Mortgagee Lacks Standing to Enforce Note and Mortgage Unless Documents are Properly Authenticated

Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592 (App. Div. 2011).  The question of whether foreclosing mortgagees have the proper proofs to support their cases has been all over the news lately.  Now, in an opinion by Judge Skillman, the Appellate Division has weighed in on what is required for a mortgagee to have standing to seek foreclosure.

Wells Fargo, the alleged assignee of the defendant’s note and mortgage, filed a motion for summary judgment in this foreclosure case.    That motion was supported by a certification of Josh Baxley, who described himself as a “Supervisor of Fidelity National as an attorney in fact for HomEq Servicing Corporation as attorney in fact for [Wells Fargo].”

Baxley certified that he had knowledge of the amount due to Wells Fargo, that Wells Fargo was the holder of the note and mortgage, and that copies of those documents attached to his certification were true copies.  But he did not include the source of any of that alleged knowledge, and the documents attached to Baxley’s certification did not include the purported assignment of the mortgage.  Instead, that assignment was attached to Wells Fargo’s reply brief.

The trial court granted summary judgment to Wells Fargo.  The Appellate Division reversed and remanded for further proceedings.

Judge Skillman’s opinion noted that under the Uniform Commercial Code, N.J.S.A. 12A:3-301, there are three ways for a party to qualify to enforce a negotiable instrument.  Two of those methods plainly were not satisfied by Wells Fargo.  Wells Fargo attempted to satisfy the third criterion— qualifying as “a nonholder in possession of the instrument who has the rights of a holder— through Baxley’s certification.

The Appellate Division stated that the documents submitted by Wells Fargo could be found sufficient to qualify Wells Fargo as “a nonholder in possession of the instrument who has the rights of a holder,” if those documents were “properly authenticated.”  But Baxley’s certification did not meet the requirement of Rule 1:6-6 that he demonstrate personal knowledge of the key facts, such as that Wells Fargo was the owner and holder of the note or that the attached note and mortgage were true copies of those documents. Moreover, the purported assignment “was not authenticated in any manner; it was simply attached to a reply brief.”  The court remanded the matter to the Chancery Division for discovery regarding Wells Fargo’s right to proceed, and for further proceedings.

This case shows once again the importance of authenticating documents submitted to a court on a motion, as required by Rule 1:6-6.  The issue has received much play in the foreclosure context, and it is plainly of critical importance there.  But Rule 1:6-6 applies to every kind of case and must always be heeded.