SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION DOCKET NO. A-0489- 21 ROM SP EN MORTGAGE LIMITED PARTNERSHIP, Plaintiff-Respondent,

v. AURA DEVELOPMENT GROUP, LLC, Defendant-Respondent, and AURA INVESTORS, LLC and THIRD STATE INVESTORS, LLC, Defendants-Appellants.

____ ____________________________

Argued October 2, 2023

– Decided January 22, 2024 Before Judges DeAlmeida, Berdote Byrne, and Bishop-Thompson. On appeal from the Superior Court of New Jersey,Chancery Division, Gloucester County, Docket No. C000054

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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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 t he internet, this opinion is binding only on the parti es in the case and its use in other cases is limite d. R. 1:36- 3.2 A- 0489

- 21 Robert Vincent Dell'Osa argued the cause for appellants (Cozen O'Connor, attorneys; Robert Vincent Dell'Osa, of counsel and on the briefs ). Michael R. Yellin argued the cause for respondent (Cole Schotz, PC, attorneys; Michael R. Yellin, of counsel and on the brief; Arnold Paul Picinich, III , on the brief).
PER CURIAM This case involv es the priority of liens amongst three parties with r espect

to the last two parcels of land in a residential deve lopment project. Third State Investors, LLC (Third State) and Aura Investors, LL C (Aura Investors) (collectively "appellants") appeal the trial court' s grant of reconsideration in favor of plaintiff and argue the trial court erred in granting Rom sp en an equitable mortgage and second priority lien because actual, n ot constructive, notice of a mortgage is necessary, and erred in failing to grant their mot ion for reconsideration. We find no basis to disturb the t rial court's findings and affirm.
I.
Rom sp en Mortgage (Romspen) is an Ontario limited partnership. Aura Development Group, LLC ( ADG ) is a New Jersey limited liability company, half-owned by John B. Canuso, Sr. (Canuso) individually and half by Canuso through Aura Investors. Canuso also owned Canuso Com munities Corp., which was ADG's non-member manager and a guarantor.3 A- 0489

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Canuso intended to assemble eight contiguous parce ls in Glassboro and Elk for development as "Aura," an integrated reside ntial community consisting primarily of single-family homes. H e acquired the parcels in Glassboro, comprising parcels A through E, along with parcel F -1 in Elk. The purchase agreements for parcels F-2, G, and H. Canuso wanted to purchase parcels F-2, G, and H , located in Elk, with Romspen funding. In 2003, Canetic Land LLC (Caneti c), another Canuso entity, entered a contract to purchase parcel F-2 from Orle ans Homebuilders, Inc. (Orleans). On February 10, 2012, Latham Investors, LLC (Latham) , yet another Canuso entity, entered into a contract to purchase approximately 442 acres in Elk from Orleans. The land comprised parcels G and H, which totaled approximately 95 acres, plus approximately 350 addi tional acres that were never intended to be part of the Aura project. Canetic a ssigned its contract rights to purchase parcel F- 2 to ADG. Canuso, through Latham, similarly assigned ADG its contract rights to purchase G, H, and the addit ional acreage from Orleans. The loan commitment letter. An internal Romspen email, written by Thomas Conwe ll (Conwell) on January 9, 2013, described the Aura project as the development of residential lots for bulk sale to home builders. He noted ADG' s $13 million loan request4 A- 0489

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was divided between a term loan "to repay existing ba nk loans and complete the purchase of some lots that are under contract" and a revolving loan "for development and approval costs on groups of lots pr ior to sale. " On April 8, 2013, Romspen sent Robert Swartz (Swar tz), ADG's attorney, a loan commitment letter (the commitment letter), e xecuted on April 9, nam ing ADG as the borrower. The "approved loan amount" of $13 million was allocated between a term loan of $8.5 million and a revolving loan of $4.5 million. For the term loan, approximately $3,762,000 of the init ial advance would be used "to repay existing registered mortgages and to assi st in acquiring additional lands . . . in accordance with a schedule to be agr eed to by Lender," while approximately $4,245,000 would be advanced in increm ents "to assist in further repayment of existing registered mortgages and to a ssist in acquiring further additional lands." Revolving loan proceeds would b e advanced as needed "to fund the cost of site improvements, interest, appro vals, overhead, and related
costs." The "Property," which would serve as loan collatera l, was defined as parcels A through H. The loan was to be secured by a promissory note an d a $13 million "first mortgage lien and fixture filing, and other securit y satisfactory to Lender's5 A- 0489

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attorneys, in the amount of $13,000,000, on the Pro perty." The commitment letter also stated, separately and in boldface:

No secondary financing with respect to the Property or the Acquired Assets shall be permitted at any time during which the Loan remains outstanding, without Lender's express written consen t. The Romspen loan, mortgage, and related agreements

. ADG and Romspen entered into the loan agreement on May 16, 2013 (loan agreement), which incorporated "all covenants, agre ements, representations and warranties made" in connection with it . The term loan of $8.5 million was for ADG to acquire parcel F-2 and parcels G and H pursu ant to the purchase agreements assigned to ADG, with the revolving loan of $4.5 million to fund development. The loan agreement required ADG to grant Romspen a first mortgage, as well as a "first lien security interest" in all "af ter acquired property . . . immediately upon acquisition of same. " The "future property" provision prevented ADG from altering its purchase agreements for p arcels F-2, G, and H without Rom spen's permission. It also required ADG to give Ro mspen a lien on those parcels "[s]imultaneously with the acquisitio n by Borrower of any of" them.6 A- 0489

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The loan agreement required ADG to sell lots worth $1.2 million to home builders within a year of the loan closing and made ADG's failure to do so an event of default. ADG would also be in default if it transfer red any interest in any part of the Property without Romspen's approval . "Transfer" was defined broadly to includ e:

any transaction pursuant to which any Person is gra nted an option to purchase all or any portion of the Pro perty or any direct, indirect or beneficial interest in Borrower; and . . . any transaction, agreement or arrangement pursuant to which any Person is given any right to control, direct or veto any material actio ns or decisions by Borrower, directly or indirectly, whet her through an ownership interest, contract right or otherwise. An unapproved transfer would allow Romspen to decla re all outstanding obligations immediately due and payable, even without a de monstration of "any actual impairment or prejudice of its security or a ny increased risk of default hereunder." The loan agreement further required ADG to assign to Romspen its rights pursuant to its purchase agreements for parcel F-2, G, and H, "as security for the Loan." It is undisputed ADG was expected to be the purchaser of all three parcels, and the assignment to Romspen was intended to allow it to ensure completion of the Aura project if ADG failed to pur chase the parcels

.7 A- 0489

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ADG also issued Romspen a term promissory note and a re volving promissory note. On May 17, 2013, ADG granted Roms pen a mortgage, which was the "Security Instrument" named in the loan agr eement. The mortgage covered the entire "Property," which comprised both the "Land," meaning parcels A through F-1, and the "Additional Land," d efined as "[a]ll additional lands, estates and development rights hereafter acq uired by" ADG. The Ad ditional Land could also, "by supplemental mortgage or otherwise[,] be expressly made subject to the lien of this Security Instrument." The mortgage obligated ADG to record or file it in any manner and place that was required "to publish notice of and ful ly to protect and perfect the lien or security inte rest hereof upon, and the interest of Lender in, the Pro perty." The mortgage was recorded after the closing, but o nly for parcels A through F-1. The parties do not dispute or explain ADG 's failure to record the mortgage on parcels F-2, G, and H, to record the pu rchase agreements for them that ADG assigned to Romspen, or to record the loan agreement with respect to any of the parcels as required by the loan document s. The parcel F-2 closing, and ADG's first inquiry to Third State. On October 14, 2013, ADG exercised its option to p urchase parcel F- 2 from Orleans. Romspen and ADG amended the mortgage to reflect their8 A- 0489

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execution of the "spreader" agreement, which spread the mortgage and the Security Instrument to parcel F-2. The "spreader m ortgage" was recorded. On January 13, 2014, Stephen Patron (Patron), a re al estate consultant to Third State, sent an email to Canuso and Swartz to thank them for meeting with him and "sharing the details of your project." Pat ron had questions about the land, improvements, and construction costs

— one of which was whether parcels G and H could be purchased without Romspen funds. Swa rtz replied it could be done, but "there are costs, approvals and improveme nts that have already been funded by Romspen and we would anticipate they will require a release that will have to be negotiated with them. " ADG's loan defaults, including its failure to purch ase parcels G and H. On August 7, 2014, Conwell sent ADG an email noting it failed to sell $1.2 million in lots to home builders within a year of the loan's closing, the failure was a default, and he was "going to call [C anuso] and express [his] profound disappointment with how this is going. " After December 2014, ADG failed to pay loan interest. The record does not i ndicate Romspen enforced those defaults by modifying its agreements with ADG or imposing a ny consequences. On January 21, 2015, Orleans sent ADG a default notic e pursuant to the purchase agreement for parcels G and H because it f ailed to purchase them by9 A- 0489

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May 20, 2014. Orleans gave ADG fifteen days from t he date of that notice to cure the default by closing on them. Orleans also notified Romspen of the default, pursuant to ADG's assignment of the purcha se agreement to Romspen and extended to Romspen the same fifteen days as AD G's lender to cure the default. Formation of Aura Investors to purchase parcels G a nd H. In April 2015, Third State and Latham, a Canuso en tity, agreed to form Aura Investors to "purchase, own, hold for investme nt and possible resale building lots in a community to be know n as 'Aura.'" They were the only members, with Third State having a sixty-five-perce nt interest and Latham having a thirty-five-percent interest. On April 28, 2015, Third State's counsel emailed S wartz about two proposed amendments to the purchase agreement for p arcels G and H. One would extend the closing date and the other would expand the agreement to include "the adjacent 350-acre parcel," the "option " portion. On April 28, 2015, ADG and Orleans entered into an agreement of sale by which ADG would purchase the entire 442 acres for $3,390,000. Howe ver, on May 6, 2015, Swartz emailed Third State stati ng ADG would not participate in the purchase, and10 A- 0489

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ADG would instead assign "the Orleans agreement" to "the new entity" Aura
Investors. Communications between ADG and Third State about co st-sharing. One element in Aura Investors' purchase of parcels G and H was the need to reimburse Romspen for the benefit its cost-shari ng advances conferred on those parcels

— the costs ADG and Third State discussed in January 2014. The parties do not dispute R om spen had a legitimate interest in such reimbursement , even if those parcels were purchased without Romspe n funds. On May 15, 2015, Third State's counsel sent Patron a "revised due diligence checklist. " One attachment was a "cost share contribution anal ysis" for the Aura project, which listed nine expense ite ms amounting to $2,759,086, and posited that certain parcels, presumably parcel s G and H, received 49.27% of the benefit from them, the equivalent of $1,596, 097. That same day, Patron emailed Canuso and Swartz to request an explanation of "the $1.5M and $500k
reimbursable/contributions for Aura. " Canuso replied and stat ed the $1.5 million was for parcels G and H. The $500,000 was for the option portion and therefore did not involve Romspen. On May 29, 2015, Swartz emailed Patron, Canuso, an d Brian Sattinger (Sattinger), a representative of Third State, in re sponse to a Third State inquiry11 A- 0489

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about "the need for $1.5M now." Swartz related Can uso's explanation that ADG needed the $1.5 million "to be released now in orde r to satisfy commitments. " Sattinger then inquired into the commitments and pe nalties for missing payment of the $1.5 million. Swartz replied to Sattinger, Patron, and Canuso that "[w]e committed a large sum to Romspen directly . . . . " Communications between ADG and Romspen. In the interim, on May 1, 2015, Conwell emailed Canuso and Swartz abo ut ADG's request to reallocate certain expenses from t he term loan to the revolving loan, in part to preserve $1.59 million in advancea ble funds under the term loan "to acquire [a]reas G&H In [sic] Elk from Orleans." Conwell noted ADG was in default pursuant to the loan agreement for sever al reasons, including its failures to pay loan interest since December 2014 ; to sell lots to developers at the rate the loan agreement required; and to acquir e parcels G and H. He added ADG "allowed the purchase contract with Orleans . . . to expire, and without those lands, our analysis shows that it is unlikely that you can repay the loan. " Conwell declared ADG's purchase agreement for parce ls G and H "must be reinstat ed ," for Romspen to consider making further advances pursuant to the loan agreement. He reminded ADG , "[i]f you acquire those lands with outside capital, Romspen will receive a first mortgage on t hem." On May 4, 2015,12 A- 0489

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Canuso replied Orleans was requiring ADG purchase t he 350-acre option portion along with parcels G and H, and Romspen's l ack of interest in funding the option required ADG to consider outside funding

. Swartz later emailed Conwell and Donovan to reques t an advance to "keep things moving. " On May 29, 2015, Conwell responded with a list of loan requirements ADG would have to satisfy before Romsp en could "process" the request. Relevant to the issues before us, one of the requirements consisted of purchasing parcels G and H, and Conwell reminded Sw artz that Romspen would get a first-priority lien on them regardless of the funding source: "The contract with Orleans Builders for Areas G&H in Elk must be reinstated. Nothing received. If you acquire those lands with outside capital, Romspen will receive a first mortgage on them. " Aura Investors' purchase of parcels G and H with Th ird State funding.
On May 29, 2015, Aura Investors purchased parcels G a nd H and the option portion from Orleans, with an agreement that had several components. The first component was an assignment agreement by which ADG transferred to Aura Investors the right to buy the three parcels. The se cond was the deed of sale, which stated the sale price of $3,390,00 was fully paid. The third component was the mortgage Aura Investors granted t o Third State. The13 A- 0489

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agreement explained Third State provided $5.1 milli on in "Purchase Money Funding," but only part of that amount represented the purchase price and transaction costs; the remainder was for reimbursin g "Canuso and its Affiliates" for development expenses already incurred. In addi tion, Third State was to make a further $1.1 million available for "other ha rd costs it or they paid towards the purchase and development of" the parcels. The mortgage gave Third State a first-priority lie n and security interest on parcels G and H and the option portion, and on all the improvements and other physical and legal appurtenances, to secure payment of the purchase money funding. For all obligations to Third State other than for the purchase money
f undi ng, Third State received a second-priority lien. O n June 8, 2015, Third State recorded its mortgage on parcels G and H and the option portion. Appellants represent Third State performed a title search on parcels G and H and found no recorded liens

. C om munications between the parties after the purchase. On June 4, 2015, Swartz sent Conwell and Donovan a n e-mail repeat ing his prior statement that Orleans "required the purch ase of the entire parcel," and he informed them that, "[w]ith the assistance of an investor, we have taken title14 A- 0489

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to the property." He added the investor was also p roviding "approximately $2 million in cost sharing/reimbursement. " On June 8, Swartz emailed Conwell and Donovan a "c ost share contribution analysis" similar to the version Patro n had received on May 15,

a lthough there were seven items instead of nine, and their total value was lower, which reduced the value of the 49.27% of the benefi t parcels G and H received from them to $1,359,433. The remainder of the appr oximately $2 million for reimbursement was allocated to the option portion, and thus of no interest to Romspen. Canuso and Romspen remained in communication into 2016 but were unable to resolve the cost-sharing issues. On Augu st 18, 2016, Romspen filed suit . In discovery, Donovan certified ADG told Romspen it might seek outside funding for the purchase of "certain additional pro perties," but not for the purchase of parcels G and H. Patron certified that "Swartz presented limited in formation" to Third State during the January 2014 discussions by failing to i ndicate Romspen had any interest in parcels G and H, or that Romspen would have an interest in them even if it did not fund their purchase. Patron added he and others "engaged in due15 A- 0489

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diligence," and no "publicly available document" sh owed Romspen owned any interest in those parcels. Donovan provided another certification to explain the appropriateness of Romspen's contractual right to receive a first mort gage on parcels G and H when ADG acquired them. He certified an eventual first mortg age on G and H was "a material inducement" for Romspen to let loan procee ds be used to benefit parcels ADG did not yet own as of the loan's effective date . The purpose of the mortgage on those parcels from inception was "to pr event ADG from using Parcels G and H to obtain additional senior financi ng and dilute the value of
Roms pen’s collateral ." Summary judgment. The trial court noted ADG began negotiating with Ro mspen in 2012 to fund the acquisition of parcels F- 1, F-2, G, and H for the Aura project and to fund various future development expenses. On May 16, 20 13, they entered into a loan agreement and closed on a loan worth $13 mil lion dollars. The loan agreement provided all of parcels

— A through H

— were to serve as collateral in one manner or another. ADG would give Romspen a mo rtgage on parcels A through F-l at closing, and it would "grant Romspen a first mortgage on Parcels F-2, G, and H if and when it took title."16 A- 0489

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The assignment agreement signed by ADG and Romspen declared it was binding on ADG, "its successors and permitted assigns and any subsequent owner of" the parcels. It named the purchase agree ments and all ADG's rights pursuant to those agreements as "additional securit y" for the loan. It required ADG to inform Romspen "promptly" of "all material cha nges in or amendments to the Collateral. " When ADG closed on parcel F-2 in October 2013, the mortgage was modified by a "spreader" agreement tha t extended it to that parcel and was recorded. When ADG defaulted by failing to purchase the additional lots, the court observed Romspen did not require AD G to close within the contractual grace period and neither ADG nor Romspe n exercised the right to

cure. The trial court noted Romspen began this action to impose "an equitable first mortgage lien" on parcels G and H, and a para llel action "to foreclose its mortgages on Parcels A through F." By that time, T hird State had advanced ADG an additional $1.1 million in cost-sharing/reim bursement in addition to the purchase money for parcels G and H. Third State al so advanced $3.7 million for "site improvements. " The court declared Romspen and Third State "to be equally sophisticated in the realm of commercial mortgage financing," and thus outside "the mold of17 A- 0489

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those financially strapped property owners for whom the court's equitable powers exist. " While Canuso and Swartz "lulled" Romspen "into non -action," Romspen's own lassitude weighed against it, as it f ailed "to timely record its interest" in parcels G and H, "give notice of its c ontinuing interest to Orleans," exercise its right to close on those parcels pursua nt to ADG's original purchase agreement with Orleans, or "require ADG to acquire" them "with Romspen funds. " However, the court found, as parties related to AD G, Aura Investors' imputed knowledge and Third State's constructive no tice of Romspen's interest in Parcels G and H, weigh ed in favor of grant ing an equitable mortgage. In particular, defendants knew Swartz communicated Rom spen would require a release for approvals and improvements that benefit ted Parcels G and H. Swartz's invocation of a "release" implied Romspen had a lien on the parcels for those expenses, and "Third State should have insist ed that Latham/ADG/Mr. Canuso provide proof of payment and non-lien status of the items listed for costsharing/reimbursement. " The court explained Romspen would be entitled to a first mortgage on parcels G and H if they were acquired with funds Ro mspen advanced after the loan closing in exchange for ADG's promise at the c losing of such a lien. That18 A- 0489

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lien would have priority over liens on those parcel s securing anything other than the purchase funds, even if such liens were recorde d earlier. However, it was Third State that actually provided the purchase fun ds, and until Romspen began this action, Third State lacked actual knowledge of the loan agreement from which Romspen claimed an equitable mortgage. Romsp en should have recorded the loan agreement and otherwise publicized and pro tected "its continuing legal interest" in parcels G and H. In contrast, Third State's actual knowledge of Rom spen's interest in those parcels was limited to the cost-sharing items Romsp en funded. The court thus found Third State "should have insisted" Canuso and his entities prove the absence of liens on those parcels that were related to the cost-sharing expenses, namely, "approvals and improvements that benefitted Parcels G and H. " The court found the balance of the equities favore d Third State until it had actual notice of Romspen's claim to an equitable mo rtgage and rendered summary judgment in part, assigning lien priorities on parcels G and H as follows: first priority to Third State for the pur chase funds; second priority to Third State for the sums it advanced for cost-shari ng and site improvements "after recordation of its mortgage and before actua l notice of Romspen's claim to an equitable mortgage" based on the loan agreeme nt; third priority to19 A- 0489

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Romspen's "equitable mortgage in an unknown amount" ; and fourth priority for any funds "advanced by Third State after the date i t was served with the complaint" in this action. First motion for reconsideration by Romspen.
Ro mspen moved for limited reconsideration, which was partia lly granted. The court explained if a party contemplating the pu rchase of land has information which is "sufficient to apprise him of the existence of an outstanding claim," and if "reasonable investigation" would "ne cessarily [lead him to] discover the existence of such a claim," that party is on constructive notice. A party with information sufficient to afford notice does not have the status of "a bona fide purchaser that would take free of the cla im. " The court candidly admitted it made a mistake and r eversed itself, f inding Aura Investors had information "sufficient to appri se" it of Romspen's "unrecorded interest" in parcels G and H before the closing. It cited the emails prior to closing that recognized Romspen already fu nded "cost approvals and improvements" for which it would "require a release "; the May 15, 2015, email from Patron to Canuso asking for "a list of items t hat account for the 1.5[M] and 500K reimbursement/contribution for Aura"; and Canu so's May 20, 2015, reply to Patron with the breakdown of the "estimated cost sharing contribution" for20 A- 0489

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parcels G and H. It also cited a May 29, 2015, exc hange about cost-sharing in which Sattinger, the Third State representative, as ked Swartz "what are the penalties for missing" the "commitment" to reimburs e Romspen. The court viewed the sum of those communications a s sufficien t information to "apprise" Aura Investors "of Romspen 's interest in the parcels that were being purchased. " The court again found Romspen had an equitable mortgage on parcels G and H to the extent of the re imbursement ADG owed it. The court made Romspen's equitable mortgage second only to Third State's purchase money mortgage, demot ing to third priority the Third State mortgage "for all other sums advanced for cost sharing and i mprovements." Defendants' reconsideration motion. Defendants then moved for reconsideration, arguing "the award of an equitable mortgage to Romspen was contrary to the c ontractual intent of ADG and Romspen," which the trial court denied. The court observed after ADG's subsequent purchase of parcel F-2 with Romspen fund s, ADG executed a "spreader of mortgage. " The court reaffirmed its finding on summary judgment that "Third State’s due diligence into the cost -sharing/reimbursement for approvals and improvements on other parcels that be nefitted Parcels G [and] H should have included proof that ADG actually funded and paid for the approvals21 A- 0489

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and other third-party activities that benefited Par cels G [and] H." That would have confirmed another party did not have a lien ag ainst the parcels. It reiterated "Third State had constructive notice of Roms pen’s right to a lien on Parcels G and H before Third State recorded its mortgage on Parcels G and H." The court found Aura Investors and Third State failed to demo nstrate why the court's interpretation or reliance on this evidence was inc orrect and rejected "by clear and convincing evidence" the argument Aura Investors and Third State already made and lost at summary judgment, without presenti ng new evidence.
II. Summary judgment should be granted when the record as a whole "show[s] that there is no genuine issue as to any m aterial fact challenged." R. 4:46 -2(c). The court must "consider whether the compet ent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resol ve the alleged disputed issue in favor of the non-moving party." Samolyk v. Berthe, 251 N.J. 73, 78 (2022) (quoting Brill v. Guardian Life Ins. Co. of Am., 14 2 N.J. 520, 540 (1995)). We review grants of summary judgment "de novo, applyin g the same standard used by the trial court." Ibid.22 A- 0489

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A motion for reconsideration from a final order pursuan t to Rule 4:49 -2 is to be granted "for good cause shown and in the serv ice of the ultimate goal of subs tantial justice." Casino Reinv. Dev. Auth. v. Tell er, 384 N.J. Super. 408, 413 (App. Div. 2006). The moving party must "state[] with specificity the b asis on which [the motion] is made" and supply "a statem ent of the matters or controlling decisions which counsel believes the co urt has overlooked or as to which it has erred . . . ." R. 4-49:2. A motion for reconsideration is "an opportunity to seek to convince the court that either 1) it has expressed its decision based upon a palpably incorrect or irrational basis, or 2) it is obvious that the c ourt either did not consider, or failed to appreciate the significance of probative, competent evidence." Kornbleuth v. Westover, 241 N.J. 289, 301 (2020) (q uoting Guido v. Duane Morris LLP, 202 N.J. 79, 87- 88 (2010)). In addition, "the magnitude of the error cited must be a game-changer for reconsideration to be appropriate." Palombi v. Palombi, 414 N.J. Super. 274, 289 (App. Div. 201 0). To establish such a basis for granting reconsidera tion, the movant ma y "bring new or additional information to the Court's attention which it could not have provided on the first application . . . ." Cu mmings v. Bahr, 295 N.J. Super. 374, 384 (App. Div. 1996) (quoting D'Atria, 242 N.J . Super. at 401- 02) ; see also23 A- 0489

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Cap. Fin. Co. of Del. Valley, Inc. v. Asterbadi, 39 8 N.J. Super. 299, 310-11 (App. Div. 2008) (court abused its discretion by de clining to consider new evidence "presented . . . on the motion for reconsideratio n in furtherance of [the movant's] argument that the judge had expressed his decision on an incorrect basis"). Nevertheless, the movant may not offer a "new theory" on "factual predicates" available when the court decided the pr ior motion. Cummings, 295 N.J. Super. at 384-85. We review motions for reconsideration for abuse of discretion. Kornbleuth, 241 N.J. at 301 (quoting Hous. Auth. of Morristown v. Little, 135 N.J 274, 283 (1994))

. This may be established by "plainly incorrect reasoning or failure to consider evidence," or disregard of " a good reason for the court to reconsider new information." Pressler & Verniero, Current N.J. Court Rules , cmt. 2 on R. 4:49 -2 (2023 ). Appellants contend Romspen did not intend to have a mortgage over the additional sums expended on parcels G and H and the refore it is not entitled to an equitable mortgage or lien, although it may be entitled to a monetary amount for its contribution. We disagree as their argumen t is belied by the record and the controlling documents conclusively demonstrate otherwise.24 A- 0489

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The loan commitment letter noted ADG's $13 million loan request was divided between a term loan of $8.5 million to repa y existing bank loans and complete the purchase of some lots that were under contract and a revolving loan of $4 .5 million "for development and approval costs on gr oups of lots prior for sale." For the term loan, approximately $3.8 m illion of the initial advance would be used "to repay existing registered mortgag es" while approximately $4

. 2 million would be advanced in increments "to assist . . . i n acquiring further additional lands." Revolving loan proceeds would b e advanced from time to time "to fund the cost of site improvements, intere st, approvals, overhead, and related costs." The loan would be secured by a promissory note and a $13 million "first mortgage lien and fixture filing . . . in the amoun t of $13,000,000, on the Property." The commitment letter also stated, sepa rately and in boldface, n o secondary financing with respect to the Property would be permitted while the loan remain ed outstanding without Romspen's express written cons ent. The final loan document stated the term loan of $8.5 mi llion was so ADG could acqui re parcel F-2 and parcels G and H pursuant to the ir purchase agreements, and the revolving loan of $4.5 million was to fund future development.25 A- 0489

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The loan agreement required ADG to grant Romspen a first mortgage in all "after acquired property . . . immediately upon acquisition of same." It also required ADG to give Romspen a lien on those parcel s "[s]imultaneously with the acquisition by Borrower of any of" them. The loan agreement required ADG to assign to Romspen its rights pursuant to its pur chase agreements for parcel F-2 and for parcels G and H, "as security for the L oan." When ADG granted Romspen a mortgage, which was also designated as th e "Security Instrument" named in the loan agreement, the mortgage covered t he entire "Property," including "[a]ll additional lands, estates and deve lopment rights hereafter acquired by" ADG. The mortgage placed the obligation on ADG to record the mortgage in any manner required "to publish notice of and fully to protect and perfect the lien or security interest hereof upon, and the interest of Lender in, the Property." It is disingenuous for Aura Investors, partially o wned by Canuso, to claim it did not have notice of Romspen's actual mortgage on parcels G and H. Canuso negotiated the Romspen loan documents as owner of A DG containing th ose specific terms. There can be no doubt Aura Investo rs had actual knowledge of its obligations pursuant to the loan agreement, whi ch included pledging G and H as collateral for the loan and recording all of t he loan documents.26 A- 0489

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Additionally, at the time Aura Investors closed on parcels G and H, Third State knew and accepted Romspen's claim of a lien o n parcels G and H, even if Third State can be said to have lack ed "actual" knowledge of it despite its status as co-member of Aura Investors. Canuso's ownership i nterest in Aura Investors owed it a fiduciary obligation to its member Third State to disclose the loan documen ts . Such knowledge correctly caused the court to giv e Romspen's lien a higher priority than Third State's lien for advan ces other than purchase funds.
E quity will not allow a contract purchaser of realty to nu llify a mortgage by a contrivance, as ADG's assignment of the purchase agreement for par cels G and H to Aura Investors attempted to do . Equity allows the application or extension of a mortgage to after-acquired property in these circumstances to prevent those dealing in realty from avoiding their mortgages "by simply assigning their rights to others and not taking leg al title." Mihranian Inc. v. Padula, 134 N.J. Super. 557, 566 (App. Div. 1975). Mihranian is clear thos e principles apply when the mortgage or other lien in a property is granted before the promisor acquires title:

Although there is nothing to which the lien can attach if the vendor has never at any time had an interest in the land, it is not fatal to its existence that the ven dor had no interest when the contract was entered into so l ong as he subsequently acquires an interest. . . . Our courts27 A- 0489

- 21 have so held where the interest subsequently acquir ed by the vendor is legal title. [Id. at 565 (citations omitted).] We conclude the trial court correctly granted Roms pen an equitable mortgage on parcels G and H for its cost-sharing ad vances, as the loan documents are clear this was ADG's and Romspen's in tent. Moreover, even assuming Th ird State did not know Romspen had a firstpriority lien on parcels G and H pursuant to the Ro mspen/ADG loan agreement and mortgage, it should have conducted appropriate due diligence given its actual knowledge of the cost-sharing lien and need for a release from Romspen. At minimum, Third State had constructive notice of Romspen's mortgage. The court's ruling that Roms pen’s equitable mortgage is senior to all but Third State’s purchase money mortgage is sound and we affirm the trial court's findings. To the extent we have not addressed appellants’ remaining arguments we find they are without sufficient merit to warrant d iscussion in this opinion. R. 2:11 -3(e)(1)(E). Affirmed.