Motion to Vacate Foreclosure Judgment for Lack of Standing by Plaintiff Came Too Late

Deutsche Bank Trust Company Americas v. Angeles, 428 N.J. Super. 315 (App. Div. 2012).  In this foreclosure case, defendant tried to argue that because his mortgage was not assigned to plaintiff until after plaintiff filed its foreclosure complaint against defendant, plaintiff lacked standing and the judgment that plaintiff eventually obtained should have been vacated.  Defendant seemed to be on fairly good ground, since the Appellate Division had held in Deutsche Bank Nat’l Trust Co. v. Mitchell, 422 N.J. Super. 214 (App. Div. 2011), that either possession of the note or an assignment of the mortgage that predated the complaint conferred standing, and that an amended complaint could not cure an initial lack of standing.  The problem here, however, was that defendant had not contested the case.  Instead, he waited “two years after default judgment was entered and three-and-one-half years after the complaint was filed” to challenge plaintiff’s standing.  Thus, his attempt under Rule 4:50 to vacate the judgment was too late, snce that rule requires applications to vacate judgment to be made within a reasonable time.  Judge Koblitz wrote the panel’s opinion, which affirmed the ruling of the Chancery Division against defendant.

Judge Koblitz noted that the standard of review in the Rule 4:50-1 context calls for “substantial deference” to the trial level court unless there is a “clear abuse of discretion.”  An abuse of discretion, she explained, occurs when a decision was “made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.”  None of that was present here.  “In foreclosure matters, equity must be applied to plaintiffs as well as defendants.  Defendant did not raise the issue of standing until he had the advantage of many years of delay.”  He never denied responsiblilty for the debt and could not reasonably argue that plaintiff was not the party legitimately in possession of the property.  Accordingly the Chancery Division did not abuse its discretion in refusing to vacate the judgment based on plaintiff’s belated acquisition of the mortgage.  Moreover, defendant had not “definitively demonstrated a lack of standing,” since defendant had not shown that plaintiff lacked possession of the note when the complaint was filed, which Mitchell had recognized as an alternative basis for standing.