WELLS FARGO BANK, N.A. VS. LAURIE JANE HAYES (F-6002-14, ESSEX COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-1065-15T1

WELLS FARGO BANK, N.A.,

Plaintiff-Respondent,

v.

LAURIE JANE HAYES, her
heirs, devisees, and
personal representatives
and his/her, their, or any
of their successors in
right, title and interest;
Mr. Hayes, husband of
Laurie Jane Hayes, his
heirs, devisees, and personal
representatives and his/her,
their, or any of their
successors in right, title
and interest,

Defendants-Appellants.
________________________________________________

Argued May 9, 2017 – Decided July 20, 2017

Before Judges Messano and Espinosa.

On appeal from the Superior Court of New
Jersey, Chancery Division, General Equity
Part, Essex County, Docket No. F-6002-14.

Joshua W. Denbeaux argued the cause for
appellant (Denbeaux & Denbeaux, attorneys; Mr.
Denbeaux, on the brief).
 Henry F. Reichner argued the cause for
respondent (Reed Smith, L.L.P., attorneys; Mr.
Reichner, on the brief).

PER CURIAM

In 2007, defendant Laurie Jane Hayes refinanced a mortgage

on her residence by executing an adjustable rate mortgage and note

in favor of World Savings Bank, FSB, predecessor in interest of

plaintiff Wells Fargo Bank, N.A. (Wells Fargo). Hayes procured

the loan through the bank's "Pick-a-Payment" program. Defendant

defaulted on the loan in March 2008 and thereafter sought a loan

modification in 2009. Although it is unclear when defendant

actually completed the application for the Home Affordable

Modification Program, Wells Fargo notified her in 2013 that it

denied her request.

In the interim, after the filing of numerous complaints

alleging the "Pick-a-Payment" program violated the federal Truth

in Lending Act (TILA), 15 U.S.C.A. §§ 1601 to 1667f, as well as

other consumer protection statutes, the United States District

Court for the Northern District of California certified a class

of plaintiffs that included defendant as a member. A settlement

of the class action lawsuit was reached on December 10, 2010. In

re Wachovia Corp. "Pick-a-Payment" Mortg. Mktg. and Sales

Practices Litig., No. M:09-CV-2015-JF (N.D. Cal. Dec. 16, 2010).

2 A-1065-15T1
 The stipulation of settlement (Settlement Agreement) provided

that, in consideration of the "settlement benefits," class members

agreed to

fully, finally, and completely release and
forever discharge the Alleged Claims and any
and every actual or potential known or unknown
claim, liability, right, demand, suit, matter,
obligation, damage, loss or cost, action or
cause of action, of every kind and description
that the Releasing Party has or may have,
including assigned claims and Unknown Claims,
asserted or unasserted, latent or patent, that
is, has been, or could have been or in the
future might be asserted by any Releasing
Party in the Lawsuit, the Related Actions,
any other case consolidated in the Lawsuit,
or in any other action or proceeding in this
Court, or any other court, administrative
venue, tribunal or arbitration or other forum,
regardless of the type or amount of relief or
damages claimed, against any of the Released
Entities arising out of the Alleged Claims,
the origination of the Settlement Class
Member's Pick-a-Payment mortgage loan, the
manner in which the Defendant's applied the
Settlement Class Member's payments to
principal and interest, negative
amortization, the Pick-a-Payment mortgage
loan's potential for negative amortization,
the disclosure of the Pick-a-Payment mortgage
loan's potential for negative amortization,
and the disclosure of the manner in which
payments would be applied to principal and
interest.

[(Emphasis added).]

Paragraph 1.6 of the Settlement Agreement defined "Alleged Claims"

as

3 A-1065-15T1
 claims that are alleged in the Lawsuit and the
Related Actions, including, but not limited
to, claims that the Defendants and the
Additional Defendants violated TILA, state
unfair competition laws, state unfair and
deceptive trade practices statutes, and state
consumer protection laws; breached the terms
of the Parties' contracts; engaged in
fraudulent misrepresentations or omissions;
and breached the implied duty of good faith
and fair dealing in connection with the
Plaintiffs' Pick-a-Payment mortgage loans by
failing to adequately disclose the loan's
potential for negative amortization,
providing Borrowers with inaccurate payment
schedules, failing to disclose the interest
rates on which those payment schedules were
based, and failing to disclose the terms of
the Parties' legal obligations, entitling them
to damages, statutory penalties, restitution,
punitive damages, interest, attorneys' fees,
costs, injunctive relief, and other legal or
equitable relief under state and federal law.

The stipulation also provided that it was "the sole and

exclusive remedy of Settlement Class Members against any Released

Entity," including Wells Fargo, "relating to any and all Alleged

Claims." Further, the parties agreed the court would retain

"exclusive and continuing jurisdiction over the Lawsuit, the

Parties," and the class members. On May 17, 2011, the district

court entered final approval of the class settlement and further

retained "continuing jurisdiction to interpret and enforce the

settlement agreement."

Defendant never opted out of the settlement. Several months

later, she received a settlement check for $178.04.

4 A-1065-15T1
 On November 19, 2012, in the context of deciding various

motions regarding the scope of the Settlement Agreement, the

district court judge filed a second order, retaining jurisdiction

of the class action settlement and further providing the settlement

included all class members' "claims or defenses based upon

origination of their pick-a-payment loans, alleged TILA

violations, and the like." (Emphasis added).

While the class action was pending in federal court, defendant

filed a complaint in the Law Division against Wachovia Mortgage,

FSB (Wachovia), another predecessor in interest of Wells Fargo,

alleging fraud, consumer fraud and other statutory violations. On

March 14, 2014, the judge granted Wachovia summary judgment.

However, the judge included the following language in his order:

[t]his Order does not in any way act as a bar
to [defendant] raising any defense to a
foreclosure action brought by Wells Fargo
against her, since this [c]ourt does not
believe that anything in the Settlement
Agreement . . . acts as a bar to [defendant]
asserting a defense to a foreclosure action,
including but not limited to origination-based
defenses.

Defendant appealed. We affirmed the trial court's summary

judgment, concluding defendant's participation in the class action

settlement precluded her suit against Wachovia. Hayes v. Wachovia

5 A-1065-15T1
Mortg. FSB, No. A-5913-13 (App. Div. March 29, 2016) (slip op. at

9).1

Wells Fargo had filed its foreclosure complaint in February

2014. Defendant subsequently moved to set aside her default. Her

proposed answer asserted fifteen affirmative defenses, including

an alleged breach of the Settlement Agreement, violation of TILA

and other improprieties in the origination of the loan. Wells

Fargo opposed the motion and cross-moved to enforce the Settlement

Agreement. Judge David B. Katz granted defendant's motion and

denied Wells Fargo's motion without prejudice pending further

discovery.

Wells Fargo subsequently moved for reconsideration, which

defendant opposed. Judge Katz granted Wells Fargo's motion in

part, enforcing the Settlement Agreement and concluding a number

of defendant's "origination-based affirmative defenses" should be

dismissed. In a written statement of reasons that accompanied his

August 28, 2014 order (the August 2014 order), Judge Katz explained

that the Law Division judge "did not make an actual ruling on the

1
Although citing an unpublished opinion is generally forbidden,
we do so here pursuant to the exception in Rule 1:36-3 that permits
citation "to the extent required by res judicata, collateral
estoppel, the single controversy doctrine or any other similar
principle of law." See Badiali v. N.J. Mfrs. Ins. Grp., 429 N.J.
Super. 121, 126 n.4 (App. Div. 2012), aff'd, 220 N.J. 544 (2015).

6 A-1065-15T1
applicability of [defendant's] claims to a foreclosure." Judge

Katz concluded the Settlement Agreement was clear and unambiguous,

and, since defendant never opted out of the settlement, she was

bound by its terms. The judge determined he should accord full

faith and credit to the Settlement Agreement. See U.S. Const.

art. IV, § 1 ("Full Faith and Credit shall be given in each State

to the public Acts, Records, and judicial Proceedings of every

other State."); 28 U.S.C.A. § 1738 (providing that the judicial

proceedings of the states are to be given full faith and credit

in federal court). Judge Katz dismissed nine of defendant's

affirmative defenses and stated the remaining six were "viable for

motion practice."

Wells Fargo thereafter moved for summary judgment, which

Judge Katz granted by order dated December 5, 2014, accompanied

by a written statement of reasons.2 Final judgment was entered on

May 21, 2015.

Before us, defendant focuses her challenge on the August 2014

order, arguing Judge Katz misconstrued the terms of the Settlement

Agreement because her affirmative defenses were not "Alleged

Claims," as defined by the Settlement Agreement. She argues that

2
The notice of motion and supporting documents, as well as
defendant's opposition, are not included in the appellate record.
We have been provided with a transcript of the oral argument before
Judge Katz.

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Judge Katz's interpretation rewrote the express language defining

"Alleged Claims," thereby implicitly recognizing the Settlement

Agreement was ambiguous. She also contends Judge Katz failed to

give appropriate weight to the Law Division judge's order in the

earlier litigation.

We are not persuaded by any of these arguments and affirm

substantially for the reasons expressed by Judge Katz. We add

only these brief comments.

Our courts give full faith and credit to class action

judgments of other jurisdictions if the class members have been

accorded procedural due process rights. Simmermon v. Dryvit Sys.,

Inc., 196 N.J. 316, 330 (2008). Defendant contends the Settlement

Agreement's defined term, "Alleged Claims," does not include her

origination-based affirmative defenses.3

3
During oral argument before us, defendant also contended she was
denied due process and cited the practical impossibility of
appearing in federal court in California to challenge the
Settlement Agreement, subsequent orders entered by the district
court or to seek relief from those orders. These issues were not
briefed, and we deem them to be waived. An issue not briefed is
deemed waived on appeal. N.J. Dep't of Envtl. Prot. v. Alloway
Twp., 438 N.J. Super. 501, 505-06 n.2 (App. Div.), certif. denied,
222 N.J. 17 (2015). Moreover, in our prior opinion, we addressed
the due process argument and concluded,

even assuming that plaintiff never received
the notice, as we must on summary judgment,
plaintiff waived her right to sue Wachovia
when she cashed the settlement check.

8 A-1065-15T1
 Under the terms of the Settlement Agreement, defendant agreed

never to "assert" "any and every actual or potential known or

unknown claim, liability, right, demand, suit, matter, obligation,

damage, loss or cost, action or cause of action, of every kind and

description . . . regardless of the type or amount of relief or

damages" against Wells Fargo. (Emphasis added). One can hardly

imagine a more comprehensive waiver of rights, and the plain and

unambiguous language includes defendant's affirmative defenses,

which she asserted defeated Wells Fargo's right to foreclosure.4

Additionally, Judge Katz correctly determined the earlier Law

Division order was not controlling. As he noted, the Law Division

judge did not consider the merits of the foreclosure action, which

had already been filed but was not before him. The Law Division

judge's advisory opinion contained in an order filed in a different

Plaintiff freely admits that she knew the
settlement check related to the "Pick-a-
Payment" loans, and that she cashed the check
after being advised to do so by her attorney.
She chose to accept the settlement check, in
spite of her pending lawsuit, thus severing
her claims against Wachovia.

[Hayes, supra, slip op. at 11.]
4
Although not critical to our decision, we note the federal
district court's subsequent order clearly determined the
Settlement Agreement included class members' waiver of "claims or
defenses based upon origination of their pick-a-payment loans,
alleged TILA violations, and the like."

9 A-1065-15T1
lawsuit regarding the effect of the Settlement Agreement on

defendant's affirmative defenses was not binding on Judge Katz.5

Affirmed.

5
Although defendant does not specifically assert the "law of the
case doctrine" applied, such that the Law Division judge's ruling
bound Judge Katz, we note the doctrine usually applies only to
interlocutory rulings made during the pendency of a single case,
not to a ruling made in a different case. Lombardi v. Masso, 207
N.J. 517, 538 (2011) (citing Lanzet v. Greenberg, 126 N.J. 168,
192 (1991)). However, even if the doctrine does apply, it is non-
binding, ibid., and "does not obligate a judge to slavishly follow
an erroneous or uncertain interlocutory ruling." Gonzalez v.
Ideal Tile Importing Co., 371 N.J. Super. 349, 356 (App. Div.
2004), aff’d, 184 N.J. 415 (2005), cert. denied, 546 U.S. 1092,
126 S. Ct. 1042, 163 L. Ed. 2d 857 (2006).

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