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Bazuaye v. Manns

Superior Court of New Jersey, Appellate Division

October 22, 2013

JOROMI BAZUAYE, Plaintiff-Appellant,
YVONNE MANNS, Defendant-Respondent, and CENDANT MORTGAGE CORPORATION, and LORETTA STRACHAN, and TED MOZES, ESQ., JOROMI BAZUAYE, Plaintiff-Appellant/ Cross-Respondent,
YVONNE MANNS and LORETTA STRACHAN, Defendants, and COLDWELL BANKER, and TED MOZES, ESQ., Defendant/Third Party Plaintiff-Respondent/Cross-Appellant,


Argued September 16, 2013

On appeal from the Superior Court of New Jersey, Chancery Division, Hudson County, Docket Nos. C-80-08 (A-2608-11), L-3732-08 (A-3013-11).

Michael Confusione argued the cause for appellant/cross-respondent Joromi Bazuaye in A-3013-11 (Hegge & Confusione, L.L.C., attorneys; Mr. Confusione, of counsel and on the brief).

William C. Sandelands argued the cause for respondents Yvonne Manns and PHH Mortgage Corporation in A-2608-11 (Sandelands Eyet L.L.P., attorneys; Mr. Sandelands, of counsel and on the brief; Alina H. Eyet, on the brief).

Robyn Gnudi Kalocsay argued the cause for respondent/cross-appellant Ted Mozes in A-3013-11 (LeClairRyan, attorneys; Ms. Kalocsay, of counsel and on the brief; Sarah K. Hook, on the brief).

Francis X. Riley, III, argued the cause for respondent/cross-appellant Coldwell Banker in A-3013-11 (Saul Ewing, L.L.P., attorneys; Mr. Riley, of counsel; Michael Rowan, on the brief).

Joseph A. Manfredi argued the cause for respondent/cross-appellant David Bendel in A-3013-11 (Manfredi & Pellechio, attorneys; Mr. Manfredi, of counsel and on the brief; Laura M. Caillier, on the brief).

Before Judges Parrillo, Harris, and Guadagno.


In these appeals, calendared back to back and consolidated for purposes of this opinion, plaintiff Joromi Bazuaye appeals from the December 22, 2011 order of the Chancery Division dismissing his complaint with prejudice and discharging his notice of lis pendens on certain property in Jersey City. Plaintiff also appeals from the February 6, 2012 order of the same court entering judgment in the amount of $30, 000 against defendant Loretta Strachan. Finally, plaintiff appeals from the January 20, 2012 order of the Law Division dismissing all remaining counts of his complaint. For the reasons that follow, we affirm the two orders of dismissal, but vacate the order granting judgment against Loretta Strachan.


Plaintiff and defendant Loretta Strachan[4] began a romantic relationship in approximately 1998. On July 31, 2002, plaintiff purchased property located on Ninth Street in Jersey City for $360, 000, obtaining a $290, 000 first mortgage from Flagstar Bank, FSB.

In October 2002, a Flagstar auditor reviewed plaintiff's loan and found that he had misrepresented his income. The auditor noted that plaintiff's application claimed W-2 wages in 1999 of $313, 548.24, while his federal tax return reported total income of $1, 125, and adjusted gross income of zero. In 1998, plaintiff claimed W-2 wages of $302, 824.37 on the loan application and reported zero wages to the IRS and adjusted gross income of fifteen dollars. Plaintiff also misrepresented his employment, claiming he was an employee of Aye Capital, when, in fact, he was the owner of the company.

Flagstar's contract with plaintiff's mortgage loan broker required the broker to repurchase a loan in the event material misrepresentations were discovered. Flagstar contacted the broker and demanded it repurchase the loan. The broker advised plaintiff that Flagstar had discovered his fraud and urged plaintiff to refinance.

In December 2002, plaintiff was arrested by federal authorities on unrelated fraud charges. After Strachan posted his bail, plaintiff sought to refinance the mortgage. In June 2003, the refinancing was approved for a $425, 000 loan, but before the loan could close, plaintiff's bail was revoked and he was again incarcerated.

Plaintiff began to use Strachan to conduct his personal and business dealings. From prison, plaintiff had access to a phone and spoke with Strachan on a daily basis, often, several times a day. Plaintiff prepared and signed a power of attorney (POA) authorizing Strachan to execute documents for the refinancing, but the mortgage broker, Aaron Eisenberg, told Strachan that the closing attorney expected plaintiff to appear at the closing. When Strachan informed plaintiff of this problem, he instructed her to give his driver's license and social security card to a friend, "Ti, " so Ti could attend the closing and pose as plaintiff.

On August 5, 2003, Ti and Strachan attended the closing and Ti identified himself as plaintiff. From prison, plaintiff spoke with Ti on Strachan's cell phone and instructed him to sign plaintiff's name to the closing documents. The closing attorney never learned of the deception.

Strachan received a check for $92, 326.82, representing the loan proceeds, less the payout to Flagstar. Plaintiff told Beverly Mack, a broker at Janney Montgomery Scott, that Strachan would be opening a brokerage account in his name. Plaintiff told Strachan to sign his name on the account application and deposit the check in the account. From prison, plaintiff used the Janney account to trade stocks through Mack. He also directed Strachan to create and sign his name to various letters to Mack that authorized several large wire transfers to Strachan's business from the Janney account to pay plaintiff's bills, including his mortgage. Plaintiff said that the letters were created because Mack "wanted something in writing."

Strachan used Janney funds to pay some of plaintiff's bills and, with plaintiff's knowledge, paid some of her own bills as well. Strachan explained that much of the money went to pay the attorneys representing plaintiff in the federal prosecution.

When the money in the Janney account was depleted, Strachan stopped paying the mortgage on the Ninth Street property. On December 2, 2003, the mortgage loan servicer issued a notice of intention to foreclose. When Strachan told plaintiff of the foreclosure notice, he instructed her to contact defendant David Bendel, a real estate agent, to arrange for the sale of the property. Bendel had met with plaintiff earlier in 2003, before he was incarcerated, and listed the Ninth Street property for rent, but plaintiff was seeking $5, 000 per month, and there were no takers at that price.

Bendel visited the property, met with Strachan and then spoke with plaintiff by phone. Plaintiff told Bendel that Strachan had his POA and was authorized to sign the listing agreement on his behalf. On March 24, 2004, Bendel prepared a listing agreement and Strachan signed plaintiff's name to it.

Bendel had several conversations with plaintiff after the listing agreement was signed. Bendel would arrange a meeting with Strachan and speak with plaintiff on Strachan's cell phone. The original listing price was $699, 000 but the property was not generating offers, and Bendel spoke with Strachan about reducing the price. Both Bendel and Strachan testified that plaintiff agreed to a reduction, as he "was in a rush" to sell the property. Plaintiff feared the property might be seized and forfeited in connection with the federal fraud charges he was facing. In 2004, plaintiff was convicted of bank fraud and sentenced to thirty-three months in prison.[5]

After the initial price was reduced, defendant Yvonne Manns agreed to purchase the house for $615, 000. At the time of the sale, the amount due on the mortgage was $469, 365.11. Plaintiff told Strachan to obtain the name of a lawyer for the closing from Aaron Eisenberg. Eisenberg referred her to defendant Ted Mozes. Mozes, who was not admitted to the bar in New Jersey, had no written retainer agreement with plaintiff and was unaware one was necessary in New Jersey. This was the only New Jersey closing Mozes ever handled.

Mozes initially believed Strachan owned the home, but before the closing she told him that plaintiff owned the property and was incarcerated. Mozes never met with plaintiff but had several phone conversations with him. The closing documents Mozes prepared were sent to Strachan "as per [plaintiff's] instructions to do whatever she said." Mozes prepared a POA for plaintiff's signature, but when Strachan told plaintiff he had to sign the POA, he told her "you have the power of attorney to sign my name. . . . Just sign my name . . . ." At plaintiff's direction, Strachan contacted a man named "Taye." Taye came to the salon where Strachan worked, picked up the unsigned POA and returned with it notarized within a day or two.

The POA was notarized by Omololu Osibodu. Although Osibodu testified at trial and denied notarizing plaintiff's signature, the trial court found his testimony incredible. After Strachan faxed the notarized POA to Mozes, he later spoke with someone who identified himself as Osibodu. Mozes requested confirmation that Osibodu notarized plaintiff's signature on the POA and Mozes received a letter from Osibodu that stated:

As per conversation on June 14, 2004 you requested a letter regarding the notary signed by Joromi Bazuaye. I witness [sic] and notarized the Power of Attorney in the month of May 2004, at the Federal Prison on Park Row. Mr. Bazuaye is a personal friend of mine for many years.

Strachan did not want anyone to know plaintiff was in prison so Mozes told the representative from the title company that plaintiff was out of the country. The title company did not raise any question regarding the POA. When the buyer's attorney, Eric Wasser, learned at closing that a POA would be used, he added the words "Prepared by, " and printed Strachan's name under the signature line, so the POA could be recorded.

The POA provided the grantee would receive all proceeds from the sale of the property, but Mozes confirmed with plaintiff that Strachan would direct how the proceeds would be distributed. Mozes spoke with plaintiff before the closing and plaintiff told him to do "whatever Loretta says to do." He spoke again with plaintiff after the closing.

Mozes wired $44, 571.97 from his escrow account to the Janney account on June 23, 2004. Transfer of the remaining proceeds was delayed because the purchaser required Strachan to remove additional debris from the property. On July 23, 2004, Mozes wrote a check from his escrow account to Strachan for $64, 960 representing the balance of the proceeds.

Strachan testified that plaintiff "was aware of every step of the way, " and that plaintiff called her at least four times on the day of the closing, "screaming my phone off the chin." Plaintiff did not want the closing check made payable to him, but Mozes did not want to put the funds in Strachan's name. When plaintiff learned that the proceeds had been wired to his Janney account, he became "very angry" because he believed "that the Feds is going to take away everything." Plaintiff told Strachan to move the money to an account she controlled, Krystla Cleaning Services.

Strachan made various payments from the proceeds including to plaintiff's criminal attorney and his sister. Strachan took approximately $30, 000 for herself that she claims plaintiff promised her. She also put $10, 000 back into the Janney account so plaintiff could continue trading stocks.

On May 23, 2008, plaintiff filed a complaint in the Chancery Division against Strachan, Mozes, and Yvonne Manns, seeking to declare the June 16, 2004, deed in Manns's name null and void. Plaintiff also sought money damages from Strachan for allegedly forging plaintiff's signature on the POA. Plaintiff asserted malpractice and negligence claims against Mozes and sought a declaration that Manns was not a good faith purchaser for value because she knew the POA was a forgery. Plaintiff also requested that a constructive trust, equitable lien, or lis pendens be placed on the property during the pendency of the litigation.

Plaintiff asserted that the property "was sold out from under him . . . by use of a fraudulent Power of Attorney" executed by Strachan. Although plaintiff conceded he authorized Strachan to pay certain bills while incarcerated, he claimed she was not authorized to sell his home.

The court severed the malpractice, negligence, and fraud claims against Mozes and Strachan and transferred them to the Law Division. The Chancery trial took place over ten days from May 12, 2009, to April 26, 2011. On December 22, 2011, the Chancery court entered an order dismissing the complaint. In an oral decision, the court concluded that defendants Manns and PHH were bona fide purchasers and plaintiff had failed to establish that the POA was fraudulent. The court found that plaintiff not only authorized the sale of the Ninth Street property but was involved in all phases of the transaction in order to complete the sale before the home was lost through forfeiture in connection with plaintiff's federal fraud charges. On February 1, 2012, defendant filed a notice of appeal from the December 22, 2011 order.

On January 20, 2012, the Law Division judge entered an order holding that the findings of the Chancery court required dismissal of the remaining Law Division counts based on the doctrines of res judicata and collateral estoppel. On February 22, 2012, plaintiff filed a notice of appeal from the January 20, 2012 order.

Plaintiff then sought entry of a default judgment against Strachan for $92, 276.08. On February 6, 2012, the Chancery court entered judgment against Strachan for $30, 000 "for the conversion of funds belonging to [plaintiff]."



Plaintiff argues that the trial court's judgment must be reversed because the POA was ineffective as an instrument to convey legal title to Manns. He claims the POA is a "forgery" that failed to comply with the statutory requirements to transfer title to real property and Manns is not a bona fide purchaser because a forged deed cannot convey title. We disagree.

The POA statute, N.J.S.A. 46:2B-8.9, on which plaintiff relies, provides that "[a] power of attorney must be in writing, duly signed and acknowledged in the manner set forth in [N.J.S.A.] 46:14-2.1." The statute provides for acknowledgment of a POA as follows:

a. To acknowledge a deed or other instrument the maker of the instrument shall appear before an officer specified in [N.J.S.A.] 46:14-6.1 and acknowledge that it was executed as the maker's own act. . . .
b. To prove a deed or other instrument, a subscribing witness shall appear before an officer specified in [N.J.S.A.] 46:14-6.1 and swear that he or she witnessed the maker of the instrument execute the instrument as the maker's own act. . . .
c. The officer taking an acknowledgment or proof shall sign a certificate stating that acknowledgment or proof. The certificate shall also state:
(1) that the maker or the witness personally appeared before the officer;
(2) that the officer was satisfied that the person who made the acknowledgment or proof was the maker of or the witness to the instrument;
(3) the jurisdiction in which the acknowledgment or proof was taken;
(4) the officer's name and title;
(5) the date on which the acknowledgment was taken.
d. The seal of the officer taking the acknowledgment or proof need not be affixed to the certificate stating that acknowledgment or proof.

[N.J.S.A. 46:14-2.1.]

Plaintiff contends that the POA in this case failed to comply with the statute's requirements in that it was not signed by him and he had not appeared before the notary public. He notes the notary denied having witnessed plaintiff's signature, and the instrument states that it was made in Kings County, while he was incarcerated in Manhattan.

The trial court found that the "mark" on the POA that purported to be plaintiff's signature was made with his authority and was done to effectuate his intent that the property be sold. The record supports the court's findings that Strachan and Osibodu both acted pursuant to plaintiff's direction.

There was ample evidence to support Strachan's testimony that she merely followed plaintiff's directions as conveyed to her in their daily cell phone conversations. Bendel testified he received instructions from plaintiff, whose voice he recognized, in the same manner, and Mozes also received instructions from plaintiff. Strachan said the POA was returned to her with plaintiff's signed and notarized signature after she had given it to plaintiff's friend as plaintiff instructed.

The court's finding that Osibodu's denials lacked credibility is also supported by substantial evidence in the record. Osibodu provided no support for his assertion that his notary stamp and signature on the POA were forgeries, and offered inconsistent testimony when confronted with the existence of a raised seal on the document. His explanations that deflected responsibility for his prior fraud-related convictions also undermined the credibility of his testimony, including his claims to have never met or spoken to plaintiff. The court's finding that he acted under plaintiff's control was well supported by the record.

The factual findings of a judge sitting in a non-jury case will not be disturbed on appeal unless manifestly unsupported by or contrary to the relevant, competent, and reasonably credible evidence in the record. Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150, 169 (2011). The factual findings show that the signature on the POA was a "mark" made with plaintiff's authority and to effectuate his intent in accordance with the requirements of N.J.S.A. 46:14-4.2. It was a valid signature for purposes of the POA.

Plaintiff also argues that the POA was ineffective because it failed to comply with the requirements of N.J.S.A. 46:6-1, which states that title to real property may be conveyed by deed under authority of a POA, but only if the POA is "first acknowledged or proved and certified and entered upon the public records[.]" Plaintiff contends that the POA was insufficient because it was not recorded prior to the closing date and recording of the deed to defendant Manns.

First, it is unclear that N.J.S.A. 46:6-1 is applicable here, because that 1898 statute is concerned primarily with the validity of deeds, grants, sales, and other conveyances "entered on the public books of records of the province of New Jersey or the public books of records of the eastern or western divisions thereof, prior to July fourth, one thousand seven hundred and seventy-six[.]" L. 1898, c. 232, §5, p. 671. Plaintiff cites no authority to support the application of this statute to a conveyance and deed initially made after that date. Second, the POA and deed here were filed on the same day. In fact, the POA was filed at 8:25 a.m. and the deed at 8:27 a.m.

Plaintiff repeatedly maintains that Strachan's signing of his name was "a forgery." The court found that Strachan acted with plaintiff's authorization when she presented the POA and relied on it to sign the closing documents. Strachan did not forge plaintiff's signature, because he authorized her to sign the documents on his behalf. The trial court properly rejected plaintiff's claim that title could not pass to Manns as a bona fide purchaser because the deed was forged. No such forgery occurred.


Plaintiff argues that the trial court erred when it placed the burden of proof on him to prove by clear and convincing evidence his entitlement to an equitable remedy.

Rescission is an equitable remedy that allows a court to return parties to the status quo ante. Rutgers Cas. Ins. Co. v. LaCroix, 194 N.J. 515, 527 (2008). Its application will serve to void a contract ab initio as though the contract were null from its inception and no longer exists for any purpose. First Am. Title Ins. Co. v. Lawson, 177 N.J. 125, 137 (2003). Fraud by either party may serve as a basis to rescind a contract when one party has gained an unfair advantage through a fraudulent misrepresentation, and money damages alone are insufficient to remedy the injury. LaCroix, supra, 194 N.J. at 527; Jewish Ctr. of Sussex Cnty. v. Whale, 86 N.J. 619, 626-27 (1981). Rescission of a contract based on fraud requires proof of the fraud by clear and convincing evidence. Weil v. Express Container Corp., 360 N.J.Super. 599, 613 (App. Div.), certif. denied, 177 N.J. 574 (2003).

In this case, plaintiff sought rescission of the sale contract based on his allegations that Strachan had engaged in fraudulent conduct. He was required to prove those allegations by clear and convincing evidence. The court found that he did not do so and its findings are well supported by the record.

Moreover, the court acted properly in relying, in part, on the doctrine of unclean hands as a basis to dismiss plaintiff's complaint. The equitable doctrine of unclean hands grants discretion to a trial court to refuse relief to one who is a wrongdoer with respect to the subject matter of the suit. Borough of Princeton v. Bd. of Chosen Freeholders, 169 N.J. 135, 158 (2001). "[E]quity cannot be invoked by one with unclean hands to do injustice." Gonzalez v. Wilshire Credit Corp., 207 N.J. 557, 581 (2011). The doctrine denies a plaintiff "the special remedies of equity, leaving him to his remedies at law." Merchants Indem. Corp. v. Eggleston, 37 N.J. 114, 132 (1962).

Plaintiff has made no showing that the trial court abused its discretion when it relied on the doctrine of unclean hands as a partial basis for its decision to dismiss plaintiff's complaint. There is ample evidence in the record of plaintiff's fraudulent conduct in securing the original mortgage, the refinancing, and the contract of sale. The court correctly determined that plaintiff could not rescind the transaction he procured through his own fraudulent conduct.


Plaintiff argues that, based on Strachan's default, all of his allegations against her should have been deemed admitted pursuant to Rule 4:5-5, and that the $30, 000 judgment awarded by the court should be amended to reflect the entire amount of the closing proceeds of approximately $100, 000. This argument has no merit for several reasons.

Rule 4:5-5 is inapplicable here. It states, in relevant part: "Allegations in a pleading which sets forth a claim for relief, other than those as to the amount of damages, are admitted if not denied in the answer thereto." Plaintiff has failed to include Strachan's answer in his appellate appendix but, at trial, his attorney conceded that Strachan had filed a responsive pleading that generally denied the allegations.

Although Strachan has not appealed the default judgment, it is clear that the judgment was not properly entered. Strachan appeared for the order to show cause, filed an answer, and had been deposed prior to trial, all of which occurred before the court entered default against her when she failed to appear at trial. Nevertheless, plaintiff's counsel told the court that he considered Strachan "an active defendant, " and his brief description of his conversation with Manns's attorney, and Strachan, suggests the Georgia resident may have believed it was unnecessary for her to appear in New Jersey at trial. The court was required to inquire further to determine why Strachan failed to appear at trial, when she had participated in the proceedings until that point.

Moreover, the court's entry of judgment based on Strachan's misappropriation of funds was improper because count seven of the complaint, which contained those allegations, had been transferred to the Law Division. The only count against Strachan for money damages that remained in the Chancery Division was count two, which was based on the allegation that plaintiff was entitled to recover the proceeds plus lost and future equity because Strachan had forged plaintiff's signature on the POA. Because the Chancery court found that had not occurred, there was no basis to award plaintiff any damages on that count.

The record is devoid of proof that Strachan was properly served with the motion for default judgment. Plaintiff claims to have mailed a copy to her, but he was required to serve her by registered or certified mail, or by personal service. R. 1:5-1 to -2; R. 4:4-4. Furthermore, Strachan clearly received no notice of a proof hearing, as required by Rule 4:43-2(b), because none was held.

Although the decision whether to hold a proof hearing is within the trial court's discretion, Rule 4:43-2(b); Heimbach v. Mueller, 229 N.J.Super. 17, 20-22 (App. Div. 1988), the trial court abused that discretion here. The court found that the proofs at trial clearly showed plaintiff controlled the sale of the property and the disposition of the proceeds. Having denied plaintiff's claims, the court improperly entered judgment based solely on Strachan's equivocal statement in her trial deposition where she said she might have taken approximately $30, 000, but she was unsure whether she took it before she learned from plaintiff's sister that he did not want her to have the money. It was an abuse of discretion for the court to rely on that equivocal testimony without a proof hearing.

Finally, when the Chancery Division entered judgment against Strachan, it no longer had jurisdiction over the matter. On December 22, 2011, the Chancery court dismissed the complaint against all defendants with prejudice; on January 6, 2012, the court denied plaintiff's motion for reconsideration and to amend its factual findings; and on January 13, 2012, plaintiff filed his motion to enter default judgment against Strachan for $92, 000. Plaintiff filed a notice of appeal from the December 22, 2011 order on February 1, 2012. Thus, the Chancery court lacked jurisdiction to enter the February 6, 2012 judgment against Strachan.

The filing of a notice of appeal deprives a trial court of jurisdiction for any further action in a matter, unless the issue is one where jurisdiction has been reserved in the trial court by statute or court rule, or involves enforcement of a prior judgment or order. Manalapan Realty, L.P. v. Twp. Comm., 140 N.J. 366, 376 (1995); R. 2:9-1.

Although plaintiff's notice of appeal indicated that claims remained for disposition, the trial court already had entered final judgment that dismissed all of plaintiff's claims against all parties. No claims remained for adjudication by the Chancery Division, as plaintiff's claims for money damages had been transferred to the Law Division.

Even if the Chancery Division's entry of judgment for money damages is construed as part of the equitable relief it was empowered to provide based on the equitable claims before it, rather than encompassed within the claims that had been transferred, it no longer had jurisdiction to grant that relief once plaintiff filed his notice of appeal.


After the dismissal of plaintiff's complaint by the Chancery Division, the Law Division dismissed plaintiff's remaining claims as barred by the doctrines of res judicata and collateral estoppel, based on the Chancery Division's findings. Plaintiff argues that the court erred because the elements of those doctrines were not satisfied. While we agree that res judicata did not apply, the Law Division properly dismissed the complaint as barred by principles of collateral estoppel.

Res judicata is a broad common-law doctrine that bars relitigation of claims or issues that have already been decided. Mortgagelinq Corp. v. Commonwealth Land Title Ins. Co., 142 N.J. 336, 346 (1995). As a judicially imposed doctrine, it serves to implement the policy goals of "'finality and repose; prevention of needless litigation; avoidance of duplication; reduction of unnecessary burdens of time and expenses; elimination of conflicts, confusion and uncertainty; and basic fairness[.]'" First Union Nat'l Bank v. Penn Salem Marina, Inc., 190 N.J. 342, 352 (2007) (quoting City of Hackensack v. Winner, 82 N.J. 1, 32-33 (1980)). It conserves "judicial resources by barring duplicative litigation of claims or issues already determined." Culver v. Ins. Co. of N. Am., 115 N.J. 451, 471 (1989). Res judicata may be applied to preclude a successive litigation when there exists "(1) a final judgment by a court of competent jurisdiction, (2) identity of issues, (3) identity of parties, and (4) identity of the cause of action." In re Estate of Gabrellian, 372 N.J.Super. 432, 446 (App. Div. 2004), certif. denied, 182 N.J. 430 (2005).

Collateral estoppel, or issue preclusion, is an aspect of the doctrine of res judicata. Mortgagelinq Corp., supra, 142 N.J. at 346. Relitigation of an issue is foreclosed when:

(1) the issue to be precluded is identical to the issue decided in the prior proceeding; (2) the issue was actually litigated in the prior proceeding; (3) the court in the prior proceeding issued a final judgment on the merits; (4) the determination of the issue was essential to the prior judgment; and (5) the party against whom the doctrine is asserted was a party to or in privity with a party to the earlier proceeding.

[First Union, supra, 190 N.J. at 352.]

In T.W. v. A.W., 224 N.J.Super. 675, 682 (App. Div. 1988), certif. denied, 117 N.J. 44 (1989), we explained the distinction between the two concepts: "Res judicata applies when either party attempts to relitigate the same cause of action. Collateral estoppel applies when either party attempts to relitigate facts necessary to a prior judgment."

The broader doctrine of res judicata was inapplicable here because the causes of action in the Chancery and Law Division matters were not the same. The Chancery Division claims sought rescission of the contract of sale, to void Manns's deed to the property, and damages from Strachan based on the allegations that she had forged the POA. The Law Division matter asserted claims of malpractice, negligence, and consumer fraud.

However, the court correctly found that plaintiff's right to assert any of these claims in the Law Division was barred by the principles of collateral estoppel. The Law Division litigation represented an attempt by plaintiff to relitigate the facts already decided by the Chancery court. All of the elements to bar the claims under the doctrine of collateral estoppel were met.

Count three alleged that Mozes had "failed to use the discretion and proper care expected of an attorney according to the custom and practices of the States of New York and New Jersey, and thereby allowed his client's home to be sold without his consent via an unauthorized and fraudulent power of attorney." The Chancery court found that Mozes had not allowed plaintiff's home to be sold without his consent or via an unauthorized POA. To the contrary, it found that plaintiff had consented to and authorized the POA.

Plaintiff was collaterally estopped from relitigating that issue in count three. First, the facts that underlay plaintiff's allegation in count three had been decided in a final judgment on the merits. Second, the determination that Mozes had not allowed the property to be sold using an unauthorized POA was essential to the Chancery court's decision that the contract should not be rescinded. The Chancery court denied plaintiff's application to rescind the contract specifically because it found that plaintiff had authorized the use of the POA for the sale. Third, in the Law Division case, Mozes sought to assert the doctrine against plaintiff, who was a party in the earlier action.

Plaintiff argues that the issues were not identical because he had alleged malpractice against Mozes on the bases that Mozes had never met with plaintiff before he undertook to represent plaintiff in the sale of the home, he relied on a POA that he did not witness, and he drafted the POA and, by doing, so facilitated Strachan's fraud and wrongdoing. However, to establish his malpractice claim, plaintiff also was required to show that Mozes's actions were the proximate cause of his damages. See Jerista v. Murray, 185 N.J. 175, 190-91 (2005).

The Chancery decision resolved that issue, because it found that plaintiff had not been damaged by the sale of the home through the fraudulent means of any actor but himself, because he intended to sell it and authorized the sale. Even if plaintiff were able to show that the factual allegations in his claim established that Mozes had breached a duty of care to him, he still would have been barred by collateral estoppel principles from maintaining a claim for malpractice because the Chancery Division already had ruled that he was unable to prove that Mozes's actions were the proximate cause of his damages.

Count four was based on the same factual underpinnings. Plaintiff alleged that Mozes's negligent conduct had allowed plaintiff's home "to be sold without his consent via an unauthorized and fraudulent power of attorney." However, the Chancery court found that had not occurred. Plaintiff's property had not been sold without his consent, and it had not been sold via an unauthorized POA. If any fraud occurred, it was perpetrated by plaintiff and not against him.

Count seven alleged that Mozes, along with Strachan, had misappropriated the sale proceeds "after they engaged in a wrongful sale of the [home] by selling Plaintiff's home without his consent via an unauthorized and fraudulent power of attorney." It is undisputed that Mozes transferred an initial payment of approximately $44, 000 from the proceeds directly to plaintiff's Janney account and that he paid to Strachan the second payment of approximately $66, 000. However, the Chancery court found that Mozes had acted in accordance with plaintiff's wishes and instructions. It also found that, contrary to plaintiff's claims that the money had been misappropriated from the Janney account, plaintiff was angry that it had been placed there at all. Plaintiff's fear that the federal government would seize his assets had caused him to direct the sale proceeds be paid to Strachan. The Chancery court found that Mozes dispersed the proceeds in accordance with plaintiff's direction and plaintiff was estopped from relitigating that issue in his Law Division claim in count seven.

Collateral estoppel also serves to bar plaintiff's claim against Coldwell Banker and Bendel, asserted in count eight. That count alleged they had committed consumer fraud and fraud when they "improperly and improvidently signed various listing agreements without appropriate authorization on behalf of the plaintiff resulting in damages[, ]" and that "Coldwell Banker was negligent through having inappropriate procedures in place at the time of the transaction permitting this event and the transaction to occur without the appropriate authorization from the plaintiff." Plaintiff alleged that because of these actions he "was forced to sustain monetary damages."

The Chancery court found that Bendel had spoken to plaintiff on Strachan's cell phone and, in multiple conversations, plaintiff authorized Strachan to sign the listing agreement and other Coldwell Banker documents on plaintiff's behalf. The only fraud that occurred was committed by plaintiff, not Bendel or Coldwell Banker. Plaintiff had not sustained any damages when his house was sold, because he wanted and intended to sell it to avoid foreclosure and the possibility of forfeiture. Bendel and Coldwell Banker properly asserted the bar of collateral estoppel against plaintiff, because he was a party to the first action that resolved the factual issues that underlie plaintiff's claims against them in count eight.

The Chancery Division order of December 22, 2011, dismissing plaintiff's complaint with prejudice is affirmed, as is the Law Division order of January 20, 2012. The February 6, 2012 Chancery Division order entering judgment for $30, 000 against defendant Loretta Strachan is vacated.

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