WILLIAMWILLIAMS v. HUDSON CITY SAVINGS BANK and MORTGAGE ACCESS CORP., d/b/a WEICHERT FINANCIAL SERVICES, and KEITH WANAMAKER
Annotate this CaseNOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2276-15T1
WILLIAM WILLIAMS,
Plaintiff-Appellant,
v.
HUDSON CITY SAVINGS BANK,
Defendant-Respondent,
and
MORTGAGE ACCESS CORP., d/b/a
WEICHERT FINANCIAL SERVICES, and
KEITH WANAMAKER,
Defendants.
_________________________________
Submitted January 30, 2018 – Decided March 1, 2018
Before Judges Hoffman and Mayer.
On appeal from Superior Court of New Jersey,
Law Division, Somerset County, Docket No.
L-1545-13.
Law Offices of Joseph A. Chang, attorneys for
appellant (Joseph A. Chang, of counsel and on
the brief; Jeffrey Zajac, on the brief).
Parker McCay, PA, attorneys for respondent
(Gene R. Mariano, of counsel; Stacy L. Moore,
Jr., on the brief).
PER CURIAM
Plaintiff William Williams appeals from an October 9, 2015
order granting the summary judgment dismissal of his complaint
against Hudson City Savings Bank (Hudson City); plaintiff's
complaint sought damages based upon allegations of predatory
lending and consumer fraud. Plaintiff also appeals from a January
13, 2016 order that imposed sanctions1 against him and his
attorney, and a March 18, 2016 order denying reconsideration of
the sanctions award.
Following our review of the record, we affirm the grant of
summary judgment, concluding that plaintiff failed to demonstrate
predatory lending or consumer fraud. We also affirm the orders
imposing sanctions and denying reconsideration, finding the motion
judge did not abuse her discretion in the entry of these orders.
We vacate and remand, however, solely for the trial court to
allocate the fee sanction as between plaintiff and his counsel.
I
In July 2008, plaintiff executed a $268,000 note and mortgage
in favor of Hudson City to purchase property in Bernardsville. To
1
The court awarded Hudson City $27,306.58, the amount of counsel
fees and costs incurred by the bank in defending against
plaintiff's suit.
2 A-2276-15T1
obtain the mortgage, plaintiff met with a Weichert Financial
Services (Weichert) representative, Keith Wanamaker, who completed
a Uniform Residential Loan Application (the Application) in
plaintiff's presence, using information plaintiff provided.2
The Application stated that plaintiff had in excess of
$150,000 in liquid assets, and he would make a $100,000 down
payment towards purchasing the property; it also indicated his
total monthly income was $7875.3 Moreover, the Application
contained an acknowledgment, which plaintiff signed, stating that
the information he provided was "true and correct" and any
"intentional or negligent misrepresentation" may result in civil
or criminal liability.
Hudson City approved plaintiff's loan based upon the
information he provided in the Application and its own independent
underwriting process. Later, at plaintiff's request, Hudson City
granted him a loan modification, reducing his monthly payment from
$1628.40 to $1502.98. Nevertheless, on October 1, 2011, plaintiff
defaulted on the loan.
2
Plaintiff also sued Weichert and Wanamaker; however, on October
9, 2015, the Law Division granted their summary judgment motion,
dismissing plaintiff's claims.
3
In contrast to the information contained in the Application,
plaintiff asserts his monthly gross income when he applied for the
loan was $3492.
3 A-2276-15T1
On June 14, 2012, Hudson City initiated foreclosure
proceedings. Plaintiff filed a motion to extend time to answer,
which the Chancery Division granted. Plaintiff then filed an
untimely answer and counterclaim, which the court struck, and
foreclosure proceeded to final judgment. Ultimately, the parties
negotiated a Consent Final Judgment of Foreclosure. See Hudson
City Savings Bank v. Williams, No. A-1914-14 (App. Div. Oct. 25,
2016) (slip op. at 4).
On September 11, 2013, plaintiff filed a complaint in the Law
Division alleging Hudson City engaged in predatory lending in
violation of New Jersey's Consumer Fraud Act (CFA),
N.J.S.A. 56:8-
1 to -20, and common law fraud. On December 10, 2014, Hudson City
served plaintiff's counsel with a frivolous pleadings notice
pursuant to Rule 1:4-8; however, plaintiff and his counsel
continued to pursue the action.
On August 31, 2015, Hudson City filed a motion for summary
judgment,4 which the trial court granted on October 9, 2015.
Hudson City then filed a motion for sanctions under Rule 1:4-8.
Following oral argument, the motion judge granted Hudson City's
4
Hudson City also moved to bar plaintiff's expert. Plaintiff
opposed and filed a cross-motion to extend discovery.
4 A-2276-15T1
application, awarding $27,306.58 in attorneys' fees,5 and issued
a written opinion setting forth the reasons for her decision.
II
On appeal, plaintiff argues the motion judge erred in granting
Hudson City's motion for summary judgment and imposing attorneys'
fee sanctions. We address each in turn.
A. Plaintiff's Summary Judgment Motion
Plaintiff argues the motion judge erred in granting summary
judgment and dismissing his CFA claim. Specifically, he asserts
he presented a prima facie case of predatory lending, which the
court should have addressed. We disagree.
In reviewing a grant of summary judgment, we apply the same
standard under Rule 4:46-2(c) that governs the motion court. See
Murray v. Plainfield Rescue Squad,
210 N.J. 581, 584 (2012). We
must "consider 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." Brill v. Guardian Life Ins. Co. of Am.,
142 N.J. 520, 540
5
The motion judge's January 13, 2016 order states plaintiff and
his counsel, "jointly and severally, are responsible for and shall
pay [Hudson City] $27,306.58 . . . ." Her January 12, 2016 written
opinion, however, states "[p]laintiff's counsel is [o]rdered to
pay [Hudson City] counsel fees and costs."
5 A-2276-15T1
(1995). When reviewing such determinations on appeal, "a trial
court's interpretation of the law and the legal consequences that
flow from established facts are not entitled to any special
deference." Estate of Hanges v. Metro. Prop. & Cas. Ins. Co.,
202 N.J. 369, 382 (2010) (citation omitted).
Under the CFA, plaintiff must prove: "(1) an unlawful
practice, (2) an ascertainable loss, and (3) a causal relationship
between the unlawful conduct and the ascertainable loss." Lee v.
Carter-Reed Co.,
203 N.J. 496, 521 (2010) (internal quotation
marks and citation omitted). Moreover, predatory lending has been
defined as:
a mismatch between the needs and capacity of
the borrower . . . . In essence, the loan
does not fit the borrower, either because the
borrower's underlying needs for the loan are
not being met or the terms of the loan are so
disadvantageous to that particular borrower
that there is little likelihood that the
borrower has the capacity to repay the loan.
[Assocs. Home Equity Servs., Inc. v. Troup,
343 N.J. Super. 254, 267 (App. Div. 2001)
(citing Daniel S. Ehrenberg, If the Loan Don't
Fit, Don't Take It: Applying the Suitability
Doctrine to the Mortgage Industry to Eliminate
Predatory Lending, 10 J. Affordable Housing &
Community Dev. L. 117, 119-20 (Winter 2001)).]
Plaintiff failed to provide evidence to support his claim of
predatory lending under the CFA. Plaintiff signed the loan
documents, thereby attesting to the accuracy of the information
6 A-2276-15T1
that led Hudson City to issue the loan. The terms of the note and
mortgage were not commercially unreasonable, with an original
interest rate of 6.125 percent and later, after plaintiff's loan
modification, a reduced interest rate of 5.375 percent.
Furthermore, as the motion judge noted, "[t]he case law
that . . . plaintiff cites in his papers are in fact not on point
in reference to any violations of the [CFA] or common law fraud."
Plaintiff's common law fraud claims are also unsupported by
the record. As the motion judge noted, plaintiff fails to
establish Hudson City had a duty to verify plaintiff's income.
Moreover, Hudson City engaged in an extensive underwriting process
before approving plaintiff's loan.6 Accordingly, we agree with
the motion judge's conclusion that "[t]here is no issue of material
fact that makes the granting of summary judgment inappropriate."
B. Defendant's Fee Sanction Award
Plaintiff next argues the motion judge erred in finding his
claims frivolous. He further contends defendant's "safe harbor"
letter, as required under Rule 1:4-8, was deficient, and the motion
judge's fee sanction determination was excessive. We disagree.
6
According to Hudson City, its underwriting process included:
"considering whether [plaintiff] could pay the mortgage loan debt
based on his stated income in [the Application]"; "reviewing
[plaintiff's] credit score"; confirming he "had sufficient assets
for the requisite down payment"; and verifying defendant's "self-
employment."
7 A-2276-15T1
We review fee sanction awards for abuse of discretion.
Ferolito v. Park Hill Ass'n,
408 N.J. Super. 401, 407 (App. Div.
2009). An abuse of discretion occurs "if the discretionary act
was not premised upon consideration of all relevant factors, was
based upon consideration of irrelevant or inappropriate factors,
or amounts to a clear error in judgment." Masone v. Levine,
382 N.J. Super. 181, 193 (App. Div. 2005) (affirming sanctions award).
N.J.S.A. 2A:15-59.1 and Rule 1:4-8 permit a court to impose
sanctions on a litigant and an attorney, respectively, for filing
a frivolous complaint. To find a claim frivolous under the
statute, the court must find it was pursued in "bad faith, solely
for the purpose of harassment, delay or malicious injury," or that
the non-prevailing party knew or should have known it was pursued
"without any reasonable basis in law or equity and could not be
supported by a good faith argument for an extension, modification
or reversal of existing law."
N.J.S.A. 2A:15-59.1(b). Our Court
Rules essentially use the same standard; to wit: a claim or defense
is frivolous if asserted for an improper purpose, or if it lacked
a factual or legal basis. See R. 1:4-8(a). We strictly interpret
the statute and the rule against the imposition of sanctions. See
LoBiondo v. Schwartz,
199 N.J. 62, 99 (2009).
A sanction may not be imposed against a represented party
unless the court finds that the party acted in bad faith in
8 A-2276-15T1
pursuing the unsuccessful claim. Ferolito,
408 N.J. Super. at
408. The court may not impute the attorney's pursuit of a
frivolous claim to the client. Rabinowitz v. Wahrenberger,
406 N.J. Super. 126, 136-37 (App. Div. 2009) (reversing fee sanction
against client and attorney and concluding it should have applied
against only the attorney).
Therefore, it is incumbent for the trial court to consider
the responsibility of both the client and his or her attorney.
Namely, if a claim "was frivolous on its merits, then the client
who pursued such an action is liable under N.J.S.A. 2A:15-59.1."
Savona v. DiGiorgio Corp.,
360 N.J. Super. 55, 63 (App. Div. 2003).
However, if the client "was genuinely unaware or uninformed of the
frivolous nature of [his or] her claim and it was being pursued
by [his or] her lawyer, liability may be posited under Rule 1:4-8
against [his or] her attorney." Ibid.
Here, we find no abuse of discretion in the motion judge's
finding that plaintiff's claims were frivolous. As noted,
plaintiff's counsel relied upon unpublished cases that are clearly
inapplicable and distinguishable from the instant facts.
Furthermore, as the motion judge observed:
Plaintiff had the financial ability to repay
the mortgage loan at issue and forfeited that
ability in favor of pursuing the underlying
suit. As stated in [plaintiff's] deposition,
he paid his attorney [$1500] per month in lieu
9 A-2276-15T1
of making his monthly mortgage payment in the
amount of [$1502.98]. That the amount paid
to counsel is nearly identical to the amount
owed speaks to the absence of merit of
[p]laintiff's case. For that reason, only
[p]laintiff's counsel has benefitted from the
underlying litigation.
Finally, the motion judge awarded a reasonable fee sanction,
based upon Hudson City's certification of legal fees and services.
See e.g., Rendine v. Pantzer,
141 N.J. 292, 316 (1995) (stating
that reasonable attorneys' fees are generally calculated by
"multiplying the number of hours reasonably expended . . . by the
attorneys' reasonable hourly rate . . . ."). Accordingly, the
motion judge did not abuse her discretion in calculating the fee
sanction.
We vacate and remand, however, solely on the issue of
determining the responsibility of payment between plaintiff and
his counsel. See Savona,
360 N.J. Super. at 63. To the extent
the court determines that the fee sanction should apply to
plaintiff, and not just plaintiff's counsel, the court must
specifically allocate the fee sanction between plaintiff and his
counsel.
Affirmed in part, vacated and remanded in part. We do not
retain jurisdiction.
10 A-2276-15T1
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