Submitted November 15, 2017
appeal from Superior Court of New Jersey, Chancery Division,
Cape May County, Docket No. F-031832-14.
Saldutti Law Group, attorneys for appellant (Robert L.
Saldutti and Thomas B. O'Connell, of counsel and on the
Fellheimer & Eichen LLP, attorneys for respondent (John
J. Jacko, III, of counsel and on the brief; Alan S.
Fellheimer, on the brief).
Judges Alvarez, Currier, and Geiger.
GEIGER, J.S.C. (temporarily assigned).
Plaintiff Customers Bank appeals from an October 5, 2016
order: (1) vacating a December 31, 2014 order; (2)
reinstating the final judgment of foreclosure in the amount
of $612, 912.31, inclusive of interest and counsel fees; (3)
declaring the foreclosure judgment satisfied; and (4)
ordering plaintiff to refund the sum of $28, 976.13 to
defendant Reitnour Investment Properties, LP (RI Properties).
For the reasons that follow, we affirm.
derive the following facts from the record. Between 1999 and
2012, plaintiff, defendant Phillip A. Reitnour (Reitnour),
and other entities in which Reitnour has an ownership
interest (the Reitnour entities) entered into a series of
four loan agreements.
these transactions was a 2008 loan entered into by
ANYTHINGFORSALEBYOWNER.COM, LLC (Anything for Sale)
(the 2 008 Loan). Anything for Sale borrowed the principal
amount of $600, 000 from New Century Bank, now known as
Customers Bank. The 2 008 Loan was memorialized in a
Promissory Note (the 2 008 Note) and Business Loan Agreement
and secured by a second mortgage on property located in Stone
Harbor, New Jersey (the Stone Harbor property) and an
assignment of rents. The mortgage contains a maximum lien
clause, which states: "The lien of this [m]ortgage shall
not exceed at any one time $600, 000.00."
Properties, is the fee simple owner of the Stone Harbor
property. The property is a summer home for Reitnour, the
principal of RI Properties. Reitnour and RI Properties were
listed as guarantors on the loan agreement.
2008 Note contains the following prepayment clause:
PREPAYMENT. Borrower agrees that all loan fees and other
prepaid finance charges are earned fully as of the date of
the loan and will not be subject to refund upon early payment
(whether voluntary or as a result of default), except as
otherwise required by law. Except for the foregoing, Borrower
may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless
agreed to by Lender in writing, relieve Borrower of
Borrower's obligation to continue to make payments under
the payment schedule. Rather, early payments will reduce the
principal balance due and may result in Borrower's making
fewer payments. Borrower agrees not to send Lender
payments marked "paid in full", "without
recourse", or similar language. If Borrower sends such a
payment, Lender may accept it without losing any of
Lender's rights under this Note, and Borrower will remain
obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, indicates
any check or other payment instrument that includes that the
payment constitutes "payment in full" of the amount
owed or that is tendered with other conditions or limitations
or as full satisfaction of a disputed amount must be mailed
or delivered to: New Century Bank, 99 Bridge Street,
Phoenixville, PA, 19460-3411.
Stone Harbor property was further pledged as collateral to
secure a commercial loan to Reitnour in 2012. This security
took the form of a third mortgage lien.
August 1, 2013, one of the loans became due, triggering a
cross-default and acceleration, encompassing all loans
entered into by plaintiff, Reitnour, and the Reitnour
entities. On September 16, 2013, plaintiff entered into a
forbearance agreement with Reitnour and the Reitnour
entities. The parties agreed to a six-month extension on all
loan agreements. While RI Properties is listed as a party to
the forbearance agreement, it did not execute the agreement.
Forbearance Agreement reads in relevant part:
Cross-Collateralization. Borrower acknowledges that a
condition of this Forbearance Agreement is that all loans and
obligations shall service as collateral for each of the
related loans and obligations. It is agreed that all loans
and their security shall serve as collateral for each and
every obligation and loan and are cross-collateralized.
April 24, 2014, plaintiff filed three actions for confession
of judgment in the Court of Commons Pleas for Chester County,
Pennsylvania. This led to the entry of judgments by
confession against Phillip A. Reitnour and RI Properties in
the amount of $634, 788.59 (the 2008 Loan); against Phillip
A. Reitnour and Emergensee, LLC in the amount of $733, 493.88
(the 2011 Loan); and against Phillip A. Reitnour, Emergensee
U, Inc., and Emergensee, LLC in the amount of $875, 264.63
(the 2012 Loan).
Reitnour defaulted on the forbearance agreement, plaintiff
commenced this foreclosure action on August 4, 2014, seeking
to foreclose the Stone Harbor property.
October 23, 2014, plaintiff voluntarily dismissed the unknown
occupants as defendants and filed a motion to enter final
judgment in foreclosure against Reitnour and RI Properties in
the amount of $585, 764.74.
receiving a notice of deficiency from the Office of
Foreclosure with regard to service of Reitnour and as to the
third mortgage lien, plaintiff dismissed Reitnour as a
defendant in the foreclosure action and proceeded with the
foreclosure action only in regard to the second mortgage lien
arising out of the 2008 Loan (the mortgage).
December 11, 2014, in the course of the confessed judgment
proceedings, plaintiff, Reitnour, and the confessed judgment
defendants (including RI Properties) entered into a
settlement agreement in which the borrowers and guarantors
were collectively identified as "Reitnour." The
Settlement Agreement confirmed the total indebtedness of all
outstanding loans was $2, 569, 422.94, confirmed the terms
and provisions of the respective loan documents, and
established settlement conditions for Reitnour and plaintiff,
including a payment plan for plaintiff to
"standstill" regarding the foreclosure.
settlement agreement reads in relevant part:
2. Confirmation of Loan Documents. Reitnour hereby
ratifies and confirms in all respects the terms and provision
of the respective loan documents including the September 16,
2013 Forbearance Agreement and the Allonges attached thereto
as well as the original loan documents and any modifications
3. Conditions of Settlement to TRI Properties 1. .
.[RI Properties] agrees as follows:
(a) [1RI Properties] shall pay the sum of Five Hundred
Thousand ($500, 000.00) Dollars . . . on or before December
31, 2014, with the payment to be credited against the total
amount of indebtedness . . .; and
(b) [RI Properties Defendant] shall pay the balance due and
owing to [plaintiff] as set forth ... in Paragraph 1 . . . on
or before ...