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Elaine A. Taylor v. American Home Mortgage Servicing Inc

June 11, 2012

ELAINE A. TAYLOR, PLAINTIFF-APPELLANT,
v.
AMERICAN HOME MORTGAGE SERVICING INC., AND WELLS FARGO BANK, N.A., AS TRUSTEE FOR OPTION ONE MORTGAGE LOAN TRUST 2004 AND ASSET-BACKED CERTIFICATES SERIES 2004-1, DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-4484-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted May 21, 2012

Before Judges Sabatino and Fasciale.

Plaintiff Elaine Taylor appeals from separate orders*fn1 granting summary judgment in favor of defendants American Home Mortgage Servicing, Inc. (AHMSI), and Wells Fargo Bank, N.A., as Trustee for Option One Mortgage Loan Trust 2004 and Asset-Backed Certificates Series 2004-1 (Wells Fargo), and awarding defendants $40,022.81 in attorney's fees and costs. We affirm summary judgment, but vacate the award of attorney's fees because the trial court's decision does not identify the legal basis for fee-shifting in this case.

In 2003, plaintiff bought property located at 89 N. 22nd Street, East Orange, New Jersey (the East Orange property), which property is the subject of this litigation. Ten days later, she bought property located at 321 Leslie Street, Newark, New Jersey (the Newark property). In order to purchase the East Orange property, plaintiff obtained a mortgage loan from Option One Mortgage Corporation (now AHMSI). In the final loan application, signed on the day of the closing, she represented that she was purchasing the property as an investment, which was also reflected in the mortgagee's internal underwriting documents. Subsequently, plaintiff defaulted on the mortgage, and the mortgagee brought a foreclosure action.*fn2

In July 2009, plaintiff filed a complaint against AHMSI, alleging breach of contract and violations of the New Jersey Home Ownership Security Act of 2002 (HOSA), N.J.S.A. 46:10B-22 to -35, and the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20. In its answer, AHMSI asserted that the East Orange property was not plaintiff's primary residence, which is a requirement for a borrower to obtain relief under HOSA.*fn3

In January 2010, AHMSI moved for summary judgment to dismiss the complaint in its entirety. Plaintiff filed opposition,*fn4 contending that she "resides at [the East Orange property] and ha[s] done [so] for more than six years." Plaintiff further represented that she had purchased the East Orange property to use as her primary residence, that she was the only occupant and had never had tenants, and that AHMSI addressed her mail, including her mortgage loan statements, to the East Orange property. Also, she represented that on the mortgage application documents, her mortgage broker had misidentified the East Orange property as investment property, alleging that when "it was discovered that the application was in error," "the error was corrected." In a supplemental opposition brief, plaintiff asserted that AHMSI "present[ed] expired documents that implie[d] [the] subject property [was] for investment. As stated previously, there was an error. The error was corrected; [the East Orange] property was and always [has] been for [p]laintiff's primary residence."

On February 25, 2010, the judge entered an order granting partial summary judgment to both defendants. The judge dismissed plaintiff's breach of contract and CFA claims with prejudice,*fn5 but denied summary judgment as to plaintiff's HOSA claim. The judge permitted an additional ninety days of discovery for AHMSI to investigate whether plaintiff resided at the East Orange property.

Subsequently, the judge ordered plaintiff to provide defense counsel with a "full account of whom she spoke to at the mortgage broker where the conversation occurred, what was said by both parties[, and] whether there are any documents other than the applications." The judge also ordered plaintiff to give "the name [and] docket number of the other Essex County foreclosure action [involving the Newark property, and] send [defense counsel] all the . . . documents."

Although plaintiff did not produce any of this information, defense counsel in the present case located legal documents relating to the Newark property foreclosure. The documents revealed that plaintiff had counterclaimed asserting HOSA violations against the mortgagee in that foreclosure, too. She had contended that the Newark property mortgagee "may argue that [HOSA] does not cover investment property; but the purpose of the loan was to purchase [the Newark] property as the primary residence of [plaintiff]." Further, she had also represented that she "was going to and had occupied [the Newark] property as her principal residence." Other documents in the Newark property foreclosure revealed that plaintiff's mortgage application for the Newark property indicated that she intended to use that property as her "primary residence."

In light of this evidence, defendants submitted a renewed motion for summary judgment, including a request for attorney's fees and costs. On October 1, 2010, the judge conducted a hearing, at which plaintiff admitted to the judge that she had "lied" in the Newark property foreclosure matter that the Newark property was her primary residence. The judge intimated that he was inclined to grant defendants' motion, but would first require a certification from defense counsel that plaintiff "benefitted by slowing the [Newark property] foreclosure process," which would be "sufficient to justify" judicially estopping plaintiff from asserting that the East Orange property was her primary residence.

Defense counsel submitted the requested certification, which stated that plaintiff had "derived a significant benefit by delaying the [Newark] [p]roperty [f]oreclosure for almost two years while asserting her frivolous HOSA claim." The certification quoted from the Newark property mortgagee's opposition to plaintiff's motion for reconsideration of summary judgment against plaintiff, which opposition stated that plaintiff "has stalled this foreclosure for almost two years and still seeks to delay the proceeding further [by] seek[ing] reconsideration on two issues, an alleged lack of standing and violations of [HOSA], both of which have been addressed numerous times." Furthermore, defense counsel's certification indicated that plaintiff had admitted at the October 1, 2010 hearing that she continued to collect rents at the Newark property while it was in foreclosure and had not remitted any of those rents.

On October 7, 2010, the judge entered an order granting defendants' renewed motion for summary judgment, dismissing plaintiff's complaint with prejudice, and granting defendants' request for "reasonable attorneys' fees and costs incurred since February 1, 2010." The judge relied on defense counsel's certification and granted summary judgment because plaintiff's "false ...


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