NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-3460-16T3
GECMC 2006-C1 COMPLEX 400, LLC, a New Jersey limited liability company,
Plaintiff-Respondent,
v.
RP 400 URBAN RENEWAL, LLC, a New Jersey limited liability company,
Defendant-Appellant,
and
NEW JERSEY MORTGAGE AND HOUSING FINANCE AGENCY, and THE STATE OF NEW JERSEY,
Defendants. ________________________________
Argued September 18, 2018 – Decided November 20, 2018
Before Judges Yannotti and Rothstadt. On appeal from Superior Court of New Jersey, Chancery Division, Passaic County, Docket No. F- 010741-15.
Carl J. Soranno argued the cause for appellant (Brach Eichler, LLC, attorneys; Carl J. Soranno, of counsel and on the briefs; Paul M. Bishop, on the briefs).
Gregory R. Haworth argued the cause for respondent (Duane Morris, LLP, attorneys; Gregory R. Haworth and Steven T. Knipfelberg, of counsel and on the brief).
PER CURIAM
In this commercial foreclosure action, defendant, RP 400 Urban Renewal,
LLC, appeals from the Chancery Division's February 8, 2016 order granting
plaintiff, GECMC 2006-C1 Complex 400, LLC's motion for summary judgment
and from orders entered on June 23, 2016, denying defendant’s motion for
reconsideration, and January 3, 2017, rejecting defendant’s objection to the
amount due. It also appeals from the court's March 7, 2017 Final Judgment of
Foreclosure. We affirm substantially for the reasons stated by Judge Bruno
Mongiardo in his written decisions issued with each order and judgment under
appeal.
Plaintiff filed this action based upon defendant's failure to make monthly
payments into escrow funds, as required by the parties' loan agreement.
Defendant contended that plaintiff waived its right to those payments through a
A-3460-16T3 2 telephone conversation between defendant's representatives and an agent of
plaintiff's predecessor. For that reason, defendant also claimed that plaintiff was
not entitled to the default interest amount provided for in the loan agreement.
Defendant did not otherwise challenge the notes, mortgage, plaintiff's right to
sue, or the fact that defendant did not make the escrow payments as required by
the loan documents.
After the parties filed their initial pleadings, pursued discovery, and
plaintiff filed a motion to strike under Rule 4:6-2, Judge Mongiardo converted
the motion to one for summary judgment, without objection, and granted it,
suppressing defendant's answer. He found that plaintiff established a prima
facie case for foreclosure and that there were no genuine issues of material facts
warranting trial because the express language of the fully integrated loan
documents clearly established defendant's obligation to make the escrow
payments and that plaintiff did not waive or modify that obligation under the
loan agreement.
On appeal, defendant argues that Judge Mongiardo abused his discretion
by awarding summary judgment in favor of plaintiff and denying its motion for
reconsideration. Defendant contends again that it does not owe any default
interest because it was not in default when it stopped making payments to the
A-3460-16T3 3 escrow account as an agent of a loan servicer orally discharged defendant's
obligation to make those payments. Additionally, defendant argues that Judge
Mongiardo erred because he failed to consider certain documents that
established plaintiff’s waiver of its entitlement to those payments. It also avers
that there is a genuine dispute of material fact as to whether defendant violated
the covenant of good faith and fair dealing and that plaintiff is barred fro m
seeking retroactive default interest by the doctrine of laches, estoppel , and
unclean hands. Moreover, according to defendant, the retroactive application of
default interest constitutes an unconscionable penalty and, in any event, should
not have not been applied from April 1, 2012. We disagree.
We first address defendant's claims regarding the award of summary
judgment and consider the facts derived from the motion record in a light most
favorable to plaintiff. Those facts are summarized as follows. In February 2006,
plaintiff's predecessor, General Electric Capital Corporation (GECC) loaned
defendant $5,437,000 in exchange for two promissory notes (Note A and Note
B) from defendant. Pursuant to the parties' loan agreement, defendant's two
notes carried different interest rates. Note A had a principal amount of
$5,117,000 and an "initial rate of 5.39% per annum," with payments due "on the
A-3460-16T3 4 first (1st) day of each calendar month." Note B had a principal amount of
$320,000 and "an initial rate of 12.75% per annum" with the same due date.
Repayment of the amounts due under the notes was secured by a mortgage
on rental property owned by defendant. The property, located in Paterson, is the
site of a fifty-unit residential apartment complex for low and moderate income
senior citizens who receive federal rental assistance.
The loan agreement required that defendant establish two escrow accounts
(escrow funds) "as further security for the loan." One account was a
"Replacement Escrow Fund" for replacement and repairs, and defendant was
required to make a monthly payment of $1,045 into that account beginning on
March 1, 2006 until March 1, 2016. The second account was designated as the
"Springing Debt Service Escrow Fund." The agreement required defendant to
make a monthly payment of $4,820 into that account from February 1, 2011 until
January 1, 2016.
In the agreement, the parties specified different events of default under
the loan. Section 9.1 of the agreement stated: "Borrower’s failure to pay any
regularly scheduled installment of principal, interest or other amount due under
the Loan Documents within five (5) days of (and including) the date when due,
A-3460-16T3 5 or Borrower’s failure to pay the Loan at the Maturity Date, whether by
acceleration or otherwise." [(Emphasis added).]
According to Section 10.2 of the loan agreement, in the event of a default,
the lender had the right to accelerate the loan balance without further notice and
"exercise all rights and remedies therefor under the Loan Documents and at law
or in equity." One of those rights included the imposition of a default interest
rate under Section 2.2. That section provided for an additional five percent
interest on the balance owed under the notes while "any Event of Default exists."
The agreement also required that any modification or waiver be in writing.
Section 11.2 provided that "[n]o amendment or waiver of any provision of
the . . . Loan Documents shall be effective unless in writing and signed by the
party against whom enforcement is sought." Further, under section 11.12, "[n]o
course of dealing on the part of Lender . . . or [its] agents, nor any failure to or
delay by Lender with respect to exercising any right, power or privilege of
Lender under the . . . Loan Documents[] shall operate as a waiver thereof."
Section 11.23 stated the parties' "Loan Documents . . . [could] not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties." (Emphasis added). The mortgage delivered by
defendant to plaintiff contained similar provisions.
A-3460-16T3 6 On April 1, 2012, defendant failed to make the monthly payments to the
escrow funds due under the loan agreement. Plaintiff's predecessor did not take
any action in response to defendant's default but, in March 2014, after plaintiff
became the holder of the notes and mortgage, plaintiff notified defendant that it
"was in default under the Notes and the other Loan Documents." When
defendant did not remedy its default, plaintiff informed defendant in January
2015 "that the Loan had been accelerated and all sums due and owing under the
Notes were immediately due and payable in full . . . ." According to plaintiff,
as of January 2015, defendant owed $4,737,431.34 and "unpaid interest,
including default interest . . . ."
On March 25, 2015, plaintiff filed its complaint in this action. Defendant
filed a contesting answer, asserting fifteen affirmative defenses and a five-count
counterclaim, including a claim for reformation and breach of the duty of good
faith and fair dealing. In its pleading, defendant asserted that it made timely and
consistent payments due under Notes A and B, and "insured the Property against
hazard and loss." Specifically, defendant noted that under the loan agreement,
"the obligation to tender monthly payments into the [escrow funds] commenced
on [March 1, 2006 and] February 1, 2011." Defendant stated that the property
"generate[d] sufficient revenue[,]" but admitted the revenue was insufficient "to
A-3460-16T3 7 enable payment into the Debt Service Escrow Fund." Defendant noted that, even
though it failed to make payment to the Escrow Fund, "[p]laintiff did not declare
a Loan default in 2011" and allowed defendant to "continue to operate and
manage the Property and [make] payments . . . on Note A and Note B."
Moreover, defendant asserted that plaintiff "did not formally declare a default
on the Loan until March 2014." The pleading did not mention any facts
supporting defendant's defense that plaintiff waived its right to the escrow
payments.
After the parties engaged in discovery, on December 23, 2015, plaintiff
moved to strike defendant’s defenses and dismiss its counterclaim, both of
which were based upon defendant's allegation that plaintiff "orally modified the
Loan Documents and waived its entitlement to [the escrow payments and]
default interest." Defendant opposed the motion and filed a cross-motion
seeking an order to reform the loan agreement, permission to file an amended
counterclaim and to adjourn the scheduled trial date.
In a certification filed in opposition to plaintiff's motion, defendant's
Managing Member, Gary Spirer, stated that in February 2012 he and Raymond
P. Marzulli, Jr, defendant's property manager, decided to contact a loan officer
of plaintiff's predecessor about the Debt Services Escrow. Spirer called the loan
A-3460-16T3 8 officer to discuss the issue that "[w]hile the Property continued . . . to generate
sufficient revenues to meet all of the [its] obligations, the revenues were not
sufficient to enable payment into the Debt Service Escrow." However, the loan
officer was not "concerned about the inability to make the Debt Service Escrow
payment since all other payments were being met and since the Property already
had significant reserves . . . ." According to Spirer, the Replacement Escrow
Account grew to more than $60,000 by February 2012, and there was an
"Additional Reserve Account" that defendant funded in the amount of
approximately $375,000, "which [GECC and all of its successors], had a
perfected security interest."
Spirer also stated that Marzulli subsequently contacted the same loan
officer and relayed to Spirer that plaintiff's predecessor would be satisfied if
defendant spent the entire Replacement Reserve Fund on improvements and
repairs for the property. Plaintiff's predecessor, according to Spirer, "never
asked that anything further be done and there was no further communication
. . . with respect to the Debt Escrow." According to Spirer, plaintiff did not
declare a default in either 2012 and 2013 but still allowed defendant to operate
and manage the property while continuing to accept payments made on Notes A
and B during that time. He confirmed that on March 6, 2014, defendant received
A-3460-16T3 9 letters from plaintiff that the Loan was in default for failure to pay and that
plaintiff was willing to meet "to discuss the status and possible modification of
the Loan." Spirer stated that the letter "contained onerous and prejudicial
provisions that required [defendant] to waive any and all defenses" as well as
other legal rights and would require it to be subject to the jurisdiction of Florida.
Defendant declined to sign and the lender "refused to discuss the loan" with
Spirer, despite his willingness to travel to Florida. Spirer certified that both
before and after receipt of the March 2014 letters, defendant "diligently pursued
efforts to refinance the Loan, which [was] scheduled to mature on March 1,
2016."
Spirer also certified that in 2014, defendant retained a mortgage refinance
consultant and broker in an attempt to refinance its loan. It was not until January
7, 2016, that defendant received a commitment form a lender to loan defendant
$4.7 million. While waiting for a response to its loan application, on November
17, 2015, defendant's attorney requested a payoff statement from plaintiff but
never received one.
Richard D. Bloom, a certified public accountant who conducted an audit
of defendant's financial statements, also submitted a certification in opposition
to plaintiff's motion. Bloom stated that, according to audit procedures, he sent
A-3460-16T3 10 a standard form to plaintiff to confirm defendant's account balance information
in 2012, 2013, and 2014. According to Bloom, the form asked plaintiff to
countersign the document to confirm that "[t]he information presented . . . is in
agreement with . . . [its] records." The form also indicated that "a
comprehensive, detailed search of . . . records, [did not disclose] other deposit
or loan accounts . . . ."
On February 5, 2016, Judge Mongiardo heard counsels' oral arguments
and on February 8, 2016, granted plaintiff's motion, entered an order, and issued
a written opinion setting forth his reasons. In his decision, Judge Mongiardo
concluded plaintiff established a prima facie claim for foreclosure, and that
defendant's opposition did "not raise genuine issues of material fact." He found
that none of defendant's factual assertions in opposition to summary judgment
could "defeat [p]laintiff’s right to foreclose." The judge rejected each of
defendant's defenses as meritless, including its contention that plaintiff's claims
were barred by the doctrines of laches and waiver. The judge found plaintiff's
decision "not to accelerate the Loan when [d]efendant first failed to make the
[Escrow Fund] payments" was to defendant’s benefit not detriment.
The judge also addressed defendant's allegations about plaintiff's waiver
of its entitlement to the escrow fund payments. He reviewed the contents of
A-3460-16T3 11 Spirer's certification and ruled that the statements made in it about the
conversation between Marzulli and the loan officer was inadmissible hearsay as
Spirer "ha[d] no personal knowledge of the content of that conversation."
Moreover, he noted that Spirer did not provide any additional documentation
"memorializing [the Lender’s] purported agreement to forego the requirement
under the Loan Documents." Judge Mongiardo found that the loan documents
were "fully integrated commercial obligations between sophisticated business
entities[,]" and without more than "vague and unsupported references to [a]
telephone conversation[,]" the defense fails. He also addressed defendant's
remaining affirmative defenses and specified his reasons for finding that each
defense failed.
Finally, Judge Mongiardo considered defendant’s cross-motion. As to
defendant’s claim for reformation of a contract, he noted that defendant admitted
to its default in the payments into the escrow funds and that defendant "does not
dispute the express terms of the fully integrated Loan Documents." The judge
held that "there is no mistake or ambiguity warranting reformation." He also
found that defendant's assertion that plaintiff breached the covenant of good
faith and fair dealing could not survive because "[p]laintiff did not act in bad
faith by electing not to immediately accelerate the Loan[,]" especially since a
A-3460-16T3 12 provision of the loan agreement provided that plaintiff had an "absolute right
whether and when to elect or not elect to accelerate." Judge Mongiardo
dismissed the remaining counts of the counterclaim as being without merit.
On May 12, 2016, defendant filed a motion for reconsideration, arguing
that the judge "failed to consider significant probative evidence related to
[d]efendant’s defenses under the doctrines of [] breach of the covenant of good
faith and fair dealing, equitable estoppel, and laches." Moreover, defendant
alleged that there was new evidence for the judge to consider, which supported
a "finding in [d]efendant’s favor and a reconsideration of the" summary
judgment order.
In his certification filed in support of the motion for reconsideration,
Spirer reiterated that he spoke to a loan officer from plaintiff's predecessor and
that he had other phone conversations with similar individuals regarding the
loan. Spirer emphasized that "[a]t no time did any of the bank officers indicate
that there was a problem concerning the missed escrow payments and it was
[his] understanding . . . that no one viewed defendant as being in default."
Moreover, he stated that he did not refinance the loan because he believed
he had until the March 1, 2016 loan maturity date to do so. Even though
plaintiff's predecessor knew from annual audits that defendant maintained other
A-3460-16T3 13 reserves, it never requested the funds be moved to cure any default in the escrow
fund payments or indicated that the escrow funds' deficiency was an issue. He
further certified that, although plaintiff's predecessor sent a letter
"acknowledging" the missed escrow payments, no default was ever declared and
thus, defendant continued making monthly principal and interest payments and
did not move funds to cure the escrow deficiencies.
On June 21, 2016, Judge Mongiardo heard oral argument on the motion
for reconsideration and on June 23, 2016 issued an order denying defendant’s
motion supported by a written decision. At oral argument, plaintiff contended
that defendant failed to act on three separate occasions after receiving notice of
default: once "in October 2013 when there was a delinquency notice, . . . [and
an] email exchange between . . . Spirer and the loan officer" requesting payment;
again "in March 2014 when the official default notice was served[;]" and finally
when "they d[id not] do anything with regard to refinancing . . . until December
2015 . . . ." Defendant argued that it did not try to correct the default because
plaintiff wanted it "to enter into some type of pre[-]negotiation agreement that
was going to be governed under Florida law, . . . where [defendant] would [be
forced to] agree to waive all [of its] rights and remedies against [p]laintiff . . . ."
A-3460-16T3 14 In his written decision, Judge Mongiardo found that he "did not rely on
plainly incorrect reasoning" nor "overlook any fact or law in rendering " his
decision on the original motion to strike defendant's pleading. Moreover, he
concluded that defendant could not "assert new theories on a motion for
reconsideration that it could have but failed to assert at the time of the original
motion[,]" and that any new evidence defendant presented to him "d[id] not
persuade the [c]ourt to change its mind." The judge still found that defendant
set forth the same arguments and saw "no reason . . . to grant [d]efendant a
second bite at the apple."
On September 26, 2016, plaintiff filed its motion for entry of a final
judgment of foreclosure. In response, defendant filed an objection to the amount
due, arguing that late charges were improperly assessed against the monthly loan
payments that were not in default, rather than the "missed Escrow Payments,"
and "the imposition of a default rate of interest [was] not reasonable under the
totality of the circumstances of the case."
On December 12, 2016, Judge Mongiardo considered the parties' oral
arguments as to defendant's objection to the amount due. In a written decision
dated January 3, 2017, the judge explained why he found defendant's objections
to be without merit. The judge stated that defendant's objection to the late
A-3460-16T3 15 charges was resolved by an amendment to the amount claimed by plaintiff. As
to the application of the default interest amount, the judge relied upon the
Supreme Court's opinion in Metlife Fin. Corp. v. Washington Ave Assocs. LP,
159 N.J. 484 (1999) and our opinion in Mony Life Ins. Co. v. Paramus Parkway
Bldg. Ltd., 364 N.J. Super. 92 (App. Div. 2003), and concluded that in this case:
(1) the loan agreement between the parties governed the default rate of interest
and accordingly, the amounts due; (2) defendant failed to meet its burden to
prove that the default interest rate was unreasonable "either at the time the
contract [was] made or at the time it [was] breached[;]" and (3) defendant "failed
to show any unconscionable conduct on behalf of [p]laintiff."
On March 7, 2017, Judge Mongiardo entered the Final Judgment of
Foreclosure in the amount of $5,645,175.13 plus taxes and counsel fees in the
amount of $7,500. This appeal followed.
"In reviewing a grant or denial of summary judgment, [we are] bound by
the same standard as the trial court under Rule 4:46-2(c)." State v. Perini Corp.,
221 N.J. 412, 425 (2015) (citations omitted). "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.'" Ibid.
A-3460-16T3 16 (quoting Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995)). In
our review, we "must view the facts in the light most favorable to the non -
moving party, which in this case is" defendant. Bauer v. Nesbitt, 198 N.J. 601,
604-05 n.1 (2009); see also R. 4:46-2(c); Brill, 142 N.J. at 540. Summary
judgment is appropriate where the record demonstrates "no genuine issue as to
any material fact challenged and that the moving party is entitled to a
judgment . . . as a matter of law." Burnett v. Gloucester Cty. Bd. of Chosen
Freeholders, 409 N.J. Super. 219, 228 (App. Div. 2009) (quoting R. 4:46-2(c)).
On appeal, defendant argues that Judge Mongiardo erred in granting
summary judgment on the issue of "whether [plaintiff] violated the covenant of
good faith and fair dealing." Relying on Wilson v. Amerada Hess Corp., 168
N.J. 236 (2001), defendant argues that plaintiff violated the covenant when it
notified defendant that "it was no longer concerned whether [defendant] could
fund the escrow reserves[,]" but later "declare[d] [defendant] to be in default
under the Loan two years later for failure to fund [the] reserves." We disagree.
"[E]very contract in New Jersey contains an implied covenant of good
faith and fair dealing." Wood v. N.J. Mfrs. Ins. Co., 206 N.J. 562, 577 (2011)
(citing Kalogeras v. 239 Broad Ave., LLC, 202 N.J. 349, 366 (2010)). The
covenant requires that "neither party shall do anything which will have the effect
A-3460-16T3 17 of destroying or injuring the right of the other party to receive the fruits of the
contract." Ibid. (quoting Kalogeras, 202 N.J. at 366). However, the implied
covenant of good faith cannot "alter the terms of a written agreement" and
therefore may not "preclude a creditor from exercising its bargained-for rights
under a loan agreement." Glenfed Fin. Corp., Commercial Fin. Div. v. Penick
Corp., 276 N.J. Super. 163, 175 (App. Div. 1994) (citations omitted).
"A creditor's temporary forbearance in exercising its remedies upon its
debtor's default does not preclude the creditor from subsequently exercising
those rights," especially where, as here, the parties' loan agreement expressly
preserved lender’s right to determine whether, and when, to exercise its
remedies for a default. Id. at 177. Absent some evidence that a lender's actions
were "characterized by bad faith . . . [or that it was] acting out of personal malice
towards [the debtor] or its principals, or that it was pursuing its own economic
interests unrelated to obtaining the repayment of the loan[,]" a lender does not
breach the covenant simply by holding a debtor in default under the terms of the
loan agreement. Nat'l Westminster Bank N.J. v. Lomker, 277 N.J. Super. 491,
497 (App. Div. 1994) (quoting Penick Corp., 276 N.J. Super. at 178).
A-3460-16T3 18 Defendant's contention that plaintiff violated the covenant is premised
upon plaintiff having waived its right to the escrow fund payments. We, like
Judge Mongiardo, discern no such waiver.
First, pursuant to the loan agreement, any waiver must be in writing and
signed by the party to be charged. Based on Bloom's certification in opposition
to plaintiff's motion to strike, defendant contends that the account balance forms
(Standard Forms) it received from the plaintiff's predecessor during 2012-2014
served as evidence that the parties reached an agreement concerning the escrow
fund payments. According to defendant, because the forms contained "no
reference to default interest" and they accounted for all interest "as paid [on the
Notes] through September 1, 2014 (Note A) and February 1, 2014 (Note B),
respectively," plaintiff waived its right to the payments. Defendant also asserts
that plaintiff’s "continued application of payments to [the] principal through at
least February 3, 2016," and the fact that plaintiff "never provided [Judge
Mongiardo] with evidence that it had actually been assessing default interest
against [defendant] from April 1, 2012 further demonstrated a waiver of the
interest." We disagree.
Waiver "'involves the intentional relinquishment of a known right, and
thus it must be shown that the party charged with the waiver knew of his or her
A-3460-16T3 19 legal rights and deliberately intended to relinquish them.'" Spaeth v. Srinivasan,
403 N.J. Super. 508, 514 (App. Div. 2008) (quoting Shebar v. Sanyo Bus. Sys.
Corp., 111 N.J. 276, 291 (1988)). "Such a waiver must be done 'clearly,
unequivocally, and decisively.'" Cole v. Jersey City Med. Ctr., 215 N.J. 265,
277 (2013) (quoting Knorr v. Smeal, 178 N.J. 169, 177 (2003)). Where a
contract requires any waiver or modification to be in writing, we will enforce
those unambiguous terms, absent clear conduct that the parties intended to waive
the requirement for a writing. See Lewis v. Travelers Ins. Co., 51 N.J. 244, 253
(1968); Home Owners Constr. Co. v. Glen Rock, 34 N.J. 305, 316 (1961);
Headley v. Cavileer, 82 N.J.L. 635, 637-39, (E. & A. 1912). Clear and
convincing evidence is required to prove waiver of a writing requirement. Home
Owners Constr. Co., 34 N.J. at 317.
Here, defendant failed to clearly and convincingly demonstrate that
plaintiff waived its right to enforce the escrow fund payments or the loan
agreement's requirement that any waiver or modification must be in writing.
The Standard Forms confirming the existence of accounts or loan balances for
audit purposes did not explicitly state that plaintiff was waiving any of its rights,
or that plaintiff intended to modify the express provisions in the loan agreement
requiring the escrow fund payments. In fact, they stated that plaintiff was not
A-3460-16T3 20 expected to conduct a detailed search of its records before signing. By merely
sending the forms to defendant to confirm the account information and balance
of the loans and amount of the interest payments, plaintiff did not release
defendant from any of its obligations under the loan documents.
We turn next to defendant's contentions about the inclusion of default
interest to the amount Judge Mongiardo found was due under the notes. Default
interest is "accepted as a means for lenders to offset a portion of the damages
occasioned by delinquent loans." Metlife, 159 N.J. at 501. Default interest is
assessed because "the actual losses resulting from a commercial loan default are
difficult to ascertain." Mony Life Ins. Co., 364 N.J. Super. at 103 (citing
Metlife, 159 N.J. at 501-02). It is meant to compensate the lender for the
potential costs of administering a defaulted loan, the potential difference
between the contract interest rate, and other damages. Metlife, 159 N.J. at 502.
Like other "liquidated damages, . . . default interest rates, . . . are [enforceable]
subject to the test of reasonableness, that is, whether the stipulated damage
clause is reasonable under the totality of the circumstances." Mony Life Ins.
Co., 364 N.J. Super. at 103 (citing Metlife, 159 N.J. at 493-95).
Defendant argues that the imposition of the default interest amount was
"unconscionable," not because it was in the amount of five percent above the
A-3460-16T3 21 notes' stated interest rates, but due to it being applied retroactively "to the period
when the Lender became aware that a default occurred." It contends that,
because plaintiff cannot demonstrate actual damages for the period of time
before it "became aware of the alleged default[,]" plaintiff is entitled to the
increased interest rate. Defendant also contends because plaintiff did not
"exercise[] its right to . . . default interest[]" "for nearly two (2) years after
[defendant] stopped making . . . escrow payments," plaintiff's claim is barred
"under the doctrines of laches, equitable estoppel and unclean hands."
We conclude that defendant's arguments regarding default interest being
unconscionable and plaintiff not being entitled to include it in the amount owed
are without sufficient merit to warrant discussion in a written opinion. R. 2:11-
3(e)(1)(E). Suffice it to say, an event of default occurred in this matter on April
1, 2012, when defendant failed to make payments due under the loan documents,
and from that date the amount of default interest started to accrue. Considering
the amount of the loan, the default interest rate of five percent is neither punitive
nor unreasonable, and was negotiated between sophisticated commercial parties,
who were represented by counsel. Judge Mongiardo did not err in including
default interest in the final judgment amount.
A-3460-16T3 22 Finally, defendant argues for the first time on appeal that "the loan
documents are ambiguous concerning the retroactive application of default
interest." It contends that we should remand the matter so that Judge Mongiardo
can conduct a plenary hearing to determine whether the loan agreement allowed
for the retroactive application of default interest. Although plaintiff raised these
arguments in its appellate brief, we will not consider them as they were not
raised before Judge Mongiardo. We will not "'consider questions or issues not
properly presented to the trial court when an opportunity for such a presentation
is available unless the questions so raised on appeal go to the jurisdictio n of the
trial court or concern matters of great public interest.'" Zaman v. Felton, 219
N.J. 199, 226-27 (2014) (quoting State v. Robinson, 200 N.J. 1, 20 (2009)).
Neither situation exists here.
To the extent we have not specifically addressed any of defendant's
contentions, we conclude they are also without sufficient merit to warrant
discussion in a written opinion. R. 2:11-3(e)(1)(E)
Affirmed.
A-3460-16T3 23