FRANK N. GARRUTO v. LORRAINE CANNICI

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5639-09T1

FRANK N. GARRUTO,

Plaintiff-Appellant,

v.

LORRAINE CANNICI, Executrix of

the Estate of MARIE GARRUTO,

Defendant-Respondent.

__________________________________________

June 6, 2011

 

Submitted March 29, 2011 - Decided

 

Before Judges Carchman and St. John.

 

On appeal from Superior Court of New Jersey, Chancery Division, Ocean County, Docket No. C-222-09.

 

Hugh M. Blair, attorney for appellant.

 

Clinton H. Drymon, attorney for respondent.

 

PER CURIAM

Plaintiff Frank N. Garruto (Frank), brother of decedent Marie Garruto (Marie),1 appeals the June 25, 2010 Chancery Division order granting summary judgment to defendant Lorraine Cannici (Cannici), Executrix of the Estate of Marie Garruto (the estate), and the denial of plaintiff's motion for summary judgment. We affirm.

The following facts are derived from evidence submitted by the parties in support of, and in opposition to, plaintiff's summary judgment motion, viewed in a light most favorable to plaintiff. See Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

According to Frank, on November 28, 1979, Marie granted a purchase money mortgage to him to secure a debt of $16,250, with interest thereon at 5.5 percent (the mortgage). Marie used the proceeds of the loan, together with other funds, to purchase premises located at 50-7 Lake Superior Drive, Mystic Island, New Jersey (the house). The mortgage, which was recorded on November 30, 1979, stated that it was to be paid in full on or before November 28, 1994. The parties do not dispute that the mortgage was to be paid over a fifteen-year term with monthly payments of $132.78, that the first payment was to be made on December 28, 1979, and that the final payment was to be made on or before November 28, 1994. At the option of the mortgagee, all outstanding principal and interest payments would become due thirty days after a default in the payment of any installment of principal or interest. Frank asserts that as of the date of the complaint, the amount due and owing on the mortgage was $78,696.63, which represents the original principal amount, together with all accrued and unpaid interest thereon at an annual rate of 5.5 percent. Frank failed to produce the underlying mortgage note which was secured by the mortgage.

Frank alleges that at some time in 1982, Marie came to him and said she was having money problems. As a result, Frank, Marie, and their brother Felix Garruto (Felix) had a family meeting. Felix recommended that interest would continue to accrue on the mortgage, but that Marie would not have to make any payments of principal or interest until she sold the house. It is also asserted by Frank that Felix drew up an agreement to that effect which was signed by all three siblings. That agreement has not been produced by Frank nor is there any proof in the record that it was recorded as a mortgage modification in the Ocean County Clerk's office.

Marie died on October 30, 2004, and thereafter the estate entered into a contract of sale for the house. A title search was done in connection with the sale, which revealed the recorded mortgage between Marie as mortgagor and Frank as mortgagee. Cannici asked Frank to remove the mortgage of record, and he refused.

This foreclosure action was not commenced in a vacuum, as the parties had been involved in prior intra-family disputes regarding Marie's estate. We set forth the relevant background.

On November 3, 2004, Felix and Frank filed a two-count complaint in the Law Division alleging the commission of fraud in the inducement by the executrix, Cannici, claiming that they were denied their proper shares of Marie's estate. Cannici moved for summary judgment. The motion judge construed the complaint to set forth a cause of action for tortious interference with an expected inheritance, perpetrated by way of fraud. The Law Division judge determined that the brothers were unable to support their claims factually, and that Felix's self-serving assertions contained in certifications opposing summary judgment did not create a question of material fact sufficient to defeat Cannici's motion. Cannici's motion was granted.

The brothers appealed to the Appellate Division, and we affirmed. See Garruto v. Cannici, 397 N.J. Super. 231 (App. Div. 2007). In that action, Frank did not claim that the estate owed him anything on the purported mortgage note or the mortgage. Although Frank was a beneficiary of Marie's will, he did not make any claim against the estate for the mortgage during the course of probate. This claim arose only after Frank was requested by the estate to remove, of record, the lien of the mortgage.

In Frank's certification in response to Cannici's motion for summary judgment in this action, he stated that he asked his attorney retained for the estate challenge for advice regarding the mortgage, which Frank claimed would be due at the time of Marie's death. Frank asserted that the attorney advised him that if Frank and Felix won the estate challenge, Frank would, in essence, be paying himself back. Frank claims that when he lost the estate challenge, he thought he then lost his right to collect on the mortgage.

On July 2, 2009, Frank's attorney sent a notice to Cannici stating that:

Pursuant to Section IV of the Fair Foreclosure Act, you are hereby notified as follows: The mortgage given by Frank N. Garruto to Marie Garruto dated November 28, 1979 and recorded in Book 2255, page 73 of the Book of Mortgages in Ocean County is in serious default. Amount due; $16,250 times 5.5 percent times 30 years equals $78,693.63 (less any payments you can supply proof of).2

 

During the course of discovery, Cannici was able to provide proof of twenty payments on the mortgage, from December 1, 1982 through August 10, 1984, but was unable to locate additional cancelled checks, having been informed by Marie's bank that her records were no longer in existence. Cannici asserted that Marie paid the mortgage in full.

Cannici filed a motion to dismiss and ultimately for summary judgment stating that Frank's claim is barred by the application of the relevant statutes of limitations, laches, and failure to timely file a claim against the estate. Frank filed a cross-motion for summary judgment. Judge Frank A. Buczynski, Jr., the motion judge, found that there were no genuine issues of material fact because, as a matter of law, the claim was barred by the six-year and twenty-year statute of limitations. N.J.S.A. 2A:50-56.1(a),(c). The judge also found that Frank failed to establish that the mortgage was modified since no proof of the modification was provided. The judge rejected Frank's claim that the doctrine of promissory estoppel applied.

Plaintiff raises the following points on appeal for our consideration:

POINT I

 

APPELLANT'S CLAIM OF THE MORTGAGE MODIFICATION CAN BE ESTABLISHED UNDER THE DOCTRINE OF PROMISSORY ESTOPPEL.

POINT II

 

ALTHOUGH NOT ADDRESSED BY THE TRIAL COURT, RESPONDENTS RELIANCE ON N.J.S.A. 3B:22-4 TO DEFEAT APPELLANT'S CLAIM IS MISPLACED.

 

POINT III

 

A GENUINE ISSUE OF MATERIAL FACT EXISTED REGARDING APPELLANT'S CLAIM OF PROMISSORY ESTOPPEL AND SUMMARY JUDGMENT WAS AN INAPPROPRIATE REMEDY.

 

Our review of a ruling on summary judgment is de novo, applying the same legal standard as the judge. Chance v. McCann, 405 N.J. Super. 547, 563 (App. Div. 2009). We consider, as the trial judge did, "'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007) (quoting Brill, supra, 142 N.J. at 536). Summary judgment must be granted "if 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). If there is no genuine issue of material fact, "[we] must [then] decide whether the trial court correctly interpreted the law." Massachi v. AHL Servs., Inc., 396 N.J. Super. 486, 494 (App. Div. 2007), certif. denied, 195 N.J. 419 (2008). Applying these standards, we are satisfied that the trial judge properly granted summary judgment.

The statute of limitations relative to residential mortgage foreclosures provides:

An action to foreclose a residential mortgage shall not be commenced following the earliest of:

 

a. Six years from the date fixed for the making of the last payment or the maturity date set forth in the mortgage or the note, bond, or other obligation secured by the mortgage, whether the date is itself set forth or may be calculated from information contained in the mortgage or note, bond, or other obligation, except that if the date fixed for the making of the last payment or the maturity date has been extended by a written instrument, the action to foreclose shall not be commenced after six years from the extended date under the terms of the written instrument;

 

b. Thirty-six years from the date of recording of the mortgage, or, if the mortgage is not recorded, 36 years from the date of execution, so long as the mortgage itself does not provide for a period of repayment in excess of 30 years; or

 

c. Twenty years from the date on which the debtor defaulted, which default has not been cured, as to any of the obligations or covenants contained in the mortgage or in the note, bond, or other obligation secured by the mortgage, except that if the date to perform any of the obligations or covenants has been extended by a written instrument or payment on account has been made, the action to foreclose shall not be commenced after 20 years from the date on which the default or payment on account thereof occurred under the terms of the written instrument.

 

[N.J.S.A. 2A:50-56.1.]

 

By its terms, the maturity date of the mortgage was November 28, 1994 and, therefore, under N.J.S.A. 2A:50-56.1(a), the within action should have been commenced by November 27, 2000. Assuming that Marie's last payment was August 10, 1984 (that being the date of the last payment uncovered in Marie's records), and she defaulted thereafter, under N.J.S.A. 2A:50-56.1(c), the within action should have been commenced by September 9, 2004 (which time period includes the thirty-day cure period set forth in the mortgage). We agree with Judge Buczynski that under the Fair Foreclosure Act's statute of limitations, N.J.S.A. 2A:50-56.1, absent a modification of the mortgage, Frank's claims are barred.

Cannici argues that Frank has not properly proven that he had modified his interest in the New Jersey realty, the house, sufficient to overcome the statute of frauds. N.J.S.A. 25:1-13; see Morton v. 4 Orchard Land Trust, 180 N.J. 118, 125 (2004).

The statute of frauds at the relevant time read in part as follows:

No action shall be brought upon any of the following agreements or promises, unless the agreement or promise upon which such action shall be brought or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or by some other person thereunto by him lawfully authorized:

 

. . . .

 

d. A contract for sale of real estate, or any interest in or concerning the same.

 

[N.J.S.A. 25:1-5.3]

 

No writing exists evidencing Frank's mortgage modification interest in the house. A mortgage is an interest in real estate. N.J.S.A. 25:1-10. The statute of frauds does not bar an oral modification of a contract required to be in writing when the modification does not affect a time of the essence provision. Tiedermann v. Corzine, 297 N.J. Super. 579, 582 (App. Div. 1997). An oral agreement to hold an interest in real property may be enforceable if proven by clear and convincing evidence. N.J.S.A. 25:1-13b. That same standard of proof is recited in the "Dead Man's Statute," to establish a decedent's oral promise, statement or act. N.J.S.A. 2A:81-2. The function of each statute is to prevent "fraudulent practices which are commonly endeavored to be upheld by perjury and subornation of perjury." Carlsen v. Carlsen, 49 N.J. Super. 130, 134 (App. Div. 1958) (citations omitted).

"Clear and convincing" evidence falls somewhere between the civil standard of a "preponderance of the evidence" and the criminal standard of "beyond a reasonable doubt." Aiello v. Knoll Golf Club, 64 N.J. Super. 156, 162 (App. Div. 1960). Evidence is clear and convincing when it produces in the mind of the trier of fact "'a firm belief or conviction as to the truth of the allegations sought to be established.'" In re Purrazzella, 134 N.J. 228, 240 (1993) (quoting Aiello, supra, 64 N.J. Super. at 162). It must be "'so clear, direct and weighty and convincing as to enable [the factfinder] to come to a clear conviction, without hesitancy, of the truth of the precise facts in issue.'" In re Seaman, 133 N.J. 67, 74 (1993) (quoting Aiello, supra, 64 N.J. Super. at 162). The clear and convincing standard does not imply absolute certainty or that the evidence is uncontested. See In re Jobes, 108 N.J. 394, 408 (1987). Evidence may be clear and convincing despite the fact that it has been contradicted. Ibid.

We discern that the record does not contain any credible evidence, let alone clear and convincing evidence, demonstrating an agreement that existed between Frank and Marie that would modify the mortgage. Specifically, Frank was unable to produce either the mortgage note or the mortgage modification. The allegation in his complaint that no payments were made on the mortgage was belied by the production of cancelled checks evidencing payment, and he failed to assert his mortgage interest in both the probate proceedings and the will challenge. Frank's actions do not evince any modification, either written or oral, of the mortgage. Finally, the purported modification would have extended the monthly payment dates and the final maturity date.

Despite evidence of an oral agreement between the parties being inadmissible to establish a variation of the terms or modification of a contract, it may be admissible to support a claim of waiver or estoppel. See Mazza v. Scoleri, 304 N.J. Super. 555, 559-60 (App. Div. 1997); Loria's Garage, Inc. v. Smith, 49 N.J. Super. 242, 248-50 (App. Div. 1958). However, the doctrines of waiver and estoppel may not be expansively applied in a manner that subverts the operation of a statute of frauds. See Malaker Corp. v. First Jersey Nat'l Bank, 163 N.J. Super. 463, 484 (App. Div. 1978), certif. denied, 79 N.J. 488 (1979); Kooba v. Jacobitti, 59 N.J. Super. 496, 500-01 (App. Div. 1960); Kufta v. Hughson, 46 N.J. Super. 222, 230-31 (Ch. Div. 1957).

A waiver is "the intentional relinquishment of a known right." W. Jersey Title & Guar. Co. v. Indus. Trust Co., 27 N.J. 144, 152 (1958). A waiver must be voluntary, and there must be a clear act showing an intent to waive the rights. County of Morris v. Fauver, 153 N.J. 80, 104 (1998). Mere acceptance of a lesser amount than provided by contract, without more, does not show an intent to waive proper payment. Id. at 101.

The doctrine of promissory estoppel is well established in New Jersey. A promissory estoppel claim will be justified if the plaintiff satisfies his burden of demonstrating the existence of, or for purposes of summary judgment, a dispute as to a material fact with regard to, four separate elements which include:

(1) a clear and definite promise by the promissor; (2) the promise must be made with the expectation that the promissee will rely thereon; (3) the promissee must in fact reasonably rely on the promise[;] and (4) detriment of a definite and substantial nature must be incurred in reliance on the promise.

 

[Pop's Cones, Inc. v. Resorts Int'l Hotel, Inc., 307 N.J. Super. 461, 468-69 (App. Div. 1998) (quoting Malaker, supra, 163 N.J. Super. at 479).]

 

We are satisfied that Frank's certification, and the deposition testimony of Felix and Cannici are insufficient to establish the prima facie elements of promissory estoppel. Bare conclusions in the pleadings without factual support in affidavits will not defeat a motion for summary judgment. Brae Asset Fund, L.P. v. Newman, 327 N.J. Super. 129, 134 (App. Div. 1999). We agree with the motion judge that, even when viewing the proofs in a light most favorable to Frank, the promissory estoppel claims lacked sufficient support to present genuine material issues of fact. Brill, supra, 142 N.J. at 540.

On appeal, Frank raises the issue of the applicability of N.J.S.A. 3B:22-4 (barring claims against the estate if not presented within nine months after the decedent's death). We note that the judge did not rely on this statutory provision and find no merit to any argument that the statute is relevant to this foreclosure action. R. 2:11-3(e)(1)(E).

Cannici requests that we order the cancellation of the mortgage of record by directing Frank to execute and file a release of mortgage and lien with the Ocean County Clerk's office. N.J.S.A. 2A:51-1 provides in pertinent part:

Where a mortgage on real estate or chattels, or both, is recorded in the office of the county clerk or register of deeds and mortgages of any county, the Superior Court in a summary or other action brought by any mortgagor or party in interest may direct the county clerk or register to cancel the mortgage of record, provided the plaintiff shall:

 

. . . .

 

c. Present such special circumstances as to satisfy the court that the mortgagee and his successors, if any, in right, title and interest have no further interest in the mortgage or the debt secured thereby.

 

We direct the Chancery Division, in its discretion, to enter an order either compelling Frank to cancel the mortgage of record, or directing the Ocean County Clerk to cancel the mortgage of record.

W

e affirm and remand to the Chancery Division for further proceedings consistent with this opinion.

1 For ease of reference, we will refer to the principals by their first names.

2 Both parties agree that the mortgage was given by Marie to Frank, not by Frank to Marie.

3 This section has since been repealed and replaced with N.J.S.A. 25:1-11.