WELLS FARGO BANK, N.A. VS. A.G. (F-005412-09, OCEAN 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NOT FOR PUBLICATION WITHOUT THE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-5256-16T2

WELLS FARGO BANK, N.A.,

Plaintiff-Respondent,

v.

A.G.,

Defendant-Appellant,

and

MR. G., husband of A.G., and
MORTGAGE ELECTRONIC
REGISTRATION SYSTEM,
INC., A NOMINEE FOR
HOMECOMINGS FINANCIAL
NETWORK, INC.,

Defendants.
_____________________________

Submitted January 8, 2019 – Decided March 1, 2019

Before Judges Yannotti and Gilson.

On appeal from Superior Court of New Jersey,
Chancery Division, Ocean County, Docket No.
F-005412-09.
 Budd Larner, PC, attorneys for appellant (Tod S.
Chasin, of counsel and on the briefs).

Phelan Hallinan Diamond & Jones, PC, attorneys for
respondent (Brian J. Yoder, on the brief).

PER CURIAM

This residential mortgage foreclosure action presents a loan with two

tales. At the age of eighty-two, defendant, a widowed woman living on Social

Security benefits, borrowed $414,000 and signed a note and mortgage, whi ch

called for her to repay the loan in monthly installments over the next thirty years.

Plaintiff, Wells Fargo Bank, N.A. (Wells Fargo or Bank), asserts that the loan

was a conventional residential mortgage loan, defendant defaulted, and it should

be allowed to foreclose on defendant's home. Defendant counters that she was

falsely led to believe she was entering into a reverse mortgage, where the loan

proceeds would be invested on her behalf and she would not have to make

mortgage payments during her lifetime.

Defendant appeals from a January 6, 2017 order granting summary

judgment to Wells Fargo and a July 11, 2017 final judgment of foreclosure. We

reverse because there were genuine issues of material facts in dispute and Wells

Fargo was not entitled to summary judgment on the current record. Thus, we

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vacate the order granting summary judgment and the final judgment and remand

for further proceedings.

I.

The record developed on summary judgment includes documents and

certifications that describe two different loan transactions. The Bank presents

documents showing that (1) in 2007, defendant applied for and received a loan

for $414,000; (2) she signed a note and mortgage, promising to repay the loan

in monthly installments over the next thirty years; (3) the loan was used

primarily to pay off two existing mortgages to Homecomings Financial of just

over $405,000, and defendant's monthly payments were reduced from $3,258.00

to $2,650.89; (4) after paying the monthly mortgage for sixteen months, in

September 2008, defendant defaulted by ceasing to make payments.

Defendant, however, filed a certification explaining a very different

transaction. She certified that (1) in 2000, she purchased her home in Jackson,

New Jersey, free of any mortgage using monies from the sale of her previous

home; (2) at that time and since then, her "sole income" has been her Social

Security benefits in the amount of $1602 per month; (3) in late 2006, when she

was eighty-one years old, an unidentified "financial advisor" approached her and

convinced her to enter into a reverse mortgage, under which she would not be

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required to make any payments during her lifetime and the proceeds from the

loan would be invested to earn her income; (4) the financial advisor first had her

sign papers with Homecomings Financial; (5) thereafter, the financial advisor

took defendant to Wachovia Bank, the predecessor of Wells Fargo, and she

signed papers, which she understood were consistent with the financial plan

described by the financial advisor; (6) she does not recall discussing with anyone

at Wachovia her income or her ability to make monthly mortgage payments; (7)

during those signings and transactions, she was not represented by an attorney;

(8) after she executed the papers, Wachovia contacted her and informed her that

she was required to make monthly payments; (9) at that time, she had

approximately $50,000 in savings and she used that money to make the monthly

payments to Wachovia; (10) while she was making those payments, she and her

daughter tried to get someone at Wachovia to explain "what had gone wrong"

and why she was receiving requests for monthly payments; (11) she was unable

to get anyone at Wachovia to "correct what had happened"; (12) when her

savings ran out, she stopped making payments to Wachovia; and (13) at around

that same time, she learned that the financial advisor "had absconded with the

mortgage proceeds."

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 In January 2009, Wachovia filed a foreclosure complaint against

defendant. Defendant did not respond and in March 2011, a default was entered.

Two and a half years later, in September 2013, the court administratively

dismissed the foreclosure action without prejudice for lack of prosecution. In

August 2014, Wachovia was allowed to reinstate the foreclosure action.

Subsequently, Wachovia was acquired by Wells Fargo, and in 2015, Wells Fargo

was permitted to be substituted as the named plaintiff.

Thereafter, Wells Fargo filed a motion for entry of final judgment and

defendant filed a motion to vacate the default. In October 2015, the Chancery

court granted defendant's motion to vacate the default, denied Wells Fargo's

motion for entry of a final judgment, and permitted defendant to file a contesting

answer. In October 2015, defendant filed an answer and counterclaims. In her

counterclaims, defendant contended that she had been fraudulently induced into

entering into the loan, note, and mortgage. She asserted five claims for

rescission, violations of the Truth in Lending Act, 15 U.S.C. §§ 1601 to 1667f,

violations of the New Jersey Consumer Finance Licensing Act, N.J.S.A.

17:11C-1 to -49, violations of the New Jersey Consumer Fraud Act, N.J.S.A.

56:8-1 to -210, fraud, and conspiracy.

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 Thereafter, the Chancery court allowed the parties to seek paper

discovery, but prohibited depositions. The case was then scheduled for trial in

June 2016. A little over three weeks before trial, defendant filed a motion

seeking permission to conduct depositions of the Wachovia employees who

prepared the loan application and who had knowledge of the review and

underwriting of the loan transaction. The Chancery court denied that request

for discovery. Thereafter, the court rescheduled the trial for September 21,

2016.

Eight days before that trial date, Wells Fargo filed a motion for summary

judgment. The trial date was adjourned and defendant filed opposition to the

motion for summary judgment. In her opposition papers, defendant included a

certification in which she provided facts concerning the origins of the

transaction as she understood the situation. Defendant also filed a response to

Wells Fargo's statement of undisputed facts, disputing many of those material

facts.

On January 6, 2017, the Chancery court entered an order granting

summary judgment in favor of Wells Fargo and striking defendant's answer and

counterclaims. The court set forth the reasons for its ruling in an oral opinion

read into the record on January 10, 2017. The court did not credit defendant's

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certification, reasoning that it was inconsistent with the loan documents and that

she had paid the mortgage for sixteen months. The court also reasoned that

plaintiff should have been aware of any fraud in 2007, and her claims for fraud

or violations of the Consumer Fraud Act were barred under the applicable statute

of limitations. Finally, the court rejected defendant's argument that she needed

more discovery.

On July 11, 2017, a final judgment of foreclosure was entered. Defendant

appealed. The Bank represents that while the appeal was pending, defendant's

home was sold by the sheriff to plaintiff. Plaintiff then "assigned" its right to

purchase the property to US Bank, National Association, as Trustee for the

RMAC Trust, Series 2016-CTT.

II.

On appeal, defendant makes two arguments. First, she contends that there

were material fact disputes precluding summary judgment. Second, she argues

that she was denied due process and fundamental fairness when she was

precluded from completing discovery. We agree.

The issues came before the Chancery court on a motion for summary

judgment. Accordingly, we review the Chancery court's decision de novo,

applying the same standard that governed the trial court's ruling. Conley v.

A-5256-16T2
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Guerrero, 228 N.J. 339, 346 (2017) (citing Templo Fuente De Vida Corp. v.

Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016)). The standard

for summary judgment is whether there are genuine issues of material fact s in

dispute and, if there are none, whether the moving party is entitled to judgment

as a matter of law. R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J.

520, 523 (1995).

"An issue of fact is genuine only if, considering the burden of persuasion

at trial, the evidence submitted by the parties on the motion, together with all

legitimate inferences therefrom favoring the non-moving party, would require

submission of the issue to the trier of fact." R. 4:46-2(c). Courts should "not

resolve contested factual issues on competing certifications and discovery

materials," but rather "determin[e] from the record whether the alleged factual

disputes are genuine." Davidovich v. Isr. Ice Skating Fed'n, 446 N.J. Super.

127, 158-59 (App. Div. 2016) (citing Agurto v. Guhr, 381 N.J. Super. 519, 525

(App. Div. 2005)); see also Parks v. Rogers, 176 N.J. 491, 502 (2003); Davin,

LLC v. Daham, 329 N.J. Super. 54, 71 (App. Div. 2000) (finding a genuine issue

of material fact based on conflicting certifications). Courts should deny a

motion for summary judgment if there are materially disputed facts. Ibid.

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 Applying this standard to the certifications and documents submitted in

support of and in opposition to the motion for summary judgment, Wells Fargo

was not entitled to summary judgment. In support of its motion, Wells Fargo

submitted documents showing that defendant had executed a note and mortgage,

the mortgage had been recorded, and defendant thereafter defaulted. Th ose

documents established a prima facie right to foreclosure. See Thorpe v.

Floremoore Corp., 20 N.J. Super. 34, 37 (App. Div. 1952). In opposition,

however, defendant submitted a certification contending that the loan was

fraudulently induced. Before us, Wells Fargo argues that defendant's

certification is "self-serving" and lacks specificity. We disagree.

The loan transaction here presents more questions than it answers.

Defendant has certified that she owned her home free and clear of any mortgage

and that she was living on a limited income from Social Security benefits. The

Bank contends, however, that defendant entered into a conventional thirty-year

mortgage. If we accept the Bank's position, it is hard to ascertain the logic of

the loan from the Bank's perspective. The Bank would have been making a loan

of $414,000 to an eighty-two-year-old woman who had a monthly income of just

over $1600. The mortgage payments were in excess of $1000 of her monthly

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income. Moreover, the Bank paid off two existing loans, which exceeded

$405,000. The Bank does not explain why it would make such a loan.

The Bank's documents also raise unanswered questions. The loan

application was prepared by an employee of Wachovia Mortgage Corporation

and the application indicates that another employee had received the information

from defendant telephonically on January 11, 2007. The mortgage loan

commitment was then approved, according to the documentation submitted by

the Bank, that same day. The mortgage commitment also indicates that

defendant signed the document on February 27, 2007, and then signed the loan

application on March 5, 2007. The note and mortgage were also signed on

March 5, 2007.

There is also a material fact issue concerning the existing mortgages .

Defendant certifies that her financial advisor convinced her to sign papers with

"Homecomings Financial." The two mortgages that the Bank paid off were

mortgages to "Homecomings Financial." There is nothing in the current record

that establishes when those mortgages were taken out. Viewing the facts in the

light most favorable to defendant, it could be that her financial advisor had her

take out those mortgages with Homecomings Financial in early 2007, had those

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mortgages paid off from the loan from the Bank, and then, as alleged by

defendant, absconded with the money.

In short, the record on summary judgment presented a number of material

fact disputes concerning the loan to defendant. Given these rather unique fact

disputes, defendant was also entitled to further discovery. Defendant sou ght,

but was denied, the opportunity to depose the Wachovia employees who were

involved in interviewing her for the loan application and approving the loan.

Those employees may have material information concerning the originations of

this loan. Defendant also argued that she was not given complete discovery

from the Bank. In that regard, she points out that the Bank never produced the

complete loan file. Given defendant's certification, she was entitled to that

discovery.

Accordingly, we reverse and vacate the order granting summary judgment

to Wells Fargo and the final judgment of foreclosure. We remand for further

proceedings. In making these rulings, we emphasize the unique nature of the

record in this case.

Reversed and remanded. We do not retain jurisdiction.

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