KAREN PFEIFFER VS. DOROTHY FUTRELL (C-000032-20, UNION 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NOT FOR PUBLICATION WITHOUT THE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-3732-19

KAREN PFEIFFER and
STONE RIDGE
CONSULTANTS, LLC,

Plaintiffs-Respondents,

v.

DOROTHY FUTRELL,

Defendant-Appellant.
__________________________

Argued June 9, 2021 – Decided July 23, 2021

Before Judges Sumners and Geiger.

On appeal from the Superior Court of New Jersey,
Chancery Division, Union County, Docket No.
C-000032-20.

Kenneth W. Thomas argued the cause for appellant
(Lanza Law Firm, LLP, attorneys; Kenneth W. Thomas,
of counsel and on the briefs).

Carmine LoFaro argued the cause for respondent
(Lofaro & Reiser, LLP, attorneys; Eric D. Reiser and
Carmine LoFaro, on the brief).
PER CURIAM

Defendant Dorothy Futrell appeals from Judge Robert J. Mega's May 22,

2020 amended order compelling her to sell a single-family home in Plainfield

("the property") to plaintiffs Karen Pfeiffer and Stone Ridge Consultants, LLC

(Stone Ridge) in accordance with the terms of their contract for sale of real

estate. We affirm.

I

On October 16, 2017, Bank of America (BOA) obtained a final judgment

of foreclosure against Futrell in the amount of $59,443.92 pertaining to the

property. A September 4, 2019 court order increased the final judgment to

$77,314.92.

Prior to the scheduled sheriff's sale of the property on September 18, 2019,

Futrell was contacted by a man named "Thom," who advised her that she could

enter an arrangement with Pfeiffer that would enable her to remain in the

property for a couple more years. After the three of them met, Futrell and

Pfeiffer entered into a September 16, 2019 contract in which she agreed to sell

the property to plaintiffs for $120,000. The next day, Futrell was successful in

getting the motion judge to stay the sheriff's sale for sixty days because of the

contract.

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 The November 14 closing did not take place because Futrell failed to

appear. She then obtained a second order from the same motion judge, staying

the sheriff's sale due to her representation that she needed more time to obtain a

payoff statement from BOA, as required by the closing title company. The judge

adjourned the sheriff's sale to January 8, 2020, on the condition that Futrell

present evidence of a valid closing date. Unlike the first time Futrell obtained a

stay, Pfeiffer appeared in court with Futrell for the motion.

Futrell seemingly was going through with the sale when she scheduled a

municipal inspection and obtained a certificate of compliance needed to transfer

title to the property. However, she failed to appear at the scheduled December

31, 2019 closing.

With the sheriff's sale scheduled on January 8, 2020, Futrell filed her third

motion to stay––this time without Pfeiffer's knowledge––that day. She

contended she needed additional time to refinance her mortgage. The same

judge denied the motion, resulting in the property being sold that day at a

sheriff's sale.

Futrell then asked Pfeiffer for a loan to redeem the BOA mortgage and

reacquire ownership of the property. Pfeiffer agreed, loaning Futrell $89,104.71

on behalf of Stone Ridge, which she solely owned, for which Futrell signed a

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promissory note along with a corresponding mortgage in favor of Stone Ridge.

Under the note's terms, Futrell was required to repay the loan in full by January

24, 2020. On January 16, with Futrell's written authorization, Pfeiffer redeemed

the BOA mortgage on Futrell's behalf with a cashier's check drawn on Stone

Ridge's bank account.

The parties agreed to close on January 23, but it was rescheduled at

Futrell's request to January 24. Again, Futrell failed to appear for the closing,

and she did not repay the loan by January 24.

About three weeks later, plaintiff's counsel sent a notice of intention to

accelerate the loan balance and foreclosure pursuant to the New Jersey Fair

Foreclosure Act, N.J.S.A. 2A:50-53 to -68, declaring her in breach, and sent her

a time of the essence notice demanding she appear at his office for the closing

on March 3 at 12:00 p.m. Prior to the closing, plaintiffs rejected Futrell's

counsel's proposal that if she closed, she would be allowed to live rent free at

the property for a year. Again, Futrell failed to appear at the closing.

On March 25, plaintiffs filed a six-count verified complaint against

Futrell, seeking specific performance on the parties' contract of sale and

damages under the loan documents. In accordance with Rules 4:67-1(b) and -5,

plaintiffs moved to proceed summarily and for final judgment on count one—

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breach of contract and specific performance—and count four—breach of loan

documents. Futrell opposed the motion but did not include her certification,

instead relying only on her counsel's certification. Additionally, she filed an

unverified answer and counterclaim. Despite being notified of these

deficiencies four days prior to the motion's return date, Futrell did not cure them.

On May 22, Judge Mega, who did not decide any of Futrell's three motions

to stay the sheriff's sale, granted plaintiff's motion to proceed summarily. In his

oral ruling, the judge deemed the motions unopposed under Rules 1:4-7, 1:6-6,

and 4:67-5, due to Futrell's unverified pleading and her attorney's certification

being inadmissible hearsay, which was inadequate to establish contesting facts,

and held that because Futrell breached the contract and loan documents,

plaintiffs were entitled to judgment on counts one and four. The judge rejected

Futrell's request to relax the court rules under Rule 1:1-2(a), citing her pattern

of bad faith conduct in not closing and her failure to mail or email her

certification and verification to the court prior to the motion's return date. The

judge also rejected Futrell's predatory loan and fraud counterclaims, finding

them to be disingenuous and without merit. In addition, the judge found that

Futrell was judicially estopped from disavowing the contract of sale and loan on

account of her prior bad faith actions including: her repeated failure to close,

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her assertion of an inconsistent position before the foreclosure court that the

contract was valid, and her use of the loan from plaintiffs to redeem her

mortgage after her property was sold at the sheriff's sale.

The judge's order compelled Futrell to convey ownership of the property

to plaintiffs pursuant to their contract of sale; entered judgment against Futrell

under the loan documents in the amount of $90,789.16; and required Futrell to

pay plaintiffs a $1000 per month use and occupancy charge for each month she

remained at the property beyond the June 19, 2020 closing date. Later that day,

the judge amended the order clarifying that Futrell's counterclaim and third-

party complaint were dismissed with prejudice.

Futrell first argues that the judge should have relaxed the court rules and

not dismissed with prejudice her unverified answer with a counterclaim and her

third-party complaint. She maintains she was unable to sign her pleadings

electronically, could not travel to her attorney's office because her purse and car

keys were stolen, and her attorney declined to personally drive to her house to

obtain her signature due to the COVID-19 pandemic. We are unpersuaded.

Rule 1:1-2 permits relaxation of our court rules, stating the rules "shall be

construed to secure a just determination, simplicity in procedure, fairness in

administration and the elimination of unjustifiable expense and delay."

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Moreover, "[u]nless otherwise stated, any rule may be relaxed or dispensed with

by the court" that is hearing the action "if adherence to it would result in an

injustice." R. 1:1-2(a).

As recognized in Romagnola v. Gillespie, Inc., "Rule 1:1-2 is not meant

as a safe harbor for the dilatory; its 'catch-all' nature is not intended to serve as

a cure-all." 194 N.J. 596, 606 (2008). A party seeking relaxation of the rules

"bear[s] a heavy burden." Ibid. "[R]elief under th[e] Rule will be granted only

sparingly and only after an appropriate examination and weighing of all relevant

factors has occurred." Id. at 606-07. There must be a showing of specific facts,

"which, if believed, would provide the court with an adequate basis on which to

rest its decision" to provide relief. State v. Mitchell, 126 N.J. 565, 579 (1992).

Our review of the record convinces us that Judge Mega did not abuse his

discretion by declining to relax the rules. See Schweizer v. MacPhee, 130 N.J.

Super. 123, 126-27 (App. Div. 1974) ("Since [Rule 1:1-2] relaxation is

discretionary with the trial judge . . . we have reviewed the matter to the end of

examining the exercise of discretion below . . . ."). The judge correctly

determined the facts did not warrant relaxation of the verification and

certification rules, and that Futrell's claims and defenses had no merit, due to

her bad faith conduct. The judge stated:

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 [A]t a minimum, the certification, any certifications or
paperwork could have been sent in the mail, taken two
days to get there, two days to get back, and it could have
been e-mailed to the [c]ourt. So[,] I understand your
position as an advocate and everything, but I, you
know, I'm looking at [Futrell's] actions here as to what's
been done since [BOA] first declared her in default, you
know, back in 2016 and brought it all the way to the
sheriff's sale, and there just seems to be a pattern here.

....

In the present matter, plaintiffs have sought to obtain
specific performance on a contract. There are no issues
of material fact. This . . . matter may proceed
summarily. It's very clear to the [c]ourt that the rules
need to be followed. There's no reason to relax them.
Counsel brings up a good point where he talks about
unclean hands, and he is . . . actually doing equity.

This is a case where actions really do speak louder than
words. Because if we look at the recitation of facts that
. . . [are in] the record, the most . . . glaring fact is this
property was lost at [a] sheriff's sale. But for this loan,
had this loan not come along because [Pfeiffer and
Stone Ridge] [were] loaning the money so [they] could
complete a purchase, and . . . the parties had been
previously negotiating, [the property] was lost at [a]
sheriff's sale. [Futrell] was out of her house. This loan
only came in as—for lack of a better term, a bridge
loan, to get the property back under a contract so it
could be closed upon and the matter proceed
accordingly.

Not only did the judge determine that the facts did not warrant relaxation

of the verification and certification rules, but he also found that Futrell's claims

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and defenses had no merit, due to her bad faith conduct. We see no basis to

upset that determination.

Futrell next contends the order to proceed summarily deprived her of

discovery that could support her claims and defenses, thereby denying her due

process rights, H.E.S. v. J.C.S., 175 N.J. 309, 321-22 (2003), and the opportunity

to have all issues resolved during a trial on the merits. She argues her loan from

plaintiffs was predatory because there was no conceivable way that she could

have repaid a $89,000 loan she signed while hospitalized, within a couple of

weeks. Futrell maintains plaintiffs engaged in equity stripping,1 resulting in

both the contract for the sale of the property and the loan contract being

unconscionable and unenforceable along with being violative of New Jersey's

Consumer Fraud Act ("CFA"), N.J.S.A. 56:8-1 to -20. Citing Cox v. Sears,

Roebuck & Co., 138 N.J. 2, 23 (1994), she contends plaintiffs' loan constituted

unconscionable commercial practices under the CFA and that debt can constitute

an ascertainable loss under the CFA, "because the consumer is not obligated to

pay an indebtedness arising out of conduct that violates the [CFA]." Futrell

1
Equity stripping involves "lending based on the value of the asset securing the
loan rather than a borrower's ability to repay . . . ." Hargraves v. Capital City
Mortg. Corp., 140 F. Supp. 2d 7, 20 (D.D.C. 2000). The lender profits through
obtaining the property when the borrower defaults rather than through loan
payments. Id. at 20-21.
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points out that she requested rescission or reformation of the contracts at issue

because equity may allow recission in a contract under certain circumstances,

unconscionability being one of them. Conduit & Foundation Corp. v. City of

Atl. City, 2 N.J. Super. 433, 439 (Ch. Div. 1949). Again, we are unpersuaded.

Futrell's contention that her due process rights were violated by summarily

granting judgment to plaintiffs is unsupported by the law. In accordance with

Rules 4:67-1(a), -2(a), and -5, a trial court may resolve a real estate contract

dispute in a summary proceeding through the filing of an order to show cause

supported by a verified complaint. The court conducts an initial hearing and if

"satisfied with the sufficiency of the application, [it] shall order the defendant

to show cause why final judgment should not be rendered for the relief sought."

R. 4:67-2(a). "If no objection is made by any party, or the defendant[] [has]

defaulted in the action, or the affidavits show palpably that there is no genuine

issue as to any material fact, the court may try the action on the pleadings and

affidavits and render final judgment thereon." R. 4:67-5. At the end of the

proceedings, the court must make findings of fact. MAG Entm't, LLC v. Div.

of Alcoholic Beverage Control, 375 N.J. Super. 534, 551 (App. Div. 2005).

Futrell's reliance on H.E.S. is misguided, as there, the defendant was

served the complaint less than twenty-four hours before the hearing and the trial

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court refused to grant an adjournment even though the plaintiff alleged an

incident that was not contained in the complaint. 175 N.J. at 321. Quite

differently, Futrell was given four days' notice and did request an adjournment.

Moreover, she failed to comply with Rule 1:6-6 by providing "affidavits made

on personal knowledge, setting forth only facts which are admissible in evidence

to which the affiant is competent to testify and which may have annexed thereto

certified copies of all papers or parts thereof referred to therein ."

Since this was a summary action and not a summary judgment motion,

there were no favorable inferences to the opposing party; thus, Futrell's reliance

on entitlement to favorable inference is mistaken. See O'Connell v. N.J. Mfrs.

Ins. Co., 306 N.J. Super. 166, 172-73 (App. Div. 1997) (applying a substantial-

credible-evidence standard in reviewing a decision from a summary action). As

noted, the judge here properly analyzed Rules 1:4-7, 1:6-6, and 4:67-5, granting

summary disposition in plaintiffs' favor based on the facts presented in the

verified complaint and the lack of opposition given Futrell's unverified answer

and uncertified opposition to plaintiffs' summary motion.

In sum, Futrell was given an opportunity by plaintiffs to pay off the

foreclosure judgment on the property and make a profit by: first, selling the

property to Pfeiffer through a contract of sale prior to a sheriff's sale; or, second,

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after Futrell failed to close and the property was sold at a sheriff's sale, receiving

a loan from Stone Ridge to redeem the property so that Futrell could transfer

title to plaintiffs, which she refused to do. Futrell, however, reneged on her

agreements and failed to adhere to our pleading requirements. Accordingly,

Judge Mega's order is unassailable.

To the extent we have not addressed any of Futrell's remaining arguments,

it is because they are without sufficient merit to warrant discussion in a written

opinion. R. 2:11-3(e)(1)(E).

Affirmed.

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