MTGLQ Inv'rs LP v. Brylinski

MTGLQ INVESTORS LP, Plaintiff-Respondent, v. EILEEN BRYLINSKI, MR. BRYLINSKI,unknown spouse of EILEEN BRYLINSKI, and FRANK J. BRYLINSKI, Defendants-Appellants.

DOCKET NO. A-2409-18T2

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

Submitted December 16, 2019

July 14, 2020

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

Before Judges Ostrer and Vernoia.

On appeal from the Superior Court of New Jersey, Chancery Division, Middlesex County, Docket No. F-007226-17.

Eileen Brylinski and Frank Brylinski, appellants pro se.

Stern & Eisenberg PC, attorneys for respondent (Salvatore Carollo, on the brief).

PER CURIAM

Under the Fair Foreclosure Act (FFA), a mortgagee must serve a notice of intention to foreclose (NOI) before filing a foreclosure action. N.J.S.A. 2A:50-56. In this foreclosure appeal, plaintiff claims its predecessor sent the required NOI. The sole issue before us is an evidentiary one: did the successor mortgagee prove that its predecessor sent the required notice? Plaintiff invokes the business record exception to the hearsay rule, N.J.R.E. 803(c)(6), to utilize a document inherited from the predecessor's files. We conclude that its reliance is misplaced, as plaintiff failed to lay a sufficient foundation to establish the document's admissibility under the rule. Therefore, we vacate summary judgment on plaintiff's foreclosure complaint and remand.

I.

In 2007, defendant Eileen Brylinski executed a 30-year, non-purchase money mortgage with Jersey Mortgage Company, along with a mortgage note of $417,000.¹ About two years later, Mortgage Electronic Registration Systems, Inc. (MERS), acting as nominee for Jersey Mortgage Company, assigned the mortgage to BAC Home Loans Servicing, LP. Another two years or so passed,and MERS assigned the mortgage to Bank of America, N.A. Both assignments were properly recorded.

On June 8, 2012, Bank of America evidently prepared an NOI addressed to Eileen. The notice includes the date, below which it states, "Sent via First Class and Certified Mail." Below that, it states again, "Certified Mail," with a tracking number, and finally, "Return Receipt Requested." (Emphasis in original). Whether that statement was true, that is, whether BOA actually sent the notice and did so by certified mail, return receipt requested, is the crux of this appeal. There are no contemporaneous U.S. Postal Service records or other documentary proof of mailing.

Thereafter, the mortgage was assigned and properly recorded twice more. Ultimately, in September 2016, the mortgage was assigned to plaintiff MTGLQ Investors, L.P.

On March 22, 2017, plaintiff filed its foreclosure action against defendants. In their answer, defendants asserted, as an affirmative defense, that plaintiff did not comply with the FFA.

Eventually, plaintiff moved for summary judgment, and to strike defendants' answer. Plaintiff attached to the motion for summary judgment a certification from Teresa Hubner, a "Litigation Foreclosure Specialist" at NewPenn Financial LLC d/b/a Shellpoint Mortgage Servicing, plaintiff's loan servicer. She asserted that the "certification [is] based on [her] personal knowledge of the facts contained herein. [Her] personal knowledge [was] based on [her] review of the business records described below."

Additionally, she certified,

2. In the regular performance of my job functions at New Penn Financial, LLC d/b/a Shellpoint Mortgage Servicing, I am familiar with the business records maintained by Shellpoint for the purpose of servicing mortgage loans, collecting payments and pursuing delinquencies (the "business records"). These business records include electronic data compilations and imaged documents pertaining to the loans serviced by Shellpoint. These imaged documents include, but are not limited to, the true copies of the loan documents referenced herein.

3. Based on my training and my general knowledge of the processes by which they are created and maintained, the business records were made at or near the time by, or from information provided by, persons with knowledge of the activity and transactions reflected in such records, and are kept in the ordinary course of the business activity regularly conducted by Shellpoint. It is the regular practice of [p]laintiff's mortgage loan servicers to make and update these business records.

Lastly, she stated, "On June 8, 2012, a Notice of Intent to Foreclose was sent in accordance with The Fair Foreclosure Act." She attached the Bank of America NOI.

Defendants asserted that Hubner's certification was "fraudulent," noting that the NOI pre-dated Shellpoint's involvement. In other words, they contested Hubner's knowledge that the NOI was sent. They raised other arguments opposing summary judgment, which are not at issue on appeal.

On January 2, 2018, the trial court found that the NOI was sent in compliance with the FFA. The court held:

(i) Plaintiff's predecessor in interest notified defendant of acceleration of payments on June 8, 2012. (ii) The NOI complied with the FFA, it's [sic] age is irrelevant as long as it complied with the Act and is not fraudulent. (iii) Plaintiff demonstrates its valid assignment of the mortgage, which in itself provides standing. Plaintiff also certifies possession of the note, which defendant does not deny signing. (iv) The certification of an individual as to review of documents must necessarily predate the filing of the complaint with which they are to be submitted. (v) Nothing is fraudulent about Ms. Hubner's certification . . . .

As plaintiff established all other elements of its claim, the court granted it summary judgment, ordered stricken defendants' answer, entered judgment, and remanded the matter to the Office of Foreclosure. The court subsequently denied another motion by defendants, challenging the amount due.

On December 24, 2018, the trial court issued final judgment in the sum of $761,950.19, plus $7,500 in counsel fees, and costs. On the same day, the trial court issued a writ of execution, commanding the Middlesex County Sheriff tosell the property. Plaintiff asserted it bought the property for $100 at the sheriff's sale on March 27, 2019.

On appeal, defendants renew their argument that plaintiff failed to present competent proof that its predecessor sent the NOI to them in compliance with the FFA. They note the absence of a return receipt, or United States Postal Service tracking documentation.

II.

A trial court will grant summary judgment when there exists no "genuine issue as to any material fact challenged and . . . the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c). We review the trial court's order de novo, applying the same standard as the trial court. Henry v. N.J. Dep't of Human Services, 204 N.J. 320, 330 (2010). However, we review evidentiary rulings preliminary to summary judgment determinations for an abuse of discretion. Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 384-85 (2010). But, "'[w]hen the trial court fails to apply the proper test in analyzing the admissibility of proffered evidence,' our review is de novo." Konop v. Rosen, 425 N.J. Super. 391, 401 (App. Div. 2012) (alteration in original) (quoting Pressler & Verniero, Current N.J. Court Rules, comment 4.6 on R. 2:10-2 (2012)).

The sole issue on appeal is whether plaintiff presented competent proof on its summary judgment motion that it sent the NOI as the FFA requires. Our Supreme Court has recognized that "[t]he notice of intention [to foreclose] is a central component of the FFA, serving the important legislative objective of providing timely and clear notice to homeowners that immediate action is necessary to forestall foreclosure." US Bank Nat. Ass'n v. Guillaume, 209 N.J. 449, 470 (2012). The FFA requires that a "[n]otice of intention to [foreclose] . . . shall be in writing . . . sent to the debtor by registered or certified mail, return receipt requested, at the debtor's last known address, and, if different, to the address of the property which is the subject of the residential mortgage." N.J.S.A. 2A:50-56(b). Mailing or in person delivery effectuates the notice. Ibid. The remedy for non-compliance with the notice requirement is left to the trial court. Guillaume, 209 N.J. at 476.

MTGLQ did not send its own NOI after purchasing defendants' mortgage. It relies on the one its predecessor, Bank of America, prepared almost five years before MTGLQ filed its complaint.² Plaintiff offers no certification of mailing by a Bank of America employee; a tracking document from the U.S. PostalService, coinciding with the certified mail number; or a return receipt, signed by either defendant. To prove the NOI was sent, plaintiff necessarily relies on the statement on the copy of the notice itself, "Sent Via First Class and Certified Mail . . . Return Receipt Requested." To offer that out-of-court statement for the truth of the matter asserted, plaintiff relies on the business record exception to the hearsay rule. N.J.R.E. 803(c)(6). As the proponent of hearsay, plaintiff bears the burden to establish its admissibility. State v. Stubbs, 433 N.J. Super. 273, 285-86 (App. Div. 2013).

A statement in "records of regularly conducted activity" may be offered into evidence for the truth of the matter asserted if the statement is

contained in a writing or other record of acts, events, conditions . . . made at or near the time of observation by a person with actual knowledge or from information supplied by such a person, if the writing or other record was made in the regular course of business and it was the regular practice of that business to make it, unless the sources of information or the method, purpose or circumstances of preparation indicate that it is not trustworthy.

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