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Haven Savings Bank v. Zanolini

September 7, 2010

HAVEN SAVINGS BANK, PLAINTIFF-RESPONDENT,
v.
KATHLEEN M. ZANOLINI AND MR. ZANOLINI, HUSBAND OF KATHLEEN M. ZANOLINI, AND CITADEL CONDOMINIUM ASSOCIATION, INC., DEFENDANTS-RESPONDENTS.
GLOBAL DISCOVERIES, LTD., AS ATTORNEY-IN-FACT FOR KATHLEEN M. ZANOLINI, APPELLANT.
NEW YORK COMMUNITY BANK, PLAINTIFF-RESPONDENT,
v.
DONIE RAY ANDERSON AND MRS. DONIE RAY ANDERSON, HIS WIFE, FRANCES ANDERSON AND MR. ANDERSON, HUSBAND OF FRANCES ANDERSON, AND KIMBALL MEDICAL CENTER, DEFENDANTS-RESPONDENTS.
GLOBAL DISCOVERIES, LTD., AS ATTORNEY-IN-FACT FOR DONIE RAY ANDERSON, APPELLANT.



On appeal from Superior Court of New Jersey, Chancery Division, Hudson County, Docket Nos. F-23022-06 and F-7175-04.

The opinion of the court was delivered by: Miniman, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Telephonically argued: February 18, 2010

Before Judges Cuff, Payne, and C.L. Miniman.

Defendant Global Discoveries, Ltd. (Global), as attorney-in-fact for defendants Kathleen M. Zanolini (Zanolini) and Donie Ray Anderson (Anderson), appeals from the reduced fees awarded to it in a March 12, 2009, order. That final order awarded surplus funds generated by the Hudson County Sheriff's sales of two mortgaged premises, one formerly owned in Hoboken by Zanolini and the other formerly owned in Bayonne by Anderson, to Global's clients, neither of whom was aware of the surplus funds until the funds were brought to their attention by Global. Because the New Jersey Uniform Unclaimed Property Act (NJUUPA), N.J.S.A. 46:30B-1 to -109, permits an award of the fees to which Anderson agreed, we now reverse. However, we affirm the judgment as to Zanolini because that agreement did not satisfy the requirements of N.J.S.A. 46:30B-106.

I.

Defendant Kathleen M. Zanolini is the former owner of realty commonly known as 450 Seventh Street, Apt. 2-I, Hoboken. Zanolini gave a mortgage on the property to Haven Savings and Loan Association, now known as Haven Savings Bank (Haven), on April 4, 1986. After Zanolini failed to make payment as scheduled, Haven began foreclosure proceedings in 2006. It obtained a final judgment of foreclosure on September 4, 2007, in the amount of $24,497.88. The Hudson County Sheriff subsequently sold the property to a third-party purchaser on November 29, 2007, and deposited $164,674.24 with the Clerk of the Superior Court, Trust Fund Unit, as surplus funds arising from the sale.

Global is in the business of assisting individuals recover funds to which they are entitled from the Trust Fund Unit. Global obtains lists, docket summaries, deeds, mortgages, liens, and other documents from various counties in New Jersey to determine if individuals are owed any funds. Global then locates the individuals and informs them of their entitlement.

Global employs eighteen to twenty full-time employees and pays the out-of-pocket expenses incurred in finding the funds, obtaining the records, and locating the individuals. Global informs the located individuals of the amount of funds to which they are entitled. If the person agrees to engage their services in recovering the funds, a ratification agreement and a limited power of attorney are executed. The power of attorney gives Global the right to act on the individual's behalf, including filing a claim for the surplus funds. Global's standard fee for its services is thirty-five percent of the amount recovered.

Global first contacted Zanolini sometime in 2008 to assist her in recovering the surplus funds to which she was entitled. Zanolini executed an agreement and a limited and specific power of attorney in favor of Global on July 11 and 19, 2008, respectively. The pertinent part of the agreement states:

(a) Client and Global agree that Global's compensation is contingent upon Client actually receiving Client's share of the funds. In the event your claim is not paid, all Parties are released of their duties and obligations under this agreement and Client will have no obligation whatsoever to compensate Global.

(b) Client agrees that Global will receive a 35% net contingency fee. Client will provide Global with a written assignment of the Client's rights to claim the funds.

(c) For clarification, Global is ONLY entitled to its net percentage of the funds that are actually collected.

The power of attorney essentially gave Global the right to act on Zanolini's behalf in obtaining the funds held by the Trust Fund Unit. On September 11, 2008, Global filed a notice of motion for distribution of surplus funds on behalf of Zanolini, and the motion was scheduled to be heard on October 10, 2008.

Defendant Donie Ray Anderson is the former co-owner of realty commonly known as 100 West Forty-fourth Street, Bayonne. Anderson gave a mortgage on the property to First Savings Bank of New Jersey, now known as New York Community Bank (Community), on August 12, 1993. After Anderson defaulted on his mortgage, Community began foreclosure proceedings in 2004. It obtained a final judgment of foreclosure on March 20, 2005, in the amount of $68,578.43. The Hudson County Sheriff subsequently sold the property to a third-party purchaser on June 16, 2005, and deposited $113,722.98 with the Trust Fund Unit as surplus funds arising from the sale. Anderson, as a former co-owner of the property, was entitled to half this amount.

Global first contacted Anderson sometime in 2008 to assist him in recovering the surplus funds. Anderson executed an agreement and a limited and specific power of attorney in favor of Global on June 30 and July 9, 2008, respectively. The terms of the agreement and the power of attorney were nearly identical to those signed by Zanolini, including the thirty-five-percent fee. On September 12, 2008, Global filed a notice of motion for distribution of surplus funds on behalf of Anderson, and the motion was scheduled to be heard on October 10, 2008.

The October 10, 2008, hearing was held before the Hudson County General Equity judge. At that hearing, Citadel Condominium Association (Citadel) claimed it was owed $11,611.83 for past-due maintenance fees and other assessments relating to Zanolini's property. The application was unopposed, and the judge ordered payment of that amount to Citadel from the surplus funds.

Regarding Global's motions for the surplus funds, Zanolini testified, upon questioning by the judge, that Global initially solicited her by mail and made contact with her through family members. After Zanolini gave her attorney the information Global gave her, Zanolini's attorney contacted Global. Zanolini later signed an agreement with Global, pursuant to which Global would receive thirty-five percent of the amount to be recovered from the Trust Fund Unit. She understood that this meant she would pay Global $53,396.84. The trial judge then advised that he would not enter an order allowing Global to recover a thirty- five-percent fee, and he refused to sign the order under which the funds would be distributed to Zanolini.

The General Equity judge held plenary hearings on February 2, 3, and 26, 2009, after no settlement was reached. Jed Byerly, Global's Chief Operating Officer, described Global's business operations and the typical way in which the company processes cases. Byerly then described, with reference to documents entered into evidence, the time spent and nature of the work done on the Zanolini case. This included sixty-three and one-quarter hours worked by the claims manager; eight hours and twenty-five minutes worked by a research analyst; a $350 bill from Zanolini's attorney paid by Global; and hard costs incurred, totaling $13,407.54. The work also included research to locate Zanolini. The court particularly took issue with an entry indicating that one hour and fifteen minutes was spent ordering flowers for Zanolini when she was hospitalized, and Byerly was unable to explain the entry.

Zanolini consulted with an attorney after receiving a copy of the agreement. Global paid her attorney's $350 fee and other fees to prosecute the case. Byerly was not aware of any statements made by Zanolini about her not wanting Global to receive the thirty-five-percent fee. He was also unaware that, according to the court, Zanolini had previously represented that she was unaware that she was paying approximately $50,000 to make this application, although this contradicted the testimony given by Zanolini on October 10, 2008.

Byerly next testified regarding the Anderson case. The first exhibit included a summary of Global's costs. The claims manager spent 56.65 hours on the Anderson case obtaining information and locating Anderson. After contacting Anderson, Global advised him in writing as to the amount of the surplus funds to which he was entitled, and Anderson entered into the agreement. Byerly testified that Anderson had the opportunity to review the agreement and power of attorney before signing them. Byerly believed Anderson was unaware of the surplus funds before Global contacted him. He also believed Anderson was "still agreeable" to the thirty-five-percent fee.

Zanolini was examined telephonically by the judge. She stated that she understood she was entitled to surplus funds in the amount of $164,674.24 as a result of the sheriff's sale. Before Global contacted her, Zanolini was made aware of her entitlement to the funds when her bank and another company had contacted her. Global first contacted Zanolini via telephone. Zanolini gave three versions of when she was informed about the specific amount she was owed: (1) she first learned when she signed the contingency agreement; (2) she first learned at the October 11, 2008, hearing; and (3) she did not remember ever hearing from Global about the specific amount. Regardless, she reviewed the agreement with her attorney, understanding that Global would attempt to obtain the money and she would pay Global a commission. She also understood that Global's commission would be thirty-five percent, although that "seemed like an excessive amount."

Anderson also testified that Global first contacted him by telephone and informed him of the services that it would provide and the fee it would charge. Global employees discussed the terms of the contract with Anderson and he read the contract himself. From this, he understood he was entitled to the funds, although no one told him the exact amount. He was also given a thirty-five-percent figure; however, he could not remember if he was going to receive or pay thirty-five percent. Anderson did not consult a lawyer about the agreement. He believed a letter he received from Global stated that he was entitled to $126,000, and he could not remember if anyone from Global verbally informed him of the amount. The judge then asked Anderson about the fee, with the following exchange occurring:

Q: And but you did sign a contract ...


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