DOLORESSMYTHE and CHRISTINA CUNNINGHAM (Power of Attorney for Dolores Smythe v. WESTINGHOUSE REDEVELOPMENT ACT, INC. and MAURICE BETHEA INFINITY HOME MORTGAGE CO

NOT FOR PUBLICATION WITHOUT THE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-1694-16T2

DOLORES SMYTHE and CHRISTINA
CUNNINGHAM (Power of Attorney
for Dolores Smythe),

        Plaintiffs-Appellants,

v.

WESTINGHOUSE REDEVELOPMENT
ACT, INC. and MAURICE BETHEA,
INFINITY HOME MORTGAGE CO.,

     Defendants.
_____________________________

              Argued January 23, 2018 – Decided February 23, 2018

              Before Judges Fisher and Moynihan.

              On appeal from Superior Court of New Jersey,
              Law Division, Essex County, Docket No.
              L-8244-15.

              Kevin B. Kelly argued the cause for appellant
              (Seton Hall University School of Law, Center
              for Social Justice, attorneys; Kevin B. Kelly,
              of counsel and on the brief).

              Respondent Infinity Home Mortgage Company has
              not filed a brief.

PER CURIAM
       Plaintiff appeals from the trial court's order, following the

entry of default judgment and subsequent proof hearing, dismissing

her Consumer Fraud Act (CFA)1 claims against defendant Infinity

Mortgage    Company      with   prejudice.   We     agree   with   plaintiff's

argument    that   the    judge    misapprehended    the    standard   used   to

determine whether a prima facie case was established at a proof

hearing and reverse.

       We will disturb a trial judge's determinations only if they

represent a clear abuse of discretion.            Hous. Auth. of Morristown

v. Little, 
135 N.J. 274, 283 (1994).                An abuse of discretion

results where a decision was "made without a rational explanation,

inexplicably departed from established policies, or rested on an

impermissible basis."           Flagg v. Essex Cty. Prosecutor, 
171 N.J.
 561, 571 (2002).         "If the judge misconceives or misapplies the

law, [the judge's] discretion lacks a foundation and becomes an

arbitrary act" requiring this court to view "the matter in light

of the applicable law to avoid a manifest denial of justice."                 In

re Presentment of Bergen Cty. Grand Jury, 
193 N.J. Super. 2, 9

(App. Div. 1984).





1 N.J.S.A. 56:8-1 to -20.


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     When a trial court requires a plaintiff to provide proof of

liability as to a defaulted defendant,2 courts generally apply the

prima facie standard to plaintiff's proofs, "thus not weighing

evidence or finding facts but only determining bare sufficiency."

Kolczycki v. City of E. Orange, 
317 N.J. Super. 505, 514-15 (App.

Div. 1999) (citing Heimbach v. Mueller, 
229 N.J. Super. 17, 20-24

(App. Div. 1988)); see also Pressler & Verniero, Current N.J.

Court Rules, cmt. 2.2.2 on R. 4:43-2 (2018) (stating "unless there

is intervening consideration of public policy or other requirement

of fundamental justice, the judge should ordinarily apply to

plaintiff's proof the prima facie case standard of [Rule] 4:37-

2(b)[3] and [Rule] 4:40-1[4]").   That exercise is "mechanical" and

"[t]he trial court is not concerned with the worth, nature or



2
  The trial court has discretion to require a plaintiff seeking a
default judgment to prove "the amount of damages or . . . the
truth of any allegation" at a hearing. R. 4:43-2(b); Heimbach,

229 N.J. Super. at 20-21.

3 Rule 4:37-2(b) provides in pertinent part that a defendant "may
move for a dismissal of the action or of any claim on the ground
that upon the facts and upon the law the plaintiff has shown no
right to relief. Whether the action is tried with or without a
jury, such motion shall be denied if the evidence, together with
the legitimate inferences therefrom, could sustain a judgment in
plaintiff's favor."

4 Rule 4:40-1 provides in pertinent part, "[a] motion for judgment,
stating specifically the grounds therefor, may be made by a party
either at the close of all the evidence or at the close of the
evidence offered by an opponent."

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extent (beyond a scintilla) of the evidence, but only with its

existence, viewed most favorably to the party opposing the motion."

Dolson v. Anastasia, 
55 N.J. 2, 5-6 (1969).          Even if the trial

court judge finds a failure of proof, the judge should "point out

the omissions and give [the] plaintiff the opportunity to remedy

them."     Heimbach, 
229 N.J. Super. at 27.

      The judge's consideration of whether plaintiff presented a

prima facie case should have been limited to whether plaintiff

demonstrated some evidence to support each of the three elements

of her CFA claim: "(1) unlawful conduct by the defendants; (2) an

ascertainable loss on the part of the plaintiff; and (3) a causal

relationship between the defendants' unlawful conduct and the

plaintiff's ascertainable loss."        N.J. Citizen Action v. Schering-

Plough Corp., 
367 N.J. Super. 8, 12-13 (App. Div. 2003).

      Instead of determining whether plaintiff established a prima

facie case as to those elements, the judge improperly determined

credibility and weighed the evidence.           "No reported case has

approved the entry of a judgment in favor of a defaulted defendant

on the ground that the court doubted the credibility of the

testimony presented."     Heimbach, 
229 N.J. Super. at 23.

      Plaintiff submitted to the court her certification, testimony

and supplemental letter brief with documentary evidence in support

of   her   contention   that   Infinity's    appraiser   overvalued   the

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property at $315,000, justifying the approval of a mortgage on a

much-inflated purchase price of the property.5 The judge's finding

that   plaintiff   voluntarily    signed    the   purchase   agreement   and

mortgage documents, and that there was no proof she was "induced,

or forced, in any way into signing the documents" ignored the

proofs that – as the judge found – established the mortgage

plaintiff entered into was "incontrovertibl[y]" in excess of the

true value of the property, and that defendant had a "history of

fraudulent lending practices." The appraisal – which was, although

subject to a program underwriter's review, not reduced – resulted

in an over-inflated purchase price and consequent mortgage payment

in excess of that which plaintiff wanted to pay or should have

paid. The judge apparently disregarded those proofs in determining

whether plaintiff established Infinity's unlawful conduct under

the CFA.   The judge, in finding no proof of inducement, ignored

evidence of fraud, and that the CFA does not require plaintiff's

reliance   on   the   unlawful   conduct.     Gennari   v.   Weichert    Co.

Realtors, 
148 N.J. 582, 607-08 (1997) (quoting 
N.J.S.A. 56:8-2,

in holding that liability can be established where "any person has

in fact been misled, deceived or damaged thereby").




5
  Plaintiff submitted appraisals valuing the property at $145,000
and $160,000; and proof of the municipal assessed value: $84,900.

                                    5                               A-1694-16T2
      In   considering    plaintiff's    testimony      regarding       Maurice

Bethea,    Infinity's     alleged   civil    coconspirator,       the        judge

improperly      weighed   the    evidence       and    judged    plaintiff's

credibility.       Plaintiff    testified    that     Bethea    paid    partial

property taxes because the monthly payment due Infinity exceeded

the   maximum    amount    plaintiff,    from    the    inception       of     the

transaction, said she could pay.            The judge found it was not

plausible for "this [p]laintiff" to prove she was a victim of

fraudulent practices. The trial court judge also determined during

the proof hearing, "[I]t does seem possible, more than probable[,]

that [Bethea] might have paid" the extra $400 in property taxes.

      Plaintiff was entitled to have her proofs considered under

the Heimbach standard – without any judgment as to weight or

credibility.     Even if the judge found plaintiff's proofs lacking,

she should have advised plaintiff of any perceived omissions and

given plaintiff the opportunity to remedy any deficiency.                       We

therefore reverse the order dismissing plaintiff's complaint with

prejudice and remand the case for a proof hearing.               Inasmuch as

we perceive the judge's views are entrenched on this matter, we

order the hearing be conducted before a different judge.                     We do

not retain jurisdiction.




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