INVESTORS BANK v. VISIONS DEVELOPMENT GROUP, LLC
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-3588-15T1
INVESTORS BANK F/K/A INVESTORS
SAVINGS BANK,
Plaintiff-Respondent,
v.
VISIONS DEVELOPMENT GROUP, LLC;
AIR JOY HEATING & COOLING; AIR
JOY MECHANICAL INC.; JEFF KLEIN
REALTY, LLC; LOMURRO DAVISON
EASTMAN & MUNOZ, PA; and 600 MADISON
AVENUE CONDOMINIUM ASSOCIATION, INC.,
Defendants,
and
ERIC W. WEISS,
Defendant-Appellant.
_________________________________________
Argued December 6, 2017 – Decided March 9, 2018
Before Judges Fuentes, Koblitz and Manahan.
On appeal from Superior Court of New Jersey,
Chancery Division, Monmouth County, Docket No.
F-002167-11.
Eric W. Weiss, appellant, argued the cause pro
se.
Thomas W. Halm, Jr. argued the cause for
respondent (Hill Wallack, LLP, attorneys;
Thomas W. Halm, Jr. and Mark A. Roney, of
counsel and on the brief).
PER CURIAM
Defendant Eric W. Weiss appeals from an order granting summary
judgment in favor of plaintiff Investors Bank f/k/a Investors
Savings Bank (Investors). Specifically, Weiss argues there are
genuine issues of material fact as to the existence of an equitable
lien with priority over a prior recorded mortgage of Investors in
certain property located in Manalapan, New Jersey. We disagree,
and affirm.
We briefly recite the facts relevant to our decision.
Defendant Visions Development Group, LLC (Visions) executed and
delivered to Investors, a note in the original principal balance
amount of $3,400,000 (loan), with interest and costs to accrue to
Investors, and a construction loan mortgage and security agreement
(mortgage) in the same amount against the property located at 610-
680 Madison Avenue, Manalapan, New Jersey (property). The costs
associated with this transaction were to be used for the
development of two commercial buildings located on the property.
Visions also executed and delivered to Investors an absolute
assignment of rents and leases (ALR) to all present and future
leases. The ALR also granted Investors a revocable license to
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collect and use rents and profits from the leases to operate the
property until the event of default. The mortgage and ALR were
both recorded in the Monmouth County Clerk's Office on November
3, 2006.
On April 11, 2006, Visions retained Weiss, a real estate
broker, to procure a commercial tenant for the property. Visions
agreed to pay Weiss a commission. The broker's agreement was not
recorded or filed so as to provide constructive notice of its
existence to creditors of Visions. The broker's agreement also
did not disclose the source of funds for Weiss's commission.
During the course of the loan, Investors and Visions agreed
to three loan modifications of the note and mortgage. The first
two modifications were recorded in the Monmouth County Clerk's
Office on April 4, and July 11, 2008, respectively.
After the second modification agreement, Investors executed
and delivered two releases of part of the mortgaged property,
dated December 12, 2008, in connection with Visions' sale of one
of the two buildings on the property. These were recorded in the
Monmouth County Clerk's Office in December of 2008.
Weiss filed a notice of lis pendens against the property
pursuant to an action filed by Visions against Weiss. The lis
pendens was recorded in the Monmouth County Clerk's Office on
October 21, 2008. On November 24, 2008, the lis pendens was
3 A-3588-15T1
discharged by order of the court and recorded on December 11,
2008.
The third modification decreased the principal balance of the
loan to $2,000,000 and was recorded in the Monmouth County Clerk's
Office on August 26, 2009. Investors was unaware of the earlier,
discharged lis pendens prior to the execution of the third
modification.
Weiss filed a second notice of lis pendens against the
property, which was recorded on April 16, 2010, pursuant to Weiss's
claim for a commission against Vision. Weiss obtained two judgment
liens against the property on January 7, 2011, docketed March 1,
and April 13, 2011.
Visions defaulted on its obligations to Investors and; on
March 30, 2011, Investors filed a foreclosure complaint against
Visions. Investors filed an amended complaint adding a claim
against Weiss for the two lien judgments against the property.
Investors also filed an action against Visions in Hunterdon County,
where they obtained an order providing that Abbie Rose Realty,
LLC, a tenant at the property, make rent payments directly to
Investors.
In the foreclosure action, a sheriff's sale of the property
was scheduled to occur on July 16, 2012. It was adjourned as a
result of an order to show cause (OTSC) filed by Weiss pro se
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seeking to stay the sale. After an initial hearing, and further
briefs submitted by the parties, a subsequent hearing was held on
the OTSC before Judge Thomas W. Cavanagh, Jr. Judge Cavanagh
entered an order which denied with prejudice the relief Weiss
sought in the OTSC, and allowed Investors to proceed with the
sheriff's sale of the property. Despite the dismissal of the
OTSC, Judge Cavanagh ordered Investors to deposit $100,000 into
its counsel's trust account as security in the event that Weiss
was successful in securing an equitable lien; Judge Cavanagh also
directed Weiss and Investors to engage in discovery limited to the
equitable lien. Weiss did not appeal this order.
After two depositions by Weiss of Investors's senior vice
president of real estate and former vice president, Investors
filed a motion for summary judgment. Judge Joseph P. Quinn heard
oral argument and entered summary judgment in favor of Investors.
Weiss raises the following points on appeal:
POINT I
THERE WAS NO JURISDICTION ON DEFENDANT AS
PLAINTIFF FAILED TO SERVE HIM WITH A COPY OF
THE COMPLAINT DESPITE HAVING ACTUAL KNOWLEDGE
OF THE FAILURE TO SERVE HIM.
POINT II
THE TRIAL COURT ABUSED ITS DISCRETION BY
ENTERING SUMMARY JUDGMENT AGAINST DEFENDANT AS
THERE WERE GENUINE ISSUES OF MATERIAL FACT
PRECLUDING SUMMARY JUDGMENT.
5 A-3588-15T1
POINT III
AS A MATTER OF LAW AND AS A MATTER OF EQUITY
THE PLAINTIFF'S MORTGAGE DOES NOT HAVE
PRIORITY TO DEFENDANT'[S] LIEN AND IT WAS AN
ABUSE OF DISCRETION TO GRANT SUMMARY JUDGMENT.
POINT IV
THE PLAINTIFF IS UNJUSTLY ENRICHED AT
DEFENDANT'S EXPENSE IF THE RULING IS NOT
REVERSED AN[D] AVOIDS PAYMENT OF THE ESCROW.
POINT V
IT WAS AN ABUSE OF DISCRETION FOR THE COURT
NOT TO FOLLOW THE DOCTRINE OF "LAW OF THE CASE"
AS ESTABLISHED BY JUDGE CAVANAGH.
POINT VI
DIRECT BREACH OF CONTRACT.
Appellate review of a summary judgment motion is de novo,
requiring application of the same standard as the motion court.
Templo Fuente De Vida Corp. v. National Union Fire Ins. Co. of
Pittsburgh,
224 N.J. 189, 199 (2016) (citing Mem’l Props., LLC v.
Zurich Am. Ins. Co.,
210 N.J. 512, 524 (2012). Under that
standard, summary judgment should be granted "if the pleadings,
depositions, answers to interrogatories on file, together with
affidavits, if any, show that there is no genuine issue as to any
material fact." R. 4:46-2(c). In determining whether a genuine
issue of material fact exists, the court considers "whether the
competent evidential materials presented, when viewed in the light
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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 (1995). The court is obligated to defer
to a motion court’s factual findings when supported by the record,
but need not accord any special deference to its interpretation
of the law. Manalapan Realty, LP v. Twp. Comm.,
140 N.J. 366, 378
(1995) (citing State v. Brown,
118 N.J. 595, 604 (1990)).
Initially, Weiss argues triable issues of fact exist as to
the existence of an equitable lien on the property. Specifically,
Weiss argues that the agreement between he and Visions, executed
prior to the ALR between Visions and Investors, created an
equitable lien on the property, as the rental payments received
pursuant to the ALR were the source of Weiss’s commissions. We
reject this argument.
Our Supreme Court has summarized New Jersey law concerning
the existence and creation of equitable liens:
An equitable lien is "a right of special
nature in a fund and constitutes a charge or
encumbrance upon the fund." Generally, "[t]he
theory of equitable liens has its ultimate
foundation . . . in contracts, express or
implied, which either deal with or in some
manner relate to specific property, such as a
tract of land, particular chattels or
securities, a certain fund, and the like."
. . . .
7 A-3588-15T1
. . . [W]here a contract creates the
basis for a lien, a court may impose an
equitable lien if the contract is assigned
with notice of that lien.
. . . .
. . . However, . . . when property is
sold subject to a lease, there is no
obligation on the purchaser’s part to pay the
broker, unless the purchaser affirmatively
assumes that obligation.
[VRG Corp. v. GKN Realty Corp.,
135 N.J. 539,
546-47, 556 (1994) (internal citations
omitted).]
Here, Weiss's commissions were based on the aggregate rental
value for the lease term. The agreement provided that Weiss’s
commission would be "earned, due, and payable in full upon the
execution and delivery of the lease by and between the landlord
and the tenant." There was no provision in the agreement that
pledged the property as security for an obligation, or required
the commissions be paid directly out of the rental income received
by Visions. Further, the agreement was never recorded as a lien
on the property, a fact that Weiss admits in his brief. The
agreement, by its express terms, provided for a contractual
obligation to Weiss which was attributable to Visions. It did not
provide for an equitable lien on the leased property. As such,
the argument that the agreement formed the basis for an equitable
lien fails.
8 A-3588-15T1
Weiss further argues that the April 16, 2010 notice of lis
pendens gave the judicial liens priority over Investors’s
mortgage. Pursuant to the chronology of events, we disagree.
It is well-settled that New Jersey is a "race-notice" state.
N.J.S.A. 46:26A-1 to -12 (Recording Act). The Recording Act
provides in pertinent part:
a. Any recorded document affecting the title
to real property is, from the time of
recording, notice to all subsequent
purchasers, mortgagees and judgment creditors
of the execution of the document recorded and
its contents.
b. A claim under a recorded document
affecting the title to real property shall not
be subject to the effect of a document that
was later recorded or was not recorded unless
the claimant was on notice of the later
recorded or unrecorded document.
[
N.J.S.A. 46:26A-12(a), (b).]
The October 21, 2008 lis pendens filed by Weiss was
discharged on December 11, 2008, removing his claim from the chain
of title. The third modification to the loan was subsequently
recorded on July 29, 2009. The second lis pendens that Weiss
filed was recorded on April 16, 2010, and the judgment liens
docketed on March 1, 2011, and April 13, 2011. The chronology of
relevant filings shows that the judgment liens were filed well
after the third modification agreement. Weiss has failed to
produce any documentation indicating Investors had any actual
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knowledge of the 2008 filing, which was recorded and discharged
more than six months prior to the recording of the third
modification to the loan. As such, on the issue of priority, the
judge properly granted summary judgment in favor of Investors.
We next address those arguments raised by Weiss relating to
the September 2012 order of Judge Cavanagh. The sole issue in
contest after the entry of that order was whether an equitable
lien existed on the property that was superior to Investors's
lien. Nonetheless, on appeal, Weiss argues: (a) the issue of
service of the foreclosure complaint; (b) that Investors's lien
was void because it did not meet the definition of a "construction
mortgage"; and (c) unjust enrichment. These issues were part of
the matter Judge Cavanagh dismissed with prejudice.
Appeals as of right to our court are limited to final
judgments of the trial courts with limited exceptions. R. 2:2-
3(a)(1). As the Supreme Court recently reaffirmed:
Generally, an order is considered final if it
disposes of all issues as to all parties.
Thus, in a multi-party, multi-issue case, an
order granting summary judgment, dismissing
all claims against one of several defendants,
is not a final order subject to appeal as of
right until all claims against the remaining
defendants have been resolved by motion or
entry of a judgment following a trial.
[Silviera-Francisco v. Board. of Educ. of City
of Elizabeth,
224 N.J. 126, 136 (2016)
(citations omitted)]
10 A-3588-15T1
A notice of appeal from a final order must be filed within forty-
five days. R. 2:4-1(a).
Judge Cavanagh's order is final not interlocutory because it
dismissed with prejudice all of Weiss's claims in his OTSC. Weiss
did not file a notice of appeal within forty-five days of this
final order. Even were we to conclude that the order was not
final, Weiss did not identify Judge Cavanagh’s order in his notice
of appeal. An appeal is limited to those judgments or orders, or
parts thereof, designated in the notice of appeal. Pressler &
Verniero, Current N.J. Court Rules, cmt. 6.1 on R. 2:5-
1(f)(1)(2018); see also Campagna ex rel. Greco v. Am. Cyanamid
Co.,
337 N.J. Super. 530, 550 (App. Div. 2001) (refusing to
consider a challenge to an order not listed in the notice of
appeal).
Affirmed.
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