SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3096-16T1

WELLS FARGO BANK, N.A.,

Plaintiff-Respondent,

v.

NARESH G. GIDWANI and

BINA R. GIDWANI,

Defendants-Appellants.

_____________________________

Submitted March 5, 2018 – Decided

Before Judges Messano and O'Connor.

On appeal from Superior Court of New Jersey,

Chancery Division, Middlesex County, Docket 

No. F-024030-14.

Law Offices of Joseph A. Chang & Associates,

attorneys for appellants (Joseph A. Chang,

of counsel; Jeffrey Zajac, on the briefs).

Reed Smith, LLP, attorneys for respondent 

(Henry F. Reichner, of counsel; Brian P. 

Matthews, on the brief).

PER CURIAM

NOT FOR PUBLICATION WITHOUT THE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.

August 3, 2018
A-3096-16T1

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In this residential mortgage foreclosure action, defendants 

Naresh G. Gidwani and Bina R. Gidwani1 appeal from a final 

judgment of foreclosure, contending the court erred when it 

entered summary judgment for plaintiff Wells Fargo Bank, N.A. 

We affirm. 

I

We culled the following from the record. In 2004,

defendants were married and owned a home together. Their home 

was encumbered by a mortgage and a home equity line of credit. 

That year, Naresh lost his job and Bina stopped working for many 

months to care for her parents, who were gravely ill. In 

October 2005, defendants were still struggling financially and 

decided to refinance the mortgage and home equity line of 

credit. Defendants believed refinancing and consolidating these 

debts would ultimately save them money and improve their 

financial condition. At that time, the outstanding principal 

balance of these debts totaled $148,726.63. 

Defendants obtained a $165,000 refinance mortgage loan

(refinance mortgage) from plaintiff's predecessor, Wachovia 

Bank, N.A. (Wachovia), and executed a thirty-year note and a 

mortgage against their home. The interest rate on the loan was 

 

1 Because they share the same surname, for clarity and 

simplicity, we refer to the defendants by their forenames. We 

do not intend any disrespect by such informality. 
A-3096-16T1

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6.05 percent per annum. The first page of the note states 

defendants agreed to pay interest on the unpaid principal 

balance, and that "the 6.05 percent interest rate would be 

charged at a rate of 1/365th of the rate for each day." The note 

also stated the loan would be paid off in thirty years if the 

monthly payments were paid on time; otherwise, defendants "may 

owe additional and substantial money at the end of the credit 

transaction and there may be little or no reduction of 

[p]rincipal."

Defendants used the loan proceeds to pay off the previous 

mortgage and the home equity line of credit, and retained 

$16,000 in cash. Defendants were not charged any fees or costs 

to complete the transaction. The monthly mortgage payment was 

$996.76; it is not known what defendants paid each month on the 

previous mortgage and the home equity line of credit.

Defendants timely made every monthly mortgage payment until 

November 2010, when they made their last payment, defaulting on 

the loan. In 2014, plaintiff, which had acquired Wachovia in 

March 2010, filed a complaint in foreclosure. In their answer,

defendants assert the affirmative defense of recoupment,

claiming plaintiff violated the Consumer Fraud Act (CFA),

N.J.S.A. 56:8-2 to -210, and the Truth in Lending Act (TILA), 15 

U.S.C. § 1638. 
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In their brief before us, defendants clarify that the

recoupment claim is premised upon plaintiff violating the CFA by

transgressing "Regulation Z," see 12 C.F.R. § 226.1(b) (2018). 

Regulation Z requires a lender to disclose to potential 

borrowers certain details about the terms and the costs of a 

proposed loan. See ibid. Defendants are not alleging plaintiff 

violated any provision in TILA as a discrete claim. They

contend plaintiff engaged in an unconscionable commercial 

practice under the CFA, see N.J.S.A. 56:8-2, because, contrary 

to Regulation Z, plaintiff failed to disclose that the "daily 

simple interest feature" of the refinance mortgage could result 

in a borrower paying far more in interest than if the borrower 

had a "conventional" mortgage. 

Plaintiff moved for summary judgment, asserting it had a 

right to foreclose upon the refinance mortgage as a matter of 

law given defendants defaulted on the loan. Defendants opposed 

the motion, arguing plaintiff had engaged in predatory lending 

by issuing the refinance mortgage to them when their combined 

annual income was only $12,225 in 2004, and by failing to 

disclose the aforementioned terms of the refinance mortgage.

Defendants did not deny executing the note and refinance 

mortgage, but they claimed they were not given an opportunity to 

read these and related documents before the closing on the 
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refinance mortgage and were never provided a copy of such 

documents thereafter. 

In support of their contention plaintiff engaged in 

predatory lending, defendants submitted an expert's report from 

an accountant. The expert noted the refinance mortgage 

defendants obtained from plaintiff was of a kind that initially 

applies monthly mortgage payments to only the interest owed. 

Once the accumulated accrued interest has been paid off, the 

monthly payments are then applied to the principal. In a 

conventional mortgage, the monthly mortgage payment is applied 

to both the interest and principal owed.

The expert noted that if defendants had timely made all 

monthly mortgage payments, the mortgage would have been paid off 

in full at the expiration of thirty years. However, because 

there was a gap in payment, had defendants resumed making the 

monthly mortgage payments in 2016, defendants would still owe 

$155,192.99 at the time the loan matured in 2035. We note 

defendants never resumed paying the mortgage after they 

defaulted in 2010 and, therefore, the eventuality envisioned by 

the expert did not materialize.

The court granted plaintiff summary judgment. It found 

defendants' claim for recoupment unavailing because any action 

against plaintiff for recoupment was dependent upon proving 
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plaintiff violated the CFA, and the six year statute of 

limitations for CFA claims, see N.J.S.A. 2A:14-1, had expired. 

The court otherwise found plaintiff proved it was entitled to 

foreclose upon the refinance mortgage. Defendants' motion for 

reconsideration of the order granting plaintiff summary judgment 

was denied. 

The court subsequently entered final judgment foreclosing 

the refinance mortgage. The judgment stated $235,915.17 is the 

sum "plaintiff is entitled to have[,]" together with counsel 

fees of $3,421.15 and interest. Whether defendants will have to 

pay plaintiff in accordance with the terms of the final judgment 

will depend upon whether plaintiff pursues and prevails in a 

deficiency action against them. 

II

On appeal, defendants contend the trial court erred when it 

granted plaintiff summary judgment. Defendants argue there was 

evidence plaintiff engaged in predatory lending because 

plaintiff (1) extended a loan to defendants when they were 

unemployed and presumably unable to make the monthly mortgage

payments, and (2) did not advise defendants the refinance 

mortgage was "an unconventional mortgage product that had the 

potential to cost them much more than a standard loan." 
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Defendants also maintain their claim for recoupment was not 

barred by any statute of limitations. 

We review a trial court's decision on summary judgment "de 

novo, employing the same standard used by the trial court."

Tarabokia v. Structure Tone, 429 N.J. Super. 103, 106 (App. Div. 

2012) (citing Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 

N.J. Super. 162, 167 (App. Div. 1998)). We give "no deference 

to the trial judge's conclusions on issues of law." DepoLink 

Court Reporting & Litig. Servs. v. Rochman, 430 N.J. Super. 325,

333 (App. Div. 2013) (citing Zabilowicz v. Kelsey, 200 N.J. 507, 

512-13 (2009)). Thus, we must also "view the evidence in the 

light most favorable to the non-moving party and analyze whether 

the moving party was entitled to judgment as a matter of law."

Mem'l Props., LLC v. Zurich Am. Ins. Co., 210 N.J. 512, 524 

(2012) (citing Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 

520, 523 (1995)). 

We agree defendants' recoupment claim was not time barred. 

Recoupment "is never barred by the statute of limitations so 

long as the main action itself is timely." Beneficial Fin. Co. 

v. Swaggerty, 86 N.J. 602, 609 (1981) (quoting Bull v. United 

States, 295 U.S. 247, 262 (1935)); see also Assocs. Home Equity 

Servs., Inc. v. Troup, 343 N.J. Super. 254, 271-72 (App. Div. 

2001) (noting the defendant homeowners in a mortgage foreclosure 
A-3096-16T1

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action were permitted to assert an equitable recoupment defense,

even though a CFA claim against the mortgagee was time barred). 

Notwithstanding defendants' recoupment claim is not timebarred, we question, without deciding, whether under these 

particular circumstances plaintiff engaged in an unconscionable 

commercial practice because it extended the refinance mortgage 

to defendants knowing they were unemployed. 

Before acquiring the refinance mortgage, defendants were 

already burdened with a primary mortgage and a home equity line 

of credit, for which they had to make monthly payments. 

Defendants had determined that consolidating and refinancing 

such debt was in their best interests. They also assumed their 

unemployment was temporary and their ability to make monthly 

payments toward the refinance mortgage was feasible. Defendants 

wanted to refinance the primary mortgage and home equity line 

against their home because it provided relief from their 

financial problems. 

Second, there is no evidence from an expert supporting 

defendants' claim that extending the refinance mortgage to 

defendants constituted predatory lending. Further, even if 

plaintiff had engaged in the unconscionable commercial practices 

alleged by defendants, they did not sustain any damages. To 

prove a cause of action under the CFA, a party must not only 
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prove the defendant engaged in conduct that violated the CFA,

but also that such conduct caused the plaintiff to sustain an 

ascertainable loss. N.J. Citizen Action v. Schering-Plough

Corp., 367 N.J. Super. 8, 12-13 (App. Div. 2003). 

There is no evidence defendants sustained any damages as a 

result of refinancing and paying off the primary mortgage and 

the home equity line of credit, and retaining $16,000 in cash 

from the refinance mortgage. Although defendants' expert states 

they would have still owed $155,192.99 in 2035 had they resumed 

paying off the refinance mortgage in 2016, defendants did not do 

so and this mortgage has now been foreclosed. Thus, there is no 

evidence defendants were damaged as a result of being issued 

this particular kind of loan. 

More important, defendants do not challenge the fact the 

final judgment provides that $235,915.17 is the sum they 

ostensibly owe plaintiff. Significantly, defendants do not 

contend the latter figure would have been less had they been 

issued a conventional mortgage. 

Because defendants did not sustain an ascertainable loss,

they cannot show plaintiff violated the CFA and, thus,

defendants cannot prevail on a claim for recoupment in the event 

plaintiff successfully prevails in a deficiency action against 
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them. The trial court's decision to grant summary judgment to 

plaintiff was appropriate.

Affirmed.