NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued June 4, 2013
On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-5555-09.
Frederic M. Shulman argued the cause for appellant (Price, Meese, Shulman & D'Arminio, P.C., attorneys; Mr. Shulman, on the brief).
Jared M. Lans argued the cause for respondent.
Before Judges Yannotti and Hayden.
Plaintiff Columbia Bank (the Bank) appeals from a provision of an order entered by the Law Division on June 29, 2012, which required the Bank to pay $387, 199.11 to defendants. We reverse.
In November 2005, the Bank loaned Hamilton Properties Associates, L.P. (HPA) $5, 300, 000. In August 2006, the Bank loaned HPA an additional $750, 000. The loans were made in connection with defendants' refinancing and refurbishment of a shopping center on Franklin Turnpike in Waldwick, New Jersey. Both loans were secured by mortgages encumbering the property.
To further secure repayment of the loans, HPA executed and delivered to the Bank an assignment of leases and rents from the mortgaged property. Defendants Barbara M. Kosky, Daniel J. Kosky, Hamilton Properties Associates, Inc., and Douglas F. Doyle unconditionally guaranteed payment of HPA's obligations under the loan agreements.
In 2009, HPA defaulted in payments due on the loans. The Bank and HPA thereafter entered into an agreement modifying the terms of the loan agreements. HPA again defaulted. On June 23, 2009, the Bank filed a complaint against defendants in the Law Division, seeking the monies due on the loans, along with late fees, interest, prepayment premiums, attorney's fees and costs of suit. The following day, the Bank also commenced an action in the Chancery Division to foreclose on the mortgages issued to secure the loans.
In October 2009, the parties entered into a written settlement agreement. After HPA breached the terms of that agreement, the litigation resumed. In April 2010, the Bank obtained a judgment in the Law Division against defendants in the amount of $5, 898, 429, 75. Thereafter, the Bank secured an order from the court appointing a receiver and manager for the mortgaged property, who was charged with collecting tenant rents, paying the expenses for the property, and turning over the net proceeds to the Bank.
The Bank also secured a final judgment of foreclosure in the Chancery Division action. Among other things, the judgment directed the Bergen County Sheriff to sell the mortgaged property. The sheriff initially scheduled the sale for October 7, 2011, but the sale was adjourned and rescheduled for November 4, 2011.
HPA endeavored to effect a private sale to Vanick Properties, Inc. (Vanick), but the sale was not consummated. HPA and others thereupon instituted an action against Vanick and other parties in the Chancery Division. The court enjoined the sheriff from selling the property until December 2, 2011. The parties to that action engaged in negotiations, and sought to determine whether Vanick's offer would be sufficient to satisfy all of the claims against the property.
On November 15, 2011, Jared M. Lans (Lans), counsel for HPA and other parties, sent Frederic M. Shulman, the Bank's attorney, an e-mail message, offering to resolve the Bank's claims under the mortgages. In his e-mail, Lans acknowledged that the rent receiver had collected monies ...