WELLS FARGO BANK, N.A. VS. ALFRED G. ROCKEFELLER (F-022533-12, BERGEN 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NOT FOR PUBLICATION WITHOUT THE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-2322-15T2

WELLS FARGO BANK, N.A.,

Plaintiff-Respondent,

v.

ALFRED G. ROCKEFELLER, his
heirs, devisees, and personal
representatives and his/her,
their, or any of their
successors in right, title
and interest, ANNETTE ROCKEFELLER,
his wife, her heirs, devisees, and
personal representatives and his/her
their, or any of their successors
in right, title and interest,
DISCOVER BANK,

Defendants-Appellants.
_________________________________________________

Submitted July 6, 2017 – Decided July 20, 2017

Before Judges Yannotti and Haas.

On appeal from Superior Court of New Jersey,
Chancery Division, Bergen County, Docket No.
F-022533-12.

Montell Figgins, attorney for appellants.
 Reed Smith LLP, attorneys for respondent
(Henry F. Reichner, of counsel and on the
brief).

PER CURIAM

Defendants appeal from a final judgment of foreclosure filed

on November 16, 2015. We affirm.

This appeal arises from the following facts. In December

2006, defendants executed and delivered an adjustable rate "Pick-

a-Payment" mortgage note to World Savings Bank, FSB (WSB), in the

sum of $400,000, to refinance residential property in Ramsey. 1 To

secure repayment of the note, defendants delivered a mortgage to

WSB, which was duly recorded in the Office of the Bergen County

Clerk.

In August 2007, a class action lawsuit was filed in the United

States District Court for the Northern District of California

against several banks including WSB, Wachovia, and plaintiff,

Wells Fargo Bank, N.A. (Wells Fargo). In that action, the

plaintiffs alleged that the defendant banks violated certain state

and federal laws in the origination of the "Pick-A-Payment"

mortgage loans and inadequately disclosed the loans' potential

for, among other things, negative amortization.

1
Effective December 31, 2007, WSB changed its name to Wachovia
Mortgage, FSB (Wachovia). In November 2009, Wachovia was acquired
and merged into plaintiff. As a result of this merger, Wachovia
is a division of plaintiff.

2 A-2322-15T2
 In March 2010, defendants and Wells Fargo entered into a loan

modification agreement, which changed the principal balance of

their loan to $434,969.83 and required bi-weekly interest-only

payments beginning at $906.19, with a starting interest rate of

2.50 per cent. In September 2010, defendants failed to make the

payment due and went into default. In January 2011, Wells Fargo

provided defendants notice of its intent to foreclose by certified

and first class mail. Defendants did not thereafter cure the

default.

In December 2010, the parties in the federal class action

settled the matter, and on May 17, 2010, the federal district

court approved the settlement agreement. The settlement agreement

covered claims or defenses based upon the origination of the "Pick-

a-Payment" loans. Pursuant to the settlement, the court

established three classes of borrowers, each consisting of persons

who obtained "Pick-a-Payment" loans from WSB or Wachovia in the

period from August 1, 2003, to December 31, 2008.

Settlement Class C included borrowers who still had their

"Pick-a-Payment" mortgage loans and whose mortgage payments were

sixty or more days past due, as of December 16, 2010. Defendants

were included within Settlement Class C. The settlement agreement

provided that members of the class could opt out of the settlement,

however, they were required to do so in writing by March 16, 2011.

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Notice of the settlement was provided to all affected class

members. Defendants did not opt out of the settlement.

The settlement agreement further provided that eligible class

members would be considered for a loan modification under either

the federal Home Affordable Modification Program (HAMP) or Wells

Fargo's internal loan modification program, MAP2R. The settlement

agreement stated that Wells Fargo would not have any obligation

to offer a loan modification to any settling class member who did

not qualify under the HAMP or MAP2R guidelines. The federal

district court retained jurisdiction to consider whether Wells

Fargo or any other defendant bank complied with the terms of the

agreement.

Under the agreement, Wells Fargo is not required to consider

a borrower for a loan modification if that borrower had already

received a loan modification. As we noted previously, in March

2010, before the court approved the class action settlement,

defendants had entered into a loan modification with Wells Fargo.

Even so, Wells Fargo reviewed defendants' application several

times, but they did not qualify for a second loan modification.

In October 2012, Wells Fargo filed a complaint for foreclosure

in the trial court, and in July 2014, defendants filed an answer,

separate defenses, and counterclaims. Among other defenses,

defendants asserted that Wells Fargo lacked standing to foreclose;

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was not a holder in due course of the underlying note; did not

provide "proper annual accountings"; violated the Consumer Fraud

Act (CFA), N.J.S.A. 56:8-1 to -20, with regard to the "subject

loan"; made material misrepresentations in the foreclosure

complaint; violated the Fair Foreclosure Act, N.J.S.A. 2A:50-53

to -73.; and violated the Fair Debt Collection Practices Act, 15

U.S.C.A. §§ 1692 to 1692p.

In addition, defendants asserted a counterclaim for

violations of the CFA with regard to the original loan and

processing defendants for "loss mitigation products" pursuant to

the federal class action settlement. Defendants also asserted a

counterclaim for breach of contract based upon Wells Fargo's

alleged violation of the federal class action settlement.

Thereafter, Wells Fargo filed a motion to strike defendant's

answer and affirmative defenses, based on the settlement of the

federal class action litigation. On February 18, 2015, the Chancery

Division judge granted plaintiff's motion for the reasons stated

in a letter opinion. The judge found that plaintiff had established

a prima facie case for foreclosure, and defendants' defenses and

counterclaims were barred by the federal class action settlement.

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The court filed a final judgment of foreclosure on November 16,

2015. This appeal followed.2

On appeal, defendants raise the following arguments: (1) the

court incorrectly characterized the counterclaims and affirmative

defenses as an attack upon the original "Pick-a-Payment" mortgage

rather than as claims arising under the subsequent agreements; (2)

the court erred by dismissing the claims under the CFA; (3) the

trial court should have vacated the final judgment pursuant to

Rule 4:50-1(a), because the judgment was premature, they were

denied the right to discovery, and they were unable to fully defend

their rights; and (4) the loan modification that Wells Fargo gave

to defendants in March 2010 was unconscionable.

We have carefully considered defendants' arguments and

conclude that they are without sufficient merit to warrant

discussion in a written opinion. R. 2:11-3(e)(1)(E). We affirm the

final judgment substantially for the reasons stated in Judge Robert

P. Contillo's letter opinion dated February 18, 2015. We add the

following.

Here, defendants argue that the trial court incorrectly

interpreted their affirmative defenses and counterclaims as an

attack upon the original "Pick-a-Payment" loan. They acknowledge

2
By order dated March 4, 2016, we granted defendant's motion to
file their notice of appeal as within time.

6 A-2322-15T2
that the settlement in the federal class action covered claims

related to the origination of the "Pick-a-Payment" loans including

claims under state unfair competition laws, unfair and deceptive

trade practices statutes, and consumer protection laws.

Defendants assert, however, that they raised claims regarding

whether Wells Fargo complied with the federal class action

settlement with regard to their March 2010 loan modification. They

contend that claims based on Wells Fargo's alleged post-settlement

actions are not barred by the federal class action settlement. We

disagree.

Judge Contillo correctly noted that the federal class action

settlement was incorporated in a judgment of the federal court,

which plaintiff is entitled to enforce in the absence of fraud or

other compelling circumstances. Simmermon v. Dryvit Sys., Inc.,

196 N.J. 316, 330-31 (2008). It is undisputed that defendants

never opted out of the settlement. The federal class action

settlement clearly resolves defendants' claims and defenses

pertaining to the origination of their "Pick-a-Payment" loan.

Moreover, defendants claimed that Wells Fargo violated the

federal class action settlement because Wells Fargo had not

provided them with a second loan modification. However, as the

judge noted in his letter opinion, the federal class action

settlement expressly provides that borrowers who had already

7 A-2322-15T2
received a loan modification are not eligible for a new loan

modification. It is undisputed that Wells Fargo and defendant had

entered into a loan modification in March 2010.

Therefore, the federal class action settlement did not

require Wells Fargo to provide defendants with another loan

modification. Since defendants are bound by the agreement, the

trial court did not err by striking the defenses and counterclaims

that are either covered by or without any basis under the federal

class action settlement agreement.

Defendants nevertheless argue that the trial court erred by

failing to afford them time for discovery. Again, we disagree.

Ordinarily, discovery should be completed before the trial court

considers a motion for summary judgment. DepoLink Court Reporting

& Litig. Support Servs. v. Rochman, 430 N.J. Super. 325, 341 (App.

Div. 2013) (citing Bilotti v. Accurate Forming Corp., 39 N.J. 184,

206 (1963)).

A court may, however, dispense with that general practice

when "it is readily apparent that continued discovery would not

produce any additional facts necessary to a proper disposition of

the motion." Ibid. Here, the motion judge properly found that

discovery was not warranted because defendant's defenses and

counterclaims failed as a matter of law.

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 Defendants also argue that the trial court erred by striking

their counterclaim under the CFA. They argue that the loan

modification agreement was unconscionable because it increased the

amount that they had to pay each month. They claim the modification

agreement is a clear example of unconscionable predatory lending.

We note, however, that in the trial court, defendants did not

allege that the March 2010 loan modification agreement violated

the CFA. Defendants only asserted claims regarding the original

"Pick-a-Payment" loan and Wells Fargo's alleged wrongful refusal

to offer them another loan modification.

We decline to consider defendants' contention that the March

2010 loan modification violated the CFA because defendants raised

this argument for the first time on appeal. See N.J. Dept. of

Envir. Prot. v. Huber, 213 N.J. 338, 372 (2013) (noting that issues

not raised in the proceedings below may not be raised on appeal);

North Haledon Fire Co. No. 1 v. Borough of North Haledon, 425 N.J.

Super. 615, 631 (App. Div. 2012) ("An issue not raised below will

not be considered for the first time on appeal").

Affirmed.

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