                   NOT FOR PUBLICATION WITHOUT THE
                  APPROVAL OF THE APPELLATE DIVISION

                                     SUPERIOR COURT OF NEW JERSEY
                                     APPELLATE DIVISION
                                     DOCKET NO. A-0305-13T1

VALLEY NATIONAL BANK, Successor
by Merger to Bergen Commercial
Bank,

          Plaintiff-Respondent,
                                               APPROVED FOR PUBLICATION

    v.                                           September 26, 2014

J. RONALD MEIER,                                 APPELLATE DIVISION

          Defendant-Appellant,

    and

GREGORIA MEIER,

          Defendant.

___________________________________________________

          Argued September 16, 2014 – Decided     September 26, 2014

          Before Judges Fisher, Nugent and Manahan.

          On appeal from the Superior Court of New
          Jersey, Chancery Division, Atlantic County,
          Docket No. F-063285-09.

          Bruce H. Dexter argued the cause for
          appellant (Dexter & Kilcoyne, attorneys; Mr.
          Dexter and Virginia Kilcoyne, on the brief).

          David Neeren argued the cause for respondent
          (Udren Law Offices, P.C., attorneys; Mr.
          Neeren, on the brief).

    The opinion of the court was delivered by

FISHER, P.J.A.D.
       In this appeal, we consider the ramifications for a later

foreclosure action when, six years earlier, defendant J. Ronald

Meier, owner with his wife of the foreclosed property, paid off

the first mortgage loan and, rather than obtain a discharge of

the    mortgage,    received   an   assignment.        We   agree    with       the

Chancery judge that, in these circumstances, the mortgage had no

further validity.

       The critical facts are undisputed.           In 1999, defendant and

his wife purchased the Ventnor property in question with the

proceeds of a $168,000 loan from Community Bank of Bergen County

the repayment of which was secured by a purchase money mortgage.

Defendant    was    the   president,       chief    executive     officer       and

chairman of the board of Community Bank.

       In 2005, defendant and his wife obtained a $100,000 home

equity loan, also secured by a mortgage on the Ventnor property,

from Bergen Commercial Bank, which later merged with plaintiff

Valley National Bank.      In 2007, defendant paid the entire amount

due on the 1999 loan, and, in exchange, Community Bank provided

defendant with a written assignment, which he recorded, of the

1999   mortgage.1     Defendant     claimed    in   the   trial   court     –    no


1
 In opposing the motion that gave rise to the order under review,
defendant, who was then unrepresented, failed to provide the
court with any opposing papers; the facts he presented at oral
                                                      (continued)


                                       2                              A-0305-13T1
affidavit or certification to this effect was provided – that he

paid off this debt with "premarital assets."2

       In 2009, plaintiff Valley National Bank filed a complaint

against defendant and his wife, as well as the holder of a later

$15,000 mortgage, seeking foreclosure of the 2005 home equity

loan.       The    complaint     made      no       mention   of    the    1999      mortgage

defendant paid off in 2007.                 A final judgment by default was

entered in plaintiff's favor on August 22, 2012, and plaintiff

purchased the property at a sheriff's sale on January 3, 2013.

       On   April    1,    2013,    approximately           three    months       after    the

sheriff's     sale,    defendant      demanded          payment     from       plaintiff    of

$149,838.06 – the amount paid by defendant to Community Bank in

2007    –   plus    $53,019.20,       which          was    asserted      to    be    accrued

interest, presumably since defendant paid the principal amount

to   Community      Bank    in     2007.            After   investigating,        plaintiff



(continued)
argument regarding his reasons for paying off the 1999 mortgage
loan, therefore, were not properly supported.    Notwithstanding,
like the Chancery judge, we assume for present purposes that
defendant's assertions are true. For example, defendant claimed
he paid off the mortgage because federal banking regulations
precluded him from having his bank hold more than one mortgage
on his property.    There is no sworn statement or evidential
material to support that this was his intention.
2
 We are told defendant and his wife were divorced.    The record
does not disclose when this occurred nor does the record suggest
how the parties' property, including the Ventnor property in
question, was distributed.



                                                3                                    A-0305-13T1
demanded that defendant agree to a discharge of the mortgage.

When defendant refused, plaintiff moved for a divestiture of the

assignment of mortgage.

       As we have observed, defendant filed no written response to

plaintiff's motion.            On the return date, the Chancery judge

permitted the unrepresented defendant to argue his position and

then   adjourned      the    matter     to    allow       additional      time   for    the

retention of counsel and a response from defendant in accordance

with court rules.            Defendant appeared on the adjourned return

date without counsel, and the judge ruled in plaintiff's favor.

       In   his     oral    decision,        the     experienced       Chancery     judge

concluded      that      defendant's    receipt          of   an   assignment     of    the

mortgage in 2007 – when he was a director of the bank – was

"troubling," and that the circumstances "might well support a

referral       of   this    matter     to    the     Department      of    Banking      and

Insurance."         He     concluded    that       the    record    demonstrated        the

mortgage had been fully satisfied in 2007, was no longer legally

viable, and the assignment was consequently unenforceable.                               By

order dated August 2, 2013, the judge divested defendant of the

mortgage and assignment and declared defendant had no further

interest in or claim to the property.

       In appealing, defendant argues, first, that the assignment

was    valid    and   the    mortgage        still    viable       and,   second,      that




                                             4                                   A-0305-13T1
because     plaintiff        did    not   question     or   contest        the    1999

mortgage's viability prior to entry of final judgment, the order

under     review    should     be    barred    by    the    entire    controversy

doctrine, or the doctrines of waiver, estoppel and laches.                         The

second argument, which was not posed in the trial court, is so

devoid of merit as to be unworthy of further discussion in a

written opinion.        R. 2:11-3(e)(1)(E).           It suffices to say that

the parameters of Rule 4:50 are broad enough to permit plaintiff

relief     in    this   extraordinary         circumstance,     and        that    the

equitable doctrines upon which defendant relies were designed to

prevent, not perpetuate, fraud and inequity.3

     As to defendant's first point, we agree with the Chancery

judge that it would be inequitable to conclude that defendant is

entitled    to     payment    from   plaintiff      pursuant   to    the    assigned

mortgage.        Defendant's argument to the contrary is based on a

misreading of well-established principles of law.

     Our analysis must start with the indisputable premise that,

in the eyes of the law, a mortgage is extinguished by operation

of law when full payment is made by a mortgagee and accepted by

3
 Defendant never responded to the complaint or otherwise put
plaintiff on notice of his claim to rights emanating from the
assigned mortgage until after entry of the foreclosure judgment
and after the property was transferred through a sheriff's sale.
That circumstance speaks for itself as a response to defendant's
claim that equitable principles preclude the relief plaintiff
seeks.



                                          5                                  A-0305-13T1
the    mortgagor.           See,   e.g.,    12    Thompson        on    Real    Property    §

101.03(c) at 414 (Thomas ed., 2d ed. 2008).                        There is no dispute

that Community Bank was the holder of the mortgage when, in

2007,    defendant          tendered    all       that     was    due     on    the   debt.

Normally, in such an instance, the borrower would be entitled to

a discharge of the mortgage, and have that event recorded so the

mortgage would no longer encumber the property.                           Here, defendant

fully    paid    off     the   debt    with       what    he     claims    were    his   own

premarital assets, and Community Bank – of which defendant was

then    president,       chairman      of   the     board,       and    chief     executive

officer – took the unusual step of providing defendant with an

assignment of the mortgage, which defendant recorded.4

       In arguing that the mortgage remained viable because of the

assignment,          defendant     chiefly        relies       upon     the    proposition

expressed       by    our    Supreme   Court       that     "[a]n      assignment     of    a


4
 We again observe that the source of the funds used to pay off
the 1999 loan and defendant's intention in obtaining an
assignment instead of the mortgage's discharge are not supported
by any sworn statement. The Chancery judge gave defendant ample
opportunity to support his arguments in the manner proscribed by
the rules, but defendant failed to do so.     Although it would
have been appropriate for the judge to have considered the
motion unopposed, we find no error in the judge's generosity in
assuming the truth of defendant's allegations, and we will do
likewise because what defendant argues presents no obstacle to
our affirmance of the judge's order.    But to be clear – since
defendant's ex-wife has not appeared in the proceedings in this
court or the trial court – the claim that premarital funds were
used was never established.



                                              6                                    A-0305-13T1
mortgage       to   one    of     two   tenants     in    common    .   .   .    does    not

discharge it."            Estate of Colquhoun v. Estate of Colquhoun, 88

N.J.    558,    565   (1982)       (internal       citation      omitted).        He     also

correctly argues that although they held the property by way of

a joint tenancy, defendant and his wife were – as to each other

– tenants in common.              Newman v. Chase, 70 N.J. 254, 259 (1976).

These principles, however, only define whether or to what extent

defendant was entitled to reimbursement from his wife for his

having       paid   off     the    mortgage        with   what     he   alleges     to    be

premarital assets. These principles do not rationally support

the argument that the assigned mortgage continued to burden the

property in any other respect, let alone recoil upon plaintiff.

       To be sure, Estate of Colquhoun suggests that a payment of

a loan with premarital assets with a concomitant assignment of

an     underlying     mortgage          may    preserve    cotenants'        rights      and

obligations.        We need not, and do not, however, opine on whether

or to what extent defendant's 2007 payoff of the 1999 mortgage

reserved in him the right to seek reimbursement from his wife;

assuming that issue has not already been resolved elsewhere, 5 it

is     not    presented         here.         Nevertheless,      because        Estate    of

5
 Recognizing that defendant represented to the trial court that
he and his wife were divorced, it is difficult for us to imagine
that any claims they may have possessed against each other or
their respective interests in the Ventnor property have not
already been finally determined.



                                               7                                  A-0305-13T1
Colquhoun constitutes the centerpiece of defendant's argument,

we find it necessary to recount its circumstances to illustrate

how that case does not govern the disposition of this appeal.

       In Estate of Colquhoun, a married couple purchased property

in part with funds provided by their son, Robert, who took back

a $51,000 mortgage; $35,000 was due by August 31, 1974, which

was timely paid, and the $16,000 balance was to be paid to

Robert in equal monthly installments over the following twenty-

five    years.    88   N.J.    at    560-61.   Four     years       later,     Robert

assigned his interest in the mortgage to his father as a gift.

Id. at 561.      The husband died four months after receiving the

assignment; his will disinherited his wife and their two sons,

leaving his estate to his brothers and sisters in Scotland.

Ibid.    The wife died seven months after her husband; she left a

will,    which   directed     that   neither   her    husband       nor    her    son,

Robert, was to benefit from her estate.                     Ibid.         The wife's

estate contracted to sell the property but was stymied by the

existing    $16,000    mortgage      purportedly     held    by     the    husband's

estate by way of the assignment and that estate's claim for

payment, ibid., leading to a suit to determine the liability of

the wife's estate, if any, on the mortgage, Estate of Colquhoun

v. Estate of Colquhoun, 177 N.J. Super. 491, 495 (App. Div.

1981).




                                        8                                    A-0305-13T1
       The trial judge granted summary judgment, concluding that

the wife's estate was liable for the entire                   $16,000 balance

together with interest.          Estate of Colquhoun, supra, 88 N.J. at

562.      We      reversed,     finding       that   "well-settled    and   long

established principles of equity compel the extinguishment of

the    mortgage    in   these   circumstances."         Estate   of   Colquhoun,

supra, 177 N.J. Super. at 496.                  Specifically, in relying on

Grober v. Kohn, 47 N.J. 135, 149 (1966), which held that "[c]o-

owners of property, as such, have a 'confidential relation' with

respect to certain aspects of their common interests," we held

that this duty

            prohibits a cotenant from acquiring an
            undisclosed adverse interest in the common
            property for his own benefit, and if he has
            acquired such an interest, he will be deemed
            to have done so for the benefit of all
            cotenants, subject only to their obligation
            to make a pro rata contribution to the
            acquisition cost, if any.

            [Estate of Colquhoun, supra, 177 N.J. Super.
            at 497.]

We found this general principle to have antecedents as old as

Weller v. Rolason, 17 N.J. Eq. 13, 19 (Ch. 1864) and Rothwell v.

Dewees, 67 U.S. 613, 618, 17 L. Ed. 309, 311 (1863), which

relied on the rule as having been "very fully laid down" to the

same effect by Chancellor James Kent, who authored the landmark

"Commentaries on American Law" in the early nineteenth century.




                                          9                             A-0305-13T1
See   also   Breitman       v.   Jaehnal,           99   N.J.   Eq.   243,   245-46     (Ch.

1926), aff’d o.b., 100 N.J. Eq. 559 (E. & A. 1927).                            Our Supreme

Court reversed our determination in Estate of Colquhoun, not

because this ancient rule had lost its vitality, but because the

Court   found       the     unique    circumstances             presented      should    be

controlled by the parties' intentions.                     88 N.J. at 565.

      In examining vastly different circumstances, we rely upon

the well-established principles mentioned above and hold that

any   interest      in    the    property       conveyed        to    defendant    by    the

assignment        related   only     to       defendant's       claim,    which    he    was

required     to    assert    within       a    reasonable       time,    see    Estate    of

Colquhoun, supra, 88 N.J. at 566; Breitman, supra, 99 N.J. Eq.

at 245-46, against his wife for reimbursement of her fair share

of his payment from allegedly non-marital assets.                               As to all

others, defendant's satisfaction of the debt underlying the 1999

mortgage caused a merger of that mortgage with defendant and his

wife's ownership of the fee.                    Stated another way, absent the

assignor and assignee's contrary intention, merger is presumed

when the greater and lesser interests in property are joined in

the same person or entity.                See Anthony L. Petters Diner, Inc.

v. Stellakis, 202 N.J. Super. 11, 18 (App. Div. 1985); Estate of

Colquhoun, supra, 177 N.J. Super. at 498; Gimbel v. Venino, 135

N.J. Eq. 574, 576 (Ch. 1944); Thompson on Real Property, supra,




                                               10                                 A-0305-13T1
§    101.03(e)     at    419-20.        Here,    no    contrary   intention      was

expressed or is reasonably inferable from the circumstances; the

1999 mortgage merged in the marital partnership's ownership of

the Ventnor property.            Estate of Colquhoun hardly suggests a

different approach because the Supreme Court in that case merely

found the presumption of a merger was overcome by a contrary

intention.     88 N.J. at 565.

      Here, it is enough to observe that defendant failed to show

that Community Bank intended that the mortgage might be used to

interfere     with      the   position    of    plaintiff's    predecessor,      the

holder of the 2005 home equity mortgage, or otherwise.                    Indeed,

it    would   be     difficult     to    characterize       defendant's   alleged

intention in obtaining the assignment as anything short of a

fraud   on    Bergen     Commercial      Bank   or    its   successors,   such   as

plaintiff.       We therefore conclude that defendant's payment in

full of the remaining debt on the 1999 loan extinguished the

mortgage insofar as anyone but his wife was concerned regardless

of the mortgage's assignment to him.6


6
 The same result is compelled when considering that defendant, as
assignee, only obtained such rights and privileges possessed by
the assignor.   See Gotlib v. Gotlib, 399 N.J. Super. 295, 313
(App. Div. 2008); Gerrold v. Penn Title Ins. Co., 271 N.J.
Super. 50, 54 (App. Div. 1994).     Once it received payment in
full, Community Bank had no further interest in the property;
accordingly, it conveyed nothing when it assigned the mortgage
to defendant.



                                          11                              A-0305-13T1
The order under review is affirmed.




                          12          A-0305-13T1
