NOT FOR PUBLICATION WITHOUT THE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-1523-15T2
ANTHONY CZYZ and
CATHERINE CZYZ,
Plaintiffs-Appellants,
v.
CARRINGTON MORTGAGE
SERVICES, LLC,
Defendant-Respondent.
______________________________________________
Submitted March 28, 2017 – Decided May 2, 2017
Before Judges Yannotti and Gilson.
On appeal from Superior Court of New Jersey,
Law Division, Passaic County, Docket No. L-
1391-15.
Anthony Czyz and Catherine Czyz, appellants
pro se.
McCabe, Weisberg & Conway, P.C., attorneys for
respondent (Joseph F. Riga, on the brief).
PER CURIAM
Plaintiffs Anthony Czyz and Catherine Czyz appeal from an
order of the Law Division, dated November 6, 2015, which dismissed
their claims against defendant Carrington Mortgage Services, LLC.
We affirm.
I.
This appeal arises from the following facts. Mr. Czyz is the
owner of real property in Bloomingdale, New Jersey. On October 7,
2005, Mr. Czyz borrowed $408,000 from New Century Mortgage
Corporation (New Century), the repayment of which was secured by
a mortgage on the Bloomingdale property. The loan had an adjustable
interest rate with an initial rate of 7.95%. Thereafter, New
Century transferred the loan to defendant. In 2007, defendant
refused to approve a so-called short sale of the property from Mr.
Czyz to Catherine Caucci, who became Catherine Czyz when plaintiffs
married.1
Mr. Czyz defaulted on the loan and on August 5, 2008, he
entered into a loan modification agreement with defendant, in
which all amounts due were capitalized into a new loan having a
principal balance of $458,659.40, with interest at a fixed rate
of 6.75%. Mr. Czyz defaulted on the modified loan agreement.
According to plaintiffs, on February 9, 2009, defendant's
1 According to defendant, a short sale is sometimes offered by a
lender when a borrower owes more than the value of the collateral
property securing the loan. A short sale is usually an arm's length
transaction that establishes the market value of the collateral.
The lender agrees to accept the sale proceeds as full payment of
the loan.
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employees entered the home to winterize it and allegedly damaged
the pipes. Plaintiffs claimed that because of the negligent
winterization, the pipes burst and the home sustained water damage.
In March 2009, Mr. Czyz filed an action against defendant in
the Florida courts. Apparently at that time, plaintiffs were
residing in Florida. They asserted fraud claims arising from
defendant's alleged refusal to permit a short sale of the
Bloomingdale, New Jersey property from Mr. Czyz to Ms. Czyz (then
Ms. Caucci), and the loan modification agreement. The Florida
trial court granted summary judgment in favor of defendant, and
Mr. Czyz's appeal was not successful.
In 2012, plaintiffs filed an action in the Law Division,
asserting the same claims that Mr. Czyz raised in the Florida
action. They also asserted claims for property damage,
misapplication of casualty insurance proceeds, and a violation of
the federal Truth in Lending Act (TILA), 15 U.S.C.A. §§ 1601 to
1693. This action also was unsuccessful.
In April 2015, plaintiffs filed this action against
defendant. In their complaint, plaintiffs asserted a claim for
negligence, alleging that defendant's employees had entered the
home in February 2009 without permission. Plaintiffs claimed that
several days later as a result of defendant's negligence, the
pipes burst and flooded the home. Plaintiffs further alleged that
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the pipes burst again in December 2011, and caused additional
damage. Plaintiffs claimed that in 2009 and 2011, they paid to
repair the damage to the home.
Plaintiffs also allege that after the pipes in the home burst
in December 2011, they submitted a claim to an insurance company
to compensate them for the loss. According to plaintiffs, defendant
directed the insurance company to make the check for the damage
payable to defendant. Plaintiffs claim that defendant fraudulently
cashed the check and refused to tender any payment to them.
Plaintiffs also asserted a claim of fraud with regard to the
original loan. Plaintiffs allege that the loan agreement was void
or voidable. Plaintiffs claim that at the time Mr. Czyz entered
into the original loan agreement, he was mentally and physically
impaired as a result of having been struck by a cement truck in
2002. Plaintiffs allege that New Century falsely represented that
the loan was a sound agreement, and that Mr. Czyz would be able
to keep his home. Plaintiffs assert that Mr. Czyz relied to his
detriment upon these false representations.
In addition, plaintiffs asserted a claim of fraud regarding
the modified loan agreement; a claim that the original loan
violated the TILA; a claim that defendant and New Century
fraudulently failed to disclose certain material terms of the
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original loan; and a claim that defendant breached the covenant
of good faith and fair dealing with regard to the original loan.
In lieu of an answer, defendant filed a motion to dismiss the
complaint pursuant to Rule 4:6-2(e). Defendant argued that the
claims regarding the alleged negligent winterization of the home
and all claims related to the original loan were barred by the
applicable statute of limitations. Defendant further argued that
claims relating to the alleged flooding of the home in December
2011 were not properly pled as tort claims since they are contract-
based claims. In addition, defendant asserted that Ms. Czyz's
claims should be dismissed because she did not have standing to
pursue any of the claims in the complaint.
The trial court entered an order dated September 11, 2015,
which denied the motion without prejudice, because the motion
papers had not been served upon Ms. Czyz in the manner required
by the court rules. On October 19, 2015, defendant re-filed its
motion. The court entered an order dated November 6, 2015, which
granted defendant's motion to dismiss Ms. Czyz's claims because
she lacked standing. The order also dismissed the complaint because
it did not assert any claim upon which relief could be granted.
This appeal followed.
On appeal, plaintiffs argue that the trial court erred by
finding that Ms. Czyz lacked standing to pursue the claims in the
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complaint. They also argue that the court erred by dismissing
their claims.
II.
We first consider plaintiffs' contention that Ms. Czyz had
standing to assert the claims in the complaint. Plaintiffs contend
that Ms. Czyz became an owner of the mortgaged property on April
27, 2007, when she married Mr. Czyz. Plaintiffs therefore argue
that Ms. Czyz had standing to assert the claims.
Here, the trial court correctly found that Ms. Czyz did not
have standing to assert the claims in the complaint. The claims
are tort claims, but relate to and arise from the original
note/mortgage and the loan modification agreement. It is
undisputed that Ms. Czyz is not a party to those agreements. Ms.
Czyz cannot assert claims based on those agreements.
The test for determining whether a third-party may bring an
action under a contract is whether the parties to the agreement
intended that a third-party "should receive a benefit that might
be enforced in court." GE Capital Mortg. Servs., Inc. v. Privetera,
346 N.J. Super. 424, 434 (App. Div. 2002). "The contractual intent
to recognize a right to performance in the third person is the
key." Ibid. (quoting Broadway Maint. Corp. v. Rutgers, The State
Univ., 90 N.J. 253, 259 (1982)).
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In this case, there is no allegation that when Mr. Czyz
entered into the subject agreements, he and the other parties to
the agreements intended to confer some benefit upon Ms. Czyz that
could be enforced in court. Since Ms. Czyz does not have the right
to pursue any contract-based claims against defendant, she also
does not have the right to assert tort claims related to the making
and performance of those agreements.
Moreover, Ms. Czyz did not have an interest in the property
that would give her standing to pursue the claims in the complaint.
Ms. Czyz alleges she became an owner of the property based upon a
quitclaim deed in which Mr. Czyz transferred the property to her.
The deed includes a certification from a notary, which stated that
Mr. Czyz signed and delivered the deed on April 18, 2011.
However, in the original note/mortgage, Mr. Czyz agreed that
he would not transfer any interest in the collateral property
without the lender's prior consent. Plaintiffs do not claim that
defendant ever consented to the transfer of the property to Ms.
Czyz. Indeed, plaintiffs have acknowledged that in 2007, defendant
refused to approve a short sale of the property from Mr. Czyz to
Ms. Czyz (then Ms. Caucci).
Furthermore, although plaintiffs apparently were married in
April 2007, the marriage did not give Ms. Czyz standing to assert
the claims in the complaint. Under N.J.S.A. 3B:28-3, a spouse has
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a right of joint possession to the principal marital residence.
However, that right is subject to the lien of a mortgage, if placed
on the residence before the marriage. N.J.S.A. 3B:28-3.1; see also
Wamco XV Ltd. v. Farrell, 301 N.J. Super. 73, 79 (App. Div. 1997)
(noting that under N.J.S.A. 3B:28-3.1, in order to avoid the
spouse's right to joint possession, the encumbrance must be placed
on the property before the marriage).
Ms. Czyz may have a right of joint possession to the marital
residence. However, such a right of possession does not give her
standing to assert claims arising from the original loan and loan
modification agreements.
III.
Next, we consider plaintiffs' contention that the trial court
erred by dismissing their claims. Plaintiffs contend defendant's
motion was procedurally defective; defendant waived the grounds
upon which it sought dismissal; the claims were not time-barred
because they allegedly relate back to earlier-filed litigation;
the claims arising in 2011 were properly pled; and defendant's
motion to dismiss should have been denied based on considerations
of equity and public policy.
We are convinced that these arguments are without sufficient
merit to warrant discussion. R. 2:11-3(e)(1)(E). However, we add
the following comments.
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Here, defendant moved to dismiss plaintiffs' claims pursuant
to Rule 4:6-2(e), arguing that in their complaint, plaintiffs
failed to assert claims upon which relief can be granted. In
reviewing a motion to dismiss under Rule 4:6-2(e), the court must
determine if a cause of action is suggested by the facts alleged.
Printing Mart-Morristown v. Sharp Electronics Corp., 116 N.J. 739,
746 (1989) (citing Velantzas v. Colgate-Palmolive Co., 109 N.J.
189, 192 (1988)). Generally, the "inquiry is limited to examining
the legal sufficiency of the facts alleged on the face of the
complaint." Ibid. (citing Rieder v. Dep't of Transp., 221 N.J.
Super. 547, 552 (App. Div. 1987)).
We reject plaintiffs' contention that defendant's motion was
procedurally defective because defendant did not submit a
certification or affidavit in support of its motion. In the motion,
defendant relied upon the facts as alleged in the complaint, as
well as the documents referred to in the pleadings. See Myska v.
N.J. Mfrs. Ins. Co., 440 N.J. Super. 458, 482 (App. Div.) (noting
that in ruling on a Rule 4:6-2(e) motion to dismiss, the court may
consider documents referred to in the pleadings), appeal
dismissed, 224 N.J. 523 (2016). Therefore, defendant was not
required to submit a certification or affidavit to establish any
relevant facts.
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We also reject plaintiffs' argument that the trial court
erred by finding that their claims were barred by the applicable
statutes of limitation. Here, plaintiffs asserted a claim of
negligence, based upon damage defendant's employees allegedly
caused to the pipes in the mortgaged property. According to the
complaint, defendant's employees damaged the pipes on February 9,
2009, when they entered the home to winterize it.
A claim for tortious injury to real property must be filed
within six years after the cause of action has accrued. N.J.S.A.
2A:14—1. Although plaintiffs claim that due to the negligence of
defendant's employees, the house sustained damage in 2009 and
2011, the cause of action accrued at the time of the alleged
negligent act, which plaintiffs claim occurred on February 9,
2009. The trial court correctly found that the negligence claim
was not timely filed.
Plaintiffs also asserted claims of fraud with regard to the
original note dated October 7, 2005, and the loan modification
agreement dated August 5, 2008. A cause of action for fraud also
is subject to N.J.S.A. 2A:14-1, and must be filed within six years
after the cause of action has accrued.
In this case, plaintiffs claim that when Mr. Czyz made the
original loan, New Century represented to him that the mortgage
was "a normal enforceable mortgage" with a non-usurious rate of
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interest, and that he would be able to "keep his home." As noted,
plaintiffs claim that New Century knew these representations were
false, and Mr. Czyz relied upon them to his detriment.
However, Mr. Czyz obviously knew about the rate of interest
on the loan when he made the original loan. Moreover, Mr. Czyz
knew or should have known of any alleged misrepresentations at
least by 2007 when he went into default. The trial court correctly
determined that plaintiffs did not file the fraud claims regarding
the original loan within the time required by N.J.S.A. 2A:14-1.
Plaintiffs also alleged that Mr. Czyz was under duress and/or
undue influence of highly intoxicating medications when he entered
into the loan modification agreement. He claims that defendant
made certain false representations at that time. Specifically, Mr.
Czyz alleges that defendant falsely claimed it had a valid
foreclosure action on the property; it would approve a short sale
of the property; and the refinancing was the only way to avoid the
sheriff's sale.
As noted, Mr. Czyz executed the loan modification agreement
on August 5, 2008. The fraud claims regarding the loan modification
argument accrued at that time, or when Mr. Czyz defaulted on the
modified agreement, which was sometime before February 2009. The
trial court correctly determined that these claims were not filed
11 A-1523-15T2
within six years of their accrual, as required by N.J.S.A. 2A:14-
1.
In addition, plaintiffs asserted a claim under the TILA, with
regard to New Century's alleged failure to make required
disclosures in connection with the original loan. A claim for
money damages under the TILA must be asserted within one year
after the date upon which the loan is closed. 15 U.S.C.A. §
1640(e). The original loan closed on October 7, 2005. Plaintiffs'
TILA claim was not filed within one year of that date, as required
by 15 U.S.C.A. § 1640(e).
Plaintiffs also asserted a claim for breach of the implied
covenant of good faith and fair dealing, which is subject to the
six-year limitations period in N.J.S.A. 2A:14-1. The claim
pertains to the alleged false and misleading disclosures made in
October 2005, when the original loan was made. The trial court
correctly found that this claim was not asserted within the time
required by N.J.S.A. 2A:14-1.
We find no merit in plaintiffs' contention that the relevant
statutes of limitations did not bar their claims because they
filed lawsuits in 2009 and 2012, which raised the same or similar
claims. The relation-back doctrine in Rule 4:9-3 applies when a
pleading is amended and adds a claim that "arose out of the
conduct, transaction or occurrence" asserted in the original
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complaint. The rule does not, however, apply to earlier-filed
complaints in other actions.
In their complaint, plaintiffs also claimed that defendant
fraudulently retained insurance proceeds that were paid as a result
of damage to the property sustained in 2009 and/or 2011. Even if
this claim had been timely filed, the facts as alleged do not
support a claim of fraud. The record indicates that at the time
of the alleged improper diversion of funds, Mr. Czyz was in
default, and the subject agreements did not preclude defendant
from retaining the insurance proceeds and applying them to the
amounts that Mr. Czyz owed.
Affirmed.
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