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PER CURIAM NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not " constitute precedent or be binding upon any court . " A lthough 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, 2018A - 3096
- 16T1 2 In this residential mortgage foreclosure action , d efendants Naresh G. Gidwani and Bina R. Gidwani 1 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 own ed 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 strugg ling 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 , t he outstanding pri ncipal balance of these debts totaled $148 , 726.63. Defendants obtained a $165 , 000 refinance mortgage loan (refinance mortgage) from p laintiff ' s predecessor , Wachovia
Bank , N.A. (Wachovia) , and execut ed 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 3 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 1/365 th of the rat e 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 c omplaint 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 .A - 3096
- 16T1 4 In their brief before us , defendants clarify that the recoupment claim is premised upon plaintiff violating the CFA by transgressing " R egulation Z ," see 12 C.F.R. § 226.1(b) (2018 ) . Regulation Z requires a lender to disclose to potential
borrower s certain details about the terms and the costs of a proposed loan. See i bid. Defendants are not alleging plaintiff violated any provision in TILA as a discrete claim . They

conten d 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 p aying 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.

D e fendants 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 theA - 3096
- 16T1 5 refinance mortgage and were never provided a copy of such
documents thereafte r. 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 monthl y mortgage payment s to only the interest owed . Once t he accumulated accrued interest has been paid off , t he 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 maki ng 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 expe rt 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 provingA - 3096
- 16T1 6 plaintiff violated the CFA , and the six year statu te 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[ , ] " tog ether with counsel fees of $3 , 421.15 and interest . W hether defendants will have to pay plaintiff in accordance with the terms of the final judgment
wil l depend upon whether plaintiff pursues and prevails in a deficiency action against them . II On appea l , 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. "A - 3096
- 16T1 7 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. " Depo L ink Court Reporting & Litig. Servs. v. Ro chman , 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 jud gment 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.

R ecoupment " 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)) ; s ee 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 foreclosureA - 3096
- 16T1 8 action were permitted to assert an equitable recoupment defense , even though a CFA claim agains t the mortgagee was time barred ). Notwithstanding def endants ' recoupment claim is not time

barred , 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 . De fendants 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 payment s toward the refinance mortgage was feasible . Defendants wanted to refinance the primary mort gage and home equity line against their home because it provide d 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 len ding. Further , e ven if plaintiff had engaged in the unconscionable commercial practice s alleged by defendants , they did not sustain any damages . To prove a cause of action under the CFA , a party must not onlyA - 3096
- 16T1 9 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

resu lt of refinan cing and paying off the primary mortgage and
the home equity line of credit , and retaining $16 , 000 in cash
from t he refinance mortgage . A lthough defendants ' expert states they would have still owed $155 , 192.99 in 203 5 had they resumed paying off the refinance mortgage in 2016 , defendants did not do
so and this mortgage has now been foreclosed . Thus , t here is no
evidence defendants were damaged as a result of being issued
this particular kind of loan. More important , defendants do not chall enge 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 no t sustain an ascertainable loss , they cannot show plaintiff violated the CFA and , thus , defendants cannot prevail on a c laim for recoupment in the event plaintiff successfully prevails in a deficiency action againstA - 3096
- 16T1 10 them . The trial court ' s decision to grant summary judgment to plaintiff was appropriate.
Affirmed.