NOT FOR PUBLICATION WITHOUT THE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-0602-15T4
OCWEN LOAN SERVICING, LLC,
Plaintiff-Respondent,
v.
ROBERT M. VARGAS,
Defendant-Appellant.
___________________________________
Argued May 16, 2017 – Decided August 7, 2017
Before Judges Fisher and Ostrer.
On appeal from the Superior Court of New
Jersey, Chancery Division, Bergen County,
Docket No. F-32025-14.
Justin M. Gillman argued the cause for
appellant (Gillman and Gillman, LLC,
attorneys; Mr. Gillman, on the briefs).
Edward W. Chang argued the cause for
respondent (Blank Rome LLP, attorneys; Donna
M. Bates and David A. DeFlece, on the brief).
PER CURIAM
Defendant Robert M. Vargas appeals from the dismissal with
prejudice of counterclaims he filed in response to a foreclosure
action by plaintiff Ocwen Loan Servicing, LLC. Ocwen thereafter
voluntarily dismissed its foreclosure complaint. Because the
trial court failed to explain the basis for its dismissal, we
vacate the court's order and remand for a statement of reasons
pursuant to Rule 1:7-4.
The mortgage has been the subject of a longstanding dispute
over defendant's allegedly delinquent payments. GMAC Mortgage
Corporation of PA (GMAC) was the initial lender when the mortgage
originated in 1994. Defendant first fell behind on mortgage
payments in 1998. He filed for Chapter 13 bankruptcy the following
year. The amount owed GMAC was incorporated in his Chapter 13
plan. Defendant completed the plan in 2003 and received a
discharge from all debts.
This discharge did not end the dispute over payments, however.
GMAC and defendant engaged in at least three rounds of litigation
between 2004 and 2010 over subsequent alleged delinquencies. In
round one, defendant successfully argued before the bankruptcy
court that GMAC improperly sought payment on debts discharged in
the Chapter 13 bankruptcy and that he was current on payments. In
round two, GMAC voluntarily dismissed its action. In round three,
GMAC argued defendant had been in default since April 2006.
Defendant countered, again successfully, that GMAC initially
declared default in error and had thereafter refused to accept
payments, which defendant deposited in an escrow account instead.
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In May 2012, GMAC itself filed for bankruptcy under Chapter
11. As part of GMAC's liquidation, Ocwen purchased GMAC's interest
in the mortgage. In April 2014, Ocwen sent defendant a notice of
intent to foreclose based on defendant's delinquency since 2006.
A foreclosure action followed in August.
Defendant conceded that payments had not been tendered to
either GMAC or Ocwen for several years. Yet, defendant challenged
Ocwen's foreclosure action by raising affirmative defenses and
seven counterclaims, alleging sweeping common law, state law and
federal law violations. Defendant asserted Ocwen had continued
GMAC's malfeasance and failed to cure GMAC's prior wrongs. Many
of the counterclaims mirrored those defendant raised in prior
proceedings and referenced actions by GMAC, not Ocwen.
In response, Ocwen moved to strike defendant's answer and
dismiss the counterclaims pursuant to Rule 4:6-2(e). In January
2015, the court issued an order mandating that (1) defendant’s
answer and affirmative defenses be stricken "except . . . [as]
related to date of default and amount due," and (2) all
counterclaims be dismissed with prejudice. The court appended
only a brief explanation of its broad dismissal:
The Court finds that there are genuine issues
of material fact related to: 1) the date of
default; and 2) the amount due. All defenses
and counterclaims, except as related to those
two issues, are stricken. The Court will hold
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a trial on those two narrow issues, and
discovery is limited to those issues only.
Accordingly, Plaintiff's Motion to Strike
Defendant's Answer and Dismiss the Defenses
and Counterclaims is granted in part and
denied in part.
Defendant immediately sought appellate review, but we
dismissed the appeal as interlocutory. That procedural hurdle was
cleared in August 2015 when the court granted Ocwen's motion to
voluntarily dismiss its foreclosure action without prejudice. In
an attached statement of reasons, the court recounted that
"Defendant's Counterclaims were stricken" by the January order,
but did not amplify its reasons.
While the formerly interlocutory order is now final and
appealable, we decline to engage in a substantive review of the
counterclaims until we are able to discern the trial court's reason
for dismissal. Although our review of decisions resulting in the
dismissal of claims is plenary, e.g., Rezem Family Assocs., LP v.
Borough of Millstone, 423 N.J. Super. 103, 114 (App. Div.) (failure
to state a claim), certif. denied, 208 N.J. 368 (2011); Nicholas
v. Mynster, 213 N.J. 463, 478 (2013) (summary judgment), we must
still review the trial court's decision. It is not for us to
consider the matter as if for the first time.
Essential to our task is an understanding of the reasons for
the decision under review. That is why Rule 1:7-4(a) requires
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trial courts to "state clearly [their] factual findings and
correlate them with the relevant legal conclusions" for all orders
appealable as of right. Curtis v. Finneran, 83 N.J. 563, 569-70
(1980); see Rutgers Univ. Student Assembly v. Middlesex Cnty. Bd.
of Elections, 438 N.J. Super. 93, 107 (App. Div. 2014) (failure
to abide by Rule 1:7-4(a) on cross-motions for summary judgment
justified reversal and remand); see also R. 1:6-2(f) (requiring a
statement of reasons for interlocutory orders when "necessary or
appropriate"); Pressler & Verniero, Current N.J. Court Rules,
comment 7 on R. 1:6-2 (2017) (stating explanation for interlocutory
orders is required "by reason of the nature of the matter"). We
rely on trial courts to articulate and explain their conclusions
of fact and law before attempting our own examination. "[A]n
articulation of reasons is essential to the fair resolution of a
case. The failure to perform this duty 'constitutes a disservice
to the litigants, the attorneys and the appellate court.'" O'Brien
v. O'Brien, 259 N.J. Super. 402, 406-07 (App. Div. 1992) (quoting
Curtis, supra, 83 N.J. at 569-70) (applying Rule 1:6-2(f)).
Here, the trial court dismissed defendant's seven distinct
counterclaims with prejudice (and struck most of his answer and
affirmative defenses). The order was appealable as of right after
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Ocwen voluntarily dismissed the foreclosure action.1 The court
did not explain its decision, except to observe there were "genuine
issues of material fact" regarding the default, which apparently
pertained only to Ocwen's action.
As a result of the trial court's silence, we can decipher
neither the legal standard it applied nor the basis for its
dismissal. As to the former, it is unclear whether the court
barred defendant's counterclaims under Rule 4:6-2(e) for failing
to state a claim, or whether the court converted the motion to one
for summary judgment under Rule 4:46 because of the extensive
materials submitted to the court on the motion. See R. 4:6-2(e).
As to the latter, the court did not explain the legal deficiency
in the various causes of action alleged. Given defendant's
multiple assertions, the court's reasons for rejecting each could
have varied widely from claim to claim. Moreover, it is possible
the court dismissed the claims for a reason not raised by the
parties, such as germaneness, R. 4:64-5; however, that would not
explain why the dismissal was with prejudice.
1
Even if the foreclosure action had proceeded and the dismissal
order remained interlocutory, the court was obliged to explain its
reasons because the order substantially affected the parties'
respective rights and the court's reasons were not obvious. See
R. 1:6-2(f).
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We express no opinion about the merit of defendant's
counterclaims. We are constrained to remand for issuance of
appropriate findings of fact and conclusions of law.
Vacated and remanded. We do not retain jurisdiction.
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