ELI FRANCISCO, et al. v. WESTERN UNION FINANCIAL SERVICES CO., et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3025-04T23025-04T2

ELI FRANCISCO a/k/a

ELIX I. FRANCISCO and

JOSE FRANCISCO,

Plaintiffs-Appellants,

v.

WESTERN UNION FINANCIAL

SERVICES CO. and CITICORP

MORTGAGE, INC.,

Defendants-Respondents.

__________________________________________

 

Submitted: October 12, 2006 - Decided November 17, 2006

Before Judges Stern and A. A. Rodr guez.

On appeal from the Superior Court of New Jersey, Law Division, Civil Part, Passaic County, L-3520-03.

Howard A. Gutman, attorney for appellants.

David J. Finkler, attorney for respondent Western Union Financial Services Co.

Gregory R. McCloskey, attorney for respondent Citicorp Mortgage, Inc.

PER CURIAM

Plaintiffs, Elix I. Francisco and her brother Jose Francisco, appeal from the November 19, 2004 orders, which granted summary judgment dismissing their complaint against Western Union Financial Services Co. (Western Union) and Citicorp Mortgage, Inc. (Citicorp). They also appeal from the January 21, 2005 order denying their motion for reconsideration. We affirm.

Plaintiff, Jose, owned real property in Passaic that was encumbered by a mortgage to Citicorp. On November 11, 1997, Jose was delinquent in his mortgage in the amount of $3,181.04. It is undisputed that on December 16, 1997, Elix deposited $969.59 with Western Union to be remitted to Citicorp as a partial mortgage payment. The regular monthly payment, without late fees, was $1,536.25. Western Union admits that it mistakenly sent the funds to "MCI" instead of "CMI," the code for Citicorp. Western Union re-transmitted the funds. However, the same mistake occurred. On October 14, 1998, Western Union successfully transmitted the funds to Citicorp. By this time, Jose was $3,072.50 in arrears on the mortgage. On July 22, 1998, Citicorp commenced a foreclosure action against Jose.

On February 12, 1999, Jose transferred the property to Elix for $150,000 consideration. The Citicorp mortgage was paid off at that time and the foreclosure action was withdrawn.

Elix financed the purchase of the home with a mortgage loan from Chase Manhattan Bank (Chase). Eventually, she defaulted on that obligation and the property was foreclosed by Chase.

Plaintiffs sued Western Union and Citicorp. Following a period of discovery, Western Union and Citicorp moved for summary judgment. Plaintiffs cross-moved to suppress Western Union's answer for failure to provide answers to interroga-tories. The judge denied the cross-motion and granted the summary judgment motions, concluding that "neither defendant proximately caused plaintiffs any damages" on any causes of action alleged by the plaintiffs (warranty, consumer fraud and negligence). The judge also found that the misdirection of funds did not cause the Citicorp foreclosure action.

On appeal, plaintiffs make the following two contentions: (1) questions of causation cannot be resolved on summary judgment; and (2) Western Union's motion for summary judgment should have been denied because of its failure to provide discovery. Plaintiffs assert that they established prima facie causes of action against Citicorp for breach of its duty of good faith and fair dealing, and against Western Union for consumer fraud, express warranty and negligence. We disagree, concurring with the trial judge that viewing the evidence in the light most favorable to defendant, plaintiffs have failed to establish the element of damages for each of these causes of action. Brill v. Guardian Life Ins. Co., 142 N.J. 520, 540 (1995). Therefore, Citicorp and Western Union are entitled to summary judgment.

As for Citicorp, we agree with plaintiffs that Citicorp had a "duty of good faith and fair dealing." However, we find no breach of that duty. Jose's arrears far exceeded the $969.59 misdirected funds when the foreclosure action was commenced. Citicorp was clearly entitled to sue in foreclosure upon the default of one payment. See Kaminski v. London Pub, Inc., 123 N.J. Super. 112, 116 (App. Div. 1973) (finding that an acceleration clause gives the mortgagee the right to insist upon strict observance of such clause, so long as the mortgagee did not cause the default). Moreover, Citicorp is not precluded from foreclosing on the mortgage because the acts triggering the default were not caused by Citicorp. Century Fed. Sav. & Loan Ass'n v. Van Glahn, 144 N.J. Super. 48, 51 (Ch. Div. 1976) (noting that courts have "even held that an improper motive will not defeat rights of the mortgagee under the acceleration clause." (citation omitted)). Rather, default was triggered by Jose's failure to make timely and complete mortgage payments. In any event, Citicorp did not proceed with the foreclosure action. The property was transferred to Elix. This resulted in the payoff of the Citicorp mortgage.

As for Western Union, plaintiffs have failed to prove an ascertainable loss as a result of Western Union's conduct. Carroll v. Cellco P'ship, 313 N.J. Super. 488, 713 (App. Div. 1998). That is fatal to their claim.

Furthermore, plaintiffs have failed to establish another element of their claim pursuant to the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 to -20 (CFA). The CFA provides sanctions for unconscionable practices by a provider of services or products. Here, plaintiffs have not alleged any facts establishing unconscionable business practices. At best, they have merely shown a breach of contract and/or warranty. This does not constitute a CFA cause of action. DiNicola v. Watchung Furniture's Country Manor, 232 N.J. Super. 69, 72-73 (App. Div.), certif. denied, 117 N.J. 126 (1989). Plaintiffs must show that Western Union engaged in "fraud in the original contract, not its non-fulfillment" to justify a CFA cause of action. Barry v. NJ State Highway Auth., 245 N.J. Super. 302, 310 (Ch. Div. 1990).

Affirmed.

 

Plaintiffs do not challenge this denial of their motion to suppress Western Union's answer.

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A-3025-04T2

November 17, 2006