Court Opinion

ID: 4430014
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:34:12.501744+00
Date Added: 2024-06-11T14:51:47.665369
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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-4005-16T4

WELLS FARGO BANK, N.A.,

           Plaintiff-Respondent,

v.

JAMES L. CHAMBERS, JR.
and MARITZA A. CHAMBERS,
his wife, each of their heirs,
devisees and personal
representatives, and his, her, their
or any of their successors in right,
title and interest,

           Defendants-Appellants,

and

CACH OF NJ LLC and MIDDLESEX
COUNTY BOARD OF SOCIAL
SERVICES,

     Defendants.
_________________________________

                    Argued October 1, 2018 – Decided November 20, 2018

                    Before Judges Haas and Mitterhoff.
            On appeal from Superior Court of New Jersey,
            Chancery Division, Burlington County, Docket No. F-
            032670-14.

            James L. Chambers, Jr., appellant, argued the cause pro
            se.

            David G. Murphy argued the cause for respondent
            (Reed Smith LLP, attorneys; Henry F. Reichner, of
            counsel and on the brief).

PER CURIAM

      Defendants James L. Chambers, Jr. and Maritza A. Chambers appeal from

the trial court's denial of their motion to vacate final judgment. We affirm,

substantially for the sound reasons expressed in Judge Paula T. Dow's March

31, 2017 written opinion. We add only the following comments.

      On November 12, 2007, defendants executed a note to Wells Fargo Bank,

N.A. ("Wells Fargo") for $417,000. To secure payment of the note, defendants

granted Wells Fargo a purchase-money mortgage on the property located in

Florence, New Jersey. In connection with the mortgage, defendants executed

Truth in Lending Disclosure Statements.       Wells Fargo retained physical

possession of the note.

      On January 10, 2014, defendants and Wells Fargo executed a Home

Affordable Modification Agreement (hereafter referred to as "HAMA" or

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                                      2
"HAMP modification"), which decreased defendants' monthly payments and

increased the number of years defendants had to pay the loan.

      On February 1, 2014, defendants defaulted on the mortgage and never

cured the default. Wells Fargo instituted this action on August 7, 2014.

      On    January     23,    2015,    defendants     sent   a    "Notice        of

Rescission/Cancellation" to Wells Fargo. On May 29, 2015, after hearing oral

argument, the Honorable Karen L. Suter, P.J.Ch. granted summary judgment in

favor of Wells Fargo.

      On September 18, 2015, defendants filed a complaint in the District Court

of New Jersey against Wells Fargo.         Defendants alleged that Wells Fargo

violated the Truth in Lending Act ("TILA"), and requested that the District Court

enforce their attempted January 23, 2015 rescission. On June 28, 2016, the

Honorable Jerome B. Simandle issued an opinion in which he dismissed

defendants' complaint for failure to state a claim under Federal Rule of Civil

Procedure 12(b)(6). He ruled that defendants' TILA claims were barred by the

statute of limitations, that defendants could not rescind their mortgage because

it was purchase-money mortgage, and that the HAMP modification executed by

defendants and Wells Fargo did not amount to a refinancing of the mortgage.

The Court of Appeals for the Third Circuit affirmed the District Court rulings in

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                                       3
Chambers v. Wells Fargo Bank, N.A., 726 Fed. Appx. 886 (3d Cir. 2018) on

March 9, 2018.

      On appeal, defendants first challenge the trial court's denial of their

rescission claim under TILA, 15 U.S.C. § 1635. Appellate courts do not afford

"any special deference" to a "trial court's interpretation of the law and the legal

consequences that flow from established facts[.]" Manalapan Realty, LP v.

Twp. Comm. of Twp. of Manalapan, 140 N.J. 366, 378 (1995) (citing State v.

Brown, 118 N.J. 595, 604 (1990)).

      Initially, we note that defendants' TILA rescission claims are barred by

collateral estoppel based on their parallel case brought in the District Court of

New Jersey. "Collateral estoppel is that branch of the broader law of res judicata

which bars relitigation of any issue which was actually determined in a prior

action, generally between the same parties, involving a different claim or cause

of action." State v. Gonzalez, 75 N.J. 181, 186-87 (1977) (citations omitted). It

applies to questions of law if "the claims arise from the same transaction, or 'if

injustice would result.'" Id. at 187 (citing Washington Twp. v. Gould, 39 N.J.
527 (1963)). For collateral estoppel to apply,

                   the party asserting the bar must show that:
                   (1) the issue to be precluded is identical to
                   the issue decided in the prior proceeding;
                   (2) the issue was actually litigated in the

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                                        4
                   prior proceeding; (3) the court in the prior
                   proceeding issued a final judgment on the
                   merits; (4) the determination of the issue
                   was essential to the prior judgment; and (5)
                   the party against whom the doctrine is
                   asserted was a party to or in privity with a
                   party to the earlier proceeding."

                   [Sacharow v. Sacharow, 177 N.J. 62, 76
                   (2003) (quoting In re Estate of Dawson,
                   136 N.J. 1, 20-21 (1994)).]

      Here, the parties in the District Court case are the same as the current

parties. The issue of defendants' rescission rights under Section 1635 of TILA

was actually litigated in the District Court. On June 28, 2016, the District Court

of New Jersey held that defendants' rescission claim failed. While defendants'

appeal of Judge Innes's grant of final judgment was pending, the Third Circuit

Court of Appeals affirmed the District Court's rulings. Thus, all of defendants'

arguments stemming from their attempted TILA rescission have already been

fully litigated both in the District Court of New Jersey and in the Superior Court;

and defendants' rescission claim is barred by collateral estoppel. See Sacharow,
177 N.J. at 76 (quoting In re Estate of Dawson, 136 N.J. 1, 20-21 (1994)).

      Even if defendants' claims were not barred by collateral estoppel, they

would still be substantively meritless. TILA specifically exempts "residential

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                                        5
mortgage transactions as defined in section 1602(w) of this title" 1 from

rescission rights.    Id. § 1635(e).     The Act defines "residential mortgage

transactions" as "a transaction in which a mortgage . . . is created or retained

against the consumer's dwelling to finance the acquisition or initial construction

of such dwelling." Id. § 1602(x). Here, the competent evidence in the record

confirms that the mortgage was a purchase-money mortgage. Thus, defendants'

mortgage was not eligible for rescission under 15 U.S.C. § 1635.

        Additionally, TILA implements a three-year statute of limitations for

rescission. Id. § 1635(f). See also Jesinoski v. Countrywide Home Loans, Inc.,

574 U.S. ___, 135 S. Ct. 790, 792 (2015) (affirming that the right a borrower

has to rescission expires three years after the closing of the loan, in accordance

with § 1635(f)); Beach v. Ocwen Fed. Bank, 523 U.S. 410, 419 (1998). Here,

the original mortgage closed on November 12, 2007. Defendants sent their

notice of rescission on January 23, 2015. Thus, the rescission is barred by

TILA's three-year statute of limitations. 15 U.S.C. § 1635(f).

        TILA disclosures are required to be provided before credit is extended.

15 U.S.C. § 1638(b)(1); 12 C.F.R. § 1026.17(b); Bartholomew v. Northampton

Nat'l Bank of Easton, 584 F.2d 1288, 1296 (3d Cir. 1978). After credit is

1
    The definition is listed at § 1602(x), rather than § 1602(w).
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                                          6
initially extended, disclosures need to be provided again if the credit is

refinanced. 12 C.F.R. § 1026.20(a). "A refinancing occurs when an existing

obligation that was subject to this subpart is satisfied and replaced by a new

obligation undertaken by the same consumer." Id.

      The HAMP modification was executed in January 2014. The modification

specifically stated that the original note and mortgage remained in effect, and

that the original note and mortgage were not satisfied or released. Thus, the

HAMP modification does not constitute a refinancing of the original mortgage.

15 U.S.C. § 1638(b)(1).

      Defendants also challenge the trial court's grant of summary judgment in

favor of Wells Fargo. The standard of review for a grant of summary judgment

is de novo. Conley v. Guerrero, 228 N.J. 339, 346 (2017) (citing Templo Fuente

De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199

(2016)). Thus, "summary judgment will be granted if there is no genuine issue

of material fact and 'the moving party is entitled to a judgment or order as a

matter of law.'" Ibid. (citing Templo Fuente, 224 N.J. at 199). The standard

requires that summary judgment be denied unless the opposing party comes

forward with evidence that creates a genuine issue of material fact. Brill v.

Guardian Life Ins. Co. of Am., 142 N.J. 520, 529 (1995). However, "conclusory

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                                      7
and self-serving assertions by one of the parties are insufficient to overcome [a

summary judgment] motion." Puder v. Buechel, 183 N.J. 428, 440-41 (2005)

(citing Martin v. Rutgers Cas. Ins. Co., 346 N.J. Super. 320, 323 (App. Div.

2002)).

      "[T]he only issues in a foreclosure action are the validity of the mortgage,

the amount of the indebtedness, and the right of the. . . mortgagee to re sort to

the mortgaged premises." U.S. Bank Nat'l Ass'n v. Curcio, 444 N.J. Super. 94,

112-13 (App. Div. 2016) (quoting Sun NFL Ltd. P'ship v. Sasso, 313 N.J. Super.
546, 550 (App. Div. 1998)).       Wells Fargo established the validity of the

mortgage by providing a copy of the original note, a copy of the original

mortgage, and the certification of Andrea Kruse, which certified that Wells

Fargo was in possession of the original note at the time the complaint was filed.

The original note established that in the event defendants defaulted on their

mortgage payments, Wells Fargo would have the right to foreclose on the

property. Defendants defaulted on their mortgage payments in February 2014

and did not cure the default. Thus, Wells Fargo established a prima facie

foreclosure case. See Curcio, 444 N.J. Super. at 112-13.

      For these reasons, we affirm the trial court's grant of summary judgment.

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                                        8
      Defendants' remaining arguments have insufficient merit to warrant

discussion in a written opinion. R. 2:11-3(e)(1)(E).

            Affirmed.

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