SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NOS. A-3015-16T4

 A-1894-17T4

 A-0674-18T4

LAMBS LANE REALTY, LLC,

LAWRENCE FEROLIE, JR., and

ELIA BORELLI FEROLIE,

Plaintiffs-Appellants,

v.

LAKELAND BANK,

Defendant-Respondent.

LAKELAND BANK,

Plaintiff-Respondent,

v.

LAMBS LANE REALTY, LLC, 

LAWRENCE FEROLIE, JR., and

ELLA BORELLI FEROLIE, 

Defendants-Appellants,

and 

NOT FOR PUBLICATION WITHOUT THE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.
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STATE OF NEW JERSEY,

Defendant.

LAKELAND BANK,

Plaintiff-Respondent,

v.

LAMBS LANE REALTY, LLC,

LAWRENCE FEROLIE, JR., and

ELIA BORELLI FEROLIE,

Defendants-Appellants.

Argued March 6, 2019 – Decided April 4, 2019

Before Judges Koblitz, Currier and Mayer.

On appeal from Superior Court of New Jersey, 

Chancery Division, Bergen County, Docket Nos. 

C-000016-17 and F-001856-17; and Law Division, 

Passaic County, Docket No. L-0249-17.

Arthur L. Porter, Jr. argued the cause for appellants

(Fischer Porter & Thomas, PC, attorneys; Arthur L. 

Porter, Jr., of counsel; Aaron E. Albert, on the briefs).

Michael P. Crowley argued the cause for respondent 

(Riker Danzig Scherer Hyland & Perretti, LLP, 

attorneys; Michael R. O'Donnell, of counsel and on the 

briefs; Michael P. Crowley, on the briefs).

PER CURIAM
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Appellants1 Lambs Lane Realty, LLC (Lambs Lane), Lawrence Ferolie, 

Jr., and Elia Borelli Ferolie (Ferolies) appeal from the following: a February 

21, 2017 order granting a motion filed by respondent Lakeland Bank (Bank) 

dismissing appellants' claims in the Chancery Division, Bergen County, Docket 

No. C-000016-17 (Chancery action); a September 29, 2017 order granting 

summary judgment in favor of the Bank in a foreclosure action filed in the 

Chancery Division, Bergen County, Docket No. F-100856-17 (foreclosure 

action); and a June 22, 2018 order granting reconsideration and summary 

judgment in favor of the Bank in the Law Division, Passaic County, Docket No.

L-0249-17 (action on the note). We affirm all three orders.

We summarize the facts pertinent to the three actions. In May 2007, the 

Bank issued a commitment letter to appellants for a $3 million loan. Appellants 

intended to use $1.5 million to construct a home on 22 Lambs Lane. On June 

26, 2007, prior to executing any loan documents, the Bank provided appellants 

 

1

 Because Lambs Lane and the Ferolies were both plaintiffs and defendants in 

the various actions, we refer to them as appellants although we traditionally

denote the parties by their status before the trial court. The corporate entity, 

Lambs Lane, owned vacant property at 22 Lambs Lane. The Ferolies owned a 

home located at 20 Lambs Lane.
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with appraisals for the collateralized properties.2 The appraisal for 20 Lambs 

Lane estimated the value of the land with the existing structure at $1.5 million. 

The appraisals for 22 Lambs Lane estimate the value of the land as vacant at

$650,000 and the value with a newly constructed home at $2 million. 

The loan closed in November 2007. Due to various construction delays, 

appellants requested and received multiple extensions of the loan's original 

maturity date.

3

On March 1, 2012, the parties agreed to restructure the 2007 loan. 

Appellants signed a note promising to repay the loan by March 15, 2013. 

Appellants also executed a mortgage in favor of the Bank, "covering premises 

at 22 Lambs Lane[.]" The Ferolies executed a guaranty, assuring the financial 

obligations under the note and mortgage. 

In accordance with the terms of the restructured loan, the failure to pay all 

sums due by March 15, 2013 constituted an event of default. The parties 

extended the maturity date on the restructured loan eight times, with the last 

extension requiring full payment by June 15, 2016. Each signed loan extension 

 

2

 The collateralized properties included 20 Lambs Lane, the lot with an existing 

home occupied by the Ferolies, and 22 Lambs Lane, the lot on which a new 

home would be built.

3

 The original maturity date was June 1, 2009.
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agreement required appellants to release any claims against the Bank. Before 

signing each loan extension agreement, Mr. Ferolie testified he read the 

document and obtained legal advice from counsel.

Appellants defaulted on June 15, 2016, and the Bank sent a notice of 

intention to foreclose on November 17, 2016. Thereafter, the parties attempted 

to negotiate a forbearance agreement but they were unable to agree on material 

terms to execute a forbearance agreement. 

Knowing a foreclosure action was likely to be filed by the Bank, 

appellants preemptively filed the Chancery action. In that action, appellants 

sued the Bank, asserting breach of contract and breach of the covenant of good 

faith and fair dealing. In addition, appellants demanded injunctive relief to bar

the filing of a foreclosure action by the Bank. Appellants also requested the 

parties be compelled to participate in mediation to achieve a forbearance 

agreement. After appellants instituted the Chancery action, the Bank filed the 

foreclosure action and the action on the note. 

The Bank also moved to dismiss the Chancery action. The Bank 

contended appellants' claims in the Chancery action could and should be raised 

in the foreclosure action. The Chancery judge agreed and issued a February 21, 

2017 order dismissing the Chancery action without prejudice. 
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The judge found appellants' claims in the Chancery action were germane 

to the foreclosure action. The judge concluded that if he were "to refrain from 

dismissing [appellants'] complaint, the entire controversy doctrine would likely 

bar [appellants] from raising their claims in the foreclosure action." The judge 

also rejected appellants' request to consolidate the Chancery action with the 

foreclosure action, finding appellants failed "to explain the need for the 

continued existence of [the Chancery action] in addition to the foreclosure action 

where [appellants] may raise all their claims." The judge held "it is inconsistent 

with the policies underlying the entire controversy doctrine to allow [appellants] 

to proceed with this duplicative litigation. The subject matter of the dispute 

between the parties involves an already-begun foreclosure proceeding, where 

[appellants'] claims may be fully and fairly litigated." 

After the exchange of discovery in the foreclosure action, the Bank moved 

for summary judgment, which appellants opposed. Appellants argued the Bank's 

2007 appraisals hid the true value of the properties. According to appellants,

the Bank's appraisals overvalued the properties and induced them to borrow 

more than the properties were worth. Appellants also claimed the parties entered 

into a binding forbearance agreement in December 2016, precluding foreclosure 

by the Bank. 
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On September 29, 2017, the foreclosure judge issued a written opinion,

dismissing appellants' answer and counterclaim and deeming the foreclosure 

action uncontested. The judge rejected appellants' claim that the loan extensions 

were unconscionable or constituted economic duress. The judge noted Mr. 

Ferolie "testified that he read the provision of the agreements before signing and

that he was represented by counsel when he executed each of the eight 

extensions." 

The judge also rejected appellants' argument that the default was caused 

by the Bank's wrongful conduct. Relying on United Jersey Bank v. Kensey, 306 

N.J. Super. 540, 558 (App. Div. 1997), the judge concluded the Bank owed no 

duty to disclose to appellants how it internally analyzed and underwrote the loan

in determining the amount the Bank was willing to lend. The judge found

appellants had the ability to obtain their own valuation of the properties. He

further noted appellants were represented by counsel when the loan extension 

agreements were executed and could have challenged the Bank's appraisals or 

the loan agreement instead of signing the extension agreements. 

The judge also found the parties failed to reach an agreement as to the 

essential terms of a forbearance agreement. Based on the parties' emails and 

drafts of the forbearance agreement, the judge determined there was no meeting 
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of the minds on an agreement. The judge explained there were essential terms

required by the Bank as part of a forbearance agreement, including a deed in 

lieu of foreclosure and appellants' waiver of all claims, and appellants never 

agreed to those terms. 

In dismissing appellants' counterclaim against the Bank for breach of 

contract of good faith and fair dealing, the judge explained there was 

"insufficient evidence to substantiate these claims." He concluded appellants 

were "represented by counsel, . . . had the appraisal as early as 2007 but did not 

challenge [the Bank's] loan agreement," and "signed eight extensions of the loan 

agreement, each of which released the [Bank] from any and all claims relating 

to the loan." 

Thereafter, the Bank applied for the entry of a final judgment of 

foreclosure, which appellants did not oppose. The final judgment of foreclosure 

was entered on December 20, 2017. 

While the foreclosure action was pending in Bergen County, the parties 

litigated the action on the note in Passaic County. In November 2017, the Bank 

moved for summary judgment in that matter. In opposing the motion, appellants 

argued the Bank was not entitled to foreclose because the parties reached a 

forbearance agreement in December 2016. In addition, appellants claimed the 
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Bank concealed its overvaluation of the collateralized properties in the 2007 

appraisals. These were the same arguments raised by appellants and dismissed 

in the foreclosure action. 

On December 14, 2017, the judge in the action on the note heard argument 

on the Bank's motion. Five months later, in a May 16, 2018 order and

accompanying written decision, the judge denied the motion. The judge 

determined the Bank's lawsuit to collect on the note was barred by res judicata, 

holding:

the summary judgment opinion from the foreclosure 

action dealt with the same causes of action and claims 

at issue before this court in the present action. These 

issues include: unconscionable loan extensions, 

deceitful behavior, contracts of adhesion, the existence 

of a forbearance agreement, breach of contract, breach 

of the covenant of good faith and fair dealing and 

rescission. Thus, all three elements of res judicata have 

been met. First, a valid final judgment was entered in 

an action prior to the one before this court. Second, all 

the parties in the current action were also parties to the 

foreclosure action in Bergen County. Third, the action 

pending before the Passaic County Law Division stems 

from the same transaction or occurrence and has the 

same claims as the foreclosure action in Bergen 

County. 

The Bank filed a motion for reconsideration, clarifying that it prevailed in 

the foreclosure action and explaining all of the issues identified by the judge had 

been resolved in the foreclosure action but a final judgment of foreclosure had 
10 A-3015-16T4

not been issued when the parties argued the motion in December 2017.4 

Therefore, the Bank argued it was entitled to summary judgment on res judicata 

grounds because the same issues involving the same parties were resolved in its 

favor in the foreclosure action. 

During argument on the reconsideration motion, the judge acknowledged 

his error concerning the procedural posture of the case. The judge explained, 

"[i]t didn't strike me that this was actually the action on the note . . . and I guess 

I should have known[.]" The judge reviewed the rulings made by the Bergen 

County judge who handled the foreclosure action and relied on those rulings in 

granting the Bank's motion for reconsideration and summary judgment in the 

action on the note. He concluded the only issue not decided by the foreclosure 

judge was the amount due to the Bank under the note and guaranty. The judge 

found appellants did not dispute the amount due on the note and the only 

outstanding issue was the amount of attorneys' fees allowable under the 

guaranty. 

By order dated June 22, 2018, the judge granted the Bank's motion for 

summary judgment in the amount of $1,597,649.36. The order allowed the Bank 

 

4

 The final judgment in the foreclosure action was issued six days after oral 

argument on the Bank's summary judgment motion in the action on the note.
11 A-3015-16T4

to submit a certification seeking attorneys' fees. In a September 10, 2018

amended order, the judge awarded the Bank the sum of $1,885,190.95, inclusive 

of attorneys' fees. 

Appellants appealed the final orders from the Chancery action, the 

foreclosure action, and the action on the note. 

In their appeal regarding the Chancery action, appellants assert the trial 

judge abused his discretion in dismissing their claims. Appellants also contend 

their claims in that action were adequately pled. Because appellants' claims in 

the Chancery action were fully litigated and addressed in the foreclosure action, 

we find the arguments on appeal related to the Chancery action are without 

sufficient merit to warrant discussion in a written opinion. See R. 2:11-

3(e)(1)(E).

In the appeal related to the foreclosure action,5appellants argue summary 

judgment should not have been granted because: (1) the Bank included 

unconscionable provisions in the loan extension agreements; (2) the default on 

the loan was attributable to the Bank's bad faith conduct; and (3) the Bank 

breached the forbearance agreement. 

 

5

 Appellants are not challenging the Bank's right to file a foreclosure action.
12 A-3015-16T4

In the appeal from the final judgment in the action on the note, appellants 

argue: (1) there were genuine material factual disputes precluding summary 

judgment; (2) the Bank's conduct caused appellants to default; (3) the Bank 

concealed its mistake in calculating the loan-to-value assessment for the 

properties; (4) the Bank violated its fiduciary duty to appellants as well as the 

covenant of good faith and fair dealing; (5) the release language in the loan 

extension agreements was unconscionable and rendered the agreements void; 

and (6) the parties agreed to the essential terms of a forbearance agreement. 

We review a grant of summary judgment de novo, applying the same 

standard as the trial court. Templo Fuente De Vida Corp. v. Nat'l Union Fire 

Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016). Summary judgment may be 

granted when "the pleadings, depositions, answers to interrogatories and 

admissions on file, together with the affidavits, if any, show that there is no 

genuine issue as to any material fact challenged and that the moving party is 

entitled to a judgment or order as a matter of law." R. 4:46–2(c).

In determining whether there is a genuine issue of material fact, courts

"consider whether the competent evidential materials presented, when viewed 

in the light most favorable to the non-moving party, are sufficient to permit a 

rational factfinder to resolve the alleged disputed issue in favor of the non-
13 A-3015-16T4

moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). 

If the evidence presented "show[s] that there is no real material issue, then 

summary judgment should be granted." Walker v. Atl. Chrysler Plymouth, Inc., 

216 N.J. Super. 255, 258 (App. Div. 1987). 

We first review appellants' argument that the loan extension agreements 

are unconscionable and thus void. Appellants based their unconscionability 

claim on the following: the Bank's requirement in the loan extension agreements

that appellants waive all claims against the Bank; the Bank took advantage of 

appellants' legal naivety; and the loan extension agreements were contracts of 

adhesion. 

To successfully plead unconscionability as a defense, a defendant must 

prove the contract "terms are manifestly unfair or oppressive and are dictated by 

a dominant party." Howard v. Diolosa, 241 N.J. Super. 222, 230 (App. Div.

1990). A defendant must demonstrate "some overreaching or imposition 

resulting from a bargaining disparity between the parties, or such patent 

unfairness in the contract that no reasonable person not acting under compulsion 

or out of necessity would accept its terms." Ibid. 

"There is of course an element of compulsion anytime a creditor asks a 

debtor in default to agree to anything; the creditor holds the upper hand." 
14 A-3015-16T4

Glenfed Fin. Corp. v. Penick Corp., 276 N.J. Super. 163, 174 (App. Div. 1994). 

However, requiring a debtor to agree to changes in the agreement when the 

creditor exercises its right "to declare a loan in default or to forbear from taking 

such action" is not "'wrongful conduct' . . . [and] does not constitute economic 

duress." Ibid.

Here, appellants admit borrowing the money, executing the loan 

documents, defaulting on the loan, and asking the Bank, on eight separate 

occasions, for extensions of time to repay the loan. The loan extensions were 

granted by the Bank to allow appellants to pay the loan and avoid foreclosure. 

This case reflects a traditional relationship between a lender and a borrower. 

Based on that relationship, there is nothing unfair or oppressive in the Bank's 

request that appellants waive any claims against it in return for the numerous 

loan extensions.

Appellants have also failed to demonstrate how the waiver of their claims 

against the Bank under these circumstances was patently unfair or 

unconscionable. The Bank had the legal right to declare appellants in default 

under the loan documents and had no obligation to agree to any loan extensions. 

Moreover, Mr. Ferolie testified he read the provisions in the loan extension 
15 A-3015-16T4

agreements and sought the advice of legal counsel before signing each extension 

agreement. 

We next consider appellants' contention that the loan extension 

agreements are contracts of adhesion and therefore unenforceable. A contract 

of adhesion "is a contract 'presented on a take-it-or-leave-it basis, commonly in 

a standardized printed form, without opportunity of the "adhering" party to 

negotiate except perhaps on a few particulars.'" Martindale v. Sandivik, Inc., 

173 N.J. 76, 89 (2002) (quoting Rudbart v. N. Jersey Dist. Water Supply 

Comm'n, 127 N.J. 344, 353 (1992)). Even if an agreement constitutes a contract 

of adhesion, the contract is not automatically void. See Rodriguez v. Raymours 

Furniture Co., Inc., 225 N.J. 343, 366-67 (2016). When considering whether to 

enforce the provisions in a contract of adhesion,

courts must look not only to the standardized nature of 

the contract, 'but also to the subject matter of the 

contract, the parties' relative bargaining positions, the 

degree of economic compulsion motivating the 

"adhering" party, and the public interests affected by 

the contract.'

[Martindale, 173 N.J. at 90 (quoting Rudbart, 127 N.J. 

at 356).] 

In this case, appellants were not coerced into signing the eight loan 

extension agreements. The Bank agreed to delay declaring default of the loan 
16 A-3015-16T4

and to the loan extension agreements so appellants could sell the newly 

constructed home and pay the loan obligation. Both parties benefited from the 

loan extension agreements. Appellants bargained for and received additional 

time to pay their financial obligations in return for the Bank's agreement to delay 

declaring default and filing for foreclosure. Appellants present no evidence that 

enforcement of the loan extension agreements implicates a matter of public 

policy. In addition, appellants had legal counsel when Mr. Ferolie signed the 

loan extension agreements. Under the circumstances, we are satisfied the loan 

extension agreements were enforceable.

We next consider appellants' argument that the Bank acted in bad faith. 

Appellants claim the Bank caused them to default by purposely overvaluing the 

properties when it extended the loan, thus inducing appellants to borrow more 

money than the properties were worth. The foreclosure judge rejected this 

argument, relying on the United Jersey Bank v. Kensey, 306 N.J. Super. 540

(App. Div. 1997). 

In Kensey, the defendant challenged a foreclosure action, arguing the bank 

breached its duty by failing to share an appraisal, estimating the value of the 

pledged property to be substantially lower than the loan amount. Id. at 544, 549. 

We held "[t]he law 'imposes no duty on banks to disclose to the borrower the 
17 A-3015-16T4

manner in which the lender internally analyzes and underwrites a loan.'" Id. at

558 (quoting N. Trust Co. v. VIII S. Mich. Assocs., 276 Ill App. 3d. 355, 364 

(Ill. App. Ct. 1995)). "[A] financial institution, acting within its conventional 

role as a lender of money, owes no duty of care to the borrower when preparing 

an appraisal of the borrower's collateral." Kensey, 306 N.J. Super. at 558. This 

is especially true because the relationship between a borrower and a lender is 

based on each party acting in their own interest and conducting themselves in 

an arms-length manner. Id. at 553. 

Here, the Bank disclosed the appraisal information to appellants prior to 

execution of the loan documents. Unlike the defendants in Kensey, appellants

failed to demonstrate the Bank encouraged them to rely on the appraisals or 

concealed any self-interest in processing the loan. The Bank was not required 

to send the appraisal information on which it based the amount it was willing to 

lend to appellants. Appellants had ample opportunity to obtain their own 

appraisals but did not do so. In addition, appellants failed to review the 

appraisals until 2014, well after the loan documents and all eight loan extension 

agreements were signed. Considering these facts, we discern no basis to disturb 

the judge's rejection of appellants' bad faith claim against the Bank.
18 A-3015-16T4

We next address appellants' argument that the Bank entered into a binding 

forbearance agreement and breached that agreement by attempting to add 

unreasonable terms. Contract law requires "an 'offer and acceptance' by the 

parties, and the terms of the agreement must 'be sufficiently definite [so] that 

the performance to be rendered by each party can be ascertained with reasonable 

certainty.'" GMAC Mortg., LLC v. Willoughby, 230 N.J. 172, 185 (2017)

(quoting Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435 (1992)). For a 

contract to be formed, the parties must "agree on essential terms and manifest 

an intention to be bound by those terms[.]" Weichert, 128 N.J. at 435. 

Here, no agreement on the essential terms of the forbearance agreement 

existed. The parties disagreed on several material terms, including the length of 

the forbearance period, the interest rate during the forbearance period, admission 

by appellants of a default under the loan, and execution of full releases in favor 

of the Bank. Appellants were also unwilling to grant a deed in lieu of foreclosure 

or provide a confession of judgment as part of the forbearance agreement. 

Because the parties were unable to agree to material and essential terms, there 

was no meeting of the minds on a forbearance agreement.

Finally, we review appellants' contention that the judge handling the 

action on the note erred in reconsidering summary judgment in favor of the 
19 A-3015-16T4

Bank. Appellants for the first time claim there were material factual disputes 

that precluded summary judgment. However, appellants never raised this 

argument to the motion judge. We need not consider arguments not properly 

presented to the trial court when an opportunity for such a presentation is 

available absent the matter going to the jurisdiction of the trial court or a concern 

of great public interest. See Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 

(1973); R. 2:10-2. 

Even if appellants had raised such an argument, we reject the contention 

that reconsideration was improper. Reconsideration is "designed to seek review 

of an order based on the evidence before the court on the initial motion" and "is 

only to point out 'the matters or controlling decisions which counsel believes the 

court has overlooked or to which it has erred.'" Capital Fin. Co. of Del. Valley 

v. Asterbadi, 398 N.J. Super. 299, 310 (App. Div. 2008) (quoting R. 4:49-2).

In this case, the Bank filed a motion for reconsideration based on an 

apparent error by the motion judge. The judge applied the doctrine of res 

judicata but was unaware at the time of the original decision that the matter 

involved a suit on the note and guaranty and not a second foreclosure action by 

the Bank. The Bank did not seek reconsideration to introduce new evidence or 

cure an inadequacy in the record. Rather, the Bank sought to address an issue 
20 A-3015-16T4

because the Bank believed the motion judge erred. Here, reconsideration was 

appropriate to correct a misperception by the motion judge in his original 

decision.

Res judicata is applicable to actions based on notes and guarantees where 

a final judgment has been entered in a foreclosure action involving the same 

issues and the same parties. See Cent. Penn Nat'l. Bank v. Stonebridge, Ltd., 

185 N.J. Super. 289, 302-03 (Ch. Div. 1982). The judge in the foreclosure action 

dismissed the same defenses and claims raised by appellants in the action on the 

note. Therefore, the Bank was entitled to summary judgment in the action on 

the note based on the doctrine of res judicata.

Having reviewed the record, we are satisfied the orders entered in favor 

of the Bank in the Chancery action, the foreclosure action, and the action on the 

note were warranted.

Affirmed.