Court Opinion

ID: 4428097
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:00:41.511196+00
Date Added: 2024-06-11T14:50:57.914289
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NOT FOR PUBLICATION WITHOUT THE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-1976-17T1

ROSEMONT PROPERTIES, LLC,

          Plaintiff-Respondent,

v.

IP REALTY, LLC, ISRAEL
PERLOW, ESTHER PERLOW,
SHIMON GINSBERG, and
AMBOY BANK,

          Defendants,

and

THE CITY OF JERSEY CITY,

     Defendant-Appellant.
___________________________

                    Argued January 29, 2019 – Decided July 8, 2019

                    Before Judges Rothstadt and Gilson.

                    On appeal from the Superior Court of New Jersey,
                    Chancery Division, Hudson County, Docket No. F-
                    022911-15.
             Elliott J. Almanza argued the cause for appellant
             (Goldenberg, Mackler, Sayegh, Mintz, Pfeffer, Bonchi &
             Gill, attorneys; Keith A. Bonchi, of counsel and on the
             briefs; Elliott J. Almanza, on the briefs).

             Michael V. Capellupo argued the cause for respondent
             (Kriss & Feuerstein, LLP, attorneys; Michael J.
             Bonneville and Michael V. Capellupo, on the brief).

PER CURIAM

      This commercial foreclosure action presents a dispute between creditors.

Defendant, the City of Jersey City (the City), was a second mortgagee of the

foreclosed property, while plaintiff, Rosemont Properties, LLC (Rosemont), held a

senior first mortgage. The City appeals from the Chancery Division's December 5,

2017 rejection of its objection to the amount due to plaintiff. On appeal, the City

contends that the trial court judge erred by not reducing the amount due to Rosemont

by the value of a Lakewood property that Rosemont released from its lien, which

was owned by one of the principals of their mutual borrower and his spouse. In the

alternative, it argues that the Chancery judge should have applied the "two funds"

doctrine to the City's claim. It also contends that the judge should not have

incorporated a default interest rate into the amount owed to Rosemont and that he

used the wrong date for calculating when the mortgagor defaulted. For the reasons

that follow, we affirm.

                                         I.

                                                                            A-1976-17T1
                                         2
         Rosemont and the City were creditors of defendant, IP Realty, LLC (IPR),

whose principals are defendants Shimon Ginsberg and Israel Perlow, the husband of

defendant Esther Perlow. IPR owned the subject property that was located in Jersey

City. The property was improved by a multi-family residential building.

         In June 2008, Rosemont lent $600,000 to IPR. In exchange for the loan, IPR

delivered a promissory note to Rosemont that was secured by a mortgage on the

Jersey City property, as well as a mortgage on the Perlows' Lakewood property. At

the time, the Lakewood property was vacant, but was later improved with a home in

which the Perlows resided. The note and two mortgages were signed by Ginsburg

and Israel Perlow on behalf of IPR, and by both Perlows individually.

         The note given to Rosemont carried an eleven and one-half percent interest

rate and was to mature on June 30, 2009. It also provided for a default interest rate

of twenty-four percent if the loan was not timely paid. Moreover, in the event of a

default, a cross-collateralization provision in the parties' agreement allowed

Rosemont, in its sole discretion, to foreclose on one or both of the properties in any

order.

         In June 2009, IPR defaulted when it stopped making any payments towards

the principal owed in accordance with its note. However, IPR continued making

interest-only payments until May 2014.

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                                          3
      While IPR was in default, in July 2010, the City lent IPR $494,105 so that six

units in the building on the Jersey City property could be developed into affordable

housing. In connection with that loan, IPR delivered to the City a second mortgage

on the Jersey City property, subordinate to Rosemont's first mortgage. The note was

signed only by Israel Perlow on behalf of IPR. Four years later, in March 2014, the

City and IPR entered into a loan modification that reflected additional funding from

the City. As a result of the modification, the amount of the City's loan increased to

$673,105. According to the City's real estate officer, the City believed its loan was

adequately protected because it understood that IPR had received additional private

financing to assist with the needed improvements to the building.

      As it turned out, in May 2014, the Jersey City property was substantially

damaged in a fire. Afterward, IPR made no payments on either loan. At the time of

the fire, the property was insured and initially, the City received $604,036.63 from

the insurance proceeds.

      In June 2015, Rosemont instituted this foreclosure action and this action

seeking to recover the insurance proceeds paid to the City.1 In March 2016, in

response to Rosemont's motion for summary judgment, the parties entered into a

1
  The complaint also named as a defendant Amboy Bank, a defendant in this action
as well. Amboy Bank held a judgment against Israel Perlow, which was a lien
against the Lakewood Property. The bank filed an uncontesting answer.
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                                         4
settlement order. Under that settlement (1) the City agreed to remit the insurance

proceeds to Rosemont; (2) Rosemont agreed to forbear from moving for final

judgment until December 1, 2016; (3) Rosemont agreed to discontinue the

foreclosure action if IPR, the Perlows, and Ginsberg paid $75,000 before December

1, 2016; (4) the City and the remaining defendants agreed to withdraw their answers;

and (5) the foreclosure action was to proceed as "uncontested."

      In accordance with the settlement order, the City turned over to Rosemont the

insurance proceeds, but neither IPR, nor the Perlows, nor Ginsberg ever paid the

$75,000. Despite their default, on January 27, 2017, Rosemont discharged its

mortgage against the Lakewood property only. According to Rosemont's managing

member, plaintiff received no consideration for the release.

      Rosemont decided to release the lien because it believed that after application

of the insurance proceeds, the value of the Jersey City property would be sufficient

to secure repayment of the amount that a court would likely order in a final judgment.

Rosemont also agreed to the discharge as an act of goodwill because the Lakewood

property was by then the Perlows' residence. According to the City, at the time, the

Lakewood property was valued at $1,250,000 and the Jersey City property's value

was $400,000, although Rosemont disputed those values.

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                                          5
      In April 2017, Rosemont moved for a final judgment, seeking an order fixing

the amount due under the terms of the loan as $1,050,000, including default interest.

In response, the City filed its objection and moved to reopen discovery in order to

investigate the bona fides of Rosemont's discharge of the Lakewood mortgage.

      Specifically, the City sought to discover whether plaintiff received any

consideration for the release of the Lakewood mortgage and argued that the release

jeopardized its security interest in the Jersey City property. The City asked the judge

to provide a credit against plaintiff for the value of the Lakewood property, or

alternatively, to reinstate the mortgage and require its sale under the "two funds" or

"marshalling" doctrine. The City also objected to plaintiff's delay in filing this

action, as well as the "exorbitant default-rate interest."

      Judge Barry P. Sarkisian granted the City's motion to reopen the case for

discovery, but reserved judgment on the merits. Accordingly, on June 29, 2017, the

judge entered an order denying Rosemont's motion for final judgment.

      After the discovery was completed, Rosemont refiled its motion for final

judgment. The parties appeared for oral argument before Judge Sarkisian on

December 1, 2017. The City renewed its earlier arguments about the "two funds"

doctrine, and its objection to the default interest rate, contending that it was an

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                                           6
"unenforceable penalty" because plaintiff was willing to accept $75,000 to satisfy

the mortgage in 2016, but now sought a judgment for over one million dollars.

       The City also challenged the date that Rosemont used for the commencement

of the default interest rate's application. It argued that interest began accruing in

May 2014, rather than the note's June 30, 2009 maturity date as used by Rosemont

because Rosemont continued to accept interest-only payments post-maturity.

According to the City, by accepting those payments, Rosemont waived the loan

documents' provisions that required modifications to be made only in writing. The

City also presented a 2015 payoff statement that Rosemont provided it, reflecting

the note's regular, non-default rate of eleven and one-half percent interest to establish

that Rosemont waived its right to any default interest until May 2014, when

payments stopped. Plaintiff contended that it did not extend the maturity date and

that its failure to demand payment of interest at the default rate in 2015 did not waive

its right to later collect such interest.

       On December 5, 2017, Judge Sarkisian entered the order fixing the amount

due as demanded by Rosemont and rejecting the City's objection to the entry of final

judgment based on that amount. In his accompanying Statement of Reasons, the

judge first summarized the parties' history and positions. He turned to the City's

contention that it was entitled to a credit for the value of the Lakewood property.

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                                            7
Citing to Hoy v. Bramhall, 19 N.J. Eq. 563, 571 (E & A 1868), the judge observed

that "where a mortgagee, . . . releases that part which is primarily liable . . . for the

payment of the mortgage debt, he cannot . . . charge other portions of the premises

with the payment of the mortgage, without deducting from the amount due, the value

of the part released." However, the judge held that it would be inequitable to credit

the value of the Lakewood property because, unlike in Hoy, plaintiff received no

consideration for the release. Additionally, discovery revealed that Rosemont had

originally intended for the Jersey City property to be primarily liable for the payment

of the debt, and the City had "constructive notice" that plaintiff had a right to pursue

its remedies solely against either property. Therefore, "the clear demands of natural

justice and equity" would not be served by crediting the value of the Lakewood

property.

      Second, the judge addressed the City's request to reinstate the Lakewood

mortgage under the doctrine of marshalling, or "the two funds" doctrine. The City

argued that the Rosemont mortgages had a "common debtor" because the signatures

of all parties appeared on both mortgages and because they arose out of a single

transaction. However, the court noted that for the doctrine to apply under Gordon

v. Arata, 114 N.J. Eq. 294, 296 (Ch. 1933), "the parties must be creditors of the same

debtor and both funds must belong to one debtor," which was not the case here.

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                                           8
Here, the Lakewood property was owned by the Perlows and the Jersey City property

was owned by IPR. Although Israel Perlow was a member of IPR, there was nothing

to suggest that IPR or Ginsberg had any interest in the Lakewood property. The

judge rejected the City's contention that the fact that the Jersey City and Lakewood

mortgages arose from a single transaction entitled the City to a credit for the release

of the Lakewood property.

      Third, the judge addressed the City's argument that the default interest rate

was an unreasonable penalty and that plaintiff unnecessarily delayed prosecuting the

action. The judge found the rate reasonable because default interest rates are

presumed reasonable and the City presented no proof of the rate's unreasonableness.

The judge was not persuaded that plaintiff's willingness to accept $75,000 under the

settlement order was evidence that the rate was unreasonable. Additionally, the

judge found the City's argument to be an attempt to shift its burden to plaintiff. The

judge also found that plaintiff's four-month delay in filing its motion for final

judgment was not unreasonable, and laches did not apply.

      Finally, the judge addressed the parties' disagreement over the loan's maturity

and due date. While acknowledging that a contract provision requiring written

modification may be waived by the parties' conduct or agreement, the judge found

that interest began accruing on the June 30, 2009 maturity date and that there was

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                                          9
no evidence of a "clear, unequivocal and intentional relinquishment" of plaintiff's

right to collect default interest as of that date. Any communication between the

parties constituted a temporary forbearance agreement.

      After Judge Sarkisian rejected the City's objection and fixed the amount due,

Judge Paul Innes later entered the final judgment of foreclosure on December 20,

2017. This appeal followed.

                                          II.

      "Foreclosure is an equitable remedy governed by the operation of traditional

equitable principles . . . ." Customers Bank v. Reitnour Inv. Props., LP, 453 N.J.

Super. 338, 348 (App. Div. 2018) (quoting U.S. Bank v. Curcio, 444 N.J. Super. 94,

113 (App. Div. 2016)). "Because equitable remedies are largely left to the judgment

of the court, which has to balance the equities and fashion a remedy, such a decision

will be reversed only for an abuse of discretion." Ibid. An "abuse of discretion"

occurs "when a decision is made without a rational explanation, inexplicably

departed from established policies, or rested on an impermissible basis." Ibid.

(quoting Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571 (2002)). However, in

our review for an abuse of discretion, we will not defer to a trial court's conclusions

of law or the legal consequences that flow from established facts as issues of law are

reviewed de novo. Cherokee LCP Land, LLC v. City of Linden Planning Bd., 234

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                                         10
N.J. 403, 414-15 (2018) (citing Manalapan Realty, L.P. v. Twp. Comm. of

Manalapan, 140 N.J. 366, 378 (1995)).

                                         A.

      We begin our review by addressing the City's contention that Judge Sarkisian

should have reduced the amount due to Rosemont by the value of the Lakewood

property. As already noted, Rosemont's loan was secured by mortgages on the two

subject properties, and pursuant to a cross-collateralization clause in its agreement

with IPR and the Perlows, Rosemont had the right, upon default, "to exercise its

remedies against each of the properties in any such order determined by [Rosemont]

or to foreclose simultaneously on both properties." The City contends that despite

that provision and the fact that Rosemont did not receive any consideration for the

discharge of the Lakewood mortgage, the City should have benefited by essentially

wiping out the priority of Rosemont's Jersey City mortgage. We disagree.

      As Judge Sarkisian observed, the "credit doctrine" as argued by the City gives

a second mortgagee "the benefit of a release," but only applies where a mortgagor

conveys part of the mortgaged property to another.

      In Hoy, the senior mortgagee released part of the mortgaged premises for

consideration. The court held that under those circumstances, the second mortgagee

                                                                             A-1976-17T1
                                        11
was entitled to a credit for the consideration received by the first lien holder against

the amount due on foreclosure. The court stated the following:

             Where a mortgagee, with [knowledge of a second
             encumbrance and] notice of several successive alienations
             of parts of the mortgaged premises, releases that part
             which is primarily liable in equity for the payment of the
             mortgage debt, he cannot be permitted to charge other
             portions of the premises with the payment of the mortgage,
             without deducting from the amount due, the value of the
             part released.

             [Hoy, 19 N.J. Eq. at 571.]

      "The rule is . . . that if a prior mortgagee releases part of the mortgaged

premises, to the prejudice of a subsequent encumbrancer or purchaser with notice of

such subsequent mortgage . . . his release operates as a discharge of his lien," equal

"to the . . . value of the land released." Cogswell v. Stout, 32 N.J. Eq. 240, 241 (Ch.

1880).

      Applying those principles, we conclude that Judge Sarkisian correctly

determined that the doctrine's application here was clearly not warranted. At no time

did the City hold any interest in the Lakewood property nor did IPR ever convey any

interest in the Jersey City property that would trigger application of the doctrine. In

addition, the cross-collateralization clause in Rosemont's agreement with IPR and

the Perlows did not require it to proceed against the Lakewood property before the

Jersey City property. As there was also no agreement between Rosemont and the

                                                                               A-1976-17T1
                                          12
City, and the City made its loan to IPR with knowledge of the Rosemont loan, the

City had no right to limit Rosemont's actions. See Meadowlands Nat'l Bank v. Court

Dev., Inc., 192 N.J. Super. 579, 583 (App. Div. 1983) (finding a junior lien holder's

interest in its borrower's contract with a purchaser of a portion of the mortgaged

premises to be at best "incidental" and not entitling it to relief). Finally, the City

produced no evidence that Rosemont's decision to discharge the Lakewood

mortgage was the result of any nefarious endeavor to defraud the City or interfere

with its rights. Under these circumstances, we have no reason to disturb Judge

Sarkisian's decision.

      We reach a similar conclusion concerning the City's argument under the "two

funds" or marshalling doctrines that the trial judge erred in not reinstating the

discharged Lakewood mortgage and compelling its sale prior to the sale of the Jersey

City property. The City contends that Judge Sarkisian interpreted the requirement

that the properties must have a common debtor too narrowly. According to the City,

because the funds here were derived from a common source, the doctrine should

apply. We disagree.

      "Marshaling is the general equitable principle that one who has a lien on a

single property may compel one who has a superior lien on the same property and

on another property, to first resort to the property which is not incumbered for the

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                                        13
satisfaction of his claim." Johnson v. Lentini, 66 N.J. Super. 398, 409 (Ch. Div.

1961). This doctrine obviously cannot be applied, however, when the other asset is

also owned or liened by parties other than the debtor. See In re Maimone, 41 B.R.

974, 984 (Bankr. D.N.J. 1984). For the doctrine to apply, "the parties must be

creditors of the same debtor, and both funds must belong to one debtor." Gordon,

114 N.J. Eq. at 296. The common debtor must hold both of the subject properties.

Id. at 297. "If the two funds to which creditors or sets of creditors may resort are not

derived from a common source, or are not in the hands of a common debtor, there

can ordinarily be no marshaling of assets." Ibid.

      In this case, the City held a mortgage only on IPR's Jersey City property and

the Perlows never borrowed any money from the City or guaranteed its loan to IPR.

Therefore, the City was not entitled to the benefit of this rule. Contrary to the City's

argument, the fact that Rosemont's Lakewood mortgage was the result of Rosemont's

Jersey City loan does not alter the rule's application. Without commonality of

debtors, the application of the "two funds" or marshalling doctrines was inapposite.

                                          B.

      Next, we consider the City's challenge's to Judge Sarkisian's including in the

amount owed to Rosemont the default interest rate provided for in Rosemont's loan

agreement with IPR. While acknowledging that default interest rates must be

                                                                               A-1976-17T1
                                         14
reasonable and that the party challenging such rate bears the burden of proving its

unreasonableness, the City contends that, here, the default interest rate "went far

beyond reasonably compensating [plaintiff] for any losses." It argues that the default

interest's excessiveness is evident from the one-year term of plaintiff's loan and its

willingness to accept $75,000 in satisfaction of the mortgage. It rejects the trial

judge's determination that its argument was actually an attempt to shift the burden

of proof to Rosemont because the difference in amount "is compelling evidence that

the default interest rate goes well beyond recompensing it for any theoretical losses

it may have sustained." The City argues that it did not need to present expert

testimony on this issue because "the record amply demonstrated how Rosemont

stood to reap a windfall." We find no merit to the City's contentions.

      Default interest "provisions in a commercial contract between sophisticated

parties are presumptively reasonable and the party challenging the clause bears the

burden of proving its unreasonableness." Metlife Capital Fin. Corp. v. Wash. Ave.

Assocs. L.P., 159 N.J. 484, 496 (1999). Default interest is "accepted as means for

lenders to offset a portion of the damages occasioned by delinquent loans." Id. at

501. It is assessed because "the actual losses resulting from a commercial loan

default are difficult to ascertain." Mony Life Ins. Co. v. Paramus Parkway Bldg.,

Ltd., 364 N.J. Super. 92, 103 (App. Div. 2003) (citing Metlife, 159 N.J. at 501-02).

                                                                              A-1976-17T1
                                        15
It is meant to compensate the lender for the potential costs of administering a

defaulted loan, the potential difference between the contract interest rate, and other

damages. Metlife, 159 N.J. at 502.

      As the Supreme Court explained in Metlife,

             Default charges are commonly accepted as means for
             lenders to offset a portion of the damages occasioned by
             delinquent loans. . . . The lender cannot predict the nature
             or duration of a possible default given many possible
             causes of borrower delinquencies. Nor is it possible when
             the loan is made to know what market conditions might be
             ten or fifteen years hence and, thus, what might be
             recovered from a sale of the collateral. For example, a
             lender cannot know what its own borrowing costs will be
             if the borrower defaults in paying a loan in the future, nor
             accurately predict what economic return it will lose when
             the borrower fails to repay the loan on time or how much
             in costs it will incur if the property is foreclosed or the
             borrower files for bankruptcy. Additional sums required
             in the context of collection activity, such as travel costs,
             expert fees and the costs of its loan officers' involvement
             in collection activities are difficult to prove with respect to
             any specific loan at its outset. We, therefore, have adopted
             the "modern trend" that the reasonableness test is applied
             either at the time the contract is made or when it is
             breached.

             [Id. at 501-02.]

      Like other "liquidated damages, . . . default interest rates, . . . are

[enforceable] subject to the test of reasonableness, that is, whether the stipulated

damage clause is reasonable under the totality of the circumstances." Mony Life

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                                          16
Ins. Co., 364 N.J. Super. at 103 (citing Metlife, 159 N.J. at 493-95). "It is the general

rule in the case of a corporate borrower that it is not illegal to provide for [even] a

higher rate of interest than the legal rate after maturity, but if such rate is

unconscionably high it will be unenforceable because it amounts to a penalty."

Stuchin v. Kasirer, 237 N.J. Super. 604, 612 (App. Div. 1990) (quoting Feller v.

Architects Display Bldgs., Inc., 54 N.J. Super. 205, 213 (App. Div. 1959)).

      Here, Judge Sarkisian correctly determined that the City did not meet its

burden of proving that the rate was unreasonable.            It provided no industry

information or other competent evidence suggesting that the rate was unreasonable.

We find no merit to its contention that the term of Rosemont's loan to IPR or the

parties' settlement order that contemplated Rosemont's discharge of its mortgages

upon its receipt of the $75,000 payment was sufficient to rebut the presumption of

reasonableness.

                                           C.

      We turn to the City's laches argument. According to the City, Rosemont could

have applied for final judgment as early as December 1, 2016, but neglected to do

so until April 27, 2017, with no explanation. It argues that the default interest

accrued during that period should be deducted from the amount due, and that Judge

Sarkisian erred in neglecting to credit the amount and finding that Rosemont's delay

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                                          17
was not intentional or an attempt to extend the accrual of interest. The City contends

that laches should have applied to bar Rosemont's claim and that the judge erred in

reading an "intent" element into the requirements for laches. According to the City,

it needed only to demonstrate an "'inexcusable and unexplained delay' that result[ed]

in prejudice" to it, which it did. We find no merit to this contention.

      "Laches is an equitable doctrine that applies when a party sleeps on [its] rights

to the harm or detriment of others." N.J. Div. of Youth and Family Servs. v. F.M.,

211 N.J. 420, 445 (2012). It can be invoked "when the party engages in an

inexcusable and unexplained delay in exercising that right to the prejudice of the

other party." Ibid. See also In re Estate of Thomas, 431 N.J. Super. 22, 30 (App.

Div. 2013). In deciding whether to apply the doctrine, a court should consider "[t]he

length of delay, reasons for delay, and changing conditions of either or both parties

during the delay." Lavin v. Hackensack Bd. of Educ., 90 N.J. 145, 152 (1982).

Significantly, "[w]hether laches should be applied depends upon the facts of the case

and is a matter within the sound discretion of the trial court." Mancini v. Twp. of

Teaneck, 179 N.J. 425, 436 (2004).

      Applying the elements of the doctrine of laches to the evidence before Judge

Sarkisian, we are convinced that the doctrine did not apply. Here, the four- to five-

month lapse between the end of the forbearance period and Rosemont's motion for

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                                         18
final judgment was not a significant amount of time or unreasonable delay so as to

constitute laches, especially because there was no evidence that it intentionally

delayed filing in order to extend the accrual of default interest. Moreover, there was

no evidence that the City took any action or failed to act in reliance on its belief that

Rosemont abandoned its right to move for final judgment.                   Under these

circumstances, we discern no abuse of the judge's discretion in not applying the

doctrine of laches.

                                           D.

      Finally, we address the City's contention that Judge Sarkisian used the wrong

default date when calculating the amount due because the evidence supported a

finding that Rosemont waived its right to default interest when it agreed to accept

basic interest-only payments from 2009 through May 2014. According to the City,

"[s]hort of a modification in writing, it is difficult to conceive of a clearer and more

unambiguous admission that neither party considered the default date to be July 1,

2009." The City contends that Rosemont's conduct constituted an implied waiver of

the contract provision requiring modification to be in writing. It relies upon the fact

that IPR continued to make interest-only payments after it stopped principal

payments in 2009 until May 2014, and Rosemont did not declare a default prior to

May 2014. The City also supports its argument with deposition testimony from

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                                          19
Israel Perlow that neither Rosemont nor IPR considered default to have occurred

until May 2014, and from Rosemont's managing member who confirmed that the

default rate was not being charged in 2009 and that Rosemont continued to work

with IPR after the maturity date "as long as [it saw] there was a possibility that [the]

loan [would] be properly satisfied." Additionally, the City points to the 2015 payoff

statement from IPR that reflected "the lower note-rate interest of 11.5%." It also

points to a 2015 verification of mortgage for $570,000 plus $2,764.64 to discharge

the mortgage, arguing that if Rosemont had considered default to have occurred in

July 2009, the figures would have been higher. We are not persuaded by these

contentions.

      It is undisputed that IPR's agreement with Rosemont contained an express

provision that required any waiver of Rosemont's rights to be in writing.

Specifically, section 8.7 of the agreement provided as follows:

               No Waiver by Holder. Neither the exercise of any
               provision hereof nor the delay in asserting any right
               granted to Holder . . . shall be construed as a waiver by
               Holder of the right to accelerate the indebtedness
               evidenced hereby as above provided or to pursue any other
               remedies available under this Note[.] . . . Any waiver
               hereunder shall be valid and enforceable only if in writing
               and signed by the party against whom enforcement is
               sought, and then only to the extent therein set forth.

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                                          20
      Waiver "'involves the intentional relinquishment of a known right, and thus it

must be shown that the party charged with the waiver knew of his or her legal rights

and deliberately intended to relinquish them.'" Spaeth v. Srinivasan, 403 N.J. Super.

508, 514 (App. Div. 2008) (quoting Shebar v. Sanyo Bus. Sys. Corp., 111 N.J. 276,

291 (1988)). "Such a waiver must be done 'clearly, unequivocally, and decisively.'"

Cole v. Jersey City Med. Ctr., 215 N.J. 265, 277 (2013) (quoting Knorr v. Smeal,

178 N.J. 169, 177 (2003)). Where a contract requires any waiver or modification to

be in writing, we will enforce those unambiguous terms, absent clear conduct that

the parties intended to waive the requirement for a writing. See Lewis v. Travelers

Ins. Co., 51 N.J. 244, 253 (1968); Home Owners Constr. Co. v. Glen Rock, 34 N.J.

305, 316 (1961); Headley v. Cavileer, 82 N.J.L. 635, 637-39 (E. & A. 1912). Clear

and convincing evidence is required to prove waiver of a writing requirement. Home

Owners Constr. Co., 34 N.J. at 317.

      Here, there was no dispute that Rosemont and IPR never executed any writing

that modified their agreement. Moreover, Rosemont's conduct as described by the

City did not constitute a voluntary and intentional relinquishment of its right to

require written modifications or performance of the note's terms. It never agreed to

extend the loan's maturity date and there was no agreement that interest was not

accruing at the default rate. At most, the parties' communications reflected a

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                                        21
temporary forbearance, which did not preclude plaintiff from exercising its rights

with respect to IPR's and the Perlows' default and the accrual of interest at the default

rate. The City's reliance on the 2015 payoff statement is also unavailing because it

evidenced only plaintiff's willingness to accept a lesser sum in satisfaction of the

loan at that time. Again, we are left with no reason to disturb the judge's findings,

which we conclude were amply supported by the record, or his conclusions of law.

      Affirmed.

                                                                                A-1976-17T1
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