Court Opinion

ID: 6221380
Source: CourtListenerOpinion
Date Created: 2022-02-14 15:08:05.739134+00
Date Added: 2024-06-11T08:57:21.833688
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NOT FOR PUBLICATION WITHOUT THE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-1354-20

ORIGEN CAPITAL
INVESTMENTS II, LLC,

          Plaintiff-Appellant,

v.

ENVIRO/CONSULTANTS
GROUP, LTD, THOMAS J.P.
HUGUES, COMMONWEALTH
CAPITAL, LLC, and KEYSTONE
BUSINESS CREDIT,

          Defendants-Respondents,

and

WACHOVIA BANK NATIONAL
ASSOCIATION, and STATE OF
NEW JERSEY,

     Defendants.
______________________________

                   Argued February 1, 2022 – Decided February 14, 2022

                   Before Judges Fisher and DeAlmeida.
           On appeal from the Superior Court of New Jersey,
           Chancery Division, Gloucester County, Docket No.
           F-019061-19.

           Mark Pfeiffer argued the cause for appellant (Buchanan
           Ingersoll & Rooney, PC, attorneys; Mark Pfeiffer, of
           counsel and on the briefs).

           Barry J. Muller argued the cause for respondent
           Thomas J.P. Hugues (Fox Rothschild, LLP, attorneys;
           Barry J. Muller, of counsel and on the brief).

           Paige M. Bellino argued the cause for respondents
           Commonwealth Capital, LLC, and Keystone Business
           Credit (Chiumento McNally, LLC, attorneys; Paige M.
           Bellino, on the brief).

PER CURIAM

     Plaintiff Origen Capital Investments II, LLC, appeals a summary

judgment dismissing its complaint, which sought to foreclose on a commercial

mortgage held on property in Clayton. Because we find the record is not

sufficiently clear to permit summary judgment on whether the mortgage should

have been previously discharged, we reverse and remand for further

proceedings.

     In 1998, Enemute Oduaran purchased the Clayton property in the name of

his business, Enviro/Consultants Group, LTD. At the same time, two mortgages

were placed on the property in favor of Mellon Bank, N.A.; one secured

repayment of a $200,000 term note and the other secured repayment of a

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$125,000 line of credit. After the purchase, Enviro merged into ECG Industries

Inc.

        Two years later, Oduaran agreed to sell the Clayton property to LJL

Properties LLC. Apparently in response to inquiries relevant to that transaction,

Mellon Bank wrote to Oduaran on April 18, 2000, stating its agreement

               to release all of its security interest in [the Clayton
               property] which relate to both the term loan and line of
               credit, upon receiving full payment which fully satisfies
               Enviro['s] loan No. 101-302-0002188.[1]

This letter also provided a pay-off figure that was "good until April 18, 2000."

The sale of the property to LJL closed in July 2000. Mellon apparently

authorized a discharge of the term-loan mortgage but not the line-of-credit

mortgage.

        On April 25, 2003, defendant Thomas J.P. Hugues purchased the property

from LJL. A title search did not reveal the presence of the line-of-credit

mortgage, although there is no dispute that it remains of record in the county

clerk's office. Soon after Hugues's purchase, the line of credit matured and

became immediately due and payable but was not paid.

1
    The account number refers to the term loan, not the line of credit.
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                                          3
      Two years later, Citizens Bank, which had been assigned Mellon Bank's

interest in the line of credit, wrote to Hugues to advise of the default and

claiming the line-of-credit mortgage remained a valid lien on the property.

Hugues disputed this and asserted, as noted above, that in April 2000 Mellon

Bank represented it would release the line-of-credit mortgage. Citizens Bank

took no further immediate action against Hugues; it did, however, sue Oduaran

and Enviro in Delaware, and, in 2009, obtained a money judgment against

Oduaran.

      In 2014, Hugues refinanced the property with defendants Commonwealth

Capital, LLC, and Keystone Business Credit. A title search apparently did not

reveal the existence of the line-of-credit mortgage, and the transaction with

Commonwealth and Keystone was consummated.

      Plaintiff Origen purchased Citizens Bank's interest in the line-of-credit

mortgage in December 2015 and, four years later, filed this foreclosure action.

Hugues moved for summary judgment; Commonwealth and Keystone joined in

the motion, which was granted for reasons expressed by the trial judge in an oral

decision on October 30, 2020. The judge found that whether Mellon Bank agreed

to discharge the line-of-credit mortgage in 2000 was not genuinely disputed, that

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Origen had not made a prima facie case for foreclosure, and that the doctrine of

laches barred Origen's claim.

      Origen appeals, arguing that the judge erred in concluding that Mellon

Bank agreed to remove the line-of-credit mortgage and that the doctrine of

laches was erroneously utilized to dismiss the action. We agree the factual

record is simply too murky to warrant entry of summary judgment.

      It is certainly true that Origen's rights rise no higher than its predecessors.

And it is true that the record before us reveals Mellon Bank's intent in April

2000 to release both the term mortgage and the line-of-credit mortgage so long

as, in selling the Clayton property, Hugues's predecessor paid off the term

mortgage. But there is no clear evidence – only inferences – to suggest that the

term mortgage was paid off or that Mellon Bank may not have altered its position

by the time of the July 2000 closing. There are only pieces of information about

whether Hugues's predecessor complied with any conditions for a release of the

line-of-credit mortgage, assuming Mellon Bank was still willing to do so by the

time of the closing. And while there is fragmentary evidential material that

might suggest Mellon Bank had agreed at that time to accept substitute collateral

in place of the line-of-credit mortgage, there is nothing so clear or certain in the

record as to permit summary judgment on the issue. Of the same value is other

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information that might suggest Citizens Bank, which acquired Mellon Bank's

interest in the line of credit, did not believe the mortgage had been paid off.

      In short, to ascertain an accurate understanding of the transactions

preceding the commencement of this foreclosure action from the few written

communications offered in support of and in opposition to the motion is like

calculating the size of an iceberg by measuring only that part visible above the

water's surface. As the opponent of the summary judgment motion, Origen was

entitled to an assumption of the truth of its allegations and the reasonable

inferences to be drawn from the evidence. Brill v. Guardian Life Ins. Co. of Am.,

142 N.J. 520, 540 (1995). Instead, it seems as if, contrary to this principle, the

movants were mistakenly given the benefit of the inferences suggested by the

fragmentary evidence. 2 Although the revelation of other information in the

future might give rise to the entry of summary judgment on behalf of one side

or the other, the record currently lacks the clarity necessary to support summary

judgment. See, e.g., Higgins v. Thurber, 413 N.J. Super. 1, 24 (App. Div. 2010)

(recognizing how "the summary judgment framework [is] too fragile" to support

2
 Contrary to what was argued here in support of the judge's ruling, it does not
matter that the motion judge will likely be the trier of fact. The principles
applicable to summary judgment motions are unaltered by that circumstance.

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a final disposition when evidential materials lack clarity), aff’d o.b., 205 N.J.

227 (2011).3

      Reversed and remanded for further proceedings. We do not retain

jurisdiction.

3
  We lastly add that even if the doctrine of laches has some bearing here, and
even if the timeliness of a suit to foreclose a commercial mortgage should not
be governed by the twenty-year time-bar described in Security National Partners
Ltd. Partnership v. Mahler, 336 N.J. Super. 101, 106-08 (App. Div. 2000) – a
matter we need not decide – the record does not yield any clearer answers about
the elements of laches than it does about the merits.
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