when they are "anonholder inp osse ssio n o f th e in stru m e nt who ha s the rights of a holder." See N.J.S.A.12A:3-30L In this scenario. the instrument is physically transferred without theindorsement of the issuer. See NJ.S.A. 12A:3w203(c). While the lack of the indorsementprevents the person with possession of the instrument from becoming a holder, the

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Re : Bank of A me rica , NA v. L im ato, e t al.Dock e t No . BER -F -6 1 88 0- 09Rider to O rd er D ate d A pri1 25. 2 01 1

transfe r "ve sts in the transfe re e any right of the . t ransfe ror to e nforce the instru me nt,inclu d ing any right as a holde r in du e cou rse .?" Se e N .1 .S.A . 12A :3 -203 (b). Unde rN-lS.A.12:A3-301;

A n on ho ld e r inposse ssion of an instnu ne nt inclu de s ape rson th at a cq uire d righ ts of a h old er by s u br og atio n o runde r Section ~-203(a). It also inclu de s both a re m itte r th athas re ce ive d an instru m ent from the issu er bu t has not yettra nsfe rre d o r n eg otia te d th e in strum e nt to a no th er p erso nand also any othe r pe rson u nd er the applicable law is asu cc ess or to th e holder o r o th e rw is e a cq u ire s the holder 'srights.

O nce th e instru m e nt's tra nsfe r h as be en com ple te d, th e a bility to e nforce th e u nind orse din strum e nt c an o nly b e d e nie d if "if th e tra nsfe re e e ng ag ed in fra ud o r ille ga lity a ffe ctin gth e in strum e nt." S ee N.1.S.A. 12A:3~203(b) .

F ina lly, stand ing to fore close on a d ebt is obtaine d w he n a h old er, w ho is e ntitle dto e nfo rc e th e in strum e nt, su bs eq u en tly lo ose s p hy sic al p osse ssio n o f th e instrument"because the in stru m ent w as d estroye d, its w he re abou ts cannot h e d ete rm ine d, or it is inthe w rongfu l posse ssion of an u nknow n pe rson or a pe rson that cannot be fou nd or is notam end able to se rvice of proce ss." Se e N .J.S.A . 1 2A :3 -3 09(a). H ow eve r, '(the loss of14Under N .J .S .& 1 2A :3 -3 0 2, " ho ld e r in d u e c ou rs e:' means th e h old er o f a n instru m ent if :

(1) th e in stru m e nt w he n issu e d o r n eg otia te d to the bolde r doe s not be ar .such apparent evidence of forgery or a lte ra tion or is D ot oth erw ise soi rr e gu l ar o r incomplete as to c al l i nt o ques t ion its a u th e nt ic it y; a n d( 2) th e h old er to ok th e in stru m e nt fo r v alu e , in g oo d fa ith , w ith ou tnotice th at Q Ie instrument' is o ve rd ue o r ha s been dishonored or thatthere is a n u nc ure d d efa ult wi th r e sp e ct to p aym e nt o f anotherins tr ument i ss u ed as part of th e same se rie s, without no tice th at th einstrument contains an u n a u th or iz e d s ig na tu r e or h as b ee n al tered,without n otic e o f a ny claim. to th e in stru m e nt ... a nd w ith ou t n otic et ha t a ny party has a defense o r c la im i n re co u pm e n t.

In essence , to be a h old er in d ue co urse , o ne m u st ta ke a n eg otia ble in stru m e nt f or v alu e , ing oo d f ait h, a ndwithout n otice o f a ny default o r d e fe ct . Ib id .

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Re : Bank of A merica, NA v. Lim ato, e t aI..Dock e t No . BER-F -61880 -09R id er to O rde r D ate d A pril 2 5, 2 011

posse ssion [m u st] not [be ] the re su lt of a transfe r by the pe rson or a law fu l se izu re ." Se eN.J.S.A. 1 2A :3 -3 09( a). A sid e from p hy sica l loss. if th e instru m ent w as " paid or acce pte dby m istake and th e pa yor or acce ptor re cove rs pa ym e nt or re voke s acce ptance , ... it istre ate d as d ishonore d. and the pe rson from w hom paym ent is re cove re d has rights as ap erso n e ntitle d to e nfo rce th e d ish on ore d in strum e nt." S ee N .J.S .A . 1 2A :3 -4 18Cd ),

B. Admi ss ib ility o f e v id e n ce" He arsay" is de fine d as " a state me nt, othe r than one m ad e by the d eclarant w hile

te stify in g a t th e trial or h earing, offe re d in e vid ence to prove the tru th of the m atte rasserted." N .J.R .E . 8 0IC e). "H ea rsa y is n ot a dm issible e x ce pt a s p ro vid ed by [th e N ewJersey ru les ofevidenc~J or by o th e r law ." l'f.J .R .E . 8 02 .

N .J.R .E . 8 03 (c) (6 ) se ts fo rth th e bu sin ess re co rd s e x ce ption to th e h ea rsa y ru le ;A s ta tem e nt c on ta in ed in a writing or o the r r e co rd of acts.e ve nts, co nd itio ns, a nd su bje ct to R u le 8 08, o pin ion s o rd ia gn ose s, m a de a t o r ne ar th e tim e o f o bse rv atio n by ap erso n w ith a ctu al k now le dge o r from info rm a tio n su pp lie dby su ch a person, if the w riting or othe r re cord w as m ad e inth e re gu lar cou rse of bu sine ss and it was th e re gu la rpractice of th at bu sine ss to m ake it, u nle ss th e sou rce s ofinfo rm a tio n or th e m e th od , p urp ose o r circum sta nc es ofp re pa ra tio n in dic ate th at it is n ot tr u stwo rth y,

N.J.R.E.803(c)(6).R . 1:6-6 se ts forth how to place e vid ence be fore a court. "If a m otion is base d on

fa cts n ot a ppe arin g o f re co rd or n ot ju d icia lly n otic ea ble , th e co urt m a y h ea r it ona ffid av its m a d e o n p er so na l k now le d ge , s ettin g fo rth only fa cts w hic h a re a dm issible ine vid e nc e to which the a ffia nt is com pe te nt to te stify and w hich m ay ha ve anne xe d th ere toce rt if ie d copi e s of all p ap ers o r p arts th ere of re fe rre d to th ere in ," P erso na l k now le dge , th e

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Re: Bank of A me rica, NA v. Lim ato, e t al.Docke t No . BER-F -61880- 09Ride r to Orde r Date d A pril 25, 20 I 1

mandate of th e rule, cle arly e xclu de s fa cts base d m e re ly on " inform ation a nd be lie f." Se e.~ W ang v. A llstate Ins. Co., 125 N.J .. 2 , 16 (1991). A ffidavits by a tto rn ey s of fa cts n otbase d on the ir pe rsonal know le dge bu t re late d to the m by and w ithin the prim aryk nowle dg e o f th eir clie nts co nstitu te ob je ction able h ea rsa y. S ee Murray v. Allstate Ins..;C o., 209 N .J. Su pe r. 163 , 169 CAppo Div, 1986). The re qu ire me nts of the ru le a lso are notm e t by a ffid avits conta ining a rgu m ent, othe r form s of he arsay and ge ne ra l factu al or le galconc lu s ion . P res sl e r &V ernie ro, C urre nt N .J. C ou rt R ule s, comm e nt on R. 1 :6 -6 (2011 ) .'W he re he arsay is ad missible u nd er a n e xce ption to the he arsay ru le w hich re qu ire s thatsp ec ific c on dition s ha ve b ee n sa tisfie d, h ea rsa y e vid en ce ca nno t b e d eem e d c omp ete ntunless it is first d ete rm ine d th at th ose c on dition s h av e b ee n sa tisfie d. Je te r V. Stevenson,284 N .J. Su pe r. 229 (A pp. D iv. 1995). M ere ly appe nding re le vant docu m ents to them otion brie f d oe s not constitu te com plia nce w ith R . 1 :6-6; su ch d ocu m ents m u st beincorporated by re fe re nc e in a n a pp ro pria te a ff id av it o r c ertif ic atio n, wh ic h p ro pe rlya uthe nticate s m ate rial w hich is othe rw ise ad missible . Se e C elino v. G ene ral A ce _ Ins.,2 11 N .], Su pe r. 5 3 8 C A p p o D iv . 1 98 6) .

N .1 .R .E . 9 01 se ts forth the r u l e for au thenticat ion of e vid e nc e. " Th e re q uirem e ntof a u th e ntic atio n o r id e ntif ic atio n a s a c on ditio n p re ce d en t to a dm i ssib ility is sa tis fie d bye vid ence su fficie nt to su pport a finding that the m atte r is w hat its p roponen t c la ims ."N .J .R .E . 901 .

C . M ate rial issu es info rec losu r e p roceedingT he d efe nse s to fore closu re actions a re na rrow a nd lim ite d. The only m ate rial

issues in a foreclosure proceeding a re the valid ity of the m ortgage , the a mou nt of

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Re : Bank of A merica, NA v. L im ato, e t a l.D oc ke t N o. BERwF-61880-09Rider to Ord e r D a te d Ap~12S. 2011

ind ebte dne ss, a nd the right of the m ortgag ee to fore close on the mortgaged property.G re at Falls B ank v. Pardo, 263 N .J. Su ne r. 3 88~ 3 94 (C h. D iv. 1993 ). In Thom e v.F lore m oore C orp., 2 0 N .J. Su pe r. 3 4 (A pp, _ Div. 195 2), the cou rt se t forth the e le m entsfor a prim a fa cie right to fore close :

S ince the e xe cu tion. re cord ing, a nd non-pa ym e nt of them ortgag e w as conce de d. a prim a facie right to fore closewa s m ade ou t. D efendants argu e since the m ortgage w as inth eir cou nse ls' posse ssion and prod uce d b y him a t there qu e st o f p la in tiff. d eliv ery th ere of a fte r e x ecu tio n w as n otestablished and conse qu ently no ca se a ppe are d. H ow eve r,proof of the re cord ing cre ate s a pre su m ption of d elive ry.

Id . at 37 . Ifthe d efe nd ant's a nsw er fa ils to cha lle nge the e sse ntia l e le m ents of thefor e clo su r e a ct ion, p la in tif f is e ntitle d to strik e d efe nd an t's a nsw e r a s a n on co nte stin gansw er. O ld R epu blic Ins. C o. v. C urrie , 284 N .J. S upe r. 57 1,57 4 (C h. D iv. 1995);S om e rse t T ru st C o. v .. S tembe rg ~ 2 38 N .J. S up er. 279,283 ( Ch . D iv . 1989).

Whe n a pa rty a lle ge s he /she is w ithou t know le dge or inform ation su fficie nt toform a be lie f as to the tru th of an aspect of the com plaint, the answ er shall be de em edn on co nte stin g to th e a lle ga tio n o f th e c omp la in t to w hich it re sp on ds. R. 4 :64-1 (a )(3 ).P ursu an t to R. 4:64- 1(c) ( 2)'a n a nsw er to a fore closu re com plaint is d ee m ed to benonconte stin g if non e of the ple ad ings re sponsive to the com plaint e ithe r conte st theva lid ity or priority of the m ortga ge or lie n b eing fore close d) o r cre ate a n issu e w ithr e sp e ct t o p la in ti ff s right to fore close . C onse qu ently, a pla intiffm ay m ove to strike su chan answ er pu rsu antto R 4: 6-5 on the gro und s it p re se nts " no question of fact or laww hich shou ld be he ard by a ple nary trial." .Old Republic Ins. Co., ~ at 574-575.

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Re : Bank of Am erica, NA v. Lim ato, e t a l,D oc ke t N o. BER -F -6 18 80 -0 9Ride r to Orde r Dated A pri12S, 2011

Inord er to sa tisfy its bu rden of proof on a su mm ary ju dgm ent m otion. 'pla intiffm ust show that no genu ine issu e of m ate rial facts e x ists. Brill v. Gu ard ian Life Ins. Co.of Am., 142 N.J. 520 , 528-29 (1995). Once the m oving party-satisfie s its bu rd en, thebu rden then shifts to the non-m oving party - he re , M elissa - to pre sent evidence the re isa genu ine issu e for tria l. Ibid . Insatisfying its bu rden, the de fendant m ay not re st u ponm ere alle gations or d enials in its ple ad ing, bu t 'm ust produ ce su fficie nt e vide nce tore asonably su pport a ve rd ict inits fa vor. T riffin v. A m. Int'l G rou p, Inc., 372 N .J. Su pe r.517.523 (App. Div, 2 00 4); R . 4:46-5(a). M ore ove r, R. 4 :5 -4 re qu ire s a ll a ffirm a tiv edefenses be su pporte d by spe cific facts. Parties must resp~nd with a ff id a vits m e e tin g there qu ire me nts of R.1 :6-6 a s oth erw ise provid ed in'this ru le and by R. 4:462(b). settingforth specific facts show ing that the re is a genu ine issu e: for tria l. A n 'tissu e of fact isge nu ine only if, conside ring the bu rde n of pe rsu asion at tria l, the e vide nce su bm itte d by

, 'the partie s on the m otion, toge the r with all le gitim ate infe re nce s the re from favoring thenon-m oving party, wou ld requ ire su bm ission of the issu e to the trie r of fact." R. 4:46-2 (c); se e also B rill, 142 N.J. at 535.

A de fe ndant in fore closu re is not permitted to raise pe rsonal de fense s against aholder indu e cou rse . Carnegie Bank v. Sballe ck, 256 N.J. Su pe r_ 23 ,45 C A p p o D iv .. 1992) ("W hen a m ortgage . se cu re s a negotiable instrum ent ... a transfe r of thene gotiable instru m ent to a hold er indu e cou rse to whom the m ortgage is also assignedwill e nable the assigne e to e nforce the m ortgage (as w ell as the ne gotiable instru me nt)accord ing to its te rm s, fre e and cle ar of any pe rsonal de fense s the m ortgagor m ay haveagainst the assignor." ). Se e also Bancred it Inc. v. Be the a, 65 N .J. Su pe r. 538" 544

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F a x ; P. 0 l7A p r 2 5 2 0 1 1 0 8 : 3 6 a m P 0 1 7 / 0 2 6'" ,,- L. oJ - L. U I I \ 1'1U 11J U 0; ~ r

Re: Bank of Amenca, NA v. Limato, et al.Docket No. BER-F-6188D-09Rider to Order Dated Apri125. 2011

(App. Div, 1961) (A holder in due course is "immune to all personal defenses of themaker against the payee, including that of fraud in the inducement. "),

When a foreclosure action is deemed uncontested, the procedure is dictated by R.4:46-1 (d). At the conclusion of a successful motion for summary judgment or to strikethe defendant's answer, the matter shall be referred to the Office of Foreclosure toproceed as uncon te s ted .Analysis

A. StandingMelissa's counsel argued plaintiff did not have standing to sue as itwas unable to

procure an original note and proof the note was assigned or transferred to plaintiff frOIDthe original holder; failed to prove plaintiff was ever inphysical possession of the note;and failed to show the note was lost, destroyed OJ ; stolen. Further, counsel argued even ifplaintiff wa s in physical possession of the note, it would be unable to enforce it as it wasnot indorsed) remained payable to America's Mortgage, and nowhere in its pleadings ormotion had plaintiff alleged the note was indorsed to bearer or order of plaintiff. Counselargued the assignment did not resolve the issue of standing in plaintiff s favor as theassignment mentioned only a passing reference to the note and did not suggest the notewas physically transferred. Counsel correctly stated the assignment did not represent atransfer of interest inthe note as under the vec, absent an allegation possession of thenote was lost, the only wayan enforceable interest may be obtained in a note is for theinstrument to be physically transferred. N.J.S.A. 12A:3-301; 12A:2-201. Counselsuggested plaintiffs assertion it was a "holder" was vague and did not entitle plaintiff to

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Re : Bank of Am e rica , NA v,L im ato, e t a l.Docket No. BER-F-61880':09Rider to Order Dated April 25, 2011

holde r by se ttin g fo rth W illia m s, w ho h ad p erso na l know le dge of th e facts se t forth in th eWilliams Cert., ce rtifie d th e note w as ind orse d in blank, th e note was assigned toplaintiff, and W ells Fargo was the se rvice r of the loan.

Counsel asserted inth e e ve nt the court rejected th e proposition Wells Fargo wasi n pos ses sion of the note and m ortgage a t the tim e the c0!llplaint was file d, d espit~ th ec ertif ic atio n p la in tif f w a s inactu al possession in the C am pbe ll C ert., it was plaintiffsconte ntion it had constru ctive posse ssion of the note and m ortgage . C ou nse l d ire cte d thecourt 's attention to th e a ssig nm e nt, by w hich the note was pu rporte d ly assigned topla intiff. C ou nse l a le rted the cou rt to a rece nt opinion of the H onorable M argare t MaryMcve igh, P.J.C h., Passa ic C ou nty. 17 A ccord ing to cou nse l, the Sale h cou rt found apla intiff had standing on the grou nd it had a significant inte re st in the note and m ortgageas was e videnced by an assignm ent e x e cu te d prior to the com mencem ent of theforeclosu re action. A ccord ing to cou nse l, Ju dge M cV eigh inte rpre te d Ford to stand forthe proposition a pla intiff, throu gh its assignm e nt, m ay affirm ative ly e stablish ow ne rshipof the note and ne ed not have posse ssion of the note u ntil final judgment, A cco rd ing ly , itwas p la in tiff 's c ou nse l's c on te ntio n if the cou rt doe s. not find plaintiff h ad actu al

" P la intiff's cou nse l a tta ch ed Ju dg e M cV eigh 's le tte r opinion re ga rd ing H SBC v. S ale h, D ocke t N o, F -14 36 5- 10 . B u t s ee , B .. ] :36-3. In Sa le h, a d efe nd ant cla im ed a plaintiff w as not the hold er ofa note andth ere fore no t th e pro pe r pa rty to b e nam ed in th e f or ec lo su re a ctio n. T he c ou rt h eld th e p la in tiff , by w ay ofa n a ssig nm e nt, h ad a ffirm ativ ely - e sta blish ed own ersh ip o f th e n ote a nd d id n ot n ee d to h av e p osse ssio n o fth e Dote u ntil fina l ju dgm e nt w he re control ofth e note w ou ld be ne ce ssa ry to e nfo rce th e u nd erlying debtThe c ou r t i nd ic at ed its d e cisio n w a s in harmony w ith F ord a s p osse ssio n n ee d nO I be prove n a tcommencemen t ; in oth er w ord s, so long a s a pla intiff ca n sh ow ow ne rsh ip of th e note a t comm e nce m ent o fa f or e clos u re ac ti on , it h as sta nd in g r eg ard le ss o f wh en it ta ke s p osse ssio n o f th e n ote .

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Re : Bank of A me rica , NA v. L im ato, e t aI.Do ck e t No . BER-F- 61 88 0- 09R ide r to O rd er D ate d A pril 2 5. 201 1

p osse ssio n; th e co urt m a y fin d p la in tiff h ad 'c on stru ctiv e p osse ssio n th ro ug h its servicerWe lls F argo w he n th e com pla in t was filed.1 8

Me lissa 's cou nse l argu ed p la intiff ha s fa ile d to p rovid e a com pe te nt w itn ess toprove that BO A w as in physical posse ssion of the note a t the com m ence me nt of thefore closu re proce ed ing a s W illiam s a nd C am pbe ll ~ e in ca pa ble of ce rtify in g w ithpe rsonal know le dge B OA is or ha s e ve r be en in p hysica l posse ssion of the n ote ."C ou nse l a sse rte d p la in tiff's a lte rn ativ e a rg um e nt c on stru ctiv e p osse ssio n is su ffic ie nt isunsupported by ca se law. C ou nse l d isa gre e d with th e S ale h o pin io n, s ta tin g it " in co rre ctlyde te rm ine d that a m ortgage can be e nforc~d w ithou t first proving the right to e nforce anote."

T he e vid ence d oe s no t su ppo rt plaintiff's con te ntion it ha s sta nd ing a s the hold erof the note . The re w ere tw o indorse m ents on the note : one indorse m ent w as in blank formp ay ab le to b ea re r by We lls Fa rgo d oing bu sine ss as (" d/b/a ") Am e rica 's M ortg ag e a ndthe othe r indorse m ent w as payable to, w hat appe are d to be , W ells Fargo. N egotia tion ofth e n ote rem a in s u np ro ve n.

F urth er, th e e vid en ce d oe s n ot su pp ort p la in tiff's c on te ntio n it has stand ing as an on ho ld er in p osse ssio n o f th e n ote .a s p la in tiff h as f aile d to p ro ve it h as po sse ssion of then ote . A lth ou gh C amp be ll h as ce rtifie d p la in tiff w as ina ctu al po sse ssion of the note at thetim e the com plaint w as file d, n o inform ation is provid ed a s to the ba sis for this a sse rtion.18 Ina ntic ip atio n o f a p oss ib le a rg ume nt o f M e lis sa 's c ou n se l, p la in tif f's c ou n se l a sse rte d t o th e e x te ntd efe nd an t a rgu e d p la in tiff sh ou ld file ~ a me nd ed compla int w hich su bstitu te d W e lls F arg o for th e na me ofBOA, th e ultimate result would be exactly the same: a properly e x ec ute d n ot e and mortgage witb a defaul tb y, th e p urc ha se r b ro ug ht b y a n e ntit y with sta nd in g. W he th er this is a n a ccu ra te sta te m en t ne ed n ot bede te rm ined- ..19 Counsel also argued th e issu e of co nflicting in do rse m en ts of th e n ote re m ain s u nre solv ed , p re clu din g af in di ng p la in ti ff h as standing.

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F a x ; P . 0 2 1A p r 2 5 2 0 1 1 0 8 : 3 7 a m P 0 2 1 / 0 2 6nrr;-c::J-CU I I tMUN} uu. 37

Re : Bank of Am erica, NA v. Lim ato, e t aI .Docket No. BER-F-61880-09Rider to O rd er D ate d A pril 25.2011

Plaintiffs cou nse l's position. as se t forth du ring oral a rgu m ent, the docu m ents stateplaintiff has posse ss ion the re for e plaintiff h as pos se ss ion, w ith ou t s u bs tantia tion. bord e rson the sublime. This is part icu lar ly t roubling as th e co urt a ffo rd ed to the plaintiff aspecific opportunity to demonstrate possession after its initial effort was lacking. There isno suggestion of discovery of a cover letter. forwarding th e note or any other informationby w hich the court co uld d ete rm ine th e bona. fid es o f the n ake d a sse rtion of po sse ssion .F u rth er, p la in tif f h as not proven it is a non -hold e r inp osse ssio n of the n ote . N.l.S.A.12A:3-301. We lls F argo's role a s s erv ic er rema in s unproven ..Section 2.01 of th es erv ic ing agre ement s ta te d , Wells Fargo "does h e re by s ell, transfer, assign. set over andconvey to {BOA] , without recourse ... all the right, title and interest of [W e lls F arg o] inand to th e Mortgage Loans." T he se rv icin g agr~ement defmed mortgage loans as a"M ortgage Loan ... identifie d on the Mortgage Loan Schedule," but the mortgage loanschedule was b lank, Noth ing inplaintiff's papers demonstrated th e lo an was subject tot he s e rv ic ing agreement which a uth orize d W e lls Fa rgo t~act a s a se rv ic er. Adding to th edifficulties, plaintiff failed to explain th e chronology, nam ely w hy the servicingagre ement e x e cu te d in2004, prior to th e assignment of the note to BOA was ex e cu te d in2009, applies. Although plaintiff has been given multiple opportunities to demonstrates tanding , p la in ti ff 's posi ti on remains deficient.

P la in tif f's a rg ument o f c on stru c tiv e possession is cre ativ e, b ut th e court hasserious re se rva tion s re ga rd in g the corre ctne ss o f'th e S ale h d ecisio n a s it pertains tosta nd in g. T he cou rt h as only the g re a te st re sp e ct f or Judge McVeigh; still. a s th e o pin io nwas issu e d by a chancery co urt in a d iffe re nt v ic in ag e, it is not binding o n th is c ou rt.


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nn u.J.t:I I ime F a x : P,022A p r 2 5 2 0 1 1 0 8 : 3 7 a m P 0 2 2 / 0 2 6

Re : Bank of America . NA v, Limato, e t al.Dock e t No . BER-F -61880 -09R ide r to O rde r D ate d A pril 25. 2011

Further , p u rs ua nt to R. 1:36~3, " [n ]o u np ub lish ed o ~in io n sh all c on stitu te p re ce de nt o r b yb in din g u p on any c ou rt." W ith th e ' e x c e ptio ns o f( ta pp 'e lla te o pin io ns n ot a pp ro ve d f orp ub lic atio n th at h av e b ee n re po rte d ina n a u th oriz ed a dm i nis tra tiv e law re p orte r, a nde x ce pt to th e e x te nt re qu ire d by r es ju d ic ata , c olla te ra l e sto pp e l, a nd s in gle c on tro ve rsyd oc trin e o r any oth er sim ilar princip le of la w. no u npu blishe d opinion shall be cite d beany o th er c ou rt." Ib id . T he c ou rt p ro vid ed plaintiff with the opportu n ity to p ro vid e c asel aw r eg a rd ing constructive pos se ss io n u n de r th e a pp lic ab le Dec p rovis ion. Couns e lprovided only th e S ale h o pin io n. Cou n se l's a rg ument c on stru c tiv e p oss essio n is su ff ic ie n tto e sta blish s ta nd in g is re je c te d .

T he c ou rt f urth er rejects plaintiff's argument it d id not viola te the FFA as no Norwas se nt b y th e " re sid en tia l m o rtg ag e le nd er."

P la in tif f h as f aile d to d emon stra te standing. F irst, P la in tiff h as v io la te d th e F FAby failing to se nd an NOr by a " re sid en tia l m o rtg ag e le nd er." S eco nd , a nd mo reimport ant ly , p la in ti ff 'h as fa il ed t~demonstrate it is a h old er, a n on -h old er in p osse ssio n,o r p osse ssio n o f th e n ote w as .Io st, A s su ch , p la in tiff's m o tio n fo r summary ju dgm en t isd en ie d, d efe nd an t's m o tio n is g ra nte d, a nd th e m a tte r is d ism isse d w ith ou t p re ju dic e.A lth ou gh fu rth er a na ly sis is u nn ece ssa ry , fo r p urp ose s o f c omp le te ne ss, th e co urt sh alla na ly ze w he th er p la in tiff's p ro ofs w e re a dm issib le , a nd whe th er issu e s o f m a te ria l fa ctexist .

,B . A dm issib ility o f e vid en ceMe liss a's c ou n se l a rg u ed the Wa lte rs C e rt., th e W illiam s C e rt., th e C amp be ll

Cert., a nd th e ir attached e x hib its sh ou ld b e stricken a s to ge th er th ey c on stitu te

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1\'" UC '- t:: I , 1 UI t : : : ! H I " ~ - c ~ - c U l l l M O N ) 0 8 : 3 7 F a x : P . 0 2 3A p r 2 5 2 0 1 1 0 9 : 3 7 a m P 0 2 3 / 0 2 6Re : Bank of A me rica , N A v. Lirnato, e t al.Dock e t No . BER- F- 61 88 0- 09R id er to O rd er D ate d A pril 2 5. 2 01 1

inadmiss ib le hea rs ay.20 According t o counse l, the he arsay ru le , N .1 .R .E. 80 2, prohibitsth e cou rt from consid ering th e W alte rs C ert. for th e pu rpose for w hich th e plaintiff offe rsit, na me ly for th e tru th of its cla im s d efe nd ants ow e m one y to plaintiff and pla intiff is ap arty e ntitle d to fo re clo se o n th e p ro pe rty ..2l Cou nse l fu rth er su bm itte d n o e x ce ptio ns toth e h ea rsa y ru le w e re a pp lic ab le . Particularly, cou nse l a rgu ed th e e xh ibits a tta ch ed to theW alte rs C ert. d o not fa ll u nd er th e bu sine ss re cord s e x ce ption to th e h ea rsa y ru le a s the rei s n o d emon st ra tio n o f a " tr ackin g p ropo sit io n. " De f e ndant s a rg u e d in o rd er fo r th ee x ce ption to a pply, th ere m u st be som e one in th e bu sine ss to te stify: (l) th e re co!d w asre cord ed pu rsu ant to th e re gu lar practice of th e bu sine ss, (2 ) th e inform a tion w asre cord ed sh ortly a fte r th e re late d e ve nt occu rre d, and (3 ) th e inform ation re cord ed cam ef rom som e on e inth at bu sine ss w ho h ad a bu sine ss d uty to re port it. S ta te V. Matulewicz ,101 N .J. 2 7, 2 9 (1 985). A ccord ing to counsel, Wa lte rs w as " no t th at p erso n."

M e lissa 's c ou nse l id en tifie d a nd e x am in ed th e a dm issib ility o f sp ec ific d oc um e ntsa tta ch ed to th e W a lte rs C e rt.: (1) th e a ssig nm e nt; (2 ) NOr I. Nor 2 , and NOI 3 ; and (3 )th e s e rv ic in g ag re emen t. In ana lyzing e ach d ocu m ent, cou nse l argu e d W alte rs w as not ane mploye e of the e mploye e of A m erica 's M ortgage , W ells Fargo or B OA and d id not havepe rsonal know le dge th e d ocu m ents w ere (1 ) e x ecu te d pu rsu ant to th e re gu la r bu sine ss .p ra ctice s o f th e re sp ec tiv e e ntitie s, (2 ) th e in form a tio n w as re co rd ed sh ortly a fte r b ein g

20 Cou n se l o n b e ha lf o f d e fe n da nts 0) a lle ge d th e W a lte rs C ert. is re pre se nta tiv e o f a n e pid em ic o f h ea rsa ya nd o th erw ise im p ro pe r d oc um e nts b ein g su bm itte d to c ou rts in this State by plaintiff 'banks in foreclosurea ct io ns a n d (2) referenced th e o rd e r to show cause executed by t he Hono rab le Mary C. Jacobson. P ,J . Ch ,of M erce r C ou nty re qu iring na me d ba nks to show ca use a s to wby th ey sh ou ld b e p erm itte d to co ntin uep,ursuing f or ecl osu r e a c ti on s jn th e S ta te .

1 Me lis sa 's c ou n se l s up plem e nta l b rie f a dd e d tlie o nly k now le d ge Walters had with re g ard to th esta te m e nts sh e m a de in h er ce rtifica tio n m u st h av e b ee n b ase d o n in fo rm a tio n p ro vid ed to h er byrepresentatives o f W e lls F arg o th ro ug h h er c lie nt,

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..............~1...I" I i W . nn;-O-CUII t M U N ) D B : 3 7 F a x ; P . D c aA p r 2 5 2 0 1 1 O B : 3 7 a m P 0 2 d / 0 2 BRe : Bank of A merica , NA v. Lim ato, e t aI.Dock et No . BER- F- 61 88 0- 09R ide r to O rd er D ate d A pri1 2S , 20 11

re vie w ed a nd /o r o bta in ed , a nd (3 ) th e in fo rm a tio n re co rd ed inth e d ocu m ents ca me fromsomeone within th e entity who had a business duty to report it. Mat~ewicz , 101 N.J. a t2 9. F u rth erm o re , c ou nse l a rgu e d W a lte rs ' status as plaintiffs cou nse l w as irrelevant as itp erta in ed to c ertif yin g th e d oc um e nts f or p u rp ose s o f a dm i ssib ility .

C ou nse l c on ce de d u nd er d iffe re nt c irc um sta nce s a nd with th e p ro pe r p erso nc ertify in g th e d ocum e nts a tta ch ed to th e W a lte rs C ert . c om p ete nc e o f th e w itn ess a nd lo ra dm issib ility wo u ld n ot be called i nto que s ti on . Such circu m stance s m ay ha ve be enpre se nte d by the su bm issions of the W illiam s C ert. by W illia ms a nd th e C am pbe ll C ert.by C am pbe ll, both e m ploye es of W e lls F argo who state d the y h ad pe rsona l know le dge ofth e is su e s in th e m atte r. T he e xh ibits in th e W illia ms C elt. and th e C am pbe ll C ert. w erea sse rte d to h av e been k ept i n conne c ti on with r e si de n ti al mo rt ga ge s . A l tho ugh Me l is sa 'scou nse l a rgu ed ne ith er W illia ms nor C am pbe ll w ere com pe te nt; su ch an argu m ent is toobroa d. A lth ou gh ne ith er W illia ms nor C am pbe ll w orke d for B OA or Am e rica 'sM o rtg age , a nd th e ce rtific atio ns d id n ot e x pla in h ow th e tw o re pre se nta tiv es cam e in toc on ta ct w ith th e d oc um e nts , R. 1 :6~ 6 re qu ire s th e a ffid av it to be m a de o n pe rso na lknow le dge and d oe s not re fe re nce -it.m u st be m ad e on th e pe rsonal know le dge ofp la in tif f. A l th ou g h Me lissa 's c ou n se l re je cts th e a ss ertio ns o fW i l1 iam s a nd C ampb ellh av e p erso na l kn ow le dg e. h e fa ils to su bsta ntia te h is a sse rtio ns. a nd h is a tte m pts to p ro veth e ne ga tive , nam e ly th at W illiam s a nd C am pbe ll d o not ha ve pe rsonal know le dge , a relik ew ise u nsu cce ssfu l. A fu ll d isc ussio n a s to a dm issibility o f th e e x hib its a tta ch ed to th eW i lliam s a nd C ampbe ll Cert, 's is se t forth be low .

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......... _,._, ''''fllt: F a x : P. 025A p r 2 5 2 0 1 1 0 8 ; 3 7 a m P 0 2 5 / 0 2 6

Re: Bank of Am erica, NA v. Lim ato, e t al.Dock e t No . BER -F~61880 -09R id er to' O rd er D ate d A pri1 25, 2 01 1

A lth ou gh th e re lie f sou gh t may be by a com p ete nt w itn ess, n o co nsid era tion w asa pp are ntly g iv en to N J.R .E . 8 03 (c)(6 ), M e lissa 's co unse l a sse rts th e v ario us a ffia ntsc an no t a tte st to th e b u sin ess practices of BOA.:n H ad this be en a case w he re an affianth ad sa tisf ie d th e evidential s ta nda rd s et f or th inN.J .R .E . 8 03( c) (6 ), it -i s p os sib le th eevidence wou ld h av e b ee n con sid ere d. T he e x hib its attached to the W illiam s andC am p be ll C ert.' s a re n ot a dm issib le , th ou gh , u nd er th e b usin ess re co rd s e x ce ptio n,N.J.R.E. 803(c) (6), a s th ere is no ind ica tion the re qu ire m ents se t forth in th e ru le ha veb e e n s at is fie d ..2 J

In su m , W alte rs is not a com pe te nt w itne ss as she la cke d pe rsonal know le dge ofth e a ss e rt io ns s e t f ort h inh e r c ertif ic atio n; a nd , a lth ou g h W illiam s a nd Campbell m ay bec omp e te nt W itn esse s, th e su bm issio ns a tta ch e d to th e c ertif ic atio ns a re n ot a dm i ssib leu nd er th e b usin ess re cord s e x ce ption to th e h ea rsa y ru le . R . 1 :6 -6 ; N .J.R .E . 80 3(c )(6 ).

Finally, th e c ou rt shal l a na ly ze w he th er p la intiff h as se t forth a prim a facie c ase inforeclosure.

C . M a te ria l issues inforec lQsure proceedingA s no com pe te nt, ad missible proofs of e xe cu tion of the note , e xe cu tion a nd

re cord ation o f th e m ortga ge , a nd nonpayment were pu t b efo re th e c ou rt, plaintiff hasfa ile d to e sta blish a prim a fa cie fore clo su re ca se . F u rth er, pla in tiff fa ile d to com ply with2lT he insta nt m otio n is su ppo rte d by thre e d eficie nt ce rtifica tion s: on e by a n incompe te nt w itn ess a nd tw oin v io la tio n o fN .J .R .E . 8 03 (c )( 6) .;;!3 F urth er, a s M e lis sa 's c ou ns el c orre ctly s ta te d, C amp be ll p ro vid e d no basis fo r hi s assertion p la in ti ff wasinac tua l possession of the no te . A s an e m plo ye e o f Wel ls F a rgo, it is doubtful Campbe l l v is it e d th e BOAfa cility a nd w itn es se d frrs th an d th e n ote w as in its poss e ss ion . L ik ew is e , it is d ou btfu l C amp be ll h an dd eliv ere d th e n ote to pla in tiff. C erta inly, sh e o r he h as n ot ce rtifie d to the sa me . F urthe r, a s d iscu sse da bo ve , the re re m ain s a n u ne x plaine d d iscre pa ncy of w he n a nd ifWe lls F argo be ca me the se rv io er on thenote as the se rvicing a gre em e nt w as e xe cu te d in 2 00 4 a nd th e a ssign me nt : w a s execu ted in 2 0 09 ; f ur th e r,the sche du le a tta che d to the no te w hich is sta te d to con ta in th e loa ns su bje ct to th e s erv ic in g a gre em en t w asblank.

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, .,. UY lot:I I1ilt::' H P ~ - ~ ~ - c D J J ( M O N ) 0 8 : 3 7 p , 02 6A p r 2 5 2 0 1 1 0 8 ; 3 7 a ~ P 0 2 6 /0 2 6a x ;

Re : Bank of A me rica, NA v. Lim ato, e t a l.Docket No. BER~F-61880~09Rider to Orde r D ate d A pril 25, 2011

tile re qu ire m en t o f the FFA a re side ntial m ortga ge le nd er m u st se nd a nNOt Therefore ,p la in tiffs m o tio n fo r s~ary ju dgm e nt is d en ie d.Conclusion

P la in tif f f aile d to e stab lis h s tand ing t~b rin g th e in sta nt fo re clo su re a ctio n,Fur ther . p la in ti ff has failed to se t forth prim a facie 'C ase to foreclose and d efe nd ant hasd em on stra te d p la in tiff vio la te d th e F FA . A s su ch , pla in tiffs m o tio n, fo r summaryju dgm ent is d enie d. D efe nd ant's cross m otion for summary ju dgm ent is gra nte d, a nd thea ctio n is d ism isse dwith ou t p re ju d ic e.

Dated : A pril 25, 2011 H on ora ble P ete r E . D oyn e, A ,J_ S.C .

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Bank of America v. Limato