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Superior Court of New Jersey,
Appellate Division.
WELLS FARGO BANK, N.A., as Trustee, Plaintiff–Respondent,
Chancery Division, Bergen County, granted assignee summary judgment. Mortgagor appealed.
© 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.
[3] Judgment 228 185.1(3)
228 Judgment
228V On Motion or Summary Proceeding
228k182 Motion or Other Application
228k185.1 Affidavits, Form, Requisites and Execution of
228k185.1(3) k. Personal knowledge or belief of affiant. Most Cited Cases
Allegations in certification by attorney in fact for purported assignee of mortgage that assignee was the holder
and owner of note and mortgage were not based on personal knowledge, and thus, the certification was insufficient
to establish that assignee had standing to pursue foreclosure action, precluding summary judgment in favor of as-
signee in foreclosure action. N.J.S.A. 12A:3–301; R. 1:6–6.
228k185.1 Affidavits, Form, Requisites and Execution of
228k185.1(3) k. Personal knowledge or belief of affiant. Most Cited Cases
A certification will support the grant of summary judgment only if the material facts alleged therein are based
on personal knowledge. R. 1:6–6.
Before Judges SKILLMAN, YANNOTTI and ESPINOSA.
The opinion of the court was delivered by
SKILLMAN, P.J.A.D.
This appeal presents significant issues regarding the evidence required to establish the standing of an alleged
assignment and therefore is not subject to any of the defenses defendant may have been able to assert against Ar-
gent.
Defendant allegedly stopped making payments on the note in the spring of 2006, and on July 14, 2006, Wells
Fargo filed this mortgage foreclosure action. In an amended complaint, Wells Fargo asserted that Argent had as-
© 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.
signed the mortgage and note to Wells Fargo but that the assignment had not yet been recorded.
On August 24, 2006, defendant, appearing pro se, filed an answer and counterclaim, which alleged that Argent
had committed predatory and fraudulent acts in connection with execution of the mortgage and note and questioned
the validity of the purported assignment to Wells Fargo. Defendant's counterclaim asserted claims under various
federal and state statutes.
Defendant also filed a demand for the production of documents relating to the execution of the mortgage and
note and purported assignment to Wells Fargo. In response, Wells Fargo produced copies of the mortgage, note, and
purported assignment. Wells Fargo also produced various documents defendant allegedly executed in applying to
Argent for the mortgage.
Wells Fargo subsequently filed a motion for summary judgment. This motion was supported by a certification
exhibits attached to his certification, which appear to be a mortgage and note signed by defendant, were “true cop-
ies.” Again, the source of this purported knowledge was not indicated. The exhibits attached to the Baxley certifica-
tion did not include the purported assignment of the mortgage.
Defendant filed a cross-motion for summary judgment seeking dismissal of Wells Fargo's complaint and judg-
ment on her counterclaim. Defendant submitted a certification in support of this motion and in opposition to Wells
$36,259.06.” Defendant further alleged that she was charged a “$20,000 fee to the mortgage agent” at the closing. It
is unclear whether this $20,000 was part of the $36,259.06 in closing costs or an additional amount.
The trial court issued a brief oral opinion granting Wells Fargo's motion for summary judgment. The court ob-
served that defendant “has raised numerous serious disturbing allegations relating to the originator of this loan [Ar-
gent], which if true would be a substantial violation of law and substantial violation of her rights.” Nevertheless, the
Court to proceed as an uncontested matter. On April 9, 2007, the court entered a final judgment of foreclosure.
Defendant filed a notice of appeal from the judgment. After a sheriff's sale of the property was scheduled, de-
fendant filed a bankruptcy petition, which resulted in a dismissal of this appeal. After defendant's bankruptcy peti-
tion was dismissed, this appeal was reinstated, and on June 17, 2010, we granted defendant's emergent motion for a
stay of a scheduled sheriff's sale pending the outcome of the appeal.
© 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.
er,” there must be a “negotiation,” and N.J.S.A. 12A:3–201(b) provides in pertinent part that “if an instrument is
payable to an identified person, negotiation requires transfer of possession of the instrument and its indorsement by
the holder.” (Emphasis added). Therefore, even if Wells Fargo had presented satisfactory evidence that it was in
“possession” of the note executed by defendant (which is discussed later in this opinion), Wells Fargo admittedly
presented no evidence of “its indorsement by [Argent].” Therefore, Wells Fargo was not a “holder” of the note with-
in the first category of “person entitled to enforce” an instrument under N.J.S.A. 12A:3–301. See Raftogianis, 418
N.J.Super. at 330–31, 13 A.3d 435.
Wells Fargo also does not fall within the third category. N.J.S.A. 12A:3–309 deals with the enforcement of in-
struments which have been lost, destroyed or stolen, and subsection d. of N.J.S.A. 12A:3–418 deals with the circum-
stance where an instrument has been paid or accepted by mistake and the payor or acceptor recovers payment or
document that purported to be an assignment of the mortgage, which stated that it was an assignment of “the de-
scribed Mortgage, together with the certain note(s) described therein with all interest, all liens, and any rights due or
to become due thereon.”
If properly authenticated, these documents could be found sufficient to establish that Wells Fargo was a “non-
holder in possession of the [note] who has the rights of a holder.” Transfer of an instrument occurs “when it is deliv-
the transferee is not a holder, under subsection (b) the transferee obtained the rights of the transferor as holder.
[UCC Comment 2 to N.J.S.A. 12A:3–203.]
Since Argent, as the payee of defendant's note, was a holder, and it allegedly transferred the note to Wells Fargo
without an indorsement, Wells Fargo may have acquired the status of a “nonholder in possession of the [note] who
has the status of a holder.” See 6B Anderson on the Uniform Commercial Code §§ 3–203:4R, 5R, 9R, 10R, 11R
tion does not give any indication how Baxley obtained this alleged knowledge. The certification also does not indi-
cate the source of Baxley's alleged knowledge that the attached mortgage and note are “true copies.”
Furthermore, the purported assignment of the mortgage, which an assignee must produce to maintain a foreclo-
sure action, see N.J.S.A. 46:9–9, was not authenticated in any manner; it was simply attached to a reply brief. The
© 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.
trial court should not have considered this document unless it was authenticated by an affidavit or certification based
on personal knowledge. See Celino v. Gen. Accident Ins., 211 N.J.Super. 538, 544, 512 A.2d 496 (App.Div.1986).
For these reasons, the summary judgment granted to Wells Fargo must be reversed and the case remanded to the
trial court because Wells Fargo did not establish its standing to pursue this foreclosure action by competent evi-
dence. On the remand, defendant may conduct appropriate discovery, including taking the deposition of Baxley and
the person who purported to assign the mortgage and note to Wells Fargo on behalf of Argent.
Our conclusion that the summary judgment must be reversed because Wells Fargo failed to establish its stand-
ing to maintain this action makes it unnecessary to address defendant's other arguments. However, for the guidance
of the trial court in the event Wells Fargo is able to establish its standing on remand, we note that even though Wells
Fargo could become a “holder” of the note under N.J.S.A. 12A:3–201(b) if Argent indorsed the note to Wells Fargo
Wells Fargo is a holder in due course.
Accordingly, the summary judgment in favor of Wells Fargo is reversed and the case is remanded to the trial
court for further proceedings in conformity with this opinion.
N.J.Super.A.D.,2011.
© 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.
[3] Judgment 228 185.1(3)
228 Judgment
228V On Motion or Summary Proceeding
228k182 Motion or Other Application
228k185.1 Affidavits, Form, Requisites and Execution of
228k185.1(3) k. Personal knowledge or belief of affiant. Most Cited Cases
Allegations in certification by attorney in fact for purported assignee of mortgage that assignee was the holder
and owner of note and mortgage were not based on personal knowledge, and thus, the certification was insufficient
to establish that assignee had standing to pursue foreclosure action, precluding summary judgment in favor of as-
signee in foreclosure action. N.J.S.A. 12A:3–301; R. 1:6–6.
228k185.1 Affidavits, Form, Requisites and Execution of
228k185.1(3) k. Personal knowledge or belief of affiant. Most Cited Cases
A certification will support the grant of summary judgment only if the material facts alleged therein are based
on personal knowledge. R. 1:6–6.
Before Judges SKILLMAN, YANNOTTI and ESPINOSA.
The opinion of the court was delivered by
SKILLMAN, P.J.A.D.
This appeal presents significant issues regarding the evidence required to establish the standing of an alleged
assignment and therefore is not subject to any of the defenses defendant may have been able to assert against Ar-
gent.
Defendant allegedly stopped making payments on the note in the spring of 2006, and on July 14, 2006, Wells
Fargo filed this mortgage foreclosure action. In an amended complaint, Wells Fargo asserted that Argent had as-
© 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.
signed the mortgage and note to Wells Fargo but that the assignment had not yet been recorded.
On August 24, 2006, defendant, appearing pro se, filed an answer and counterclaim, which alleged that Argent
had committed predatory and fraudulent acts in connection with execution of the mortgage and note and questioned
the validity of the purported assignment to Wells Fargo. Defendant's counterclaim asserted claims under various
federal and state statutes.
Defendant also filed a demand for the production of documents relating to the execution of the mortgage and
note and purported assignment to Wells Fargo. In response, Wells Fargo produced copies of the mortgage, note, and
purported assignment. Wells Fargo also produced various documents defendant allegedly executed in applying to
Argent for the mortgage.
Wells Fargo subsequently filed a motion for summary judgment. This motion was supported by a certification
exhibits attached to his certification, which appear to be a mortgage and note signed by defendant, were “true cop-
ies.” Again, the source of this purported knowledge was not indicated. The exhibits attached to the Baxley certifica-
tion did not include the purported assignment of the mortgage.
Defendant filed a cross-motion for summary judgment seeking dismissal of Wells Fargo's complaint and judg-
ment on her counterclaim. Defendant submitted a certification in support of this motion and in opposition to Wells
$36,259.06.” Defendant further alleged that she was charged a “$20,000 fee to the mortgage agent” at the closing. It
is unclear whether this $20,000 was part of the $36,259.06 in closing costs or an additional amount.
The trial court issued a brief oral opinion granting Wells Fargo's motion for summary judgment. The court ob-
served that defendant “has raised numerous serious disturbing allegations relating to the originator of this loan [Ar-
gent], which if true would be a substantial violation of law and substantial violation of her rights.” Nevertheless, the
Court to proceed as an uncontested matter. On April 9, 2007, the court entered a final judgment of foreclosure.
Defendant filed a notice of appeal from the judgment. After a sheriff's sale of the property was scheduled, de-
fendant filed a bankruptcy petition, which resulted in a dismissal of this appeal. After defendant's bankruptcy peti-
tion was dismissed, this appeal was reinstated, and on June 17, 2010, we granted defendant's emergent motion for a
stay of a scheduled sheriff's sale pending the outcome of the appeal.
© 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.
er,” there must be a “negotiation,” and N.J.S.A. 12A:3–201(b) provides in pertinent part that “if an instrument is
payable to an identified person, negotiation requires transfer of possession of the instrument and its indorsement by
the holder.” (Emphasis added). Therefore, even if Wells Fargo had presented satisfactory evidence that it was in
“possession” of the note executed by defendant (which is discussed later in this opinion), Wells Fargo admittedly
presented no evidence of “its indorsement by [Argent].” Therefore, Wells Fargo was not a “holder” of the note with-
in the first category of “person entitled to enforce” an instrument under N.J.S.A. 12A:3–301. See Raftogianis, 418
N.J.Super. at 330–31, 13 A.3d 435.
Wells Fargo also does not fall within the third category. N.J.S.A. 12A:3–309 deals with the enforcement of in-
struments which have been lost, destroyed or stolen, and subsection d. of N.J.S.A. 12A:3–418 deals with the circum-
stance where an instrument has been paid or accepted by mistake and the payor or acceptor recovers payment or
document that purported to be an assignment of the mortgage, which stated that it was an assignment of “the de-
scribed Mortgage, together with the certain note(s) described therein with all interest, all liens, and any rights due or
to become due thereon.”
If properly authenticated, these documents could be found sufficient to establish that Wells Fargo was a “non-
holder in possession of the [note] who has the rights of a holder.” Transfer of an instrument occurs “when it is deliv-
the transferee is not a holder, under subsection (b) the transferee obtained the rights of the transferor as holder.
[UCC Comment 2 to N.J.S.A. 12A:3–203.]
Since Argent, as the payee of defendant's note, was a holder, and it allegedly transferred the note to Wells Fargo
without an indorsement, Wells Fargo may have acquired the status of a “nonholder in possession of the [note] who
has the status of a holder.” See 6B Anderson on the Uniform Commercial Code §§ 3–203:4R, 5R, 9R, 10R, 11R
tion does not give any indication how Baxley obtained this alleged knowledge. The certification also does not indi-
cate the source of Baxley's alleged knowledge that the attached mortgage and note are “true copies.”
Furthermore, the purported assignment of the mortgage, which an assignee must produce to maintain a foreclo-
sure action, see N.J.S.A. 46:9–9, was not authenticated in any manner; it was simply attached to a reply brief. The
© 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.
trial court should not have considered this document unless it was authenticated by an affidavit or certification based
on personal knowledge. See Celino v. Gen. Accident Ins., 211 N.J.Super. 538, 544, 512 A.2d 496 (App.Div.1986).
For these reasons, the summary judgment granted to Wells Fargo must be reversed and the case remanded to the
trial court because Wells Fargo did not establish its standing to pursue this foreclosure action by competent evi-
dence. On the remand, defendant may conduct appropriate discovery, including taking the deposition of Baxley and
the person who purported to assign the mortgage and note to Wells Fargo on behalf of Argent.
Our conclusion that the summary judgment must be reversed because Wells Fargo failed to establish its stand-
ing to maintain this action makes it unnecessary to address defendant's other arguments. However, for the guidance
of the trial court in the event Wells Fargo is able to establish its standing on remand, we note that even though Wells
Fargo could become a “holder” of the note under N.J.S.A. 12A:3–201(b) if Argent indorsed the note to Wells Fargo
Wells Fargo is a holder in due course.
Accordingly, the summary judgment in favor of Wells Fargo is reversed and the case is remanded to the trial
court for further proceedings in conformity with this opinion.
N.J.Super.A.D.,2011.
