August 15, 2011

The New Jersey courts have once again made it abundantly clear that they will not tolerate noncompliance with Management Orders, failure to provide court-ordered discovery, failure of a foreclosing Plaintiff to demonstrate that it had standing to sue at the time of the filing of a foreclosure action, and failure to meet the legal burden to be entitled to summary judgment.

Today, a New Jersey Chancery Court Judge dismissed a foreclosure action filed by Wells Fargo where Wells Fargo failed to comply with the Court’s Management Order compelling the borrower’s discovery, with all required Certifications, by a date certain. Wells Fargo only served incomplete discovery responses by the due date in the Management Order, and admitted that the responses were incomplete. Wells Fargo’s counsel admitted that there was no misunderstanding of the requirements of the Management Order. Jeff Barnes, Esq. and local NJ counsel Alan Angelo, Esq. represent the borrower.

The case had been previously filed and voluntarily dismissed by Wells Fargo when it had failed to comply with discovery which had been propounded by Mr. Barnes and local counsel. This is now the 8th foreclosure case which Mr. Barnes and his local counsel have had dismissed in NJ for the foreclosing Plaintiff’s failure to comply with discovery and Court Management Orders. 

Separately, the Appellate Division of the Superior Court of New Jersey has issued a 19-page opinion in the matter of Deutsche Bank National Trust Co. as Trustee for Long Beach Mortgage Trust 2006-3 v. Mitchell and Bethea, Docket No. A-4925-09T3 which reversed the trial court’s grant of summary judgment finding that Deutsche Bank did not have standing at the time that it filed the foreclosure action, and that the trial court erred in finding that DB had “cured” the standing defect when it filed an Amended Complaint after receiving the Assignment of Mortgage (when the original Complaint had been filed without the subject Assignment having been received).

Significantly, in holding that DB did not have standing when it filed the original Complaint because it did not have possession of the Note, the NJ Appellate Court cited the “Boyko decision” from Ohio (In Re Foreclosure Cases, 521 F.Supp.2d 650 (S.D. Ohio 2007)) on the issue of the requirement of proof of standing at the time of filing a foreclosure action, and held that DB could not cure its defect by filing an Amended Complaint following the assignment.

The Court also held that the proofs presented by DB in support of its Motion for Summary Judgment were inadequate, including the holding that “the trial court should not have considered an assignment that was not ‘authenticated by an affidavit or certification based on personal knowledge'” citing NJ case law and NJ procedural Rule 1:6-6. The Court found that the Certification by the attorney, which was based on “custody and review of computerized records”, did not meet the personal knowledge requirement of NJ case law and cautioned that “Attorneys in particular should not certify to ‘facts within the primary knowledge of their clients.'”

The Court further held that the Certification by the servicer, JP Morgan Chase Bank, stating the [legal conclusion] that “the plaintiff is still the holder and owner of the obligation and mortgage” did not make any mention of the assignment or how the signor knows that DB became the holder of the note.

The Court thus vacated the sheriff’s sale and the summary judgment.

This Appellate decision, which was approved for publication on August 9, 2011, is extremely important for all NJ cases, as it sets forth the specific requirements for standing, Certifications, and a foreclosing Plaintiff’s burden on summary judgment which, although having been previously set forth in the NJ Rules of Procedure including the recent amendments to the Rules dealing with foreclosure filings, had not been previously set out in a published decision.

Jeff Barnes, Esq. has also been admitted pro hac vice to the United States District Court for the Middle District of Tennessee, Nashville Division, in connection with the defense of a foreclosure initiated by Bank of America.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com