May 11, 2011
ALAKH N. SINGH, PLAINTIFF-APPELLANT,
BANK OF AMERICA, N.A., DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-5522-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted March 14, 2011
Before Judges C.L. Miniman and LeWinn.
Plaintiff maintained a regular checking account at Bank of America (BOA). In 2007, a dispute arose in which he claimed that, in May and August of that year, BOA wrongfully dishonored two of his mortgage payment checks for insufficient funds when he had sufficient funds to cover them and this damaged his credit rating to a degree that caused him to lose profitable investment opportunities; he also claimed BOA committed fraud by altering the dates on which certain transactions were debited and credited to his account in order to charge him excessive overdraft fees.
In June 2008, plaintiff filed a complaint against BOA alleging "accounting fraud" and seeking damages of $10,000,000 that he claimed resulted from "lost borrowing and investment opportunities over . . . [his] lifetime . . . from [an] adverse credit rating so that [he] . . . couldn't get new and cheaper loans and use those loans productively for further investments." Trial commenced on November 4, 2009, but ended in a mistrial the following day. BOA then filed a motion for summary judgment. Plaintiff now appeals from the January 8, 2010 order granting that motion and dismissing his complaint. We affirm.
Plaintiff's checking account with BOA was governed by a contract consisting of the following documents: (1) a "Deposit Agreement and Disclosures" (Agreement) and (2) a Schedule of Fees. The Agreement governs the manner in which BOA will make deposited funds available to an account holder, depending on whether those deposits are made by wire or electronic transfer or by cash/check deposits.
The Agreement further provides for the assessment of overdraft and "returned item" fees against the account holder for insufficient funds; it states:
Whether we return or pay an insufficient funds item depends on a number of factors, including the amount of the item and the past activity in your account. We may, without notice to you and in our sole discretion, either pay it and overdraw your account or we may decline or return an insufficient funds item unpaid. . . .
We may establish different processing orders for checks and other items. When you do not have enough available funds to pay all checks and other items on a given day, we may pay one or more checks or other items, and return other checks or other items, in any order we deem appropriate. We may change our processing orders at any time without notice to you, even though some processing orders may result in more insufficient funds items and more fees than others.
Although plaintiff's complaint was grounded on the dishonoring of two mortgage checks for insufficient funds, and a claim of excessive overdraft fees - procedures clearly governed by express terms of the Agreement - plaintiff did not assert a claim for breach of contract. His claims sounded only in fraud.
The gravamen of plaintiff's complaint with respect to the two dishonored mortgage checks in May and August 2007 was that these actions by BOA prevented plaintiff from refinancing his residence. He intended to refinance for an amount that was $50,000 over its appraised value and invest that $50,000 in stocks, resulting eventually in a return of $10,000,000.
In support of this claim plaintiff prepared a one-page statement, which reads as follows:
STATEMENT SHOWING HOW BANK OF AMERICA CAUSED
LOSS OF $10 MILLION BY RETURNING MY TWO
If BOA would not have returned my first check on 5/14/2007, I would have been able to save $50,000 by refinancing my mortgage amounting to $355,000 at a lower rate of
5.75% to 6% from the existing (initial borrowing) rate of 6.75% which the plaintiff had been paying to . . . Weichert Financial. I could not refinance my mortgage even though 16 refinancing companies called me, some of them even offering as high as 125% of balance mortgage amount, but each refused by saying that I was ineligible for their program because I had one late mortgage payment during the last 12 months. The list of those 16 companies is enclosed. Thus the plaintiff lost good opportunities to make money.
The calculation of Value of Lost Opportunity of saving from borrowing = $50,000 and reinvesting that $50,000 is explained below: The economics is like this[:]
The opportunity was that this amount of $50,000 would have multiplied at the compounded net growth rate of 13% for 40 years of my remaining life.
The mathematics to support this economics [sic] in rounded figures is like this:
Cost of borrowing: 6% per annum
Net Annual Compounded Return from Investing in Stock Indexes (Mixture of Small Cap and Large Cap[s): 19%. This return of 19% is taken from the history of 70 years of return from stock indexes.
Differential Return: 19%-6% = 13%
Formula for estimating the loss: = $50000*(1.19^40)(1.06^40) = $5,112,279 Rounded to $5 Million.
The same loss from return of second check on 8/14/2007. Thus total estimated loss = $10 Million.
One late mortgage payment reduces credit score by up to 150 points (Evidence enclosed from an author of Mortgage Industry . . . .) Plaintiff included a list of what appear to be mortgage brokers, fifteen of which he has numbered, thereby apparently indicating he submitted refinancing requests to those brokers. This list noted "date[s] of request" between February 10 and September 24, 2007. He also attached a printout from a website, GetPreQualified.com, which includes this statement:
If you have a late payment on a mortgage account this will impact your ability to get a new mortgage for either a new home purchase or a refinance for several years. While it might not prevent you from getting a mortgage it will make an underwriter look very close[ly] at your file to make sure that you are not a high credit risk on the new mortgage. Typically a late mortgage payment will definitely impact an underwriting decision for [two] years with a Fannie Mae or Freddie Mac conventional mortgage and for [twelve] months with an FHA mortgage.
The one exception to the rule about missed payments and future mortgages is associated with the FHA Secure program. This program will overlook your missed or late payments if you qualify for this loan program. This program was launched in 2007 to provide a loan refinance option through FHA for nonFHA adjustable rate mortgages that have adjusted or are set to adjust over the next few years.
In preparation for trial, plaintiff provided BOA with a report from his proposed expert on liability and damages, Himanshu Maru. Plaintiff did not provide a curriculum vitae for Maru; rather he furnished a print-out of Maru's personal profile from the website LinkedIn.*fn1 Maru's report consisted of one page and stated the following:
$1,000 invested in Small Cap Value on 1/1/1960 would grow to $1.7 mm [sic] on 12/31/2006! In comparison, $1,000 invested in Large Cap Growth on 1/1/1960 would grow to only $66,000 (Source: http://investmentscientist.com/2007/12/11 small-cap-underperforming-a-historical-perspective/)
Based on that historical return, if somebody invests just $10,000 today and sleeps he would get $17 million after 46 years. If he invests $50,000 he would get $85 million.
This is simple finance based upon compounded rate of return of 19.4146%**per annum that the small caps have given in the past. (**Source: http://investmentscientist.com /2007/12/11/small-cap-value-underperforminga-historical-perspective/). So, if a person invests $1,000 today in the same small caps Index (with avg. annual rate of return =
19.4146%), he would get $1,208,640 after 40 years.
If somebody invests a bit wisely i.e. by mixing small caps with the large caps, he can make even billions. That's how self-made billionaires like Warren Buffet are born. To sum up, if you are fined $10,000 for doing some wrong or if somebody steals your $10,000 you actually lose millions over your life time [sic]!
BOA filed a motion to bar Maru from testifying and having his report introduced in evidence at trial. On October 9, 2009, after hearing oral argument, the judge rendered a decision from the bench granting BOA's motion. The judge found that plaintiff's proffer of the LinkedIn website print-out was insufficient evidence of Maru's background, education and expertise. The judge also found that Maru's report constituted a "net opinion" containing only "bare conclusions unsupported by factual evidence related to this case."
The judge also ruled that plaintiff could not personally testify as to the value of his damages because expert testimony was necessary and, although plaintiff had experience in financial investments, the judge determined that he had failed to proffer any "supporting data or facts" for his opinions. The judge declined to dismiss the case at that juncture, however, finding that plaintiff was still entitled to testify as a lay witness.
A description of what occurred at trial is set forth in the judge's comments at the outset of oral argument on BOA's motion for summary judgment on January 8, 2010. It appears that plaintiff blatantly disobeyed the judge's limitations on his testimony and "tried to offer testimony on the value of his real estate, his lost potential profits, and . . . his estimate of the amount of damages." This led the judge to declare a mistrial.
In granting BOA's motion for summary judgment, the judge found that plaintiff "d[id] not have the capacity to demonstrate that there was a genuine dispute of material fact. . . . [He] cannot prove that [BOA] acted outside the scope of its duties and obligations created by his account agreement." The judge further noted that plaintiff had asserted claims "of common law fraud or negligence against [BOA,]" but that "a tort remedy does not arise from a contractual relationship unless the breaching party owes an independent duty imposed by law. There is no independent duty here. The only obligation owed to [plaintiff] is the obligation to meet the contractual commitments under the account agreement."
The judge found further that plaintiff could not prevail on a breach of contract claim, even if he had asserted one, because:
Here there is a contract, . . . an agreement called the [D]eposit [A]greement and [D]isclosures that governs how the . . . account is to be administered. The plaintiff does not dispute that under those agreements he agreed to pay return items or overdraft charges if items are presented for payment where there were insufficient funds in the account to pay those items. This is exactly what happened as to checks 164 [May 2007] and 204 [August 2007;] when they were presented to [BOA] for payment plaintiff's account contained insufficient funds, and [BOA] returned the items unpaid. . . .
[T]here is no proof at all that [BOA] did not perform under the contract. . . . [P]laintiff has not shown in anything that [he] has submitted to this court that [BOA] wrongfully dishonored his checks. Had . . . plaintiff provided appropriate discovery . . . someone with expertise in the banking field other than himself [who] could testify as to the banking standards and practices that might apply, he might have successfully resisted this motion. Matters relating to accounting, banking, and business practices, financing, and investment . . . are beyond the understanding of most people and will, therefore, require in most cases expert testimony to sustain a plaintiff's claim . . . .
But I ruled that . . . plaintiff was barred from introducing expert testimony . . . . [P]laintiff . . . provided the report of Dr. Maru . . ., and I ruled that Dr. Maru was barred from testifying because I did not think that he was qualified in the field to offer an opinion in the area of the claim made or raised by [plaintiff].
I think it would be absolute speculation for a jury to reach . . . any decision in this case or even a judge as a trier of fact.
Turning to plaintiff's arguments on appeal, we note initially that he has failed to comply with Rule 2:6-2(a)(1), which requires the table of contents of an appellant's brief to "include[e] the point headings to be argued[,]" and Rule 2:6-2(a)(5), requiring the brief to state the "legal argument . . ., which shall be divided, under appropriate point headings, distinctively printed or typed, into as many parts as there are points to be argued." Plaintiff's table of contents merely states "Legal Argument in Brief"; he has submitted twelve pages of legal argument that contain subheadings identifying the various stages of the proceedings, but in no way state the points to be argued.
Furthermore, plaintiff raises several claims of trial error. He has not, however, provided us with the transcripts of trial. One of his trial issues, that the judge erred in barring him from presenting expert testimony, was addressed at a pre-trial hearing on October 9, 2009; BOA has provided a copy of that transcript in its appendix, thus enabling us to address it. However, we are unable to address plaintiff's claims relating to error in (1) the exclusion of certain documents at trial and (2) the granting of a mistrial. We do not have the record of those proceedings.
The trial judge properly excluded plaintiff's proffered expert, Himanshu Maru, for the reasons stated in his decision from the bench on October 9, 2009. We affirm substantially for those reasons because we are satisfied they are "based on findings of fact which are adequately supported by [the] evidence." R. 2:11-3(e)(1)(A). We add only the following brief comments.
"In reviewing a trial court's evidential ruling, an appellate court is limited to examining the decision for abuse of discretion." Hisenaj v. Kuehner, 194 N.J. 6, 12 (2008). We will "'uphold the . . . findings undergirding the trial court's decision if they are supported by adequate, substantial and credible evidence on the record.'" Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 384 (2010) (internal citations omitted).
Neither party has given us a copy of Maru's LinkedIn profile, and nothing in the record describes his qualifications. We are, therefore, not in a position to assess the judge's determination that he was not qualified by background, education and experience to testify as an expert. Nonetheless, even assuming Maru was so qualified, his report was clearly a "net opinion" and, therefore, inadmissible. "[T]he net opinion rule . . . forbids the admission into evidence of an expert's conclusions that are not supported by factual evidence or other data." Polzo v. Cnty. of Essex, 196 N.J. 569, 583 (2008) (internal citations omitted).
BOA informs us that Maru's report was one page in length. Although neither party has furnished us with a full copy of that report, BOA quoted extensively from it in its motion to strike his testimony. Plaintiff has not referred us to any other portion of the report. Maru's report did not contain an opinion on BOA's procedures for dishonoring checks and assessing overdraft fees, which were the basis of plaintiff's complaint. There was, therefore, no expert evidence to support plaintiff's liability claims.
Insofar as Maru addressed damages, his report is sheer speculation, completely lacking in any "facts or data[,]" N.J.R.E. 703, to support the results he predicts would occur from the investments he describes. N.J.R.E. 703 requires that an expert's opinion be based upon "facts or data . . . perceived by or made known to the expert at or before the hearing."
Measured against this standard, Maru's report falls directly under the "net opinion rule [which] 'requires an expert to give the why and wherefore of his . . . opinion, rather than a mere conclusion.'" State v. Townsend, 186 N.J. 473, 494 (2006) (quoting Rosenberg v. Tavorath, 352 N.J. Super. 385, 401 (App. Div. 2002)).
Having properly excluded Maru as an expert, the judge also correctly determined that plaintiff would not be permitted to testify as an expert with respect either to liability or damages, as he lacked expertise in both areas. Clearly, plaintiff was not an expert on banking procedures. With respect to damages, we conclude that plaintiff's proofs, described above, were as speculative as Maru's opinion
Plaintiff's documents were significantly deficient as support for his damages claim. First, plaintiff submitted no proof of what, if any, effect on his credit rating resulted directly from BOA's actions. Second, he did not provide any evidence of rejections of his refinancing inquiries by the companies he claimed "call[ed him]." Third, his "calculation of Value of Lost Opportunity" is based upon a net return of thirteen percent compounded on $50,000 over forty years, based on "the history of 70 years of return from stock indexes"; there is no evidence, and plaintiff is not an expert qualified to show, that his investment would consistently generate a thirteen percent return for the next four decades. Moreover, plaintiff's own evidence, the printout from GetPreQualified.com, indicated the possibility of refinancing even for someone who has made a late payment on a mortgage account; plaintiff failed to show why he could not refinance under the exception described in that printout.
Finally, we turn to the judge's decision to grant summary judgment to BOA after a mistrial had been declared. "In an appeal of an order granting summary judgment, appellate courts 'employ the same standard [of review] that governs the trial court.'" Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010) (quoting Busciglio v. DellaFave, 366 N.J. Super. 135, 139 (App. Div. 2004)). We must "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party in consideration of the applicable evidentiary standard, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995). Summary judgment is properly granted where "the pleadings, depositions, answers to interrogatories and admissions on file . . . show that there is no genuine issue 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(c).
Here, plaintiff's claims of liability (fraudulent banking practices) and damages ($10,000,000 in lost investment revenues) clearly required expert testimony. In the absence of such evidence, plaintiff proffered no material disputed fact as to BOA's liability resulting from the dishonoring of two checks or the assessment of overdraft fees. Moreover, plaintiff's proofs were completely devoid of any evidence that BOA's actions proximately caused his loss of $10,000,000 in investment profits.
It is fundamental that in order to visit tort liability upon a defendant a "plaintiff must prove . . . [p]roximate cause [which] has been defined as "any cause which in the natural and continuous sequence, unbroken by an efficient intervening cause, produces the result complained of and without which the result would not have occurred." [Vuocolo v. Diamond Shamrock Chems. Co., 240 N.J. Super. 289, 294 (App. Div.) (internal quotations omitted) (emphasis added), certif. denied, 122 N.J. 333 (1990).]
As noted in our discussion of plaintiff's proofs on damages, above, he failed to demonstrate any nexus between BOA's alleged fraudulent conduct and his claimed damages. In short, plaintiff was unable to establish any genuine issue of material fact sufficient to defeat summary judgment.*fn2