NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued telephonically May 20, 2013
On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-135-11.
Michael D. Malloy argued the cause for appellant (Finestein & Malloy, attorneys; Russell M. Finestein and Mr. Malloy, on the brief).
Jerold C. Feuerstein argued the cause for respondent (Kriss & Feuerstein, attorneys; Mr. Feuerstein, of counsel and on the brief).
Before Judges Fisher and Waugh.
In this appeal, we consider whether the trial court erred in granting summary judgment with regard to the meaning of a mortgage estoppel certificate and other related documents that memorialized the parties' transaction. Because the handwritten changes made to the mortgage estoppel certificate suggested more than one plausible interpretation of the parties' intent, we find the document ambiguous and, therefore, reverse and remand for further proceedings.
The genesis of this action was a transaction in which defendant Eastern Savings Bank, FSB, lent $350, 000 to Frank Pasquale Limited Partnership; the note memorializing Pasquale's debt to Eastern was secured by a mortgage on property on Adams Street in Hoboken. Pasquale defaulted on the loan, and Eastern commenced a foreclosure action, which resulted in entry of a judgment in Eastern's favor in the amount of $431, 847.01.
Later, plaintiff Adams Associates, L.L.C., agreed to purchase from Eastern the note and mortgage and Eastern's rights in the foreclosure judgment for $553, 429.06. To memorialize this transaction, Adams' attorney provided Eastern's attorney with drafts of a mortgage estoppel certificate, an assignment of mortgage, an assignment of the foreclosure judgment, an assignment of leases and rents, and an assignment of the note and guaranty. Eastern's attorney made revisions to the mortgage estoppel certificate, which, along with the other documents were executed and returned to Adams.
Following this transaction, Adams was substituted in Eastern's place in an action Eastern had commenced in the Law Division against the Pasquale defendants, who filed an answer in the Law Division action and moved to vacate the default judgment in the foreclosure action. In moving for relief, the Pasquale defendants argued that the loan documents were executed by Frank A. Pasquale, Jr., not Frank A. Pasquale, Sr., and that only the latter had the authority to bind the borrower. These matters were consolidated, and a plenary hearing was conducted. The judge concluded that the documents were not executed or authorized by Pasqsuale, Sr. – a fact that required the vacating of the default judgment and dismissal of the consolidated matters. Adams appealed, and we affirmed. Adams Assocs, , L.L.C. v. Frank Pasquale Ltd. P'ship, No. A-5724-08 (App. Div. Jan. 14, 2011).
With the invalidation of what it thought it had purchased, Adams commenced this action against Eastern for breach of the alleged warranty contained in the loan documents, and against New Jersey Title Insurance Company pursuant to the title policy Eastern obtained when entering into its transaction with Pasquale. After Eastern's successful motion to dismiss, and Adams' motion for reconsideration, the trial judge permitted Adams to amend its complaint. Adams filed an amended complaint sounding in negligence, as well as a later amendment alleging breach of contract, lack of consideration, mutual mistake and unjust enrichment.
All parties to the action thereafter moved for summary judgment. The judge denied the title insurer's motion, granted Adams' motion for summary judgment against the title insurer, denied Adams' motion for summary judgment against Eastern, and granted Eastern's motion for summary judgment against Adams.
Adams appeals, arguing: the judge erred in dismissing the warranty claim; the circumstances require rescission of the Adams-Eastern transaction; and Eastern was unjustly enriched. We agree that the judge erred in dismissing Adams' ...