NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-4005-16T4
WELLS FARGO BANK, N.A.,
Plaintiff-Respondent,
v.
JAMES L. CHAMBERS, JR. and MARITZA A. CHAMBERS, his wife, each of their heirs, devisees and personal representatives, and his, her, their or any of their successors in right, title and interest,
Defendants-Appellants,
and
CACH OF NJ LLC and MIDDLESEX COUNTY BOARD OF SOCIAL SERVICES,
Defendants. _________________________________
Argued October 1, 2018 – Decided November 20, 2018
Before Judges Haas and Mitterhoff. On appeal from Superior Court of New Jersey, Chancery Division, Burlington County, Docket No. F- 032670-14.
James L. Chambers, Jr., appellant, argued the cause pro se.
David G. Murphy argued the cause for respondent (Reed Smith LLP, attorneys; Henry F. Reichner, of counsel and on the brief).
PER CURIAM
Defendants James L. Chambers, Jr. and Maritza A. Chambers appeal from
the trial court's denial of their motion to vacate final judgment. We affirm,
substantially for the sound reasons expressed in Judge Paula T. Dow's March
31, 2017 written opinion. We add only the following comments.
On November 12, 2007, defendants executed a note to Wells Fargo Bank,
N.A. ("Wells Fargo") for $417,000. To secure payment of the note, defendants
granted Wells Fargo a purchase-money mortgage on the property located in
Florence, New Jersey. In connection with the mortgage, defendants executed
Truth in Lending Disclosure Statements. Wells Fargo retained physical
possession of the note.
On January 10, 2014, defendants and Wells Fargo executed a Home
Affordable Modification Agreement (hereafter referred to as "HAMA" or
A-4005-16T4 2 "HAMP modification"), which decreased defendants' monthly payments and
increased the number of years defendants had to pay the loan.
On February 1, 2014, defendants defaulted on the mortgage and never
cured the default. Wells Fargo instituted this action on August 7, 2014.
On January 23, 2015, defendants sent a "Notice of
Rescission/Cancellation" to Wells Fargo. On May 29, 2015, after hearing oral
argument, the Honorable Karen L. Suter, P.J.Ch. granted summary judgment in
favor of Wells Fargo.
On September 18, 2015, defendants filed a complaint in the District Court
of New Jersey against Wells Fargo. Defendants alleged that Wells Fargo
violated the Truth in Lending Act ("TILA"), and requested that the District Court
enforce their attempted January 23, 2015 rescission. On June 28, 2016, the
Honorable Jerome B. Simandle issued an opinion in which he dismissed
defendants' complaint for failure to state a claim under Federal Rule of Civil
Procedure 12(b)(6). He ruled that defendants' TILA claims were barred by the
statute of limitations, that defendants could not rescind their mortgage because
it was purchase-money mortgage, and that the HAMP modification executed by
defendants and Wells Fargo did not amount to a refinancing of the mortgage.
The Court of Appeals for the Third Circuit affirmed the District Court rulings in
A-4005-16T4 3 Chambers v. Wells Fargo Bank, N.A., 726 Fed. Appx. 886 (3d Cir. 2018) on
March 9, 2018.
On appeal, defendants first challenge the trial court's denial of their
rescission claim under TILA, 15 U.S.C. § 1635. Appellate courts do not afford
"any special deference" to a "trial court's interpretation of the law and the legal
consequences that flow from established facts[.]" Manalapan Realty, LP v.
Twp. Comm. of Twp. of Manalapan, 140 N.J. 366, 378 (1995) (citing State v.
Brown, 118 N.J. 595, 604 (1990)).
Initially, we note that defendants' TILA rescission claims are barred by
collateral estoppel based on their parallel case brought in the District Court of
New Jersey. "Collateral estoppel is that branch of the broader law of res judicata
which bars relitigation of any issue which was actually determined in a prior
action, generally between the same parties, involving a different claim or cause
of action." State v. Gonzalez, 75 N.J. 181, 186-87 (1977) (citations omitted). It
applies to questions of law if "the claims arise from the same transaction, or 'if
injustice would result.'" Id. at 187 (citing Washington Twp. v. Gould, 39 N.J.
527 (1963)). For collateral estoppel to apply,
the party asserting the bar must show that: (1) the issue to be precluded is identical to the issue decided in the prior proceeding; (2) the issue was actually litigated in the
A-4005-16T4 4 prior proceeding; (3) the court in the prior proceeding issued a final judgment on the merits; (4) the determination of the issue was essential to the prior judgment; and (5) the party against whom the doctrine is asserted was a party to or in privity with a party to the earlier proceeding."
[Sacharow v. Sacharow, 177 N.J. 62, 76 (2003) (quoting In re Estate of Dawson, 136 N.J. 1, 20-21 (1994)).]
Here, the parties in the District Court case are the same as the current
parties. The issue of defendants' rescission rights under Section 1635 of TILA
was actually litigated in the District Court. On June 28, 2016, the District Court
of New Jersey held that defendants' rescission claim failed. While defendants'
appeal of Judge Innes's grant of final judgment was pending, the Third Circuit
Court of Appeals affirmed the District Court's rulings. Thus, all of defendants'
arguments stemming from their attempted TILA rescission have already been
fully litigated both in the District Court of New Jersey and in the Superior Court;
and defendants' rescission claim is barred by collateral estoppel. See Sacharow,
177 N.J. at 76 (quoting In re Estate of Dawson, 136 N.J. 1, 20-21 (1994)).
Even if defendants' claims were not barred by collateral estoppel, they
would still be substantively meritless. TILA specifically exempts "residential
A-4005-16T4 5 mortgage transactions as defined in section 1602(w) of this title" 1 from
rescission rights. Id. § 1635(e). The Act defines "residential mortgage
transactions" as "a transaction in which a mortgage . . . is created or retained
against the consumer's dwelling to finance the acquisition or initial construction
of such dwelling." Id. § 1602(x). Here, the competent evidence in the record
confirms that the mortgage was a purchase-money mortgage. Thus, defendants'
mortgage was not eligible for rescission under 15 U.S.C. § 1635.
Additionally, TILA implements a three-year statute of limitations for
rescission. Id. § 1635(f). See also Jesinoski v. Countrywide Home Loans, Inc.,
574 U.S. ___, 135 S. Ct. 790, 792 (2015) (affirming that the right a borrower
has to rescission expires three years after the closing of the loan, in accordance
with § 1635(f)); Beach v. Ocwen Fed.
Free access — add to your briefcase to read the full text and ask questions with AI
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-4005-16T4
WELLS FARGO BANK, N.A.,
Plaintiff-Respondent,
v.
JAMES L. CHAMBERS, JR. and MARITZA A. CHAMBERS, his wife, each of their heirs, devisees and personal representatives, and his, her, their or any of their successors in right, title and interest,
Defendants-Appellants,
and
CACH OF NJ LLC and MIDDLESEX COUNTY BOARD OF SOCIAL SERVICES,
Defendants. _________________________________
Argued October 1, 2018 – Decided November 20, 2018
Before Judges Haas and Mitterhoff. On appeal from Superior Court of New Jersey, Chancery Division, Burlington County, Docket No. F- 032670-14.
James L. Chambers, Jr., appellant, argued the cause pro se.
David G. Murphy argued the cause for respondent (Reed Smith LLP, attorneys; Henry F. Reichner, of counsel and on the brief).
PER CURIAM
Defendants James L. Chambers, Jr. and Maritza A. Chambers appeal from
the trial court's denial of their motion to vacate final judgment. We affirm,
substantially for the sound reasons expressed in Judge Paula T. Dow's March
31, 2017 written opinion. We add only the following comments.
On November 12, 2007, defendants executed a note to Wells Fargo Bank,
N.A. ("Wells Fargo") for $417,000. To secure payment of the note, defendants
granted Wells Fargo a purchase-money mortgage on the property located in
Florence, New Jersey. In connection with the mortgage, defendants executed
Truth in Lending Disclosure Statements. Wells Fargo retained physical
possession of the note.
On January 10, 2014, defendants and Wells Fargo executed a Home
Affordable Modification Agreement (hereafter referred to as "HAMA" or
A-4005-16T4 2 "HAMP modification"), which decreased defendants' monthly payments and
increased the number of years defendants had to pay the loan.
On February 1, 2014, defendants defaulted on the mortgage and never
cured the default. Wells Fargo instituted this action on August 7, 2014.
On January 23, 2015, defendants sent a "Notice of
Rescission/Cancellation" to Wells Fargo. On May 29, 2015, after hearing oral
argument, the Honorable Karen L. Suter, P.J.Ch. granted summary judgment in
favor of Wells Fargo.
On September 18, 2015, defendants filed a complaint in the District Court
of New Jersey against Wells Fargo. Defendants alleged that Wells Fargo
violated the Truth in Lending Act ("TILA"), and requested that the District Court
enforce their attempted January 23, 2015 rescission. On June 28, 2016, the
Honorable Jerome B. Simandle issued an opinion in which he dismissed
defendants' complaint for failure to state a claim under Federal Rule of Civil
Procedure 12(b)(6). He ruled that defendants' TILA claims were barred by the
statute of limitations, that defendants could not rescind their mortgage because
it was purchase-money mortgage, and that the HAMP modification executed by
defendants and Wells Fargo did not amount to a refinancing of the mortgage.
The Court of Appeals for the Third Circuit affirmed the District Court rulings in
A-4005-16T4 3 Chambers v. Wells Fargo Bank, N.A., 726 Fed. Appx. 886 (3d Cir. 2018) on
March 9, 2018.
On appeal, defendants first challenge the trial court's denial of their
rescission claim under TILA, 15 U.S.C. § 1635. Appellate courts do not afford
"any special deference" to a "trial court's interpretation of the law and the legal
consequences that flow from established facts[.]" Manalapan Realty, LP v.
Twp. Comm. of Twp. of Manalapan, 140 N.J. 366, 378 (1995) (citing State v.
Brown, 118 N.J. 595, 604 (1990)).
Initially, we note that defendants' TILA rescission claims are barred by
collateral estoppel based on their parallel case brought in the District Court of
New Jersey. "Collateral estoppel is that branch of the broader law of res judicata
which bars relitigation of any issue which was actually determined in a prior
action, generally between the same parties, involving a different claim or cause
of action." State v. Gonzalez, 75 N.J. 181, 186-87 (1977) (citations omitted). It
applies to questions of law if "the claims arise from the same transaction, or 'if
injustice would result.'" Id. at 187 (citing Washington Twp. v. Gould, 39 N.J.
527 (1963)). For collateral estoppel to apply,
the party asserting the bar must show that: (1) the issue to be precluded is identical to the issue decided in the prior proceeding; (2) the issue was actually litigated in the
A-4005-16T4 4 prior proceeding; (3) the court in the prior proceeding issued a final judgment on the merits; (4) the determination of the issue was essential to the prior judgment; and (5) the party against whom the doctrine is asserted was a party to or in privity with a party to the earlier proceeding."
[Sacharow v. Sacharow, 177 N.J. 62, 76 (2003) (quoting In re Estate of Dawson, 136 N.J. 1, 20-21 (1994)).]
Here, the parties in the District Court case are the same as the current
parties. The issue of defendants' rescission rights under Section 1635 of TILA
was actually litigated in the District Court. On June 28, 2016, the District Court
of New Jersey held that defendants' rescission claim failed. While defendants'
appeal of Judge Innes's grant of final judgment was pending, the Third Circuit
Court of Appeals affirmed the District Court's rulings. Thus, all of defendants'
arguments stemming from their attempted TILA rescission have already been
fully litigated both in the District Court of New Jersey and in the Superior Court;
and defendants' rescission claim is barred by collateral estoppel. See Sacharow,
177 N.J. at 76 (quoting In re Estate of Dawson, 136 N.J. 1, 20-21 (1994)).
Even if defendants' claims were not barred by collateral estoppel, they
would still be substantively meritless. TILA specifically exempts "residential
A-4005-16T4 5 mortgage transactions as defined in section 1602(w) of this title" 1 from
rescission rights. Id. § 1635(e). The Act defines "residential mortgage
transactions" as "a transaction in which a mortgage . . . is created or retained
against the consumer's dwelling to finance the acquisition or initial construction
of such dwelling." Id. § 1602(x). Here, the competent evidence in the record
confirms that the mortgage was a purchase-money mortgage. Thus, defendants'
mortgage was not eligible for rescission under 15 U.S.C. § 1635.
Additionally, TILA implements a three-year statute of limitations for
rescission. Id. § 1635(f). See also Jesinoski v. Countrywide Home Loans, Inc.,
574 U.S. ___, 135 S. Ct. 790, 792 (2015) (affirming that the right a borrower
has to rescission expires three years after the closing of the loan, in accordance
with § 1635(f)); Beach v. Ocwen Fed. Bank, 523 U.S. 410, 419 (1998). Here,
the original mortgage closed on November 12, 2007. Defendants sent their
notice of rescission on January 23, 2015. Thus, the rescission is barred by
TILA's three-year statute of limitations. 15 U.S.C. § 1635(f).
TILA disclosures are required to be provided before credit is extended.
15 U.S.C. § 1638(b)(1); 12 C.F.R. § 1026.17(b); Bartholomew v. Northampton
Nat'l Bank of Easton, 584 F.2d 1288, 1296 (3d Cir. 1978). After credit is
1 The definition is listed at § 1602(x), rather than § 1602(w). A-4005-16T4 6 initially extended, disclosures need to be provided again if the credit is
refinanced. 12 C.F.R. § 1026.20(a). "A refinancing occurs when an existing
obligation that was subject to this subpart is satisfied and replaced by a new
obligation undertaken by the same consumer." Id.
The HAMP modification was executed in January 2014. The modification
specifically stated that the original note and mortgage remained in effect, and
that the original note and mortgage were not satisfied or released. Thus, the
HAMP modification does not constitute a refinancing of the original mortgage.
15 U.S.C. § 1638(b)(1).
Defendants also challenge the trial court's grant of summary judgment in
favor of Wells Fargo. The standard of review for a grant of summary judgment
is de novo. Conley v. Guerrero, 228 N.J. 339, 346 (2017) (citing Templo Fuente
De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199
(2016)). Thus, "summary judgment will be granted if there is no genuine issue
of material fact and 'the moving party is entitled to a judgment or order as a
matter of law.'" Ibid. (citing Templo Fuente, 224 N.J. at 199). The standard
requires that summary judgment be denied unless the opposing party comes
forward with evidence that creates a genuine issue of material fact. Brill v.
Guardian Life Ins. Co. of Am., 142 N.J. 520, 529 (1995). However, "conclusory
A-4005-16T4 7 and self-serving assertions by one of the parties are insufficient to overcome [a
summary judgment] motion." Puder v. Buechel, 183 N.J. 428, 440-41 (2005)
(citing Martin v. Rutgers Cas. Ins. Co., 346 N.J. Super. 320, 323 (App. Div.
2002)).
"[T]he only issues in a foreclosure action are the validity of the mortgage,
the amount of the indebtedness, and the right of the. . . mortgagee to re sort to
the mortgaged premises." U.S. Bank Nat'l Ass'n v. Curcio, 444 N.J. Super. 94,
112-13 (App. Div. 2016) (quoting Sun NFL Ltd. P'ship v. Sasso, 313 N.J. Super.
546, 550 (App. Div. 1998)). Wells Fargo established the validity of the
mortgage by providing a copy of the original note, a copy of the original
mortgage, and the certification of Andrea Kruse, which certified that Wells
Fargo was in possession of the original note at the time the complaint was filed.
The original note established that in the event defendants defaulted on their
mortgage payments, Wells Fargo would have the right to foreclose on the
property. Defendants defaulted on their mortgage payments in February 2014
and did not cure the default. Thus, Wells Fargo established a prima facie
foreclosure case. See Curcio, 444 N.J. Super. at 112-13.
For these reasons, we affirm the trial court's grant of summary judgment.
A-4005-16T4 8 Defendants' remaining arguments have insufficient merit to warrant
discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
A-4005-16T4 9