Tuesday, November 20, 2012

NJ Appeals Court: Excessive Delay In Raising 'Standing' Issue In State Court Proceeding Fatal To Foreclosure Defense; Judgment Obtained By Standing-Lacking Lender Not Necessarily Void


Law 360 reports:

  • A New Jersey appeals court ruled Wednesday that a homeowner couldn't use standing arguments to disrupt a foreclosure decision after excessive delay, adding that a foreclosure judgment won by a party that lacked standing isn't necessarily “void” under the meaning of a key court rule.(1)
For more, see Delayed Standing Defense Can't Upset Foreclosure: NJ Court.

For the ruling, see Deutsche Bank National Trust Co. v. Russo, Docket No. A-2437-11T1 (NJ App. Div. November 14, 2012) (for publication).

(1) In this regard, the court stated:
  • Based on our reading of Guillaume and Deutsche Bank, we conclude that, even if plaintiff did not have the note or a valid assignment when it filed the complaint, but obtained either or both before entry of judgment, dismissal of the complaint would not have been an appropriate remedy here because of defendants' unexcused, years-long delay in asserting that defense. Therefore, in this post-judgment context, lack of standing would not constitute  a meritorious defense to the foreclosure complaint.

    In reaching that conclusion, we note that, contrary to defendants' contention, standing is not a jurisdictional issue in our State court system and, therefore, a foreclosure judgment obtained by a party that lacked standing is not "void" within the meaning of Rule 4:50-1(d).

    In the federal courts, standing is a jurisdictional concept, because Article III of the United States Constitution limits the jurisdiction of the federal courts to cases and controversies. See Raftogianis, supra, 418 N.J. Super. at 353 (citing In re Foreclosure Cases, 521 F. Supp.2d 650, 653-54 (S.D. Ohio 2007)).

    By contrast, the Superior Court of New Jersey is a court of general jurisdiction, Swede v. Clifton, 22 N.J. 303, 314 (1956), and in our courts, the requirement that a party have standing is a matter of judicial policy not constitutional command. See DeVesa v. Dorsey, 134 N.J. 420, 428 (1993) ("Unlike the Federal Constitution, the New Jersey Constitution does not confine the exercise of the judicial power to actual cases and controversies. See U.S. Const. art. III, § 2, cl. 1; N.J. Const. art. VI, § 1, para. 1.") (Pollock, J., concurring); Salorio v. Glaser, 82 N.J. 482, 490-91, cert. denied, 449 U.S. 804, 101 S. Ct. 49, 66 L. Ed. 2d 7 (1980).

    "Because standing affects whether a matter is appropriate for judicial review rather than whether the court has the power to review the matter, and standing is a judicially constructed and self-imposed limitation, it is an element of justiciability rather than an element of jurisdiction." N.J. Citizen Action v. Riviera Motel Corp., 296 N.J. Super. 402, 411 (App. Div. 1997), appeal dismissed, 152 N.J. 361 (1998); see also Gilbert v. Gladden, 87 N.J. 275, 280-81 (1981) (distinguishing the concept of justiciability from that of subject matter jurisdiction).4

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