On appeal from the Superior Court of New Jersey, Law Division, Passaic County.
Michels, Baime and Wallace. The opinion of the court was delivered by Michels, P.J.A.D.
We granted defendant Valley National Bank (Valley Nationa) leave to appeal from a summary judgment of the Law Division that declared it liable to plaintiff Anastasia P. Slowinski for damages she sustained as a result of the wrongful repossession of her property and from an order dismissing its counterclaims. Plaintiff cross appeals from an order that denied her motion for summary judgment against Valley National grounded on claims of conversion and unconscionable commercial practices.
A brief review of the procedural history and factual background is necessary for an understanding of the issues raised on this appeal. On October 27, 1990, plaintiff went to Headquarters Buick/Nissan (Headquarters) in response to a mailed advertisement to negotiate the purchase of a new car. She decided on a 1990 Nissan Sentra and put down a $300 deposit. Apparently, plaintiff was not obligated to go through with the deal at that time. Plaintiff returned to Headquarters on November 17, 1990 with the intent of either retrieving her deposit or striking a deal for the car if she was satisfied with the offer. She initially spoke with salesman defendant Jeffrey Weinert (Weinert), but was then referred to a salesman named Richard. Plaintiff discussed the
price of the car with Richard and then agreed to fill out a purchase order. Because it was late in the day, however, Richard went home and Weinert filled out the purchase order.
Plaintiff admits signing the purchase order, which provided that the total cost of the car was $11,789 and that plaintiff would have to finance $7,011.83, after factoring in the value of her trade-in and her down payment. Plaintiff claims she intended and agreed to finance only $7,001.83 plus $595.00 for the installation of a car alarm. Plaintiff claims that she was told by defendant Carl Olivera (Olivera), who handled the financing, that a financing agreement was not necessary until he contacted the bank to negotiate terms. Thus, plaintiff claims that no financing agreement was signed that evening, although she did fill out credit applications. Plaintiff admits, however, that she took possession of the car that evening. She claims that Weinert told her she had to take the car that night because Richard wanted to get the cars off the lot.
Plaintiff claims that she called Olivera twice afterwards to ascertain the status of the financing arrangements. Plaintiff further claims that the first indication to her that the loan terms had been finalized was when she received a loan payment book from Valley National in the mail on December 15, 1990. She noted that the loan amount was in excess of what she had agreed to finance the evening of November 17, 1990. On December 18, 1990, she returned to Headquarters and requested to see the loan documents. She was given a First Atlantic Automobile Club membership application, a Vehicle Service Contract, and a Retail Installment Sales Agreement. All three documents bore the purported signature of plaintiff and were dated November 17, 1990. Plaintiff claims that she did not knowingly sign any of these documents and that she did not agree to finance $9,683.06 at an interest rate of 18% as indicated on the allegedly forged contract.
On February 8, 1991 plaintiff instituted this action against Headquarters, Olivera and Weinert, alleging violations of the Federal Truth in Lending Act, unconscionable commercial practices,
various allegations of fraud and misrepresentation, negligent hiring and supervision and intentional infliction of emotional distress. Headquarters went bankrupt and plaintiff continued against Olivera and Weinert, claiming generally that they forged her name on car loan applications, causing her to be obligated to Valley National on a loan greater in amount than she intended or agreed.
By this time, Valley National had already documented plaintiff as delinquent on the loan and sent her account for collection. On January 22, 1991 and February 25, 1991, plaintiff's attorney contacted Valley National, requesting that all action with respect to the account be suspended until the fraud allegations were settled. Valley National evidently refused and, by letter dated June 15, 1991, plaintiff's attorney informed Valley National that absent any offers to settle, plaintiff would seek a judgment against it. In August 1991, plaintiff was granted leave to amend her complaint to include Valley National as a defendant.
On August 23, 1991, a default judgment was entered against Olivera and a proof hearing for damages was scheduled for October 22, 1991. In the meantime, on September 5, 1991, plaintiff filed an amended complaint, adding Valley National as a defendant. Plaintiff sought declaratory relief stating that she was not liable on the fraudulent loan. The summons was not served on Valley National, however, until October 28, 1991, after the proof hearing.*fn1
The proof hearing was held on October 22, 1991. Neither Olivera nor Valley National appeared. Plaintiff testified that she did not sign the documents in question. In addition, Donna Scalia, a handwriting expert hired by plaintiff, testified that the signatures on the First Atlantic Automobile Club Service Form and the
Vehicle Service Contract were forged. Ms. Scalia further testified that the signatures on the Purchase Order/Credit Application and the Retail Sales Agreement may not be authentic. At the Conclusion of the proofs, the trial court found Olivera liable under the Federal Truth in Lending Act and awarded plaintiff damages in the total sum of $17,331.79. However, the trial court specifically noted that the decision had no bearing on the liability of Valley National.
On December 9, 1991, Valley National answered plaintiff's amended complaint, denying liability generally and asserting, among other affirmative defenses, that plaintiff's complaint failed to state a cause of action upon which relief may be granted. Thereafter, plaintiff and Valley National engaged in settlement negotiations. By letter dated February 10, 1992, plaintiff offered $6,500 to settle the outstanding loan balance. On February 26, 1992, Valley National rejected this offer and stated that an additional $2,000 would be needed to settle the matter. On May 1, 1992, plaintiff authorized her attorney to make a final offer of settlement for $7,500. Before this offer could be communicated to Valley National, plaintiff discovered on May 5, 1992 that her car had been repossessed. She delivered the keys to Valley National and requested the return of her personal possessions. Valley National did not return plaintiff's personal items, claiming that plaintiff can travel to Fair Lawn, New Jersey to obtain them. Plaintiff apparently was unwilling to take time off from work to do that.
Plaintiff then filed a supplemental complaint against Valley National, alleging wrongful repossession, conversion, trespass, unconscionable commercial practices and breach of the duties of good faith and fair dealing. Valley National denied the allegations and counterclaimed for the payment of the balance due on the loan plus interest, costs, and fees. Plaintiff moved for partial summary judgment on the claims of wrongful repossession, conversion and unconscionable commercial practices in violation of the Consumer Fraud Act and for dismissal of Valley National's counterclaims. Valley National moved for dismissal of plaintiff's claims and for
summary judgment on its counterclaims, or, alternatively, for permission to amend its answer, which had inadvertently omitted denials of the forgery allegations in the original complaint. Following argument, the trial court granted summary judgment as to liability for wrongful repossession in favor of plaintiff, dismissed Valley National's counterclaims with prejudice, and dismissed plaintiff's claims based on conversion and unconscionable commercial practices with prejudice. This appeal and cross-appeal followed.
Valley National first contends that the trial court erred in ruling that it was barred by the doctrine of "law of the case" from litigating the issues of fraud and forgery. The trial court refused to allow Valley National to litigate the issue of whether plaintiff's signature had been forged on the loan documents because judgment had been entered in plaintiff's favor on this issue in her suit against Headquarters. The trial court held that although Valley National was excluded from the prior ruling, there was enough evidence to support the finding of forgery made at the proof hearing. Furthermore, the trial court did not find any of the evidence presented by Valley National to prove the authenticity of the signature to be persuasive.
The application of the "law of the case" doctrine in New Jersey was thoroughly explained in State v. Hale, 127 N.J. Super. 407, 410-11, 317 A.2d 731 (App.Div.1974). There we stated:
It has been generally stated that the "law of the case" doctrine "applies to the principle that where there is an unreversed decision of a question of law or fact made during the course of litigation, such decision settles that question for all subsequent stages of the suit." Wilson v. Ohio River Company, 236 F. Supp. 96, 98 (S.D.W.Va.1964), aff'd 375 F. 2d 775 (4 Cir.1967). This rule is based upon the sound policy that when an issue is once litigated and decided during the course of a particular case, that decision should be the end of the matter. United States v. U.S. Smelting Refin. & M. Co., 339 U.S. 186, 198, 70 S. Ct. 537 0 , 94 L. Ed. 750 (1950). "Law of the case" most commonly applies to the binding nature of appellate decisions upon a trial court if the matter is remanded for further proceedings, or upon a different appellate panel which may be asked to reconsider the same issue in a subsequent appeal. 5 Am.Jur. 2d, Appeal and Error, § 744 at
188-189 (1962); Scamahorne v. Commonwealth, 376 S.W. 2d 686 (Ky.Ct.App.1964). A final judgment is required in order to sustain an application of the rule, just as it is for the kindred rule of res judicata. United States v. U.S. ...