The opinion of the court was delivered by: Thompson, U.S.D.J.
This matter has come before the Court upon the Motions for Summary Judgment filed by Defendants David Stanger, Westmarq Property Group, LLC, Parkstone Acquisition, LLC, Acqes, LLC, Westmarq LLC, Westmarq Fund Management LLC, David Stone, and Gabor Gottesman (collectively, "Stanger Defendants"); Defendant GMAC Mortgage, LLC ("GMAC"); and Defendant Madison Title Agency ("Madison") [docket # 111, 112, 113]. The Court has decided the motions upon the submissions of the parties and without oral argument, pursuant to Fed. R. Civ. P. 78(b). For the reasons stated below, the Defendants' motions are granted in part and denied in part.
This case involves a sale-leaseback agreement entered into by Plaintiff's wife and a company owned by Defendants David Stanger and Gabor Gottesman. Plaintiff now claims that this transaction was a sham designed to strip the equity from his property and executed without his knowledge or consent. He therefore seeks to have the property restored to his ownership and requests damages for various other conspiracy, fraud, fiduciary duty, and unjust enrichment claims.
A.The Property, Previous Mortgages and Foreclosure
Plaintiff Richard Szelc and his wife Teresa Szelc (the "Szelcs") owned a residence in Manahawkin, New Jersey (the "Property"), to which they had acquired title as Surviving Joint Tenants upon the death of Plaintiff's grandparents. (Pl.'s Statement of Undisputed Material Facts ("SUMF") ¶ 2) [116-1]. According to appraisals during the relevant period, the Property was worth roughly $510,000. (Pl.'s SUMF ¶ 70); (Edward J. Kelleher, Esq., Certification Ex. NN) [116-6]. In September 2002, the Szelcs borrowed $160,190, secured by a First Mortgage on the Property. (GMAC SUMF ¶ 3) [112-26]; (Stephen McNally, Esq., Certification Ex. B, C) [112-3]. In May 2003, the Szelcs opened a $25,000.00 line of credit, secured by a Second Mortgage on the Property. (GMAC SUMF ¶ 5); (McNally Certification Ex. E).
Foreclosure actions were commenced on the mortgages in 2005 and again in 2006 due to the Szelcs' failure to make payments, (GMAC SUMF ¶¶ 6, 10, 11), and the Property was ultimately sold in a sheriff's sale on January 29, 2008, for $254,000. (Pl.'s SUMF ¶ 17.) On the day of the foreclosure sale, Plaintiff's wife was visited at home by Nachman Taub, an employee of Westmarq Property Group, to discuss the possibility of selling the Property to avoid the foreclosure. (GMAC SUMF ¶ 24--25.) Under New Jersey law, a mortgagor may exercise the right to redeem a property within ten days of a foreclosure sale-in this case, by February 8, 2008. See N.J. Ct. R. 4:65-5; Hardyston Nat'l Bank v. Tartamulla, 267 A.2d 495, 497--98 (N.J. 1970). Mrs. Szelc subsequently called David Stanger, the principal of Westmarq Property Group, to further discuss the details of an arrangement whereby Stanger's company would pay off the mortgages to redeem the Property, the Property would be transferred to an affiliated entity, and the Szelcs would remain on the Property as renters with the option to repurchase or otherwise have the Property sold off for profit. (GMAC SUMF ¶ 30.)
B.The Sale-Leaseback Transaction
Stanger prepared a contract of sale containing the option agreement and the lease terms. (Stanger SUMF ¶ 16) [113-3]. Stanger arranged for Madison Title Agency, LLC ("Madison"), to prepare closing documents including a deed, an affidavit of title, and an HUD closing statement. (Id. ¶ 15.) Mrs. Szelc had stated that her husband, the Plaintiff, was a commercial crab-fisherman whose schedule did not permit him to be involved in the closing of the transaction. (Stanger SUMF ¶ 12) [111-38]. Accordingly, Stanger also arranged for Madison to prepare a Power of Attorney from Plaintiff to Mrs. Szelc. (Id. ¶ 15.)
On February 7, 2008, Mrs. Szelc took all of these documents-apparently
signed by Plaintiff-to a notary, Betty Mulch. (Madison SUMF ¶ 35--36)
[113-3]. Although Mulch did not witness Plaintiff sign the documents,
she notarized them based upon Mrs. Szelc's representations that
Plaintiff had signed the documents and that he could not appear in
person because he was busy working on his fishing boat.*fn1
(Id. ¶ 37--46.) However, Plaintiff states that he did not
actually sign any of the documents and that his signature was forged.
(Pl.'s SUMF ¶ 38, 42). The Defendants suggest that Plaintiff's
signature most likely was forged by his wife, Teresa Szelc.*fn2
(Stanger SUMF ¶ 27); (GMAC Br. in Supp. of Mot. for Summ. J. 20); (Madison Mem. in Supp. of Summ. J. 36).
On February 8th, Mrs. Szelc met Stanger and a Madison representative at the Sheriff's office to deliver the signed and notarized closing documents. (Stanger SUMF ¶ 20--21.) The Deed transferred ownership from the Szelcs to Parkstone Acquisition, LLC ("Parkstone")-a New Jersey company of which Stanger and Gabor Gottesman are the sole members-for the amount of $260,497.65. (Madison SUMF ¶ 48.) The sale amount, paid out of pocket by Gottesman, went to the Sheriff's office in order to pay off the First and Second Mortgages,*fn3
thereby canceling the foreclosure. (Stanger SUMF ¶ 20.)
The "Contract of Sale -- With Lease and Option to Purchase" provided that the Szelcs would remain in possession and would owe, in accordance with the Lease, a monthly rent of $2000.00 plus utilities (Fred R. Gruen Aff. Ex. 16) [111-20]. The contract further provided that the Szelcs would have the option to purchase the Property at a price equal to the sum of the following: (i) the option price of $300,497.65, open through February 7, 2009; (ii) the annual rent price of $24,000.00, as due under the lease for the entire one-year term; (iii) taxes paid during Parkstone's ownership, (iv) homeowner's insurance; (v) all closing costs incurred upon transfer of title; and (vi) reimbursement for any repairs advanced by Parkstone. (Id.) Finally, the contract provided that the Szelcs could request at any time during the option period that the property be sold and thereby collect on any proceeds above the option price after the deduction of closing costs.*fn4 (Id.)
C.Transfer of Property to Gottesman and New Mortgage
On February 26, 2008, Parkstone transferred title to the Property over to Gottesman for consideration of $1.00. (Kelleher Certification Ex. BB) [116-5]. Prior to the recording of the Parkstone-Gottesman Deed, Plaintiff's counsel contacted Stanger and Parkstone to advise them that Plaintiff had not signed the original Szelc-Parkstone deed and that his signature was not valid. (Pl.'s SUMF ¶ 57.) On February 29th, Stanger emailed Pessy Herman at Madison, stating, "[P]lease do not record the transfer into [sic] Sam Gottesman, something came up that I will need to address." (Kelleher Certification Ex. GG.) However, Stanger did not explicitly note in the email any issue regarding Plaintiff's signature and, on March 5th, Stanger authorized Herman to record the transfer. (Pl.'s SUMF ¶ 61.)
Subsequently, on March 19th, Gottesman obtained a loan from First Meridian Mortgage ("First Meridian") in the amount of $277,000.00, secured by a mortgage on the Property, (Pl.'s SUMF ¶ 54); (Kelleher Certification Ex. DD). First Meridian later assigned this mortgage to GMAC Mortgage Corporation ("GMAC"). (GMAC SUMF ¶ 40) [112-26]. The loan documents that First Meridian handed over to GMAC did not provide notice of any forgery or other claims that Plaintiff now makes. (Jean Aguirre Certification ¶ 4) [112-1].
Plaintiff later personally contacted Madison on April 9, 2008, to advise the agency that he disputed the original Szelc-Parkstone transfer. (Madison SUMF ¶ 57.)
D.Initial Action and Motion for Summary Judgment
Plaintiff filed a Complaint on September 25, 2008 , an Amended Complaint on November 5, 2008 , and finally a Second Amended Complaint on August 13, 2009 . The Second Amended Complaint brings claims against Defendants Stanger, Westmarq Property Group, LLC ("WPG"), Parkstone Acquisition, LLC ("Parkstone"), Acqes LLC ("Acqes"), Westmarq LLC ("WM"), Westmarq Fund Management LLC ("WFM"), Gottesman, David Stone a/k/a/ David Stanger (collectively, the "Stanger Defendants"), as well as GMAC and Madison.*fn5
In the Second Amended Complaint, Plaintiff includes fifteen counts, alleging federal RICO violations, New Jersey RICO violations, violation of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq., violation of the Home Ownership and Equity Protection Act ("HOEPA"), 15 U.S.C. § 1639, breach of fiduciary duty, violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692(a)(6), violation of the Consumer Fraud Act ("CFA"), N.J.S.A 56:8-1 et seq., civil conspiracy, aiding and abetting, unjust enrichment, unconscionability, negligence, and fraudulent transfer.
The Stanger Defendants, GMAC, and Madison now move for Summary Judgment. [111, 112, 113].
A. Legal Standard for Summary Judgment
Summary judgment is appropriate if the record shows "that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In deciding whether summary judgment should be granted, a district court considers the facts drawn from "the pleadings, the discovery and disclosure materials, and any affidavits" and must "view the inferences to be drawn from the underlying facts in the light most favorable to the party opposing the motion." Fed. R. Civ. P. 56(c); Curley v. Klem, 298 F.3d 271, 276--77 (3d Cir. 2002) (internal quotations omitted). In resolving a motion for summary judgment, the Court must determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, 477 U.S. 242, 251--52 (1986). Specifically, summary judgment should be granted if the evidence available would not support a jury verdict in favor of the nonmoving party. Id. at 248--49.
B.Summary Judgment as to Stanger Defendants
The Stanger Defendants' request for summary judgment consists of three main arguments:
(1) none of the disclosure statutes apply because the forgery of Plaintiff's signature rendered the transaction void ab initio; (2) they are not creditors subject to the disclosure statutes because the sale-leaseback transaction was a sale and not a loan; and (3) the common law claims must fail as a matter of law. We address these arguments in turn.
The Stanger Defendants argue that because forgery renders the transaction at issue "void ab initio, the Stanger Defendants per force cannot have violated any disclosure statutes controlling enforceable loan transactions." (Stanger Br. in Supp. 21 (emphasis in original)) .
It appears well-established that the effect of a forgery is that the forged document is null and void. See, e.g., In re Galtieri, 2007 WL 2416425, at *6 (Bankr. D.N.J.) (declaring deed null and void as a result of forgery); Roger A. Cunningham, William B. Stoebuck & Dale A. Whitman, The Law of Property, § 11.9 at 782 (1984) ("A recorded deed, for example, may be a forgery, procured by fraud in the execution, executed by a minor, or never delivered. Any one of these defects will make the deed void, and the fact that it is recorded in no sense enhances its validity"); Brewster v. Entz, 86 N.J. Eq. 242, 242 (Err. & App. 1916) (per curiam) ("As the point of the opinion is that the assignment was a forgery, the language of the decree itself is correct in adjudging that the assignment is null and void."); Angle v. North-Western Mut. Life ...