A dispute over the foreclosure and sale of a Newark church property has resulted in an appellate court affirming a lower court’s decision to deny motions seeking to vacate both the foreclosure judgment and subsequent sheriff’s sale. The case centers on claims by the church and its pastor that they did not receive proper legal notice, raising questions about due process in foreclosure proceedings.
The appeal was filed by Living Water Christian Assembly of Smyrne, a New Jersey non-profit corporation, and Donnie Patterson, individually and as pastor of the church. The complaint was brought before the Superior Court of New Jersey, Appellate Division, under Docket No. A-0304-24, with U.S. Bank National Association, as trustee for Velocity Commercial Capital Loan Trust 2021-2, named as plaintiff-respondent. Intervenor 928 18th Ave TYH, LLC also participated as respondent.
According to court records, on June 24, 2021, Living Water Christian Assembly executed a Term Note and Loan Agreement with Velocity Commercial Capital in the principal amount of $350,000. Pastor Donnie Patterson also signed an Unlimited Guarantee for repayment. To secure payment, the church provided a commercial mortgage on its property at 928-934 18th Avenue in Newark. The mortgage was recorded on July 9, 2021.
The defendants failed to make their monthly mortgage payment due August 1, 2021 and did not cure this default after receiving a demand letter dated October 21, 2021. On December 3, 2021, Velocity assigned the mortgage to U.S. Bank National Association as trustee for Velocity Commercial Capital Loan Trust 2021-2.
On January 4, 2022, U.S. Bank initiated foreclosure proceedings by filing a complaint in commercial mortgage foreclosure. The parties agreed to extend the deadline for the church’s answer until February 28, which was met; however, there were issues regarding proof of service on Pastor Patterson individually. An affidavit filed by plaintiff stated that service had been left with “Pastor Genette,” described as a Black female around sixty years old at the church address.
Summary judgment was granted in favor of U.S. Bank on May 30, 2023. The order declared the mortgage to be a valid first lien against the property and entered default against both defendants after striking their answer. Final judgment was entered on August 14, 2023 awarding $449,617.53 plus interest and costs to plaintiff and ordering that possession be given to plaintiff or purchaser at sheriff’s sale.
Subsequent motions by defendants sought to vacate default judgments and adjourn or reschedule the sheriff’s sale scheduled for February 6, 2024; these motions were denied by the Chancery Division after oral argument. On February 6, intervenor respondent 928 18th Ave TYH LLC purchased the property at sheriff’s sale for $571,000; this deed was recorded May 15 and writ of possession issued May 24.
Defendants continued their efforts through July with further motions arguing that Patterson had not received proper notice either of initial service or of sheriff’s sale itself—alleging he resided in Florida rather than New Jersey—but these arguments were rejected by the trial court based on affidavits attesting to service at the church address and proof of certified mail delivery regarding notice of sale.
In its August order denying further relief sought by Patterson and Living Water Christian Assembly—including requests for adjournment or stay—the trial court wrote: “Defendants in this matter have made several attempts to stay, adjourn, and vacate both the final judgment and the sheriff[’]s sale… Succinctly… there has been no law presented by movant to support the right to relief sought… defendant Patterson is in default… plaintiffs opposition included proof of service by certified mail upon defendant Patterson.”
On appeal before Judges Sabatino and Bergman (as noted), defendants argued improper service under Rule 4:4-4(a) rendered all subsequent actions void due to lack of due process but failed to provide transcripts from earlier hearings or relevant documents such as copies showing Patterson’s Florida address associated with loan documents or guarantees.
The appellate opinion outlines established standards: “A default judgment is void ‘when a substantial deviation from service of process rules has occurred…'” but concludes that minor flaws do not automatically void judgments if due process has otherwise been afforded—citing precedent such as Jameson v. Great Atlantic & Pacific Tea Co., M & D Assocs v Mandara,
and Citibank N.A v Russo among others.
Ultimately,the appellate panel found no abuse of discretion nor credible evidence supporting defective service or lack of notice: “We conclude defendants have failed to provide sufficient proofs that the court abused its discretion by finding…Patterson was validly served at Church property through Pastor Genette.” Regarding notice for sheriff’s sale,“plaintiff provided proof…by way of certified mail” which went unrebutted.
The opinion affirms all orders under review without addressing additional arguments deemed lacking sufficient merit per Rule R.2:11-3(e)(1)(E).
Attorneys listed include Joel C Seltzer representing appellants,and Hugh A Keffer (Fidelity National Law Group) representing intervenor respondent.The case is identified as Docket No.A-0304-24.
