ESSECARE, INC v. JPMORGAN CHASE BANK NA

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

ESSECARE, INC.,

Plaintiff-Appellant,

v.

JPMORGAN CHASE BANK, NA,

Defendant-Respondent.

________________________________

November 23, 2015

Argued October 21, 2015 Decided

Before Judges Fuentes, Koblitz and Gilson.

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-5785-10.

Joseph H. Neiman argued the cause for appellant.

David L. Menzel argued the cause for respondent (Kraemer Burns P.A., attorneys; Mr. Menzel, of counsel and on the brief).

PER CURIAM

This is the second appeal by plaintiff Essecare, Inc. concerning a dispute over a prepayment penalty on a commercial loan from defendant JPMorgan Chase Bank, NA (Chase). Previously, we affirmed the dismissal of most of Essecare's claims because they were preempted by the federal National Bank Act of 1864 (the Bank Act), 12 U.S.C.A. 1 et seq., and regulations issued by the Office of the Comptroller of Currency. We reversed the dismissal of Essecare's claims concerning the computation of the prepayment penalty and remanded for further proceedings, including allowing Essecare to amend its complaint.

After further proceedings on remand, the trial court granted summary judgment dismissing Essecare's amended claims holding that those new claims were also preempted or failed to state a viable cause of action. The court then conducted a bench trial on the prepayment penalty calculation and awarded Essecare $32,640 plus interest for an overpayment. Essecare now appeals the order dismissing its amended claims. Having considered the law and record, we affirm.

I.

We have previously set forth the relevant facts in the opinion we issued on the first appeal. Essecare, Inc. v. JPMorgan Chase Bank, NA, No. A-4485-10 (App. Div. Jan. 30, 2012). We will only summarize the facts and procedural history relevant to this second appeal.

In 2006, Chase issued a commitment letter for a $700,000 commercial loan to Essecare. The commitment stated that the loan would be secured by a mortgage and evidenced by loan documents, including a promissory note and a loan agreement. The commitment also stated that other terms and conditions would be spelled out in the loan documents and that those final terms of the loan documents would govern the loan. The loan was thereafter finalized and Essecare executed the promissory note, the mortgage, and the loan agreement. The promissory note included a prepayment penalty provision. Essecare then received the loan of $700,000.

In 2009, Essecare sold the real property securing the loan, paid the balance of the loan, and paid Chase a prepayment penalty of just over $167,000. Thereafter, Essecare filed this action asserting that Chase had engaged in a bait-and-switch scheme because the commitment allegedly did not advise Essecare of the significant prepayment penalty. Specifically, Essecare asserted four counts against Chase, and the first three of those counts were based on claims of "unconscionable" conduct or violations of the New Jersey Consumer Fraud Act (CFA) N.J.S.A. 56:8-1 to -20. The fourth count claimed that the prepayment penalty was improperly calculated.

As previously noted, on the first appeal, we affirmed the dismissal of all claims as preempted by the Bank Act, except the claim challenging the calculation of the prepayment penalty. We then remanded for further proceedings, including allowing Essecare to amend its complaint. In remanding, however, we noted that the proposed amendment "may turn out to be a stealth bait and switch claim that would be barred by the [Bank] Act, but that determination (or any other determination) must be first made in the Law Division." Essecare, supra, slip op. at 13.

On remand, Essecare twice amended its complaint to assert three new claims: (1) breach of the commitment letter, also referred to as promissory estoppel; (2) breach of the covenant of good faith and fair dealing; and (3) a breach of contract claim concerning a $7000 commitment fee.1 Chase moved for summary judgment to dismiss those amended claims, and the trial court granted that motion holding that the breach of the commitment/promissory estoppel and breach of covenant claims were bait-and-switch claims preempted by the Bank Act. The trial court also held that Chase did not breach any contract by charging Essecare a $7000 loan commitment fee. Essecare now appeals the summary judgment order dismissing its amended claims.

II.

Orders granting summary judgment are reviewed de novo, and we apply the legal standard employed by the Law Division. Townsend v. Pierre, 221 N.J. 36, 59 (2015). In performance of our appellate function, we consider as did the motion court, "'whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party.'" State v. Perini Corp., 221 N.J. 412, 425 (2015) (quoting Brill v. Guardian Light Ins. Co. of Am., 142 N.J. 520, 540 (1995)).

On appeal, plaintiff raises five arguments, contending that (1) it has a viable claim for breach of the commitment letter; (2) on the first appeal, we did not dismiss plaintiff's CFA claim related to the miscalculation of the prepayment penalty; (3) the trial court erred in granting summary judgment on the amended claim of breach of the implied covenant and good faith and fair dealing; (4) the trial court erred in granting summary judgment on the amended claim for promissory estoppel; and (5) we should reconsider and reverse our prior ruling that the original claims were preempted.2

None of these arguments have merit and, given our 2012 opinion, these arguments only warrant summary discussion. Essecare's amended claims for breach of the commitment/promissory estoppel and breach of the covenant of good faith and fair dealing are disclosure claims that are preempted by the Bank Act. While Essecare contends otherwise, reading the amended complaint in the light most favorable to Essecare establishes that Essecare continues to assert bait-and-switch arguments. In its amended claims, Essecare is still contending that Chase lured it into the loan through the commitment by not disclosing the prepayment penalty and by misrepresenting the amount of the prepayment penalty. Alleging that the commitment promised that there would be no prepayment penalties is still a disclosure claim because there is no dispute that Essecare executed the loan document, including the promissory note with the prepayment penalty. Whether called a breach of the loan commitment, promissory estoppel, or breach of the covenant of good faith and fair dealing, those amended claims are still disclosure claims preempted by the Bank Act. As we explained in our 2012 opinion

"Nearly two hundred years ago . . . [the Supreme] Court held federal law supreme over state law with respect to national banking." Watters v. Wachovia Bank, N.A., 550 U.S. 1, 10, 127 S. Ct. 1559, 1566, 167 L. Ed. 2d 389, 399 (2007) (citing McCulloch v. Maryland, 17 U.S. 316, 4 L. Ed. 579 (1819)). "In 1864, Congress enacted the [Bank Act], establishing the system of national banking still in place today." Ibid. (citations omitted). The [Bank] Act vested in nationally chartered banks enumerated powers and "all such incidental powers as shall be necessary to carry on the business of banking." Ibid. Those powers include the power to engage in real estate lending. 12 U.S.C. 371.

[Essecare, supra, slip op. at 11.]

Thus, any claim that is a disclosure claim is preempted by the Bank Act. See Rosenberg v. Washington Mut. Bank, F.A., 369 N.J. Super. 456 (App. Div. 2004). In our 2012 opinion we noted that if Essecare attempted such a stealth amendment, the proper remedy would be dismissal. Essecare, supra, slip op. at 13.

Essecare is also incorrect in contending that we did not affirm the dismissal of its CFA claim related to the prepayment calculation in the 2012 opinion. That claim was asserted in count three of Essecare's original complaint. On the first motion for summary judgment, the trial court dismissed count three and we affirmed that dismissal in our 2012 opinion. Specifically, we held "that summary judgment in favor of Chase was properly granted dismissing all state law claims in counts one, two, and three based upon preemption principles." Essecare, supra, slip op. at 10. Moreover, we expressly held that all of Essecare's CFA claims were preempted

The Law Division correctly determined that all of Essecare's grievances related to Chase's putative bait and switch tactics were, at their core, disclosure discrepancies preempted by the [Bank] Act. We do not view Essecare's CFA challenge to Chase's prepayment penalty to be anything other than a direct interference with its business of making loans secured by interests in real estate.

[Essecare, supra, slip op. at 10-11 (citations omitted).]

In short, contrary to Essecare's current position, the 2012 opinion only remanded the claim concerning the calculation of the prepayment penalty.

Finally, we will not reconsider our prior opinion issued in 2012. Essecare did not file a timely motion for reconsideration, see Rule 2:11-6 (a motion for reconsideration must be filed within ten days), nor did it file for certification to the Supreme Court, see Rule 2:12-3. Thus, Essecare has no basis to request such reconsideration at this time. Moreover, we reject Essecare's arguments that there is new evidence or new law warranting reconsideration and conclude that those arguments do not warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.

1 On remand, Essecare also filed a malpractice action against the attorney who represented it at the loan closing. That action was initially consolidated with the claims against Chase, but after the second summary judgment, the malpractice action was severed from this case.

2 On this appeal, Essecare did not make any arguments about the $7000 commitment fee it paid to Chase. Thus, we deem that issue as waived and abandoned by Essecare. See Santiago v. N.Y. & N.J. Port Auth., 429 N.J. Super. 150, 154 n.2 (App. Div. 2012) (recognizing that arguments not briefed are deemed abandoned), certif. denied, 214 N.J. 175 (2013).