Deutsche v Mitchell Reversed Sale Vacated

8/4/2019 Deutsche v Mitchell Reversed Sale Vacated

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NOT FOR PUBLICATION WITHOUT THEAPPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEYAPPELLATE DIVISIONDOCKET NO. A-4925-09T3

DEUTSCHE BANK NATIONAL TRUSTCOMPANY, AS TRUSTEE FOR LONGBEACH MORTGAGE LOAN TRUST2006-3,

Plain t i f f -Respondent ,v.CONSTANCE LAWRENCE MITCHELLand GENERAL MOTORS ACCEPTANCECORPORATION,

Defendants ,andJACQUELINE BETHEA,

Defendant-Appellant .

APPROVED FOR PUBLICATIONAugust 9, 2011

APPELLATE DIVISION

Submitted May 3, 2011 - Decided August 9, 2011Before Judges Wefing, Baxter and Kobl i tz .On appeal from Superior Court of New Je r sey ,Chancery Divis ion , Union County, Docket No.F-18394-08.

Pete r A. Ouda, a tto rn ey fo r appel lan t .Zucker, Goldberg & Ackerman, L.L.C. ,a tto rn ey s fo r respondent (Steven D. Krol , ofcounse l and on th e b r i e f ) .


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The opin ion of th e cou rt was del ivered byKOBLITZ, J .S .C . ( t emporar i ly ass igned) .

In t h i s mortgage fo rec losure ac t i on , defendant Jacque l ineBethea, a vic t im of a buy- lease-back "mortgage rescue scam,"appea ls th e orde r of f i n a l judgment in favor of p la in t i f fDeutsche Bank National Trus t Co. as t r u s t e e fo r Long BeachMortgage Loan Trus t , (Deutsche Bank), an ass ignee o f the noteand mortgage from the or ig ina l mortgagee ' s successor in

i n t e r e s t . Bethea a l so appeals th e t r i a l cour t ' s orde r en te r ingsummary judgment in favor o f Deutsche Bank and t r ans fe r r ing toth e Law Division her t h i rd -pa r ty complain t aga ins t p la in t i f f ando ther pa r t i e s a l leged ly involved in the rescue scam. 1 Defendantargues t h a t Deutsche Bank did no t have s tanding to f i l e th efo rec losure complain t and, if it d id have s tanding, it was not aholder in due course o f th e mortgage. withou t evidence t h a tDeutsche Bank possessed th e note a t th e t ime of f i l i ng , andknowing t h a t th e complain t was f i l ed p r i o r to the assignment ofth e mortgage, the t r i a l cour t neve r the le s s found t h a t DeutscheBank had s tanding. The cour t found t h a t p la in t i f f cured th e

defec t o f f i l i ng the complain t a day before rece iv in g the1 Bethea does not argue t h a t th e t r ans f e r of th e t h i rd -pa r tycomplain t was improper. Nor does she inform us of the s t a tus o ft h a t case . Therefore, we do not address th e merit s o f th et r ans f e r , which i s within th e d i sc re t ion o f th e t r i a l cour t .4 :3 -1 (b ) .

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assignment by f i l ing an amended complaint . The t r i a l court a lsofound t ha t Deutsche Bank was a holder in due course of th emortgage and thus was not sub jec t to any defenses asser ted byBethea because nothing in the t ransac t ion would have a ler t ed theor ig ina l lender or Deutsche Bank to any fraud in the under lyingt r ansac t ion .

After reviewing the record in l igh t of the contentionsadvanced on appeal , we reverse the gran t of summary judgm ent andf ina l judgment and vacate the she r i f f ' s sa l e , holding t h a tDeutsche Bank d id not prove it had s tanding a t the t ime it f i l edthe or ig ina l complaint . The assignment was not perfec ted un t i la f t e r the f i l ing of the complaint, and p l a i n t i f f presented noevidence of having possessed the under lying note p r io r to f i l ingthe complaint . I f p l a i n t i f f d id not have the note when it f i l edthe or ig ina l complaint, it lacked s tanding to do so , and itcould not obtain s tanding by f i l ing an amended complaint . Givent ha t Deutsche Bank has not demonstrated s tanding, we cannotdecide a t th i s tim e w heth er it was a holder in due course of themortgage.

Bethea 's mother conveyed an in te re s t in her two-familyhouse located in Pla inf i e ld , New Jersey (Property) to Bethea onDecember 14, 2002. Bethea and her mother obtained a mortgage onthe Proper ty from Home American Credi t Inc . d/b /a Upland

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Mortgage in the amount of $150,000. 2 Both the deed and th emortgage were recorded on January 10, 2003. Bethea ' s motherdied l a t e r in 2003, and Bethea, who suf fe r s from long-standingmedical condi t ions , fa i l ed to keep up the mortgage paymen ts.Bethea l ives in one sect ion of the two-family house and her sonand grandson l ive in the other . 3

Bethea met Steve French, pres iden t and CEO of El i t eFinancia l Services (E l i t e ) , when seeking options to preventfo rec lo su re o f the Property . She ce r t i f i ed t ha t French promisedher t h a t he could save her home and convinced her to dism iss herthen-pending bankruptcy pe t i t i on . Bethea ce r t i f i ed t ha t Frenchproposed a buyout of the Property , which would allow her to saveher home, payo f f her debts , improve her c red i t score and allowher to remain in her home.

On February 17, 2006, French fac i l i t a ted Bethea ' s sa le ofthe Property to a straw-person, Constance Lawrence Mitche l l , for$355,000. Mitchell obta ined a mortgage in the amount of$319,500 from Long Beach Mortgage Company (Long Beach) topurchase the Property .

mortgage on the Property .

Bethea also gave Mitchel l a $35,500

2 Defendant ce r t i f i ed t ha t the mortgage was fo r $150,000, but sheon ly p ro vid ed the f i r s t of f i f teen pages of the mortgage, whichdoes not speci fy an amount.3 We have received no information indica t ing t ha t they have movedout of the Property .

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French dro ve Beth ea to the clos ing a t an a t torney ' s of f i ce .Bethea was not represented by her own lawyer a t the clos ing .She acknowledges t h a t she s igned severa l papers a t th e clos ing ,but claims she d id not unders tand t h e i r s ign i f i cance . Betheaentered in to a "Consult ing Agreement" (Agreement) with El i t e andFrench a t the clos ing . The Agreement provided fo r a sa le of th eProperty to a t h i rd p ar ty (M itc he ll) , but allowed Bethea to ren tth e home fo r two years w ith th e opportunity to repurchase itwithin t ha t per iod . The Agreement provided t ha t Bethea wouldcrea te a reserve account by se t t i ng as ide $37,187 from theclos ing proceeds . I f Bethea fa i l ed to make a r en t a l payment,th e Agreement authorized counsel to pay th e r en t from thereserve account . The Agreement also provided t ha t Bethea wouldpay El i t e a $25,000 "consul t ing fee ." Mi tche ll r ec ei ved $10,000from th e "consult ing fee ."

At the clos ing , Bethea also entered in to a "Lease Agreementwith Option to Purchase" (Option) with Mitche l l , allowing Betheato ren t the house fo r twenty-four months fo r an unspecif iedamount. Under th e Optio n, B ethea was to pay a l l the "u t i l i t i e s

and cos t s re la ted to th e [ P]r op erty " w ith the option to purchaseth e Property with in twenty-four months fo r $319,500, th e amountof Mitche l l ' s mortgage from Long Beach.

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Based on the United Sta tes Department of Housing and UrbanDevelopment Uniform Sett lement Statement (HUD-l), signed a t theclos ing by Bethea, Mitchel l and the atto rney , Bethea wassupposed to receive $62,187.02 of the $355,000 sa les p rice ofthe Property . Bethea did not receive any money di rec t ly fromthe sale because the $62,187.02 re f l ec ted on the HUD-l as "cashto se l le r" was used to pay the $25,000 consul t ing fee to El i t eand the remaining $37,187.02 was placed in an escrow accountpursuant to the Agreement.

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In Apri l 2006, French cal led Bethea and to ld her t h a t shewould have to pay $1680 per month towards her monthly ren t ofapproximately $3000. She ce r t i f i ed t h a t he to ld her t ha t "thebalance would come out of the escrow account . " Betheas ta ted t ha t "she was shocked t h a t [she] was expected to pay t ha tmuch to stay in the house, [because] a t the time, [her]monthly income was approximately $1,195.00." Bethea ce r t i f i edt ha t before she sold the house to Mitchel l her month ly mor tgagepayment, which she was unable to keep cur ren t , was approximately

4 The HUD-l indica tes t h a t the $292,812.98 remaining in sa lesproceeds was expended as fol lows: $23,027.53 fo r "se t t l ementcharges," including a tax sa les cer t i f i ca t e of $19,520.55;$19,759.04 on behalf of M itchell for c los ing cos t s , including$9,940 in a broker ' s fee; $11,000 fo r the balance of an autofinance loan; $75 towards "FedEx payoffs" ; $35,500 as a mortgagegiven to Mitchel l by Bethea; and $203,451.41 to sa t i s fy Bethea 'soutstanding mortgage.

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$900. She ce r t i f i ed t ha t she made the $1680 ren ta l paymentsun t i l approximately May 2008, when French to ld her to stopmaking the payments and to s t a r t saving money to move. Betheaalso ce r t i f i ed t ha t she paid the property t axes , u t i l i t y b i l l sand "municipal c ha rg es" a f te r the sale of the Property toMitche l l .

On November 15, 2007, the c lo sin g a tto rn ey sent Bethea al e t t e r informing her t ha t the escrow account, which was used tomake her r en t a l payments, had been exhausted. He advised Betheat ha t it was "imperat ive t ha t [she] s e l l th i s property as soon aspossible" and enclosed a statement accounting fo r the use of theescrowed proceeds from the sale of the Property .

On May 13, 2008, Deutsche Bank f i l ed a complaint forforec losure agains t Mitche l l , Bethea and General Motors Corp. 5Bethea was named as a defendant as a re su l t of the recorded$35,500 mortgage she gave Mitchel l in c onne ctio n w ith the saleof the Proper ty .

On May 14, 2008, a day a f te r the complaint was f i l ed ,Washington Mutual, successor in in te re s t to Long Beach, assigned

the mortgage to Deutsche Bank. On June 2, 2008, Deutsche Bank

5 General Motors was included due to i t s recorded judgment fo r$4794.25 agains t Mitche l l .

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f i led an amended complaint for fo re clo su re containin g anaddi t ional sect ion s ta t ing :

4. The Note and Mortgage have been assignedas follows:4a. By assignment of mortgage fromWashington Mutual Bank, successor inin te re s t to Long Beach Mortgage Company toDeutsche Bank National Trust Company, asTrustee for Long Beach Mortgage Loan Trust2006-3, p la in t i f f , herein , dated 05/14/2008.Said assignment i s unrecorded a t th is t ime. 6

On September 22, 2008, Bethea f i led a contes t ing answercontaining aff i rmat ive defenses and countercla ims al legingviolat ions of the Truth in Lending Act (TILA), 15 U.S.C.A. 1601 to 1667, Home Ownership Equity Protect ion Act (a provisionof TILA), 15 U.S.C.A. 1602(aa), Real Estate Sett lementProcedu re s Act, 12 U.S.C.A. 2601 to 2617, and New Jersey Home

Ownership Securi ty Act, N.J.S.A. 46:10B-22 to -35. Bethea alsof i led a th i rd-par ty complaint al leging violat ions of theConsumer Fraud Act, N.J.S.A. 56:8-2, common law fraud, breach off iduciary duty and unjus t enrichment agains t Deutsche Bank,Mitchel l , French and El i t e as well as the t i t l e company and thec lo sin g a tto rn ey . We are unaware of any response by Mitchel l toth e f or ec lo su re complaint .6 The assignment was recorded by the Union County Clerk onOctober 9, 2008. The date of recordation does not af fec t theval id i ty of the assignment. EMC Mortg. Corp. v. Chaudhri, 400N.J. Super. 126 (App. Div. 2008).

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Deutsche Bank f i l ed a motion fo r summary judgment to s t r ikethe contes t ing answer and countercla im and to sever the t h i rd -party complaint . Bethea f i l ed a cross-motion fo r summaryjudgment on her c ounte rc la im and sought discovery on her t h i rd -party complaint .

On March 11, 2009, the cour t heard ora l argument on themotion and cross-motions for summary judgment and discovery.The court granted summary judgment in favor of Deutsche Bank and

found:The fac t t ha t the HUD-1 prepared by theth i rd-par ty defendants i s a l i e does not putthe lender on not ice t ha t the s e l l e r wasn ' tgoing to be ge t t ing everything t ha t shethought she was going to be ge t t ing out ofthe proceeds of the sa l e , the fac t t ha t shenever ac tua l ly got the proceeds of the sa l e .There ' s nothing t ha t would suggest to alender t ha t t ha t ' s what happened and t ha t ' srea l ly the crux of the f raud here .

Although the court found t h a t th e proceeds of the sale werenever del ivered to Bethea, it ind ica ted t ha t nothing in th et ransac t ion would s igni fy fraud to the lender. The cour t notedt ha t the fac t t ha t th e se l l e r continued to l ive in the home d id"not ra i se any unusual fac t t h a t would put a lender on not ice ofsome i r r egu la r i t y . " The court decided tha t , although DeutscheBank f i l ed the complaint before receiving the assignment,Deutsche Bank cured the defec t by f i l ing an amended complaint .Accordingly, the c ou rt in dic ate d t ha t Deutsche Bank had s tanding

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to f i l e th e fo re clo su re complaint and was a holder in due courseof the mortgage. The court entered an order g ran tin g summaryjudgment in favor of Deutsche Bank, dismissing Bethea 'scounterclaim and t ransfer r ing her th i rd-par ty complaint to theLaw Division.

Deutsche Bank submitted an app lica tion fo r en try of f ina ljudgment, and Bethea f i l ed a motion to deny the appl ica t ion onSeptember 3, 2009. On January 8, 2010, an order was entereddenying Bethea 's motion.

On June 18, 2010, Bethea f i l ed her not ice of appeal of thecour t ' s March 11, 2009 o rd er g ra ntin g summary judgment in favorof Deutsche Bank and the f ina l judgment entered on May 4, 2010.Notice of the sale of the Property scheduled for September 1,2010, was provided to Bethea 's counsel , Bethea and Mitche l l .Bethea did not seek a s tay pending appeal and, on September 1,2010, Deutsche Bank purchased the Property fo r $100 a t theshe r i f f ' s sa le .

Bethea ra i ses the following i ssues on appeal :I . THE STANDARD FOR GRANTING SUMMARY JUDGMENT

I I . DEUTSCHE BANK DOES NOT HAVE STANDING TOPROSECUTE THIS FORECLOSURE ACTIONI I I . DEUTSCHE BANK'S MOTION FOR SUMMARY JUDGMENT

SHOULD BE DENIED BECAUSE THERE ARE GENUINEISSUES OF FACT AND DISCOVERY HAD NOT BEENCOMPLETED

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A. Deutsche Bank i s subject t o a l l s e t - o f f sand defenses t h a t Bethea could have r a i s e di n an act ion by Deutsche Bank's ass ignor ,Long Beach, and a l l of those s e t - o f f s anddefenses can properly be r a i s e d i n t h i sforeclosure caseB. There are genuine i s s u e s of f a c t mater ia lt o Bethea 's claims, s e t - o f f s and defensesagains t Deutsche BankC. Bethea 's claims, s e t - o f f s and defensesD. 12 C.F.R. 560.2 does not preempt Bethea 'ss t a t e law claims of unconscionabi l i ty andconsumer f raud a g a i n s t Deutsche Bank.Defenses can proper ly be r a i s e d i n t h i sforeclosure case

Deutsche Bank argues t h a t , as no s t a y of the s h e r i f f ' s s a l ewas sought and the s a l e was completed, we should f ind t h i sappeal t o be moot. We consider an i s s u e moot when "our decisionsought i n a mat ter , when rendered, can have no p r a c t i c a l e f f e c t

on the e x i s t i n g controversy." G reenfield v. N.J. Dep' t ofC o r r . , 382 N.J. Super. 254, 257-58 (App. Div. 2006) (quoting NewYork S. & W. R. Corp. v. S t a t e Dep't of Treasury, Div. ofTaxation, 6 N.J. Tax 575, 582 (1984), a f f ' d , 204 N.J. Super.630, (App. Div. 1 9 8 5 . We w i l l cons ider the m erits of an i s s u enotwithstanding i t s mootness i f s i g n i f i c a n t i s s u e s of publicimport appear. Joye v. Hunterdon Cent. Reg ' l High Sch. Bd. ofEduc., 176 N.J. 568, 583 (2003). P l a i n t i f f has not demonstratedt h a t t h e r i g h t s of a t h i r d p a r t y would be a f f e c t e d by ourconsiderat ion of the i s s u e s . Given the importance of t h e i s s u e s

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ra ised by Bethea, we choose to address the under lying merits o fthe i ssues Bethea r a i s e s .Pla in t i f f f i l ed i t s foreclosure complaint the day before it

was assigned the mortgage. In i t s or ig ina l complaint, DeutscheBank s ta ted t ha t "[ 0 ] n or before the date the with in complaintwas dra f ted , the p l a i n t i f f herein became owner of the note andmortgage being foreclosed here in." Deutsche Bank did notprovide any proof or information in i t s or ig ina l complaint

regarding how it obtained the note . On June 2, 2008, DeutscheBank f i l ed an amended complaint, which l i s t ed the assignment ofthe mortgage, purportedly to cure the defec t in the or ig ina lcomplaint.

" 'As a general proposi t ion , a par ty seeking to foreclose amortgage must own or co ntro l th e under lying debt . ' " Wells FargoBank, N.A. v. Ford, 418 N.J. Super. 592, 597 (App. Div. 2011)(quoting Bank of N.Y. v. Raftogianis , 418 N.J. Super. 323, 327-28 (Ch. Div. 2010. "In the absence of a showing of suchownership or cont ro l , the p l a i n t i f f lacks standing to proceedwith the forec losure ac tion and the complaint must be

dismissed." Ib id . Deutsche Bank did not have s tanding when itf i led the or ig ina l complaint because it did not have anassignment nor did it demonstrate t ha t it possessed the note a tt ha t t ime.

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Deutsche Bank argues tha t it i s en t i t l ed to foreclose onthe Property as a holder of the note. Art icle I I I of theUniform Commercial Code (UCC), N.J.S.A. 12A:3-101 to -605,governs the t ransfe r of a negotiable ins trument. N.J.S.A.12A: 3-301 i s the provision of the UCC tha t addresses who mayenforce negotiable instruments. I t provides for threecategor iesins truments :

of persons en t i t l ed to enforce negotiable

"Person en t i t l ed to enforce" an ins trumentmeans the holder of the ins trument, anonholder in possession of the instrumentwho has the r ights of the holder, o r aperson not in possession of the ins trumentwho i s ent i t led to enforce the ins trumentpursuant to 12A: 3-309 or subsection d. of12A:3-418. A person may be a personen t i t l ed to enforce the ins trument eventhough the person i s not the owner of theins trument or i s in wrongful possession ofthe ins trument.[N.J.S.A. 12A:3-301.]

Deutsche Bank does not f a l l within the th i rd category se tfor th in N.J.S.A. 12A:3-301, which allows enforcement by someonewho i s not in possession of the note. N. J . S .A . 12A: 3-309addresses the enforcement of instrum ents tha t have been l os t ,

destroyed or s to len , and "subsection d. of N.J.S.A. 12A:3-418deals with the circumstance where an ins trument has been paid oraccepted by mistake and the payor or a cc ep to r re co ve rs payment

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or revokes acceptance." Ford, supra , 418 N.J. Super. a t 598.Neither of these circumstances are p resen t here .

Deutsche Bank also does not f i t within the f i r s t categoryas a "holder" of the ins trument, which i s payable to Long Beach.N.J .S.A. 12A:3-201 to -207 governs negot ia t ion , t ransfe r andindorsement of instrum ents. "N.J.S.A. 12A:3-201(a) providest ha t fo r a person other than the one to whom a negot iableinstrument i s made payable to become a ' ho lder , ' there must be a

' n ego t i a t ion [ . ] ' " Ford, supra , 418 N.J. Super. a t 598.Negotia t ion i s "a t ransfe r o f p osse ssio n, whether voluntary o rin vo lu nta ry , o f an instrument by a person other than th e i s suerto a person who thereby becomes i t s holder." N. J . S A 12A: 3-201(a) . For an instrument payable to an iden t i f i ed person,nego ti at io n r equ ir es two th ings: " t ransfer of possession of th einstrument and i t s indorsement by the ho ld er." N.J .S.A. 12A:3201(b) .

Art ic le I I I def ines indorsement as "a s ignature , other thant ha t of a s igner as maker, drawer, or acceptor , t ha t alone oraccompanied by other words i s made on an instrument for the

purpose of negot ia t ing the ins t rument ." N.J .S.A. 12A:3-204(a).Long Beach was the or ig ina l holder of the note t h a t

Deutsche Bank would l ike to enforce , and the copy of the noteprovided by Deustche Bank i s not indorsed.

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Deutsche Bank has

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not es tabl ished tha t it may enforce the note as a "holder" asprovided by N.J.S.A. 12A:3-301.

Deutsche Bank may f i t within the second category of"nonholder in posse ssio n o f the ins trument who has the r ights ofa holder." N.J.S.A. 12A:3-301.

T ransfer of an ins trument occurs "when it i sdel ivered by a person other than i t s i s suerfor the purpose of giv ing to the personreceiving del ivery the r igh t to enforce theins trument." N.J.S.A. 12A:3-203(a). Such adel ivery, "whether or not the t ransfe r i s anegot ia t ion, ves ts in the t ransferee anyr igh t of the tran s fe ro r to enforce theinstrument ." N.J.S.A. 12A:3-203(b)[Ford, supra, 418 N.J. Super. a t 599.]

The UCC Comment explaining th i s subsec ti on p rov ides:I f the t ransferee i s not a holderbecause the t ransferor did not indorse, the

t ransferee i s nevertheless a person en t i t l edto enforce the ins trument under sect ion 3301 i f the t ransferor was a holder a t thetime of t ransfe r . Although the t ransfereei s not a holder, under subsection (b) thet ransferee obtained the r igh ts of thet ransferor as holder.[N.J.S.A. 12A:3-203 Uniform Commercial CodeComment 2 .]

Because Deutsche Bank has not demonstrated tha t itpossessed the note a t the time it f i led the or ig ina l complaint ,it has not es tabl ished s tanding under t h i s sect ion e i ther .

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Deutsche Bank must prove it had po ssessio n o f the note when itf i l ed the complaint to obta in s tanding.

A f edera l d i s t r i c t cour t has also required t h a t o therp la in t i f f s prove they had possess ion of the notes when theyf i l ed foreclosure complaints o r face dismissal without prejudiceo f twen ty -s even comp la in ts in In re Forec losure Cases , 521Supp. 2d 650 (S.D. Ohio 2007). The cour t noted, "[w] h i Ie eacho f the complaints fo r fo rec lo sure pleads standing and

j u r i sd i c t i on , ev id en ce s ubmitte d e i t h e r with the complaint orl a t e r in th e case i nd ica tes t h a t standing and/or sub jec t mat te rj u r i sd i c t i on may not have ex i s t ed a t the t ime ce r ta in of theforeclosure complaints were f i l ed . " Id . a t 652. The cour t heldt h a t " [ t ]o show s tanding in a foreclosure ac t ion , thep la in t i f f must show t h a t it i s th e holder o f the note and themortgage a t th e t ime th e complaint was f i l ed . " Id . a t 653. Thep la in t i f f s were then given t h i r t y days to submit proofs t h a tthey had standing when th e complaints were f i l ed to preventd ism issa l . Id . a t 654.

Deutsche Bank could not cure th e de fec t in th e i n i t i a l

complaint , f i l ed one day b efo re o bta in in g the assignment , byf i l i ng an amended complain t fo llowin g th e assignment . SeeSummit Office Park, Inc . v . United S ta tes S tee l Corp. , 639 ~ 2 1278, 1284 (5th Cir . 1981) (where, a f t e r determining t h a t th e

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or ig ina l pla in t i f f s did not have standing, the cour t requirednew pla in t i f f s with s tanding to f i le a new lawsui t ins tead ofamending the or ig ina l p la in t i f f s ' complaint) . Deutsche Bankcould have es tabl ished s tanding as an assignee, N.J.S.A. 46:9-9,i f it had presented an authent icated assignment indica t ing tha tit was assigned the note before it f i led the or ig ina l complaint.The only evidence presented by Deutsche Bank was to thecont rary . We reverse the gran t of summary judgment and remandfor a hearing to determine whether or not, before f i l ing theor ig ina l complaint, p l a i n t i f f was in possession o f the note orhad another bas is to achieve s tanding to forec lose , pursuant toN.J.S.A. 12A:3-301.

Although our reversa l of summary judgment resolves th i sappeal , we th ink it important to note tha t the proofs presentedby p l a i n t i f f in support of summary judgmen t were inadequate . InFord, supra, we explained tha t "[ a] ce r t i f i ca t ion wi l l supportthe grant of summary judgment only i f the mater ia l fac ts al legedthe re in are based, as required by Rule 1:6-6, on personalknowledge." 418 N.J. Super. a t 599. We held t ha t the t r i a l

court should not have considered an assignment tha t was not"authent icated by an af f idavi t or ce r t i f i ca t ion based onpersonal knowledge." Id . a t 600.

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In suppor t of its motion fo r summary j udgmen t, Deu ts che Bankprovided a ce r t i f i c a t i on of an a t to rney dated January 22, 2009,which s ta ted t h a t " [p ] l a i n t i f f i s th e pre sen t holder of th e Noteand Mortgage. A copy of th e Assignment of Mortgage i s a t tachedas Exhib i t B." The a t to rney ce r t i f i ed t h a t h is knowledge wasbased upon h is "custody and review of th e computerized recordso f p la in t i f f which w ere made in th e ord in ary course of businessas pa r t of p l a i n t i f f ' s r egu la r p rac t ic e to c rea te and maintain

sa id records and which were recorded contemporaneously with th et r ansac t ions re f lec ted t h e re i n . " This at torney ce r t i f i c a t i ondoes not meet th e requ i remen t o f pe r sona l knowledge wea r t i cu l a t ed in Ford. Attorneys in pa r t i cu l a r should not ce r t i fyto " fac t s within th e primary knowledge o f t h e i r c Ld.errt.s s "? SeePre s s l e r s Vern iero , C urren t N. J . Court Rules , comment on &1:6-6 (2011); H iggins v . Thurber , 413 N.J . Super . 1,21 n.19(App. Div. 2010), a f f ' d , 205 N.J . 227 (2011) .

7 Recent amendments to th e Court Rules , however, now req uire th ep l a i n t i f f ' s a t to rney in a l l r e s iden t i a l f or ec lo su re a ct io ns toa t t ach a "ce r t i f i ca t i on o f d i l i g en t inqui ry" to th e complain tand an "a f f idav i t of d i l i gen t inqui ry" to th e motion to en te rjudgment, both ver i fy ing t h a t th e p l a i n t i f f ' s a t to rney spoked i r e c t ly to a n employee of the c l i e n t o r loan se rv ic er to ensuret h a t th e informat ion provided in th e documents i s accura t e . &4 :64-1 (a ) (2 ) ; & 4 :64-2(d ) . The Cour t ' s orde r o f June 9 , 2011 ,appl ied t h i s requ i remen t to a l l pending r e s iden t i a l fo rec losure swhere the re has not been a she r i f f ' s s a l e .

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In suppor t of i t s motion fo r f ina l ju dg ment, Deu tsche Bankprovided a ce r t i f i ca t ion o f proof of amount due by a spec ia l i s tof JP Morgan Chase Bank, N.A., se rv ic er for Deutsche Bank, datedJune 9, 2009, s t a t ing , in par t , t h a t " [p] l a in t i f f i s still theholder and owner of the aforesa id obl iga t ion and Mortgage."However, t h i s ce r t i f i ca t ion does not make any mention o f theassignment of the mortgage o r how the signor knows tha t DeutscheBank became th e holder of the note.

At ora l argument in the t r i a l cour t , p l a in t i f f ' s counselind ica ted tha t p l a i n t i f f had possession of the note p rio r toobta in ing th e assignment. Deutsche Bank did not present anyce r t i f i ca t ion based on personal knowledge s ta t ing t h a t it everpossessed the or ig ina l note.

We vacate the she r i f f I s sa le , the f ina l judgment and theorder grant ing summary judgment and remand to the t r i a l cour tfor fur ther proceedings in conformance with t h i s opinion .

Rev er sed and remanded.

I hereby cernfy that the foregOingIS a true copy of the onglnal onfile In my office 1 ~

CLERK OF1l-IE DIVISION

Deutsche v Mitchell Reversed Sale Vacated

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