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Magloire v. Bayview Loan Servicing


July 31, 2007


On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-2588-05.

Per curiam.


Argued March 13, 2007

Before Judges R. B. Coleman and Gilroy.

Plaintiff, Jacques Magloire, appeals from a March 1, 2005, order of the Law Division granting summary judgment in favor of defendant, Bayview Loan Servicing. For the reasons that follow, we affirm.

Plaintiff was the owner of a multi-dwelling building at Harrison Avenue in Roselle. Plaintiff executed a mortgage on the property on July 31, 1997, with Parmann Mortgage Associates, LLC, for $490,000. The terms of the mortgage required that plaintiff obtain and maintain fire and casualty insurance insuring the interest of the mortgagee for the term of the mortgage. Initially, plaintiff secured the requisite insurance coverage, but ultimately failed to make payments, allowing the policy to lapse.

Consequently, on November 10, 2003, defendant's predecessor in interest, Interbay Funding, LLC, notified plaintiff in writing that, unless a satisfactory casualty or hazard insurance was put into force by plaintiff within thirty days, defendant would obtain and/or renew a sufficient policy directly. The same letter also advised plaintiff that he would not be an insured under the coverage contemplated by defendant. At the conclusion of the thirty days, on December 11, 2003, Interbay notified plaintiff in writing that it had secured an insurance policy with Balboa Life and Casualty, that plaintiff was not an insured and that plaintiff would not be entitled to receive any proceeds from the insurance coverage in the event of a loss or damage to the property. Defendant made payments on the policy directly to Balboa and debited these costs to plaintiff's loan account.

On February 18, 2004, a fire occurred at the premises which damaged a portion of the structure. Balboa paid the insurance proceeds directly to defendant which, in turn, disbursed certain sums to plaintiff. These disbursements began after commencement of repairs on the property and were made in installments as repairs on the premises progressed.

In October 2004, plaintiff intended to sell the property, however, he realized that the sale proceeds would be insufficient to secure a release of the mortgage lien. Therefore, after negotiations, defendant issued to plaintiff a discount payoff letter dated October 28, 2004. Therein, defendant agreed to accept the sum of $625,500 for release in lieu of the $652,000 actually owed by plaintiff. Defendant's agreement to accept the discounted amount was expressly made subject to plaintiff's agreement, acceptance and compliance with the terms and conditions of the discount payoff letter.

The discount payoff letter contained a comprehensive release in favor of defendant. This release states in relevant part as follows:

As consideration for this discount payoff offer and as a condition to Borrower's acceptance of this discount payoff offer, Borrower, . . . knowingly and voluntarily releases, discharges, and covenants not to sue Bayview Loan Servicing, LLC . . . from [sic] any and call [sic] claims, demands, liabilities, . . . counterclaims, actions, and causes of action of whatsoever kind or nature, whether known or unknown, whether legal or equitable, which he or she has, or may assert in the future against Bayview Loan Servicing, LLC . . . directly or indirectly, or in any manner connected with any event, circumstance, action or failure to act, of any sort or type, whether known or unknown, whether legal or equitable, which was related or connected in any manner, directly or indirectly, to the Property or Loan. Borrower further acknowledges and agrees that, to the extent any such claims exist, the value to the Borrower of the discount payoff offer by Bayview Loan Servicing, LLC contained in this letter substantially and materially exceeds any and all value of any kind or nature whatsoever of any such claims.

Plaintiff agreed to these terms and executed the document. Although the mortgage was discharged of record in November 2004, pursuant to the agreed terms of the discount payoff letter, defendant maintained the right to pursue plaintiff for the entire contractual amount due.

In November 2004 and April 2005, after satisfaction of the mortgage, Balboa released additional funds totaling $19,425.47 to the defendant. Plaintiff, through counsel, wrote to Balboa and asserted that the mortgage had been satisfied and that any future proceeds should be paid directly to him. Balboa, in a letter dated April 6, 2005, declined to remit proceeds to plaintiff because the policy was lender-based and plaintiff was not an "insured" under the policy.

Plaintiff filed a complaint, dated July 20, 2005, in the Law Division of the Superior Court of New Jersey, Union County, against defendant in an effort to obtain the monies Balboa released to defendant. On March 1, 2006, the court entered orders denying plaintiff's motion for summary judgment and granting defendant's cross-motion for summary judgment.

On appeal, plaintiff argues that summary judgment was improvidently granted in favor of defendant on several contractual and equitable grounds: (1) unjust enrichment; (2) an implied-in-fact contract between plaintiff and defendant to turn over the insurance proceeds; (3) an express contract between plaintiff and defendant to turn over the insurance proceeds; and (4) quasi-contract.

A motion for summary judgment should be granted if "the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issues as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2. The evidence is to be considered in the light most favorable to the non-moving party, which, here, is plaintiff. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). On appeal, we apply those same standards. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div. 1998).

In granting defendant's cross-motion for summary judgment, the judge found that the general release in the discounted payoff letter, signed by plaintiff, precluded any litigation by plaintiff against defendant. We agree.

"The scope of a release is determined by the intention of the parties as expressed in the terms of the particular instrument, considered in the light of all the facts and circumstances." Bilotti v. Accurate Forming Corp., 39 N.J. 184, 203 (1963). The terms of the release are clear and unambiguous. The release, reproduced in pertinent part above, releases defendant of any liability from any and all claims that plaintiff might have had. Additionally, plaintiff received valuable consideration in the form of a discount on discharge of his mortgage payoff of roughly $27,000.

Moreover, "[a] general release, not restricted by its terms to particular claims or demands, ordinarily covers all claims and demands due at the time of its execution and within the contemplation of the parties." Id. at 204. This includes the alleged right to the insurance proceeds following satisfaction of the mortgage. Despite plaintiff's knowledge of outstanding proceeds from the amount of the insurance settlement, plaintiff failed to carve out any exception in the general release relating to a claim to those proceeds. That failure supports the conclusion that plaintiff waived any such claim.

Plaintiff was aware, prior to executing the release, of the total amount that Balboa approved to settle the claim and he was also aware that what he had received from defendant for repairs was less than the insurance proceeds approved before he executed the general release. It does not matter that the money was actually disbursed after the release was signed. Any right plaintiff had to that money arose at the time of the loss, not when the money was actually paid out. Also, the satisfaction of the mortgage does not change the fact that defendant was the "insured" and plaintiff was never an "insured" under the terms of the particular policy.

Having determined that there existed an express agreement between the parties barring plaintiff's claims against defendant, we need not reach plaintiff's other equitable theories of recovery. Summary judgment was appropriately granted.



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