NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
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 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.
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 ...