On appeal from the Superior Court of New Jersey, Chancery Division, Passaic County, Docket No. F-20730.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted December 19, 2011
Before Judges Sabatino and Ashrafi.
This foreclosure action stems from a mortgage and corresponding note allegedly signed in 1990 in connection with a home improvement contract. Twenty years later in 2010, plaintiff The Cadle Company, as an assignee, sued the homeowner whose name appeared on the mortgage, asserting that the mortgage loan was in default. The homeowner denied liability, asserting that the instruments were invalid and that the home improvements underlying the alleged mortgage loan were never performed. After a bench trial in the Chancery Division, the court dismissed the foreclosure complaint. Finding the defense witnesses "very compelling," the court ruled that plaintiff had not met its burden of proving the validity of the mortgage and also that the demanded relief of foreclosure would be inequitable.
Plaintiff now appeals, arguing that the Chancery judge's decision was against the weight of the evidence. Plaintiff further argues that defendant's contentions that the mortgage and note were invalid were insufficiently substantiated. For the reasons that follow, we affirm the Chancery judge's decision.
We summarize the pertinent facts. In December 1989, defendant Pellegrino Ciarla ("Mr. Ciarla")*fn1 purchased a home on Dover Street in Paterson from Louise D. Craig.*fn2 According to the testimony of one of his sons at trial, Mr. Ciarla spoke Italian and broken English.
On March 8, 1990, Progreso Home Inspection Company ("Progreso") allegedly contracted with Mr. Ciarla to perform certain repairs and improvements on his home, specifically the windows and siding, for the sum of $15,000. That same day, Mr. Ciarla purportedly signed a consumer note with Progreso for $15,000, with an annual interest rate of eighteen percent, to finance the work on his home. The note was secured by a mortgage provided by Essex Mortgage Corp., also dated March 8, 1990.
Plaintiff, the ultimate assignee of the mortgage, presented no witnesses at trial with personal knowledge of the execution of the mortgage or the note. Nor did plaintiff present any witnesses with personal knowledge regarding whether the improvements and repairs on Mr. Ciarla's home had actually been completed. However, plaintiff did move into evidence a one-page form document dated March 31, 1990. The document bears the letterhead of "Compliance Spot-Checks, Ltd." ("Compliance"), a firm with an address in Wayne. The document lists Progreso as the "dealer" on the transaction. The document indicates a contract amount of $15,000 and that 120 monthly payments of $272.17 were due, starting in 45 days. It references, without further description or elaboration, improvements on the "siding [and] windows" of Mr. Ciarla's property, stating that the work was completed on approximately March 31, 1990 and that the entire proceeds of the $15,000 note were to be applied to the work. In handwritten block letters near the bottom of the document, is the following statement: "WORK COMPLETED SATISFACTORILY -- PLEASE RELEASE MONEY TO CONTRACTOR." The document has two signatures: the first, an illegible signature from an inspector (presumably from Compliance) and the second, a signature alleged to be that of Mr. Ciarla as the "purchaser."
After a series of assignments, plaintiff became the assignee of the mortgage in 2000. Plaintiff alleged that the mortgage and loan had been in default since at least 1992. Defendant did not contest plaintiff's status as an assignee, but instead disputed the validity of the underlying instruments.
Plaintiff initially brought an action in the Law Division to collect on the note. That lawsuit was dismissed as untimely because it was not brought within the six year statute of limitations for contract debts. Plaintiff then filed the present foreclosure complaint in the Chancery Division in April 2010.
At the trial, plaintiff's sole witness was one of its account officers. The account officer presented certain documents from his company's file, including the mortgage, the note, and the March 1990 compliance document. No witnesses were called from Progreso, Essex Mortgage, or Compliance.
The defense, meanwhile, presented testimony from defendant's widow, Maria Ciarla, and the couple's two adult sons, Giuseppe Ciarla and Attilio Ciarla. Mrs. Ciarla testified that she had no recollection of any work being done on the home during the relevant time period. Although the trial judge found Mrs. Ciarla difficult to understand, the judge accepted her testimony as credible, noting that she was not trying to misrepresent the facts to the court.
The sons testified that they likewise had no recollection of any work being done on the windows or siding of the house in 1990. In particular, Giuseppe Ciarla, who lived on the premises until 2008, testified that siding, along with an enclosed porch, was not added to the home until 1993, three years after the alleged transaction underlying plaintiff's complaint. At that time Giuseppe was age twelve or thirteen. He noted that the construction work done on the house was performed after 1990 with the assistance of a neighbor who was a contractor. He presented a series of photographs showing the porch and the siding. He also noted that he checked the records in the city's construction office and found no permits issued for the alleged siding work supporting the mortgage and note. The other son, ...