                                NOT FOR PUBLICATION WITHOUT THE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.




                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-4201-18T2

THE BANK OF NEW YORK
MELLON f/k/a THE BANK OF
NEW YORK, AS TRUSTEE FOR
THE CERTIFICATEHOLDERS
OF THE CWABS, INC., ASSET-
BACKED CERTIFICATES
SERIES 2004-5,

          Plaintiff-Respondent,

v.

DOLORES MARIE DICICCO,

          Defendant-Appellant,

and

BOSCOV'S and NEW CENTURY
FINANCIAL SERVICES INC.,

     Defendants.
_____________________________

                    Argued January 6, 2020 – Decided February 3, 2020

                    Before Judges Geiger and Natali.
             On appeal from the Superior Court of New Jersey,
             Chancery Division, Burlington County, Docket No. F-
             000714-16.

             Lewis G. Adler argued the cause for appellant.

             Robert F. Thomas argued the cause for respondent
             (Pluese, Becker & Saltzman, LLC, attorneys; Stuart H.
             West, on the brief).

PER CURIAM

      In this foreclosure action, defendant Dolores Marie Dicicco appeals from

a July 27, 2016 order granting plaintiff Bank of New York summary judgment,

denying defendant's cross-motion for summary judgment, striking defendant's

answer, deeming the dispute an uncontested foreclosure, and transferring the

matter to the Office of Foreclosure for entry of final judgment. She also appeals

the May 30, 2019 final judgment of foreclosure and an April 12, 2019 order

vacating the court's administrative dismissal of the action and reinstating the

foreclosure complaint.

      Defendant contends she had no financial obligations to plaintiff due to her

timely rescission of the loan in accordance with the Truth in Lending Act

(TILA), 15 U.S.C. §§ 1601 to 1667f. She also contends the court abused its

discretion when it reinstated the foreclosure complaint. We disagree and affirm

all three orders.


                                                                         A-4201-18T2
                                       2
                                        I.

      On or about April 21, 2004, defendant executed a six percent fixed rate

note in favor of Full Spectrum Lending, Inc. (Full Spectrum) in the amount of

$277,500, encumbering a residence in Southampton. As security for repayment,

defendant executed a mortgage in the same amount to Mortgage Electronic

Registration Systems, Inc. (MERS) as nominee for Full Spectrum.               The

following day defendant sent an April 22, 2004 notice of right to cancel the note,

which she mailed to Full Spectrum. It is unclear from the record when Full

Spectrum received the notice, but it is undisputed that Full Spectrum failed to

unwind the transaction and proceeded to disburse the mortgage funds to

defendant. At closing, defendant used the proceeds to pay off a prior mortgage

in the amount of $226,357.33 and a tax bill in the amount of $1483.66. She also

received a cash payment of $38,457.91.

      Defendant made timely monthly payments in accordance with the note for

approximately five years: from June 2004 until she defaulted in March 2009.

MERS, acting solely as nominee for Full Spectrum, assigned defendant's

mortgage to plaintiff on October 19, 2009. Plaintiff mailed defendant a June 11,

2015 notice of default and intent to foreclose stating that as a result of




                                                                          A-4201-18T2
                                        3
defendant's failure to make her monthly mortgage payments from March 2009

to June 2015, she owed $143,210.78 and was in default.

      Plaintiff elected to accelerate the debt consistent with the note and filed a

January 8, 2016 foreclosure complaint. Plaintiff joined Boscov's and New

Century Financial Services, Inc. because of their interest in the foreclosure

arising out of their respective judgments and liens on the property.

      Defendant filed an answer and counterclaims demanding judgment

dismissing plaintiff's foreclosure complaint. In her second affirmative defense,

defendant alleged that plaintiff "lack[ed] standing to prosecute the instant case"

because it, or its predecessor in interest, "failed to comply with TILA by failing

to honor . . . [d]efendant's written rescission notices as required by TILA . . .

and Regulation Z."1 More specifically, defendant stated that her "notice [of the

rescission] was sent prior to the disbursement of any funds on the loan" and

pursuant to TILA and Regulation Z, the mortgage and note "are deemed null and

void . . . [and] [d]efendant has no further obligation to pay for the funds. "




1
   Defendant specifically referenced sections of Regulation Z that provides in
relevant part that "[t]o exercise the right to rescind [under TILA], the consumer
shall notify the creditor of the rescission by mail, telegram, or other means of
written communication." 12 C.F.R. § 1026.15(a)(2); 12 C.F.R. § 1026.23(a)(2).


                                                                            A-4201-18T2
                                         4
      Plaintiff moved for summary judgment, and to strike defendant's answer

and counterclaims. Defendant filed a cross-motion for summary judgment

arguing that plaintiff's foreclosure complaint should be dismissed as a matter of

law because "there does not exist a valid mortgage on the premises as the

transaction was canceled in accordance with TILA and Regulation Z." Relying

on 15 U.S.C. § 1635(b) and Jesinoski v. Countrywide Home Loans, 574 U.S.

259 (2015), defendant argued that Full Spectrum "failed to act within [twenty]

calendar days after [her] tender of the notice of rescission," and thus, she "may

keep the proceeds without any further obligation," as the "loan is void."

      At a July 22, 2016 summary judgment hearing, defendant's counsel

explained defendant's five years of timely mortgage payments as acts undertaken

simply to "preserve the status quo" and because defendant "was trying to

preserve her position concerning her loan so that when [Full Spectrum] did

unwind it she would not be behind." Defendant's counsel concluded that "any

payments that she made were . . . at best . . . received as a gift by [Full Spectrum]

. . . and [defendant] has no further obligation."

      Plaintiff acknowledged at the summary judgment hearing that it "doesn't

dispute the fact that a valid notice of rescission was sent [by defendant to Full

Spectrum]" and agreed that Full Spectrum received defendant's notice to cancel


                                                                             A-4201-18T2
                                         5
yet still tendered the mortgage funds to her. Plaintiff also acknowledged that,

under the statute, defendant "was not obligated to return the cash that she

received . . . immediately, because . . . [she was] not obligated to return those

funds until . . . [Full Spectrum] acted."

      In a July 27, 2016 order, Judge Paula T. Dow granted summary judgment

in favor of plaintiff and denied defendant's cross-motion. Judge Dow also

entered default against defendant and transferred the matter to the Office of

Foreclosure to proceed as an uncontested matter.

      In her accompanying written statement of reasons, Judge Dow found that

plaintiff had possession of the note and mortgage prior to the filing of th e

foreclosure complaint and thus had standing to prosecute the foreclosure action.

Specifically, the court found that the original note and mortgage were "executed

and delivered to Full Spectrum and MERS, as nominee for Full Spectrum, and

ultimately transferred to [p]laintiff by way of assignment, who possessed both

at the time it filed the complaint."            Judge Dow concluded that plaintiff

established standing "as an assignee of the [m]ortgage by assignment and

possession of the [n]ote, endorsed in blank, prior to the filing of the complaint."

      Judge Dow also found that plaintiff established a prima facie right to

foreclose the property because:      "[d]efendant executed the [m]ortgage and


                                                                           A-4201-18T2
                                            6
[n]ote"; "[p]laintiff is the current holder of the [m]ortgage and [n]ote";

"[p]laintiff has been in such possession since before the commencement of the

current foreclosure action"; "[d]efendant was properly served with a [notice of

intent to foreclose]"; and "[d]efendant defaulted under the terms of the [n]ote

and [m]ortgage on March 1, 2009."

      The court further noted that "[t]he only issue of any significant

disagreement is the parties' competing interpretations of [TILA] and the effect

on [d]efendant's [n]otice to [c]ancel on April 22, 2004" and whether "TILA

serves as a bar to foreclosure under these circumstances." Judge Dow first

rejected plaintiff's arguments that defendant's claims under TILA were time

barred by 15 U.S.C. § 1640(e), as "defendant was entitled to raise violations of

TILA as a defense in the present foreclosure action," and 15 U.S.C. § 1635(f),

which she interpreted as merely "extending the typical [three]-day right of

rescission to three years in the event that required information and forms are not

delivered to the borrower."

      Judge Dow found that defendant's April 22, 2004 notice to rescind "[did]

not serve as a bar to foreclosure under . . . TILA, given [d]efendant's subsequent

and consistent ratification of the terms of the loan." She emphasized that

following the erroneous distribution by Full Spectrum, defendant "chose to keep


                                                                          A-4201-18T2
                                        7
the funds and make timely payments for five years." She found that defendant

"considered the [m]ortgage and [n]ote enforceable, as it [was] unlikely

[defendant] would continue sending monthly payments to a creditor she believed

nothing was owed." The court also declined to unjustly enrich defendant stating

that to escape foreclosure on these facts would "render the proceeds of the

[m]ortgage a windfall to [d]efendant, who would be free of any obligation under

the [n]ote" and plaintiff "would be left without recourse to pursue the amount

loaned by their predecessor."

      The court also found that defendant's reliance on Jesinoski was misplaced.

According to Judge Dow, Jesinoski "held that TILA does not require the filing

of a suit or return of the funds to effectuate rescission," but here, "there [was]

no question that [d]efendant timely and properly rescinded the loan." The court

clarified that the issue was not whether defendant's rescission was timely, but

whether defendant "ratified the terms of the loan by commencing payment and

continuing to so pay for five years."

      Despite the court's July 27, 2016 order, plaintiff did not promptly move

for final judgment and, on September 1, 2017, the action was administratively

dismissed without prejudice for lack of prosecution. Plaintiff moved to reinstate

the foreclosure action on March 18, 2019, which defendant opposed. Judge


                                                                          A-4201-18T2
                                        8
Kathi F. Fiamingo granted plaintiff's motion in an April 12, 2019 order and in

an accompanying written statement of reasons acknowledged that plaintiff "had

a significant and unexplained delay in moving this matter forward," but reasoned

that "defendant's default occurred more than ten years ago and plaintiff is now

in a position to make application for final judgment."           Judge Fiamingo

concluded that "[d]enying plaintiff the relief it requests would be inequitable

under [the] circumstances." The Office of Foreclosure subsequently entered

final judgment on May 30, 2019 in the amount of $445,554.90, plus interest and

costs. This appeal followed.

                                        II.

      Our review of a ruling on summary judgment is de novo, applying the

same legal standard as the trial court. Townsend v. Pierre, 221 N.J. 36, 59

(2015). "Summary judgment must be granted if 'the pleadings, depositions,

answers to interrogatories and admissions on file, together with the affidavits, if

any, show there is no genuine issue as to any material fact challenged and that

the moving party is entitled to a judgment . . . as a matter of law.'" Town of

Kearny v. Brandt, 214 N.J. 76, 91 (2013) (quoting R. 4:46-2(c)). We accord no

special deference to the trial judge's conclusions on issues of law. Nicholas v.

Mynster, 213 N.J. 463, 478 (2013).


                                                                           A-4201-18T2
                                        9
      "The only material issues in a foreclosure proceeding are the validity of

the mortgage, the amount of the indebtedness, and the right of the mortgagee to

resort to the mortgaged premises." Great Falls Bank v. Pardo, 263 N.J. Super.

388, 394 (Ch. Div. 1993), aff'd, 273 N.J. Super. 542 (App. Div. 1994). A party

seeking to foreclose must demonstrate "execution, recording, and non-payment

of the mortgage." Thorpe v. Floremoore Corp., 20 N.J. Super. 34, 37 (App. Div.

1952).

      In addition, the foreclosing party must "own or control the underlying

debt." Deutsche Bank Nat'l Tr. Co. v. Mitchell, 422 N.J. Super. 214, 222 (App.

Div. 2011) (quoting Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592, 597

(App. Div. 2011)). In Mitchell, we held that possession of the note or an

assignment of the mortgage predating the original complaint conferred standing.

Id. at 225. We agree with Judge Dow that plaintiff had standing and also

established a prima facie case to foreclose, rulings defendant does not challenge

on appeal.

                                     III.

      TILA permits consumers to rescind specified loans upon timely

notification. 15 U.S.C. § 1635(a). Upon receipt of a rescission notice that

complies with applicable regulations, a creditor must, within twenty days,


                                                                         A-4201-18T2
                                      10
"return to the obligor any money or property given as earnest money,

downpayment, or otherwise, and shall take any action necessary or appropriate

to reflect the termination of any security interest created under the transaction."

Id. at § 1635(b).

      In her principal argument on appeal, defendant contends that the trial court

"improperly held that the void mortgage was enforceable after all parties

acknowledge that . . . [d]efendant had properly cancelled the loan." Specifically,

defendant maintains that the aforementioned TILA provision, and its applicable

regulations, along with the Jesinoski and Sherzer holdings, support a conclusion

that "upon rescission the loan was void," and she was "required to tender back

the loan proceeds . . . only after [Full Spectrum] performed its statutory

obligations."   The consequence of Full Spectrum's inaction according to

defendant is that she is permitted to "keep the proceeds without any further

obligation." We disagree and affirm substantially for the reasons detailed in

Judge Dow's thoughtful written decision. We offer the following additional

comments.

      As Judge Dow correctly concluded, and despite defendant's contentions,

the holding in Jesinoski is inapplicable to the facts here. In Jesinoski, the

Supreme Court resolved whether a borrower properly invoked his right to


                                                                           A-4201-18T2
                                       11
rescind under TILA by merely providing written notice or whether TILA

required a borrower to sue the lender before the three-year statute of limitations

period lapsed. Jesinoski, 574 U.S. at 259 ("The question presented is whether a

borrower exercises this right by providing written notice to his lender, or

whether he must also file a lawsuit before the [three]-year period elapses.").2

Judge Dow did not conclude that defendant's rescission was ineffective for her

failure to file a timely lawsuit seeking rescission. Rather, defendant's rescission

was deemed ineffective due to the undisputed fact that defendant ratified the

loan by obtaining its benefits, making timely payments thereafter for five years,

and failing to tender the loan proceeds.       Jesinoski does not stand for the

proposition seemingly urged by defendant that a creditor under these

circumstances loses all interest in the property resulting in the borrower getting

a free house.




2
  We also note that in proceedings conducted upon remand from the Supreme
Court, the United States District Court for the District of Minnesota explained
that the Supreme Court only reached "the narrow issue of whether [debtors] had
to file a lawsuit to enforce a rescission" or "merely deliver a rescission notice
within three years of the loan transaction," and "nothing in the Supreme Court's
opinion . . . would override TILA's tender requirement." See Jesinoski v.
Countrywide Home Loans, Inc., 196 F.Supp.3d 956, 962 (D. Minn. 2016), aff'd,
Jesinoski v. Countrywide Home Loans, Inc., 883 F.3d 1010 (8th Cir. Feb. 28,
2018).
                                                                           A-4201-18T2
                                       12
      In this regard, TILA also explicitly states that if a "creditor does not take

possession of the property within [twenty] days after tender by the obligor,

ownership of the property vests in the obligor without obligation on his [or her]

part to pay for it." 15 U.S.C. § 1635(b). Here, defendant did not ever tender the

residence or the proceeds of the loan back to Full Spectrum or plaintiff following

the notice of rescission.

      Additionally, Jesinoski did not overturn Third Circuit precedent that "a

notice of rescission is not effective if the obligor lacks either the intention or the

ability to perform, i.e., repay the loan." Sherzer v. Homestar Mortg. Servs., 707

F.3d 255, 265 n.7 (3d Cir. 2013). And Jesinoski also did not remove a court's

discretion to modify rescission procedures. See 15 U.S.C. § 1635(b) (stating

that the rescission "procedures prescribed by this subsection shall apply except

when otherwise ordered by a court"); see also 12 C.F.R. 226.23(d)(4) (stating

that the rescission "procedures outlined in paragraphs (d)(2) and (3) of [§

226.23] may be modified by court order").

      It is beyond peradventure that defendant had no intention to repay the loan

as she clearly performed in accordance with its terms for years and used its funds

to pay off a prior mortgage, other debts, and also retained $38,457.91 of the

mortgage proceeds. Under these circumstances, the court properly rejected


                                                                              A-4201-18T2
                                         13
defendant's interpretation of TILA and Jesinoski and determined that defendant's

notice to rescind did not act as a bar to the foreclosure proceedings.

      We also conclude that to allow defendant to void the mortgage and escape

foreclosure would lead to her unjust enrichment.        "The doctrine of unjust

enrichment rests on the equitable principle that a person shall not be allowed to

enrich himself unjustly at the expense of another." Goldsmith v. Camden Cty.

Surrogate's Office, 408 N.J. Super. 376, 382 (App. Div. 2009) (internal

quotation marks omitted). "To establish a claim for unjust enrichment, 'a [party]

must show both that [the opposing party] received a benefit and that retention

of that benefit without payment would be unjust.'" Iliadis v. Wal-Mart Stores,

Inc., 191 N.J. 88, 110 (2007) (quoting VRG Corp. v. GKN Realty Corp., 135

N.J. 539, 554 (1994)).

      Defendant used the disbursed funds to pay off a mortgage, pay outstanding

taxes, and received a $38,457.91 cash payment. She acted in compliance with

the mortgage and note for five years and raised her claim that she rescinded the

mortgage only after facing foreclosure due to her now decade-old, undisputed

default. As we noted in Deutsche Bank Trust Co. Americas v. Angeles, 428 N.J.

Super 315, 320 (App. Div. 2012), "[i]n foreclosure matters, equity must be

applied to plaintiffs as well as defendants."


                                                                         A-4201-18T2
                                       14
                                         IV.

      Defendant's final claim that the court erred in reinstating the complaint is

also without merit. "[A]n application to open, vacate, or otherwise set aside a

foreclosure judgment or proceeding subsequent thereto is subject to an abuse of

discretion standard." United States ex rel. U.S. Dep't of Agric. v. Scurry, 193

N.J. 492, 502 (2008). An "abuse of discretion only arises on demonstration of

'manifest error or injustice,'" Hisenaj v. Kuehner, 194 N.J. 6, 20 (2008) (quoting

State v. Torres, 183 N.J. 554, 572 (2005)), and occurs when the trial judge's

"'decision [was] made without a rational explanation, inexplicably departed

from established policies, or rested on an impermissible basis.'" Scurry, 193

N.J. at 504 (quoting Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571 (2002)).

      In accordance with Rule 4:64-8, the administrative dismissal for lack of

prosecution was without prejudice. Reinstatement is permitted "only on motion

for good cause shown."      R. 4:64-8.      Rule 4:64-8 "follows [Rule] 1:13-7."

Pressler & Verniero, Current N.J. Court Rules, cmt. on R. 4:64-8 (2020).

Similar to the analysis under Rule 1:13-7, "reinstatement is ordinarily routinely

and freely granted when plaintiff has cured the problem that led to the dismissal

even if the application is made many months later." Ghandi v. Cespedes, 390

N.J. Super. 193, 196 (App. Div. 2007) (internal quotation omitted). "[A]bsent


                                                                          A-4201-18T2
                                       15
a finding of fault by the plaintiff and prejudice to the defendant, a motion to

restore under the rule should be viewed with great liberality." Id. at 197.

      The court acknowledged that plaintiff "had a significant and unexplained

delay in moving this matter forward," but stated that "defendant's default

occurred more than ten years ago and plaintiff is now in a position to make

application for final judgment," and "[d]enying plaintiff the relief it requests

would be inequitable under these circumstances." The court did not abuse its

discretion in reinstating the complaint as defendant was not prejudiced by the

delay. Defendant had exclusive possession of the mortgaged premises during

the litigation without paying plaintiff as required under the note. Under the

circumstances, there was no principled reason for the court to deny plaintiff's

motion and require it to refile the complaint, re-serve Boscovs and New Century

Financial Services, Inc., and restart the foreclosure proceedings.

                                       V.

      In sum, we conclude that the trial court properly determined that

defendant's timely notice to rescind under TILA was not a bar to foreclosure,

and the court did not abuse its discretion when it granted plaintiff's motion to

reinstate its complaint. To the extent we have not addressed any of defendant's




                                                                          A-4201-18T2
                                      16
arguments it is because we concluded they lacked sufficient merit to warrant

discussion in a written opinion. R. 2:11-3(e)(1)(E).4201-18

      Affirmed.




                                                                     A-4201-18T2
                                     17
