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Getting Harder To Blame It On The Bank

A few years ago, the New Jersey Supreme Court decided U.S. Bank Nat’l Assoc. v. Guillaume, 209 N.J. 449 (2012), which settled the uncertainty surrounding the appropriate remedy available to a trial court when faced with a plaintiff in a foreclosure action who has failed to serve a “notice of intention to foreclose” in compliance with the Fair Foreclosure Act (FFA), N.J.S.A. 2A:5053–68. The court in Guillaume overruled case law holding that dismissal without prejudice was the sole remedy available to a trial court where the lender has failed to serve a compliant notice of intention, and declared that courts of equity should exercise their inherent equitable powers and discretion to fashion appropriate remedies under such circumstances. A recent unreported decision by a New Jersey Chancery Court, Salierno v. Kosky, BER-F-10013-12 (Ch. Div. Jan. 22, 2013), which declined to dismiss a foreclosure complaint where the lender completely failed to serve a notice of intention to foreclose, may be interpreted as an expansion of the court’s holding in Guillaume, further eroding the impact of a common defense raised by defendants in foreclosure actions.

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