On appeal from the Superior Court of New Jersey, Chancery Division, Essex County, Docket No. C-128-007.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 23, 2009
Before Judges Miniman and Waugh.
Plaintiffs Willie M. White and Josephine O. White appeal from the judgment dismissing their complaint with prejudice. We reverse.
We discern the following facts and procedural history from the record. Because the complaint was dismissed at the end of the Whites' case pursuant to Rule 4:37-2(b), we set forth the facts in the manner most favorable to the Whites.
White is approximately eighty-four years old. He completed tenth grade and became a licensed boiler engineer, working for the same company for thirty-eight years. He and Josephine White have been married approximately fifty-eight years. At the time of trial, Josephine White was living in a nursing home.
The Whites purchased a single-family home located on Carnegie Avenue in East Orange in 1955. At some point in the 1980s, they paid off the mortgage on the house. In 2000, because they were experiencing financial difficulties, they borrowed money and gave a mortgage on the house to secure the loan. However, their financial difficulties continued, causing them to default on the mortgage. Despite attempts to resolve their financial problems through bankruptcy, the mortgage went into foreclosure.
The Whites' property was eventually scheduled for a sheriff's sale. Following publication of the notice of sheriff's sale, White received a personalized flyer from defendant Dahan & Associates, Inc. (Dahan Associates). The flyer was headed: "TIME IS OF THE ESSENCE!!!" and attached a copy of the sheriff's sale notice that had been published in the Star Ledger. The relevant portions of the flyer stated:
We can STOP the foreclosure and save your
WE ARE FORECLOSURE SPECIALISTS!
Let's discuss your options! In Bankruptcy?
It listed "443 Northfield Ave., Suite #300" in West Orange as the location of Dahan Associates' office. The flyer was mailed in an envelope indicating that it had been sent by "Ed Baldwin" at that address.
"Ed Baldwin" is not a real person, but rather a "marketing name" used by Dahan Associates. The flyer was mailed to the Whites by defendant Edward Dahan, who described himself as a "consultant" to Dahan Associates. He and others at Dahan Associates routinely clipped the sheriff's sale notices from the Star Ledger, and mailed a flyer, similar to the one sent to the Whites, to the record owners of the foreclosed properties.
According to Dahan, the notices were sent out so that Dahan Associates could assist people facing foreclosure in getting "restructured" through "refinancing." The refinancing was done through defendant First Choice Mortgage (First Choice), which used the same address and telephone number as Dahan Associates. Dahan testified that he worked with First Choice loan officers to process their loans.
White called the telephone number on the flyer. The call was answered by defendant Daniel S. Bell. Kenneth Dube, an owner of First Choice, testified that Bell was "an employee" of First Choice as a mortgage solicitor. White had known Bell for approximately ten or fifteen years because Bell had once provided legal representation for White's brother. White did not know that Bell had been disbarred in the interim, In re Bell, 162 N.J. 184 (2000); and Bell did not disclose that fact to him.
According to Dahan, Bell "had a location within" Dahan Associates' office on Northfield Avenue. Dahan would "process" all of the loans that Bell "took in" at the office. Dahan had also sold Bell his interest in defendant Bindi Investments (Bindi), an entity that Dahan had "registered." Bindi had its offices at the same location as Dahan Associates and First Choice, and used the same telephone number as both those entities. After selling Bindi to Bell, Dahan engaged in some business transactions with Bindi that involved the purchase of real property.
Following their telephone call, White went to the Northfield Avenue office and met with Bell. According to White, after he explained his situation, Bell told him that "the best thing to do is take [the house] out of [White's] name for one year and after one year they would put everything [back] in [his] name." During this conversation, Bell called Dahan over to his office and asked him if he thought that was "the best thing to do." Dahan agreed and returned to his own office.
According to White, he was given few details of Bell's plan. White understood that he would pay approximately $2,400 per month and continue to live in the house, and after a year he would regain title to the house.
There are two contracts of sale for the Whites' house in the record, both are signed by defendant Paul M. Santoro, Jr., and the Whites, and both are dated September 12, 2005. One called for a purchase price of $250,000, with a $1,000 deposit and the remaining amount to be paid at closing. The second called for a purchase price of $258,000, with the Whites to "contribute up to $15,480" as a "sellers concession." It also called for them to take back a "second mortgage" from the purchaser for $51,600. Santoro was to be the purchaser under both contracts. It is not clear when the contracts were signed or whether they were signed on the same date or on different dates.
White signed a power of attorney (POA) to Dahan Associates, dated October 8, 2005. According to its terms, the POA was to permit Dahan Associates to "DISPUTE ANY AND ALL DEROGATORY INFORMATION REPORTED AGAINST PRINCIPAL'S PROFILE." There was also an authorization permitting creditors to disclose account information to Dahan Associates and allowing Dahan Associates to settle the Whites' accounts.
By the time these events had transpired, the sheriff's sale had apparently taken place, but the redemption period had not ended. According to White's recollection, a day or so after their first meeting, Bell telephoned him at home and instructed him to go to the Essex County courthouse to get an extension of the redemption period because Bell needed more time to process the papers. White received his first extension on October 13, 2005.
Bell subsequently instructed White to return to court and request a second extension. The General Equity judge apparently requested proof that there was actually going to be a redemption. Dahan sent a letter to the judge's chambers, confirming that the mortgage commitment for the purchase of the property had been extended. The letter, dated October 31, 2005, was on First Choice's letterhead and signed by Dahan as "Manager." The second extension was granted.
A third extension was subsequently requested and received. According to the receipt from the Essex County Sheriff's Office, Dahan redeemed the Whites' property on November 18, 2005, by paying $162,701.11 in principal, interest, costs, and fees. The closing on the sale of the Whites' house to Santoro took place at the Northfield Avenue office. According to the HUD-1, the lender was FGC Commercial Mortgage Finance, doing business as Fremont Mortgage. In addition to the property taxes due, the HUD-1 listed various items as "REDUCTIONS IN AMOUNT DUE SELLER," among which ...