Court Opinion

ID: 4995004
Source: CourtListenerOpinion
Date Created: 2021-09-27 20:00:29.007879+00
Date Added: 2024-06-11T08:16:48.769281
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ___________

                                       No. 20-1459
                                       __________

                   WILMINGTON SAVINGS FUND SOCIETY FSB

                                             v.

                              BERYL OTIENO-NGOJE,
                                                 Appellant
                       ____________________________________

                     On Appeal from the United States District Court
                               for the District of New Jersey
                         (D.C. Civil Action No. 2:16-cv-05631)
                      District Judge: Honorable William J. Martini
                      ____________________________________

                    Submitted Pursuant to Third Circuit LAR 34.1(a)
                                    June 1, 2021

              Before: CHAGARES, PHIPPS and COWEN, Circuit Judges

                           (Opinion filed: September 27, 2021)

                                      ___________

                                       OPINION*
                                      ___________

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
PER CURIAM

       Beryl Otieno-Ngoje appeals pro se from the District Court’s grant of summary

judgment against her in this civil action brought by Wilmington Savings Fund Society

(“WSFS”). For the reasons that follow, we will affirm that judgment.

                                             I.

       In 2008, Otieno-Ngoje agreed to purchase, “as is,” a residential property located in

Orange, New Jersey (hereinafter “the Property”). Her credit apparently was poor, so the

mortgagee, GFI Mortgage, Inc. (“GFI”), told her that she needed a co-borrower. Auslene

Simon, an acquaintance of Otieno-Ngoje, agreed to co-sign the mortgage. However, at

closing, GFI stated that, to secure a good interest rate, the mortgage had to be signed by

Simon only. Otieno-Ngoje and Simon assented to this arrangement.

       The mortgage, which was for 30 years and $275,400, included a provision stating

that, in the event of a loss, “any insurance proceeds, whether or not the underlying

insurance was required by Lender, shall be applied to restoration or repair of the

Property, if the restoration or repair is economically feasible and Lender’s security is not

lessened.” (WSFS’s App. at 171.) This provision further stated that, “[i]f the restoration

or repair is not economically feasible or Lender’s security would be lessened, the

insurance proceeds shall be applied to the sums secured by this Security Instrument,

whether or not then due, with the excess, if any, paid to Borrower.” (Id. at 172.) The

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mortgage made clear that its provisions benefitted not only the lender, but also the

lender’s “successors and assigns.” (Id. at 174.)

         From the outset, Simon and Otieno-Ngoje had a verbal understanding that the

latter would reside on the Property and make the mortgage payments. But the Property

was initially uninhabitable. Nevertheless, for the first year or so, Otieno-Ngoje made the

mortgage payments. In 2009, Simon and Otieno-Ngoje executed a quitclaim deed that

transferred Simon’s interest in the Property to Otieno-Ngoje for $1. That same year, the

amount of the monthly mortgage payment increased dramatically, apparently because the

homeowner’s insurance carrier had withdrawn coverage in view of the fact that the

Property was vacant. Otieno-Ngoje attempted to obtain a loan modification, but her

efforts were unsuccessful. It appears that, after 2009, she did not make any more

mortgage payments.

         In 2011, Otieno-Ngoje and her family moved into the Property. That year, she

obtained a homeowner’s insurance policy from Liberty Mutual (hereinafter “the Policy”).

The Policy listed the Property’s mortgagee as “Wells Fargo Bank NA . . . ISAOA [(i.e.,

its successors and/or assigns)],” (WSFS’s App. at 198),1 and the Policy included a

mortgage clause. That clause stated, in pertinent part, that “[i]f a mortgagee is named in

1
    By that point, the mortgage had been assigned to Wells Fargo.

                                              3
this policy, any loss payable . . . will be paid to the mortgagee and you, as interests

appear.” (Id. at 210 (emphasis added).)

       In late 2015, at which time the Policy was still in effect, the house on the Property

was badly damaged in a fire. At that time, the amount due on the mortgage was well over

$400,000, because the monthly mortgage payments were not being made. Otieno-Ngoje

subsequently submitted a claim under the Policy. Liberty Mutual approved the claim

and, between May and July 2016, issued two checks totaling $340,544.65.2 Both checks

were made jointly payable to the public adjuster, Otieno-Ngoje, and “Carrington” (which

is short for Carrington Mortgage Services). Carrington was the mortgagee’s agent and

the servicer of the mortgage. By that point, the mortgage on the Property had been

assigned multiple times, and the interest was presently owned by WSFS, a Delaware

federal savings bank to whom the mortgage had been assigned a few months earlier.

       Liberty Mutual sent the two checks to the public adjuster, who signed them and

gave them to Otieno-Ngoje. When Otieno-Ngoje received the first check, she signed her

name, forged Carrington’s signature, and then deposited the check into her bank account.

2
 At the time of the fire, there was a second insurance policy on the Property. That
policy, which the mortgagee had obtained through a different insurance carrier (Great
American Insurance Group (“GAIG”)), had coverage totaling about $272,000; however,
because Liberty Mutual’s $340,544.65 payment exceeded that coverage amount, no
disbursement was made under the GAIG policy.

                                              4
The second check arrived while Otieno-Ngoje was abroad, so she directed her daughter to

deposit that check electronically.

       Thereafter, WSFS filed a complaint against Otieno-Ngoje in the District Court,

invoking that court’s diversity jurisdiction under 28 U.S.C. § 1332. WSFS asserted

claims for conversion, fraud, and unjust enrichment under New Jersey state law, and it

sought to recover all of the insurance proceeds that had been disbursed by Liberty

Mutual. The parties eventually filed cross-motions for summary judgment. In February

2020, the District Court granted WSFS’s motion, denied Otieno-Ngoje’s cross-motion,

and entered judgment in favor of WSFS. In doing so, the District Court concluded that

each of WSFS’s three legal claims had merit, and that WSFS was entitled to all

$340,544.65 of the insurance proceeds. This timely appeal followed.

                                            II.

       We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291, and our

review over the District Court’s summary-judgment decision is plenary, see Barna v. Bd.

of Sch. Dirs. of Panther Valley Sch. Dist., 877 F.3d 136, 141 (3d Cir. 2017). Summary

judgment is appropriate when the movant “shows that there is no genuine dispute as to

any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ.

P. 56(a). Although the non-movant’s evidence “is to be believed, and all justifiable

inferences are to be drawn in h[er] favor in determining whether a genuine factual

question exists,” summary judgment should be granted “unless there is sufficient

                                            5
evidence for a jury to reasonably find for the nonmovant.” Barefoot Architect, Inc. v.

Bunge, 632 F.3d 822, 826 (3d Cir. 2011) (internal quotation marks omitted).

                                            III.

       As mentioned above, the Policy stated that any loss payable would be paid to the

mortgagee and the policy holder, “as interests appear.” (WSFS’s App. at 210.) Although

WSFS was not assigned the mortgage on the Property until after the fire, WSFS is

considered the “mortgagee” for purposes of determining the “interests” under the Policy.

This is because the Policy listed the mortgagee as Wells Fargo and its successors and/or

assigns, and because the “assignee of a mortgage succeeds to the rights and privileges . . .

of the assignor.” Gerrold v. Penn Title Ins. Co., 637 A.2d 1293, 1295 (N.J. Super. Ct.

App. Div. 1994).

       To determine the respective interests of WSFS and Otieno-Ngoje, we return to the

mortgage’s property-insurance provision. Recall that this provision stated that insurance

proceeds were to be used to either repair/restore the Property (if economically feasible) or

pay down the mortgage balance. There is no indication that using the $340,544.65 in

insurance proceeds to repair or restore the Property would have been economically

feasible.3 Furthermore, although the mortgage stated that excess insurance proceeds

3
 Otieno-Ngoje testified at her deposition that she obtained estimates from three
contractors to repair the Property, and that “[t]hey were all above [$]600,000.” (WSFS’s
App. at 136.)

                                             6
would be distributed to the borrower, that situation did not present itself here because the

insurance proceeds were less than the mortgage balance. Accordingly, when Otieno-

Ngoje received the two Liberty Mutual checks, she should have just signed them and

turned them over to WSFS’s agent, Carrington. Instead, she chose to forge Carrington’s

signature and deposit the checks into her own account. For substantially the reasons

provided by the District Court, we agree with the District Court that Otieno-Ngoje is

liable to WSFS for committing the tort of conversion. (See Dist. Ct. Op. entered Feb. 14,

2020, at 4-6.)4

                                            IV.

       We have considered Otieno-Ngoje’s various arguments and find none of them

persuasive. Accordingly, and in view of the above, we will affirm the District Court’s

February 26, 2020 judgment entered against her. To the extent that she requests any

other relief from this Court, those requests are denied.

4
  Although the District Court determined that Otieno-Ngoje was also liable under
WSFS’s other two causes of action — fraud and unjust enrichment — we need not rule
on those to decide this appeal. After all, the District Court did not conclude, and the
parties do not argue here, that the amount of damages for one cause of action is different
than the amount for the other two.

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