NOT FOR PUBLICATION WITHOUT THE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.
3 A-2322-15T2
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;
4 A-2322-15T2
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.
5 A-2322-15T2
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.
8 A-2322-15T2
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.
9 A-2322-15T2