3/8/2019 Legal Memorandum In Opposition to Plaintiff’s Motion for Summary Judgment | Foreclosure Defense Nationwide – Mortgage Foreclosure …

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Legal Memorandum In Opposition to

Plaintiff’s Motion for Summary Judgment

(address of local counsel)

Atlantic City, NJ
(609)

DEUTSCHE BANK TRUST COMPANY SUPERIOR COURT OF NEW

AMERICA, JERSEY
CHANCERY DIVISION
ATLANTIC COUNTY
Plaintiff,

v. CIVIL ACTION

DOCKET NO.:
(borrowers),

Defendants

____________________________________________________

LEGAL MEMORANDUM IN OPPOSITION TO

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PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

____________________________________________________

Atlantic City, NJ

WILLIAM J. BARNES, ESQ. (admitted pro hac vice)

On the Brief

LEGAL ARGUMENT

I. PLAINTIFF’S 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 factually inapplicable
decisional law; ignores the threshold issue of legal standing; fails to justify the striking of
Defendants contesting Answer; and purports to be supported by a Certification 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 of genuine issues of material fact and
has failed sustain its burden to be entitled to the entry of summary judgment.

Plaintiff’s own submissions and admissions therein demonstrate that the Defendants 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 the Fairhurst
Defendants. A close reading of the Sternberg opinion reveals that Plaintiff’s reliance is
misplaced, as the cited portion plainly states that the “pattern” involves a situation where “the
mortgagor fails to respond” [to the summary judgment motion]. It is of record that the Fairhurst
Defendants have responded to Plaintiff’s summary judgment motion.

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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 the essential elements of the
mortgagee’s right to foreclosure and fail to interpose a validly recognized defense in
foreclosure suits”. It is of record that the Defendants have challenged the Plaintiff’s very
standing to foreclose and thus its right to seek the remedy of foreclosure ab initio and as set
forth more fully herein.

Plaintiff’s 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, 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 the 1947 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 “germane” counterclaims in foreclosure actions. Such
counterclaims are “germane” if they arise out of the subject matter of the mortgage
transaction, and discovery is permitted on such counterclaims. 137 N.J.Super. at 358
(reversing order striking defendants’ first affirmative defense, severing counterclaim, and
transferring to Law Division).

The sixth Separate Defense of the Defendants states that Plaintiff was not, at the time 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 a foreclosure. 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 a foreclosure. The Second Count of the
Counterclaim requests the entry of Injunctive Relief 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 standing of 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 subject matter 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 not be stricken; discovery should be permitted; and Plaintiff’s Motion for Summary
Judgment should be denied.

Plaintiff has failed to cite a single case which precludes the assertion of an equitable
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 a single case which permits

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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. Plaintiff’s 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 factual situation 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 as distinct 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); Gregory v. 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 whether victim 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 issues in foreclosure actions raised in this case, and have consistently held
that when there 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
was proper.

In mortgage foreclosure actions (as in all actions), the foreclosing party must have standing 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 the litigant’s 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 foreclosure action, 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 have standing to institute the action.
New Century Mortgage Corporation v. Durden et al., 2009 NY Slip Op 50175(U) (N.Y. Sup. Ct.

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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 mortgage post-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 one who 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 et al., 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 AD2d 537, 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 the Complaint 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, Plaintiff’s 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 December 27, 2007 by virtue of the very Assignment attached as Exhibit “B” to the Plaintiff’s
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 arguably had no interest in the mortgage
until late 2008.

As such, Plaintiff lacked legal standing to institute this mortgage foreclosure action ab
initio. This issue of material fact warrants not only the denial of Plaintiff’s Motion for Summary
Judgment, but also supports the entry of summary judgment in favor 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 Defendants have 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 date of this Response. These discovery
requests seek information as to the Plaintiff’s legal standing including the chain of title to the
mortgage and note which are factual issues material to not only the Plaintiff’s claim but also the
Counterclaim of the Defendants. As there is a dispute as to the absence of factual issues at this
early stage of the proceedings where the case is not fully developed, summary judgment is

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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 or defense
the opportunity for full exposure of his case”, and “When “critical facts are peculiarly within
the moving party’s knowledge,” it is especially inappropriate to 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 of whether 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, 188 A.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 Plaintiff’s Motion 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 an officer 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 the plaintiff”. As the Certification is not based on personal
knowledge, the statements in the Certification can only be based on information and belief.

Rule 1:6-6 requires that Certifications in support of Motions be made on personal knowledge.
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 Landfill Reclaiming, 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
Plaintiff’s Motion for Summary 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 by the 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, and raises genuine issues of material fact as to
when (if ever) Plaintiff came into any ownership rights of either the Note or the Mortgage. Plaintiff’s
Motion for Summary Judgment must thus be denied, and summary judgment should be entered in
favor of the Fairhurst Defendants on their Sixth Separate Defense and their Counterclaim.

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CONCLUSION

Plaintiff has, by its very submissions, demonstrated that there are genuine issues of material fact
as to when, if ever, Plaintiff came into any ownership interest in either the Note or Mortgage.
Plaintiff’s submissions demonstrate that there is no genuine issue of material 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 was without legal standing to institute this action.
Summary judgment for Plaintiff is thus inappropriate.

Summary Judgment is also improper at this time given that discovery is incomplete. The
Haber Certification, which consists of incompetent hearsay, is legally inadmissible 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 in favor of the Defendants on their Sixth Separate
Defense and their Counterclaim.

Plaintiff’s Motion for Summary Judgment must thus be denied, and summary judgment in
favor of the Defendants on their Sixth Separate Counterclaim should be granted pursuant to the
Cross-Motion for Summary Judgment filed by the Defendants.

Respectfully submitted,

(counsel)

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