NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-3539-23
A-3785-23
EAST-WEST FUNDING, LLC, Plaintiff-Respondent,
v.
339 RIVER ROAD HOLDINGS, LLC, f/k/a EDGEWATER THEATRES, INC., f/k/a EDGEWATER THEATRES, LLC,
Defendant-Appellant,
and
HONGKUN USA REAL ESTATE HOLDING, LLC, MUESER RUTLEDGE CONSULTING ENGINEERS, PLLC, and HIGHGROUND INDUSTRIAL, LLC,
Defendants-Respondents,
and
339 RR OWNER LLC and GENSLER ARCHITECTURE,
DESIGN & PLANNING, PC, Defendants.
EAST-WEST FUNDING, LLC, Plaintiff-Respondent, v.
339 RIVER ROAD HOLDINGS, LLC, f/k/a EDGEWATER THEATRES, INC., f/k/a EDGEWATER THEATRES, LLC, HONGKUN USA REAL ESTATE HOLDING, LLC, and MUESER RUTLEDGE CONSULTING ENGINEERS, PLLC,
Defendants-Respondents, and
HIGHGROUND INDUSTRIAL, LLC,
Defendant-Appellant, and
339 RR OWNER LLC and GENSLER ARCHITECTURE, DESIGN & PLANNING, PC,
Defendants.
A-3539-23
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Submitted May 6, 2026 – Decided August 17, 2026 Before Judges Currier, Smith and Jablonski.
On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. F-
000691-22.
Pashman Stein Walder Hayden, PC, attorneys for appellant 339 River Road Holdings, LLC in A-3539-23 and respondent in A-3785-23 (Michael S. Stein, Roger Plawker, and Janie Byalik, on the briefs).
Norton & Christensen, PA, attorneys for respondent Highground Industrial, LLC in A-3539-23 and appellant in A-3785-23 (Henry N. Christensen, Jr., on the briefs).
Shafron Law Group, LLC, attorneys for respondent East-West Funding, LLC (Jonathan R. Vender, on the brief).
PER CURIAM In these consolidated appeals, arising out of a foreclosure proceeding, we consider whether a defaulting party on a loan may raise post-default conduct, specifically an allegation of unclean hands, as an affirmative defense to a foreclosure complaint to preclude the entry of summary judgment. The Chancery Division found the allegation of unclean hands was non-germane to the limited issues considered in a foreclosure proceeding, because the purported interference did not relate to the defaulting party's debt or ability to re-pay the
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debt, and it occurred after the default. Therefore, the court granted plaintiff summary judgment and entered final judgment, directing a sale of the property to satisfy the debt.
Because the unclean hands defense pertained to post-default conduct and did not arise out of claims to the mortgage transaction, it was not germane to the foreclosure action. Therefore, we affirm the orders for summary judgment. However, we vacate the portion of the final judgment order regarding the calculation of default interest, as the trial court imposed the default interest rate prior to the earliest date of default. We remand solely for the recalculation of default interest from the correct date and the entry of an amended final judgment order reflecting the revised figures.
I.
Plaintiff is a limited liability company of which Fred A. Daibes is its principal. In 2018, plaintiff made a $25 million loan to defendant 339 River Road Holdings LLC (339 Holdings). As security for the loan, defendant encumbered its property in Edgewater (the Property).
The terms of this loan were reflected in an August 10, 2018 loan note (First Loan Note). The First Loan Note had a maturity date of September 1, 2020. It required 339 Holdings to make monthly "interest-only" payments at a
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rate of 8.75% for the first year and then 9.75% for the second year, with payments commencing October 1, 2018, and the principal balance due on the maturity date. The amount of the monthly payments would be calculated from "the actual number of days elapsed over a 360-day year and based on the actual amount due." Paragraph 4 of the First Loan Note required 339 Holdings to deposit an "interest reserve in the amount of twelve (12) months monthly interest," and plaintiff would draw upon this reserve for the first year's payments. After that, 339 Holdings would not have to replenish the interest reserve and would commence its regular monthly payments.
Paragraph 8 provided that if 339 Holdings did not tender payment within ten days of the due date, then 339 Holdings was to pay "a late charge of five (5%) percent of the overdue payment," which was due immediately. Paragraph 9 provided if there were any default in payment of interest or principal, plaintiff could opt to demand full immediate payment, including principal and interest, and "thereafter" interest would be calculated "at the Default Rate." Paragraph 10 defined events of default, which included 339 Holdings' failure to pay "any installment of principal or interest on the Loan Documents on its due date or after the applicable grace period" of twenty days from the due date . Paragraph
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11 defined the default interest rate as the "loan rate at the time of [default] . . . plus 5.00%," which plaintiff could impose at its "sole discretion."
As security for the loan, plaintiff and 339 Holdings executed a "Term Loan Mortgage" in which 339 Holdings gave plaintiff the mortgage to the Property as "security" for payment on the loan note. 339 Holdings remained responsible for payments on the Property, such as taxes and insurance payments. Should 339 Holdings default on the loan, plaintiff could accelerate payment on the loan, take possession of the Property and receive all rents and income generated from it, or foreclose on the Property.
Also on August 10, 2018, defendant Hongkun USA Real Estate Holding LLC, an affiliate of 339 Holdings, executed an agreement to guarantee 339 Holdings' obligations under the loan.
The following year, in August 2019, plaintiff made a second loan to 339 Holdings for $5 million, the terms of which were set forth in the Second Loan Note. The interest rates and method used to calculate the interest amount both remained unchanged from those in the First Loan Note. Commencing October 1, 2019, 339 Holdings was obligated to pay interest-only payments through the maturity date of September 1, 2021, when the full principal balance became due.
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Paragraph 4 of the Second Loan Note included a different interest reserve provision than the First Loan Note, stating 339 Holdings would provide six months of interest, plaintiff could draw upon this amount in the event of default, and 339 Holdings would have to replenish the reserve if drawn upon. It added that plaintiff's draw from the reserve would "not be considered a cure of any default."
The Second Loan Note included a similar definition of what constituted a default, and the imposition of a default interest rate of 5% in addition to the regular interest rate in place at the time of default, to be imposed at plaintiff's "sole discretion." As additional security, 339 Holdings executed a "Second Term Loan Mortgage" on the Property for $5 million. As was done previously, Hongkun executed a second agreement to guarantee 339 Holdings' obligations under the Second Loan Note.
Defendants Gensler Architecture Design & Planning, P.C., Mueser Rutledge Consulting Engineers, PLLC, and High Ground Industrial LLC filed construction lien claims with the Bergen County Clerk's office against the Property in 2019 and 2020 for monies owed them by 339 Holdings.
339 Holdings did not pay the monthly installments for either loan that were due on December 1, 2019, and January 1, 2020. Consequently, on January
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24, 2020, plaintiff sent a notice of default to 339 Holdings, demanding payment and asserting its right to default interest under the Loan Documents .
Thereafter, 339 Holdings made a payment of $231,597.22 on March 5, 2020. However, it did not make any other interest payments between January 2020 and May 2020 on either loan, resulting in a second default notice from plaintiff on May 8, 2020.1 Plaintiff stated in the notice that it "agreed to forbear" after 339 Holdings "made a payment in March towards the delinquent balance at the time," but then 339 Holdings failed to make subsequent payments, and the default remained "uncured." Plaintiff said it "decided to apply the funds in the interest reserve account to the past due balance," but that 339 Holdings still owed monies under the terms of the Loan Documents. Plaintiff thus demanded "full payment" on the Loan Documents, plus late charges and default interest .
On June 10, 2020, the parties entered into a modification agreement (First Modification Agreement) to address the notices of default on the Loan Documents. The First Modification Agreement related to 339 Holdings' obligations under the Loan Documents collectively and did not distinguish 339 Holdings' obligations between the two loans. The parties agreed that "any and
1 The letter is incorrectly dated as March 8, 2020. The parties acknowledged this error and recognize that the correct date is May 8, 2020.
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all asserted defaults and the default event raised in the Notice of Default, shall be deemed to be abated and cured subject to [339 Holdings'] compliance with terms and conditions which follow." The parties agreed that 339 Holdings' May and June 2020 payments would be taken from the interest reserve, which would deplete the funds in the reserve. The agreement provided a schedule for 339 Holdings' upcoming payments for July and August 2020, and directed payments after that to be made in accordance with the terms of the Loan Documents . The First Modification Agreement also required 339 Holdings to gradually restore the interest reserve over a twelve-month period.
Pertinent to the appeal, the agreement included the following provision:
8. Provided [339 Holdings] fully, timely and faithfully tenders the payments as aforesaid, [plaintiff] agrees to waive the accrual of any default interest, late fees and any penalties, and the loan balance will accrue interest at the nondefault rate set forth in the Notes and related loan documents; in addition, and provided [339 Holdings] fully, timely and faithfully tenders the payments as aforesaid [plaintiff] likewise agrees to waive any other costs and expenses incurred inclusive of default interest, late fees and any penalties, attorney's fees and all other costs and expenses that [plaintiff] would otherwise be entitled to collect from [339 Holdings] in the event of a default . . . .
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The agreement provided that all other terms and conditions of the Loan Documents remained in full force and effect, unless otherwise expressly modified.
From June to December 2020, 339 Holdings made several partial monthly payments to plaintiff.
Meanwhile, in August 2020, High Ground initiated a lien foreclosure action against 339 Holdings and recorded a notice of lis pendens with the Bergen County Clerk's Office. In September, Mueser initiated proceedings to enforce its construction lien against 339 Holdings.
In January 2021, plaintiff and 339 Holdings executed a Second Modification Agreement, which stated that 339 Holdings had defaulted under the terms and conditions of the Loan Documents (including the First Modification Agreement) because it failed "to make monthly loan payments when due" and "to make payments to restore the Interest Reserve." As with the First Modification Agreement, the Second Modification Agreement did not differentiate between 339 Holdings' obligations under the two loan notes .
The parties recognized this default permitted plaintiff to "terminate the [First Modification Agreement] and declare all of [339 Holdings'] obligations to [plaintiff] under the Loan Documents to be immediately due and payable in
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full," but that plaintiff "has not, at this time, elected to take such action," and reserved the right to do so in the event of another default. Pursuant to the Second Modification Agreement, plaintiff agreed to the forbearance of one-half of the monthly interest payments for four months. The deferred interest would be added to the principal due, and payable on the maturity date of the loan. After the forbearance period, 339 Holdings would resume paying full interest pursuant to the conditions of the Loan Documents. If 339 Holdings failed to comply with these payments, the Second Modification Agreement would automatically terminate. 339 Holdings also agreed to a scheduled restoration of the interest reserve.
Notably, in paragraph five, 339 Holdings "agree[d] and acknowledge[d]
that this Agreement does not constitute an agreement to forgive any debt, but rather an agreement to defer certain payments," and was not a waiver of "any rights or remedies that [plaintiff] is entitled to under the Loan Documents." In paragraph six, 339 Holdings "ratifie[d] and reaffirm[ed] the validity and enforceability of all of the obligations and of each of the Loan Documents"; agreed that it had no "defense (whether legal or equitable), set-off or counterclaim to the payment or performance of the obligations in accordance with the terms of the Loan Documents"; and affirmed the security for the loans .
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Moreover, it stated any delay by plaintiff in exercising its rights or remedies under the Loan Documents would not operate as a waiver of any existing defaults, an agreement to forbear from exercising its rights under the Loan Documents or constitute a waiver or modification of the Loan Documents. Plaintiff thus "expressly reserve[d]" its rights and remedies under the Loan Documents, including the right to act when it deemed necessary or appropriate, "in its sole and absolute discretion."
339 Holdings made monthly "partial payments" to plaintiff from January through July 2021.
In September 2021, plaintiff sent a third notice of default, stating 339 Holdings had defaulted under the terms of both modification agreements and the Loan Documents, by failing to "make monthly loan payments when due" and "to make payments to restore the Interest Reserve." Plaintiff made a demand for "full payment of the Notes with late charges and the Default Interest Rate accruing."
II.
Plaintiff filed a foreclosure complaint in January 2022 seeking full repayment on its $30 million loan to 339 Holdings and foreclosure on the Property to satisfy the loan, as permitted under the Loan Documents. The
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complaint named 339 Holdings as the borrower, defendant Hongkun as the guarantor, defendant 339 RR Owner (an affiliate of 339 Holdings), and defendants High Ground, Gensler, and Mueser because each company had a construction lien against the Property.
In July 2022, plaintiff moved for summary judgment against defendants, to strike all defendants' answers, and to dismiss Gensler's cross-claim against Hongkun so the matter could be treated as an uncontested foreclosure matter and transferred to the foreclosure unit for summary proceedings. Plaintiff contended 339 Holdings defaulted on its obligations under the Loan Documents by failing to pay monthly installments, re-fortify the interest reserve, maintain real estate taxes, repay the loan by the maturity dates on the notes, and failing to pa y for the work done on the Property, resulting in the filing of multiple construction liens.
In its counter statement of facts filed in opposition to the motion, 339 Holdings agreed it had failed to pay monthly interest on December 1, 2019, but disputed it made no payments thereafter, referencing the partial payments made subsequent to the Modification Agreements. It disputed its actions constituted a default under the Loan Documents. It admitted, however, it failed to pay real estate taxes in excess of $800,000.
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339 Holdings also filed certifications, arguing they supported its unclean hands defense, which it contended was germane because plaintiff's actions interfered with 339 Holdings' ability to re-pay the loan and caused it to suffer additional monetary losses. Therefore, there remained a question as to the amount owed which precluded summary judgment.
The certifications provided the following information: In June 2022, 339 Holdings entered into a Purchase Agreement to sell the Property to 339 River Road Partners (339 Partners), for $45 million. Fan (Richard) Liu, the principal for 339 Holdings and Hongkun, certified the sale proceeds would have enabled 339 Holdings to satisfy both its mortgage and any other liens on the Property.
Liu stated he met with Daibes in the summer of 2022 and notified him about the pending sale of the Property. He declined to tell Daibes who the purchaser was. According to Liu, Daibes said plaintiff "was going to 'take the Property back' and that no one else would get favorable zoning for the Property ."
Liu certified that in early November 2022, an associate of Fred Daibes called him, advising Liu he had learned that 339 Holdings was selling the Property to a buyer Daibes considered to be "the enemy." The associate also said plaintiff was "taking this property back." Around this same time, Liu learned Edgewater's Council had proposed an amendment to the zoning
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ordinances to rezone the Property from commercial to light density residential zoning.
Liu asserted because the proposed re-zoning ordinance would adversely impact the Property's value, he re-negotiated the Purchase Agreement to extend 339 Partners' right to terminate the agreement by one month, until November 30, 2022. However, because the ordinance "had been tabled," Liu said they were unable to progress on the deal due to the continuing concern of re-zoning.
According to Liu, 339 Partners terminated the Purchase Agreement on November 29, 2022, because the prospective re-zoning "significantly adversely affected" the Property's value and "could no longer support a sale price of [$45 million]." Liu certified 339 Holdings was unable to find another buyer for the Property.
Brian M. Chewcaskie, Esq., who represented 339 Partners in connection with the Purchase Agreement, certified he met with Michael McPartland, the then-mayor of Edgewater in September 2022, and notified him of the Purchase Agreement. Chewcaskie stated he informed McPartland of 339 Partners' intent to develop the Property in accordance with its present zoning for retail, and there were "significant parties interested in leasing space at the Property." McPartland responded that Edgewater did not want retail development for the
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Property, but preferred a residential use. Chewcaskie also met with Daibes the following month and apprised him of the Purchase Agreement.
Chewcaskie certified that several weeks later, Edgewater's Council proposed an amendment to the Borough's zoning ordinance to re-zone the Property from commercial to residential. Chewcaskie certified "the difference in value between a commercially zoned parcel and a light residential use is significant," with the latter being worth "significantly less." Although the Council subsequently tabled the ordinance, Chewcaskie said there remained "uncertainty" regarding the Property's zoning status and how it would impact the Property's value. As a result, 339 Partners terminated the Purchase Agreement.
High Ground also opposed plaintiff's motion and raised the connection between the parties and the Loan Documents, as well as the contribution agreement between Hudson River Associates and Beijing Hongkun. High Ground argued that neither the Loan Documents nor the mortgage represented transactions "made in the ordinary course of a lending business," but were fashioned in a manner to "damage" the rights of the construction lien holders .
On March 31, 2023, after two oral arguments, the court granted plaintiff's motion for summary judgment and to strike the answers and defenses from the
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pleadings, and referred the matter to the Office of Foreclosure as an uncontested foreclosure pursuant to Rule 4:64.
In its written opinion, the court outlined the terms of the Loan Documents and Modification Agreements. The court found 339 Holdings defaulted on the loans when it failed to pay real estate taxes on the Property for the second, third, and fourth quarters of 2021. This resulted in plaintiff paying $800,628.35 as a "protective advance" on the delinquent real estate taxes. In addition, the court also found 339 Holdings defaulted for failing to pay the requisite amounts due under the loan.
The court considered 339 Holdings' arguments that plaintiff's principal acted with unclean hands and that the "possible re-zoning of the property is germane to the foreclosure issue since the re-zoning will result in a diminution in value, rendering the property unmarketable to a purchaser." The court noted that Daibes was not a member of Edgewater's Council and thus lacked authority to make any zoning decisions. The court further noted Edgewater had not voted to re-zone the property nor had it been divided into multiple plots. Therefore, the court characterized 339 Holdings' contentions as "purely speculative and wholly nongermane" to the foreclosure action.
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The court stated that, pursuant to Rule 4:64-5, only germane counterclaims may be pled in a foreclosure action without leave of the court. Citing to Great Falls Bank v. Pardo, the court defined germane claims as relating to "the amount of indebtedness, validity of the mortgage, and the right of the mortgagee to foreclose on the mortgage premises." 263 N.J. Super. 388, 394 (Ch. Div. 1993). The court noted 339 Holdings had not sought leave to plead the counterclaim. In addition, the unclean hands defense was germane only if it "directly relate[d] to the original transaction that created the mortgage being foreclosed." Because 339 Holdings' contentions did not relate to the Loan Documents, but rather to the subsequent Purchase Agreement, the court concluded the defense was "nongermane and immaterial."
The court then addressed High Ground's argument that its construction lien should take priority over plaintiff's loan to preclude summary judgment. The court concluded there was "no representation that [p]laintiff's loan was anything outside of a standard commercial loan constituting a mortgage on the property and a note reflecting the indebtedness." Because plaintiff's mortgage was recorded prior to High Ground's construction lien, the court determined High Ground's lien was "appropriately subordinated to [p]laintiff's mortgage."
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The court granted plaintiff's motion for summary judgment, striking defendants' answers "as non-contesting as [they] fail[] to constitute any bona fide dispute regarding the validity and priority of [p]laintiff's lien and fail[] to maintain a basis in fact or law and pursuant to Rule 4:6-4(b)." (Citations reformatted).
339 Holdings moved for reconsideration, contending, as a matter of equity, the "unjustifiable impairment on collateral" precluded summary judgment. 339 Holdings included new submissions to support its argument that Daibes had received favorable treatment from the Edgewater Council in other matters.
339 Holdings requested the court either to re-open the case and allow discovery to prove the interference, or to place an "effective stay" on the foreclosure judgment and allow 339 Partners six to nine months to secure its financing, so it could purchase the Property and 339 Holdings could pay back the loan owed to plaintiff.
On June 6, 2023, the court denied the motion in an oral decision. The court stated that a foreclosure proceeding is "a very specific" action involving a note, mortgage, and the collateral for the debt, and it should not be used as a means for "general business litigation." The court reiterated the facts alleged by
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339 Holdings were not "germane" to the foreclosure action, because the allegations "would not affect the amount of the note and the interest." The court also stated that 339 Holdings could institute an action in the Law Division regarding its allegations of interference with the Purchase Agreement.
III.
On appeal, 339 Holdings and High Ground contend the court erred in concluding the unclean hands defense was not germane to the foreclosure action and in granting summary judgment to plaintiff. High Ground also asserts it is entitled to discovery to determine whether plaintiff and 339 Holdings had a valid loan agreement as it disputes plaintiff had a priority lien on the Property. In addition, appellants contend plaintiff waived its right to default interest, and the default interest calculation is incorrect.
We review the grant of a motion for summary judgment de novo, applying the same standard used by the trial court. Boyle v. Huff, 257 N.J. 468, 477 (2024) (citing Samolyk v. Berthe, 251 N.J. 73, 78 (2022)). That standard requires the court to "review the competent evidential materials submitted by the parties to identify whether there are genuine issues of material fact and, if not, whether the moving party is entitled to summary judgment as a matter of law." Bhagat v. Bhagat, 217 N.J. 22, 38 (2014) (citing Brill v. Guardian Life
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Ins. Co. of Am., 142 N.J. 520, 540 (1995)); R. 4:46-2(c). The reviewing court must affirm the summary judgment ruling "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." Funtown Pier Amusements, Inc. v. Biscayne Ice Cream & Asundries, Inc., 477 N.J. Super. 499, 512 (App. Div. 2024) (quoting Hyman v. Rosenbaum Yeshiva of N. Jersey, 474 N.J. Super. 561, 572 (App. Div. 2023), aff'd, 258 N.J. 208 (2024)).
However, while all reasonable inferences must be drawn in favor of the non-moving party, that party must present sufficient evidence to show a genuine issue of material fact. Cortez v. Gindhart, 435 N.J. Super. 589, 605 (App. Div. 2014). "When no issue of fact exists, and only a question of law remains, this Court affords no special deference to the legal determinations of the trial court." Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016).
A.
On appeal, 339 Holdings' challenge to the court's summary judgment decision is limited to whether the court erred in its narrow construction of what constitutes a germane claim in the context of a foreclosure claim and declining
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to consider its unclean hands defense. High Ground raises a similar contention. They argue that after the foreclosure complaint was filed, 339 Holdings attempted to sell the Property to 339 Partners—which would have satisfied its debt to both plaintiff and to the other creditor-defendants—but that plaintiff's principal, Daibes, interfered in the sale by seeking to have the Property re-zoned.
Under Rule 4:64-5, "[o]nly germane counterclaims and cross-claims may be pleaded in foreclosure actions without leave of court. Non-germane claims shall include, but not be limited to, claims on the instrument of obligation evidencing the mortgage debt, assumption agreements and guarantees." To be germane, "the counterclaim must be for a claim arising out of the mortgage foreclosed." Joan Ryno, Inc. v. First Nat'l Bank of S. Jersey, 208 N.J. Super. 562, 570 (App. Div. 1986) (citing Leisure Technology-Northeast, Inc. v. Klingbeil Holding Co., 137 N.J. Super. 353, 356 (App. Div. 1975)).
A lender's right to foreclose is dependent on proof of execution and recording of a mortgage and note, and default on payment of the note. Thorpe v. Floremoore Corp., 20 N.J. Super. 34, 37 (App. Div. 1952). Thus, generally in an action to foreclose on a mortgage, the only material issues are "the validity of the mortgage, the amount of the indebtedness, and the right of the mortgagee to resort to the mortgaged premises." U.S. Bank Nat'l Ass'n v. Curcio, 444 N.J.
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Super. 94, 112-13 (App. Div. 2016) (quoting Sun NLF Ltd. P'ship v. Sasso, 313 N.J. Super. 546, 550 (App. Div. 1998)).
If a defendant's answer fails to challenge the essential elements of the foreclosure action, a plaintiff is entitled to a final judgment of foreclosure. Old Republic Ins. Co. v. Currie, 284 N.J. Super. 571, 574 (Ch. Div. 1995). Thus, a foreclosure action will be deemed uncontested if "none of the pleadings responsive to the complaint either contest the validity or priority of the mortgage or lien being foreclosed or create an issue with respect to plaintiff's right to foreclose it" or "all the contesting pleadings have been stricken or otherwise rendered noncontesting." R. 4:64-1(c)(2), (3).
The trial court found 339 Holdings failed to make its monthly interest payments to plaintiff as well as property tax payments as required under the Loan Documents and Modification Agreements. 339 Holdings does not dispute the validity of the Loan Documents, that it mortgaged the Property as security for the loans, or that it failed to make payments as required under the Loan Documents. Indeed, the Chancery Division found 339 Holdings conceded it failed to comply with the Modification Agreements. Consequently, there was no real dispute regarding the validity of the mortgage or even that a default had
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occurred, triggering plaintiff's right to foreclose on the Property. Curcio, 444 N.J. Super. at 112-13.
However, 339 Holdings contends there is a disputed issue regarding the amount of indebtedness arising out of its allegations of plaintiff's unclean hands, which precludes the entry of summary judgment. 339 Holdings states its allegations establish a germane defense.
"A party who resorts to equity to foreclose a mortgage exposes himself to the operation of equitable principles and must submit to an equitable resolution of the issues raised." Leisure Tech., 137 N.J. Super. at 356 (citing Spiotta v. William H. Wilson, Inc., 72 N.J. Super. 572, 579 (App. Div. 1962)). Thus, the doctrine of unclean hands may be asserted in a foreclosure proceeding. Curcio, 444 N.J. Super. at 113 (citing N.J. Bank v. Azco Realty Co., 148 N.J. Super. 159, 166 (App. Div. 1977)). This doctrine provides that "a court should not grant relief to one who is a wrongdoer with respect to the subject matter in suit." Faustin v. Lewis, 85 N.J. 507, 511 (1981). The "essence" of this doctrine "is that a suitor in equity must come into court with clean hands and he must keep them clean after his entry and throughout the proceedings." Curcio, 444 N.J. Super. at 113 (quoting Marino v. Marino, 200 N.J. 315, 345 (2009) (Rivera- Soto, J., dissenting)).
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However, unlike any of the cases cited and relied upon by appellants, they do not allege unclean hands regarding the mortgage transaction as a germane defense but rather raise an issue of unclean hands that arose from alleged interference that did not relate to the Loan Documents but occurred after defendant's default.
We note initially that no New Jersey court has defined a germane claim to include post-default interference such as alleged here. Nevertheless, 339 Holdings asserts our caselaw has expanded through the years as to what is considered germane in foreclosure proceedings. It refers to the 1975 decision in Leisure Tech., 137 N.J. Super. at 357, where the Chancery Division severed the defendant's unclean hands defense and sent the claim to the Law Division for trial. On appeal, we concluded this was error as the entire controversy doctrine "requires that a party litigate all aspects of a controversy in a single legal proceeding." Id. at 356-57 (citing N.J. Const. art. VI, § III, ¶ 4; Falcone v. Middlesex Cnty. Med. Soc'y, 47 N.J. 92 (1966)). In addition, we rejected the contention that an unclean hands defense can only be raised in a foreclosure claim if it relates "to the validity or existence of the underlying debt or mortgage." Id. at 357. We thus extended the unclean hands defense to the defendant's claim that, after the mortgage was executed, the plaintiff breached
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their agreement and interfered in the defendant's attempt to sell land that resulted in the defendant's inability to meet the mortgage payments. Id. at 358.
However, Leisure Technology is distinguishable from the facts presented here because the alleged interference in that case caused the default, in contrast to here where the allegations of interference occurred after the default. Thus, the case did not broaden the temporal scope of what is germane in foreclosure proceedings. Indeed, in a subsequent case, Ryno, we interpreted Leisure Technology as holding that "any conduct of a mortgagee known to the mortgagor prior to the institution of a foreclosure that could be the basis of an independent action for damages by reason of the mortgagee having brought the foreclosure could be raised as an equitable defense in the foreclosure." Ryno, 208 N.J. Super. at 570 (emphasis added) (citing Leisure Tech., 137 N.J. Super. at 356). As the alleged interference here occurred after the institution of the foreclosure proceeding, Leisure Technology does not support 339 Holdings' position.
Nor is Ryno helpful to 339 Holdings' argument as the mortgagee's conduct in that case contributed to the mortgagor's default, which is not the situation here. 208 N.J. Super. at 564. In Ryno, we did not address whether post-default interferences were germane to a foreclosure dispute.
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Indeed, none of the cases cited by 339 Holdings involve allegations against a lender post-default. See Sun NLF, 313 N.J. Super. at 549-51 (finding the bank-lender's "breach of its written promise to purchase the mortgaged property for a sum far in excess of the amount of the mortgage would have been a valid defense to foreclosure," where the bank's inaction contributed to the default); Atl. Seaboard Co. v. Borough of Seaside Park, 36 N.J. Super. 142, 155 (App. Div. 1955) (unclean hands applicable to individual for whose benefit the mortgage was created, and he instead procured assignment of the mortgage for a nominal sum and then sought to enforce it "to the full extent of the indebtedness he still owes"); Delacruz v. Alfieri, 447 N.J. Super. 1, 6-7, 21 (Law Div. 2015) (finding borrower's claims that lender acted improperly and inequitably in creating the contract/loan as "germane" to the foreclosure action because it related to the validity and enforceability of the mortgage and note); Taylor v. Mitchell, 90 N.J. Super. 312, 320-21 (Ch. Div. 1966) (holding defense of unclean hands was applicable because the mortgage was the product of illegality).
A foreclosure proceeding is purposefully limited to the material issues of "the validity of the mortgage, the amount of the indebtedness, and the right of the mortgagee to resort to the mortgaged premises." Curcio, 444 N.J. Super. at
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112-13 (quoting Sun NLF, 313 N.J. Super. at 550). The court found the speculative arguments raised by 339 Holdings were not germane to the foreclosure action. Rather, they were akin to those asserted in "general business litigation." The allegations of interference were unsupported by concrete acts— there was no evidence of the zoning proposal developing any further than that— a proposal.
In moving for reconsideration, in essence, 339 Holdings was seeking to stay the foreclosure action to pursue additional time to obtain financing to pay off the loan to plaintiff. That is not a germane defense for the preclusion of summary judgment in a foreclosure action. In addition, permitting such a nongermane defense would only prolong a foreclosure proceeding. Indeed, 339 Holdings candidly conceded it sought at least six to nine months to secure financing despite its unsuccessful attempts to do so over the several years of this litigation. Moreover, as plaintiff asserts, if the foreclosure proceedings continue to linger and remain unresolved, the ongoing default interest payments (accruing at approximately $400,000 to $500,000 per month) would far outweigh the value of the Property, leaving plaintiff without a remedy to secure the monies owed to it. This has never been the intent of our carefully crafted foreclosure jurisprudence. Plaintiff met its requisite proofs here and the Chancery Division
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properly granted it summary judgment as there were no material disputed issues of fact.
B.
We turn to High Ground's contention on appeal that the Chancery Division erred in granting plaintiff summary judgment because High Ground presented a material dispute of facts as to whether plaintiff had a priority lien on the Property.
High Ground holds a construction lien which was reduced to a judgment for $210,000. Pursuant to N.J.S.A. 2A:44A-3, a construction company can apply for a lien reflecting the value of the work/service or equipment/materials provided, which will attach to the interest of the owner of the real property in question. However, except for certain situations not applicable here, "N.J.S.A. 2A:44A-10 provides priority to all first-filed mortgages over subsequently filed construction liens." Sovereign Bank v. Silverline Holdings Corp., 368 N.J. Super. 1, 8 (App. Div. 2004). A lower priority lien may be entitled to recoupment in a foreclosure action filed by the primary lien holder, as set forth in Rule 4:64-1(e).
High Ground does not dispute that, as a construction lien holder, it has a lower priority than 339 Holdings, a commercial loan holder. Nor does it dispute
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that plaintiff's claim pre-dates High Ground's construction lien. Instead, it contends plaintiff is not entitled to a priority lien because plaintiff and 339 Holdings did not enter into a typical loan agreement, as they had a shared interest in the development of the Property. High Ground asserts various affiliate companies of plaintiff and 339 Holdings were involved in a loan regarding another property. High Ground sought to probe this relationship through discovery requests made to plaintiff, but plaintiff never responded, and instead filed its summary judgment motion. High Ground contends if plaintiff and 339 Holdings indeed had a joint venture or other form of relationship, then the Loan Documents cannot take priority over High Ground's construction lien.
The Chancery Division dismissed this argument, finding there was "no representation that [the] loan was anything outside of a standard commercial loan constituting a mortgage on the property and a note reflecting the indebtedness."
Even if High Ground could demonstrate the Loan Documents were part of a larger joint venture between the parties' affiliates, it nevertheless fails to provide any support for its contention that because of this possible joint venture relationship, the Loan Documents do not hold priority over the construction lien. High Ground does not support its argument with any case law to establish this
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type of loan arrangement should be treated differently. Moreover, regardless of the background relationship between the two entities, on its face the Loan Documents present as a typical loan arrangement, with a borrower, lender, principal loan amount, terms of payments, due date, interest amount, and other terms. Consequently, given the facial validity of the Loan Documents, and High Ground's failure to present any legal basis to challenge the priority of the loans, we discern no error in the Chancery Division's dismissal of this argument as a basis to preclude summary judgment.
C.
We turn to appellants' contentions the Chancery Division erred in calculating the total judgment due because plaintiff agreed to temporarily waive interest in the Modification Agreements and did not re-assert its right to interest until September 2021. In addition, appellants assert the court erred in failing to consider plaintiff's unclean hands when calculating interest, and in light of its actions, plaintiff was not entitled to any interest after it interfered in the sale of the Property.
We first address whether the Chancery Division erred in concluding plaintiff did not waive its right to default interest.
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In May 2023, plaintiff moved for entry of final judgment against 339 Holdings. Plaintiff included a certification from its representative, calculating that 339 Holdings owed plaintiff $43,822,230.73. The certification listed the payments made by 339 Holdings to plaintiff between March 2020 and July 2021. Although the certification indicated these were "partial payments," it did not break down what 339 Holdings was required to pay each month under the Loan Documents or Modification Agreements, and by how much 339 Holdings was delinquent.
In opposing the motion, 339 Holdings included a certification from Liu, which did not contest plaintiff's calculations, but disputed the timeframe in which the default interest rate was applicable. Liu contended the court should not apply the default interest rate between March 2020 and July 13, 2021, because 339 Holdings made $2,535,798.26 in payments during that time, and imposing default interest would inflate 339 Holdings' debt, notwithstanding these payments. Liu further asserted because plaintiff had access to the interest reserve—which had six-months' worth of interest payments—plaintiff could have withdrawn funds from that account, which would have circumvented a default. This again supported the assertion that adding default interest to this period further inflated 339 Holdings' debt. In addition, 339 Holdings reiterated
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plaintiff should not be entitled to any default interest after its interference with the Purchase Agreement. 339 Holdings requested the court enter a final judgment in the amount of $40,383,071.20, based on a calculation that did not impose the higher default interest rate.
High Ground apprised the court the judgment should be $39,044,919.63, which included a default interest rate only between September 8, 2021, and December 1, 2022.
On May 22, 2024, the Chancery Division adopted plaintiff's calculations and entered final judgment in the amount of $47,373,075.98.
In its cogent written opinion, the court rejected 339 Holdings' claim that it was entitled to an equitable defense against default interest based on plaintiff's purported interference with the Purchase Agreement. The court noted its previous ruling that plaintiff's purported unclean hands were not germane to the foreclosure litigation, and that pursuant to the "law of the case" doctrine, its decision was binding throughout the course of the action. The court stated it was "procedurally improper" for 339 Holdings to use its objection to the judgment amount "as a vehicle to simply re-litigate substantive issues that have already been ruled on."
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The court concluded that plaintiff had not waived its right to default interest. Although plaintiff agreed to waive and forebear the application of default interest in the First Modification Agreement, the court found the clear terms of the agreements stated this was conditioned on 339 Holdings' continued compliance with the Loan Documents. Moreover, while plaintiff agreed to continue to forebear on its rights in the Second Modification Agreement, it did not waive default interest and reserved its right to terminate the new agreement if 339 Holdings again defaulted. Therefore, the court concluded, based on the plain language of the Modification Agreements, plaintiff did not expressly waive its rights after an event of default.
The court adopted plaintiff's calculations and concluded that 339 Holdings owed: (1) $30 million due on unpaid principal; (2) $15,289,757.30 on unpaid interest, applying the default interest rate; (3) $1,669,291.98 on real estate taxes advanced by plaintiff; and (4) $414,026.70 for interest on the real estate tax advances. In calculating the interest amount, the court utilized a 14.75% default interest rate on the first loan (representing the 9.75% regular interest amount plus the 5% default interest); on the second loan, it utilized a 13.75% default interest rate for the first year (representing the 8.75% regular interest amount, plus the 5% default interest) and a 14.75% interest rate thereafter (representing
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the regular 9.75% interest amount, plus the 5% default interest), beginning November 1, 2019 through February 29, 2024. The court's calculations also credited 339 Holdings for the following amounts: (1) $2,535,798.26 for its interest payments after the initial period of default; (2) $140,000 for rents received by plaintiff from the Property; and (3) the $1,312,500 interest reserve amount provided by 339 Holdings.
We review a decision granting a motion for entry of a final judgment of foreclosure for abuse of discretion. Customers Bank v. Reitnour Inv. Props., LP, 453 N.J. Super. 338, 348 (App. Div. 2018). "Although the ordinary 'abuse of discretion' standard defies precise definition, it arises when a decision is made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis." Ibid. (quoting Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002)). A Chancery Division's factual findings and legal conclusions are entitled to significant deference and may be upset only if they "are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150, 181 (2011) (quoting In re Trust Created By Agreement Dated Dec. 20, 1961, ex rel. Johnson, 194 N.J. 276, 284 (2008)).
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In foreclosure actions, the final judgment "fixes the amount due under the mortgage and directs the sale of the real estate to raise funds to satisfy the amount due." Wells Fargo Bank, NA v. Garner, 416 N.J. Super. 520, 523 (App. Div. 2010) (quoting Eisen v. Kostakos, 116 N.J. Super. 358, 365 (App. Div. 1971)). Thus, the judgment "'represents the final determination of the debt and amount due' on the mortgage being foreclosed." Customers Bank, 453 N.J. Super. at 350 (quoting Colonial Bldg.-Loan Ass'n v. Mongiello Bros., 120 N.J. Eq. 270, 276 (Ch. 1936)).
339 Holdings contends that, pursuant to the original Loan Documents, plaintiff had the right to invoke application of the higher default interest rate, but it was not automatic. While it agrees plaintiff invoked its right to default interest in its January and May 2020 default letters, it argues plaintiff later waived this right by entering into the Modification Agreements. In the alternative, 339 Holdings argues that the language of the Loan Documents and the Modification Agreements, viewed together, created ambiguity on this point. Thus, it asserts plaintiff was not entitled to default interest until September 2021, when it sent its third default notice.
High Ground also contends plaintiff waived its right to default interest, and raises several additional arguments challenging the court's calculations.
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First, it argues there was no default on December 1, 2019, because plaintiff could have drawn funds from the interest reserve to pay the balance. Second, it contends there was no actionable default until January 21, 2021—because 339 Holdings made payments in compliance with the First Modification Agreement up until then—and plaintiff did not invoke its right to default interest until September 7, 2021. Third, it argues the payments made after the parties entered into the Modification Agreements should have been used to pay the creditors, as plaintiff had agreed to forebear collecting interest and defaulting on the loans in the agreements. Fourth, High Ground says the court erred in applying default interest retroactive to December 2019, because the "Loan Modification Agreement" said the default rate would apply "thereafter.2"
We discern no error in the Chancery Division's conclusion that plaintiff did not waive its right to default interest. Although the record is somewhat unclear as to when exactly 339 Holdings' purported default occurred, there is no real factual dispute that 339 Holdings failed to comply with the terms of the First Modification Agreement. Therefore, any waiver of a prior default was no longer valid.
2 The page cited to by High Ground does not include this language and we did not find anything similar in either of the Modification Agreements. Therefore, we do not address the argument further.
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We briefly address appellants' arguments. Preliminarily, we disagree with 339 Holdings' contention that there is any ambiguity regarding the application of default interest in the agreements. When interpreting a contract, the court must consider "the intent of the parties, the express terms of the contract, surrounding circumstances and the underlying purpose of the contract." In re Cnty. of Atl., 230 N.J. 237, 254 (2017) (quoting Manahawkin Convalescent v. O'Neill, 217 N.J. 99, 118 (2014)). "'[I]f the contract into which the parties have entered is clear, then it must be enforced' as written." Ibid. (quoting Maglies v. Est. of Guy, 193 N.J. 108, 143 (2007) (Hoens, J., dissenting)).
The Loan Documents entitled plaintiff to unilaterally assert its right to default interest following a default under the mortgage. There is no ambiguity in this provision. Plaintiff first asserted this right in its January 2020 default notice, following 339 Holdings' failure to pay interest in December 2019. It again asserted this right in its May 2020 notice. In the First Modification Agreement, plaintiff agreed to waive its right to default interest so long as 339 Holdings fully complied with the terms of the agreement. If 339 Holdings was compliant and tendered timely payment, plaintiff would have been bound to waive its right to default interest. However, 339 Holdings was again delinquent in its payments as recognized in the Second Modification Agreement. Thus,
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while plaintiff was willing to waive its right to default interest, this was invalidated by 339 Holdings' subsequent default.
339 Holdings also contends plaintiff waived any required compliance with the agreements' conditions by entering into the Second Modification Agreement. However, the Second Modification Agreement was even clearer and unambiguous, providing no conditions to cure default, and expressly stating there was no agreement to forgive debt, but only to defer certain payments . Moreover, the Second Modification Agreement provided that any delay by plaintiff in exercising its rights and remedies was not deemed a "waiver of the [e]xisting . . . [d]efault[s]," and plaintiff could exercise its rights at any point, in its "sole and absolute discretion." Thus, there was no ambiguity in the parties' agreements. The Loan Documents allowed plaintiff to unilaterally impose the default interest rate following a default; in the First Modification Agreement, the parties recognized a default had occurred but plaintiff agreed to waive its right to default interest so long as 339 Holdings complied with the terms of the agreement; and in the Second Modification Agreement, the parties recognized another default had occurred, and plaintiff no longer agreed to waive any right to interest. The Chancery Division properly found there was no reason to
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deviate from the express terms of the agreements. In re Cnty. of Atl., 230 N.J. at 254.
High Ground offers alternative arguments as to when the default interest should apply. One contention is that the court should have forestalled application of the default interest rate until at least January 2021, because 339 Holdings made regular monthly interest payments between June 2020 (when the First Modification Agreement was executed) and December 2020.
For the reasons set forth above, this argument is unavailing. 339 Holdings defaulted in January 2021, when it failed to pay its full interest obligation . Because this constituted a default of the First Modification Agreement, by the terms of that same agreement, plaintiff's waiver of prior default interest was no longer valid. Thus, plaintiff remained entitled to default interest following its default notice in January 2020, based on 339 Holdings' default in December 2019.
D.
We turn to High Ground's contention that the trial court erred in adopting plaintiff's date of the commencement of the default interest rate following 339 Holdings' default on December 1, 2019.
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Plaintiff's certification identified the default date as December 1, 2019, when 339 Holdings failed to make its monthly interest payment, but then applied the default interest rate retroactively to November 1, 2019. The court adopted those calculations. High Ground challenges the calculation, asserting the default interest rate could not apply until after both the default and plaintiff's exercise of discretion to impose the penalty. Thus, High Ground argues the earliest the default interest could have been applied was December 21, 2019, the end of the grace period. Plaintiff asserts the date of default was December 1, 2019.
We agree the November 1, 2019, date used by the court in its calculations is incorrect. The parties agree the default occurred on December 1, 2019, when 339 Holdings did not make its monthly interest payment. The Loan Documents defined the event of default as failure to pay the monthly interest payment on the due date or after the applicable grace period of twenty days. Plaintiff could then opt to impose a default interest rate—utilizing the default rate of interest applicable at the time of default, plus 5%. The Loan documents do not state the interest rate could be applied retroactively to when the last interest payment was made, in November 2019.
High Ground contends the earliest possible date the interest could begin would be December 21, 2019, which would be after the grace period for payment
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expired. However, it also argues the default interest could not apply until after plaintiff exercised its discretion to impose the default interest. This occurred on January 24, 2020, when plaintiff sent its notice of default and invoked its right to default interest.
The Loan Documents do not clarify when one should apply the default interest rate—December 1, 2019, when the default occurred; December 21, 2019, when the grace period ended; January 1, 2020, when the next monthly interest payment was due after default; January 24, 2020, when plaintiff invoked its right to default interest, or even February 1, 2020, when the next monthly interest payment was due after plaintiff invoked its right to default interest.
"An ambiguity in a contract exists if the terms of the contract are susceptible to at least two reasonable alternative interpretations." Schor v. FMS Fin. Corp., 357 N.J. Super. 185, 191 (App. Div. 2002) (quoting Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997)). To determine the meaning of the terms, a court must examine their "plain and ordinary meaning." Ibid. (quoting Nester, 301 N.J. Super. at 210). Here, the terms of the Loan Documents do not clarify when the default interest rate becomes applicable , preventing a court from calculating the proper judgment against 339 Holdings. Moreover, the parties have not advised who drafted the Loan Documents; 339
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Holdings only represents that plaintiff drafted the Second Modification Agreement. See Schor, 357 N.J. Super. at 193 ("[W]here an ambiguity appears in a written agreement, the writing is to be strictly construed against the party preparing it.") (alteration in original) (quoting Orange Twp. v. Empire Mortg. Servs., Inc., 341 N.J. Super. 216, 227 (App. Div. 2001)). It also does not appear the parties ever argued this specific point, or that the Chancery Division ruled on it. Therefore, the court's calculation is not entitled to deference because it is inconsistent with the record below, Seidman, 205 N.J. at 181, as its judgment was based on a calculation that imposed default interest prior to the occurrence of the default. Because there is ambiguity as to when the default interest was applicable, and because there is insufficient information for us to resolve the question, we are constrained to remand this matter to the Chancery Division to consider and decide the issue. The court should first determine the proper date from which to begin calculating interest and then adjust and amend the final judgment to reflect this calculation.
High Ground also contends the court's calculations were incorrect because it did not account for the interest reserve, which plaintiff was bound to utilize first, before accepting direct interest payments from 339 Holdings. Plaintiff responds that the interest reserve had enough funds to satisfy payments for a
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year, and that 339 Holdings' default occurred after this one-year mark, at which point 339 Holdings was required to make interest payments.
The First Loan Note was executed on August 10, 2018, with payments to start on October 1, 2018. Plaintiff was to utilize the interest reserve for the first year of payments, thus through October 1, 2019. After that, it was incumbent on 339 Holdings to make monthly interest payments to plaintiff . The Second Loan Note also required an interest reserve of six months, and permitted plaintiff to draw upon it in the event of default, but directed that such a draw would "not be considered a cure of any default."
A review of the First Modification Agreement reflects the interest reserve included two months of additional interest, which the parties then used to pay 339 Holdings' May and June 2020 payments. At that point, the parties represent the interest reserve was depleted. However, 339 Holdings' certification listed $1,312,500 in the interest reserve, including $1,093,750 from the first loan and $218,750 from the second loan. The parties' submissions do not clarify this contradiction—whether the interest reserve was depleted following the agreed- upon withdrawals in May and June 2020, or whether there was more than a million dollars remaining in the reserve for the entirety of the loans. It also is possible that the $1,312,500 amount reflects the interest reserve amount after
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339 Holdings replenished the reserve, as it agreed to do pursuant to the loan modification agreements. Either way, the record is unclear as to how much interest reserve existed, whether it existed the entire time, or whether it was replenished by 339 Holdings after the fact.
Assuming High Ground is correct and a combined $1,312,500 remained available in the reserves the entire time, it is unclear why the parties did not utilize this amount to pay 339 Holdings' obligation, particularly given the parties' willingness to use other sums from the interest reserve to satisfy 339 Holdings' May and June 2020 payments. Nevertheless, even if the monies were available and the parties elected not to utilize them for some reason, the First Loan Note did not require plaintiff to use those monies towards 339 Holdings' interest payment after the first year, and the default occurred after this one-year- period. Moreover, per the Second Loan Note, any use of the interest reserve would not cure the default. Thus, while the parties could have agreed to utilize the remaining interest monies to offset the outstanding interest owed by 339 Holdings, they were not required to do so, and there is no evidence the failure to do so was an attempt by plaintiff to artificially inflate the interest amount. Moreover, the Chancery Division ultimately factored in this amount when
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calculating the judgment, reducing the judgment against 339 Holdings by $1,312,500.
We are satisfied the Chancery Division did not err in finding 339 Holdings was obligated to pay default interest following its default on December 1, 2020. However, we vacate the amount of the judgment for the reasons stated and remand solely for the court to determine when the default interest payments should begin, and to recalculate the final judgment accordingly.
To the extent we have not commented on them specifically, all other points appellants raise on appeal lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed in part, vacated in part, and remanded for further proceedings in accordance with this opinion. We do not retain jurisdiction.
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