ETRADE BANK VS. FARLEY BOYLE(F-4325-14, MONMOUTH COUNTY AND STATEWIDE) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE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-3732-15T4
E* TRADE BANK,
Plaintiff-Respondent,
v.
FARLEY BOYLE, MR. BOYLE,
husband of Farley Boyle,
PATRICK BOYLE, MRS. PATRICK
BOYLE, his wife, and WELLS
FARGO BANK, N.A.,
Defendants-Appellants.
___________________________________
Submitted August 1, 2017 – Decided August 8, 2017
Before Judges Sabatino and O'Connor.
On appeal from Superior Court of New Jersey,
Chancery Division, General Equity, Monmouth
County, Docket No. F-4325-14.
Fox & Melofchik, L.L.C., attorneys for
appellants (Gary E. Fox, on the briefs).
Phelan Hallinan Diamond & Jones, P.C.,
attorneys for respondent (Brian J. Yoder, on
the brief).
PER CURIAM
The narrow focus of this residential foreclosure appeal is
whether the final judgment of foreclosure reflects duplicative or
excessive charges that should be subtracted from the defendant
homeowners' monetary obligation to the plaintiff bank. For the
reasons that follow, we vacate the trial court's April 1, 2016
order rejecting defendants' overcharge claims on the papers and
the ensuing April 27, 2016 final judgment, and remand for a plenary
hearing concerning the alleged overcharges.
Much of the factual and procedural background is undisputed.
On February 25, 2005, defendants Farley and Patrick Boyle executed
a promissory note in the amount of $1,241,000 payable to GreenPoint
Mortgage Funding, Inc. ("GreenPoint") for funds they borrowed to
purchase a residence in Little Silver. On that date, the Boyles
executed a mortgage in that same amount to GreenPoint's nominee.
The mortgage was duly recorded. Almost eight years later, in
January 2013, GreenPoint's nominee assigned the Boyles' mortgage
to plaintiff, E* Trade Bank, and that assignment was likewise duly
recorded.1
As admitted by the Boyles, they defaulted on the Note in or
about December 2012. The default prompted plaintiff to file this
foreclosure action in the Chancery Division in February 2014. The
1
The Boyles also entered into a second mortgage on the property
in June 2006 with co-defendant Wells Fargo Bank, N.A., which is
not pertinent to the present appeal.
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Boyles do not dispute plaintiff's standing as an assignee to bring
this action.
In their answer to the foreclosure complaint, the Boyles
asserted that they had been improperly double-charged by plaintiff
and its servicer for certain insurance costs. Thereafter, counsel
for the parties entered into a Consent Order in December 2014
agreeing to have the matter returned to the Office of Foreclosure.
The parties also agreed to attempt to mediate the dispute and
achieve a possible loan modification through the court's
foreclosure mediation program. The mediation occurred, but failed
to produce a settlement.
Plaintiff then moved for the entry of final judgment in the
sum of $1,619,775.62, plus costs and attorney's fees. Plaintiff's
notice of motion specifically advised that the borrowers could
object in writing to the "calculation of the amount due[.]" The
notice further advised that if such a specific objection to the
amount due were advanced by the borrowers, the dispute would be
referred to a judge in the county of venue.
Through their counsel, the Boyles filed a written objection
to the calculation of the final judgment. They did so in the form
of a letter, a certification from Mrs. Boyle, and supporting
documents. Specifically, the Boyles objected to (1) allegedly
duplicative flood insurance charges of $7,567.50, respectively
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dated December 16, 2011 and December 29, 2011, and (2) homeowner's
insurance charges of $10,699.89. As stated in Mrs. Boyle's
certification, the Boyles directly maintained and paid homeowner's
insurance for the residence every year, and thus it was unnecessary
for plaintiff to incur and seek reimbursement for that premium
cost. Mrs. Boyle also provided a copy of the flood insurer's
endorsement for the policy period of October 24, 2014 to October
24, 2015, reflecting that the annual flood premium was only $7,500,
and not the sum used by plaintiff for over that amount. Plaintiff
contested these assertions, maintaining that the insurance
expenses that had been charged were proper and not duplicative.
The overcharge dispute was referred by the Office of
Foreclosure to the vicinage's Chancery Division. The Boyles'
counsel supplied the court with his client's prior submissions,
along with his own certification and brief in support of the
motion. Counsel requested oral argument on the motion, and sent
a letter to the court on March 16, 2016, confirming his
understanding that the court would hear oral argument on April 1,
2016. Meanwhile, two days before that return date, plaintiff
served a package of additional responding documents upon the
Boyles' counsel. The following day, March 31, the court advised
counsel that it would not allow oral argument on the pending motion
and would instead decide the matter on the papers.
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On April 1, 2016, the trial court issued an oral opinion,
granting plaintiff the full amount it had sought in the final
judgment and rejecting the Boyles' contention that they had been
overcharged. Among other things, the court characterized the
Boyles' objection as "speculative" and insufficiently "specific."
With respect to the flood insurance charges, the court found
that plaintiff's "business records show that the charge[s] [were]
not duplicative, but [that] plaintiff was forced to make certain
payments." The court further noted that the mortgage provided
that, if the borrowers failed to maintain required insurance
coverages, the lender had the right to obtain such coverage at its
own option and at the borrowers' expense. The court deemed Mrs.
Boyle's certification inadequate because, although it states that
the borrowers maintained homeowners' insurance, the borrowers did
not furnish the court with "any proofs that show that they did."
On appeal, the Boyles argue that the trial court procedurally
erred in denying their counsel's request for oral argument and,
moreover, in not conducting a plenary hearing at which testimony
could have shed light on the disputed pretrial issues. Plaintiff
responds that there were no genuine issues of disputed fact to
justify either oral argument on the motion or a plenary hearing.
In addition, plaintiff interposes a legal argument not relied upon
by the trial court, arguing that the Boyles waived any right to
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contest the final calculation of the judgment by entering into the
December 2014 Consent Order.
Having considered these arguments, we conclude that the
fairest and most appropriate course of action is to remand this
matter to the trial court for further proceedings concerning the
alleged overcharges.
In general, trial courts are to honor litigants' requests for
oral argument on substantive civil motions that do not concern
pretrial discovery or calendaring issues. See R. 1:6-2(c). Where,
as here, a timely request has been made for oral argument on a
civil motion not related to discovery or calendaring, Rule 1:6-
2(d) prescribes that such a "request shall be granted as of right."
See also Great Atl. & Pac. Tea v. Checchio, 335 N.J. Super. 495,
497-98 (App. Div. 2000). This is not an exceptional instance in
which the entitlement to oral argument under Rule 1:6-2(d) was
appropriately relaxed because argument would have been manifestly
unproductive. Cf. Polanski v. Polanski, 414 N.J. Super. 274, 285-
86 (App. Div. 2010). Moreover, the trial court's decision does
not address why the Boyles' request for oral argument was denied.
The thrust of the Boyles' opposition to the bank's
calculations centered upon factual issues and disputes that could
have benefited from a plenary hearing. In general, a plenary
hearing in such contexts is preferable to the court resolving the
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issues based solely upon competing written submissions. Bruno v.
Gale, Wentworth & Dillon Realty, 371 N.J. Super. 69, 76-77 (App.
Div. 2004) (remanding a dispute for a plenary hearing "[t]o insure
a proper accommodation to fairness" and "to resolve the conflicting
factual contentions").
Although we appreciate the trial court's legitimate interest
in disposing of pending motions efficiently, in this particular
instance the better course would have been to permit counsel to
present oral advocacy and plenary testimony before conclusively
rejecting the Boyles' overcharge claims. We do agree with the
trial court that the Boyles' objections would have been more
persuasive had they attached additional documentation, such as
invoices or bank statements substantiating Mrs. Boyle's certified
assertion that they, in fact, had paid their homeowners' policy
premiums directly. But, as the Supreme Court has instructed, one
should be cautious in hypothesizing that witnesses who attest to
facts under penalty of perjury are lying or mistaken. See, e.g.,
Townsend v. Pierre, 221 N.J. 36, 58-59 (2015).
We recognize that plaintiff has supplied plausible evidence,
which defendants dispute, to substantiate its explanation that the
two December 2011 flood insurance premiums it paid were for two
successive policy periods and thus not duplicative. Nevertheless,
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these matters could have been explored in a relatively short
hearing that would have dispelled any lingering uncertainties.
Although we need not reach the question because plaintiff's
waiver argument was not adjudicated below, we reject its overly-
broad construction of the December 2014 Consent Order. To be
sure, the Consent Order does recite that defendants waived "all
claims and defenses" against plaintiff. Nevertheless, we decline
to construe that language as depriving the borrowers an opportunity
to interpose an objection to the total amount of the final
judgment, which had not yet been calculated pending further
processing by the Office of Foreclosure. The notice sent to the
Boyles expressly advised them of their right to file a specific
objection to the calculation of the final amount due. We will not
consider that written direction to be meaningless. The Boyles
appropriately exercised the rights afforded to them under the
notice, and the trial court accordingly was authorized to consider
their objection on its merits (as it did, albeit without a hearing)
notwithstanding the prior Consent Order.
For these reasons, the trial court's rulings are vacated and
the matter is remanded for oral argument and a plenary hearing.
In doing so, we express no views about the ultimate merits of the
Boyles' overcharge claims.
Vacated and remanded. We do not retain jurisdiction.
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