Opinion
DOCKET NO. A-4214-12T3
05-20-2014
BARBARA H. FLEISHER and MICHAEL GINN, CUST. EDEN GINN UNIF TRAN MIN ACT PA, Plaintiffs-Respondents/Cross-Appellants, v. ROSE E. COLON a/k/a ROSE COLON, THE STATE OF NEW JERSEY and RONALD W. HOROWITZ, Defendants, and KIM-AHN NGUYEN, Defendant-Appellant/Cross-Respondent.
Bruce D. Nimensky and Christopher J. Lombardo argued the cause for appellant/ cross-respondent (Mr. Nimensky and Mr. Lombardo, attorneys; Mr. Lombardo, of counsel; Mr. Nimensky, on the brief). John-Paul Madden argued the cause for respondent/cross-appellant (Madden & Madden, P.A., and Archer & Greiner, P.C., attorneys; Joseph A. Martin and Darth M. Newman, of counsel; Mr. Madden, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Fisher, Koblitz and O'Connor.
On appeal from the Superior Court of New Jersey, Chancery Division, Monmouth County, Docket No. F-3115-07.
Bruce D. Nimensky and Christopher J. Lombardo argued the cause for appellant/ cross-respondent (Mr. Nimensky and Mr. Lombardo, attorneys; Mr. Lombardo, of counsel; Mr. Nimensky, on the brief).
John-Paul Madden argued the cause for respondent/cross-appellant (Madden & Madden, P.A., and Archer & Greiner, P.C., attorneys; Joseph A. Martin and Darth M. Newman, of counsel; Mr. Madden, on the brief). PER CURIAM
This is the third time this matter has come before us. We dismissed an earlier appeal because all issues had not been adjudicated. Fleisher v. Colon, No. A-5299-07 (App. Div. March 13, 2009) (Fleisher I). When finality was later achieved in the trial court, an appeal was filed, and we reversed and remanded because we found disputed factual questions that precluded summary judgment. Fleisher v. Colon, No. A-2807-10 (App. Div. Feb. 6, 2012) (Fleisher II). At the conclusion of the non-jury trial that followed our remand in Fleisher II, the chancery judge determined that defendant Kim-Ahn Nguyen's $92,000 mortgage deserved priority over plaintiffs' mortgage. By way of a motion for reconsideration, Nguyen asserted the judgment entered in an earlier suit had established $120,000 was the proper amount of her mortgage. The judge denied that motion, and Nguyen appeals, arguing, among other things, that the judge did not defer to the earlier judgment as to the amount of the mortgage; plaintiffs filed a cross-appeal, arguing the judge erred in assigning priority to Nguyen's motion. We find no merit in the parties' arguments and affirm.
The circumstances in question, which also involve proceedings in a separate earlier case brought by Nguyen against Colon (hereafter Nguyen v. Colon), were thoroughly outlined in Fleisher II. In a nutshell, Nguyen claimed that, in August 2003, she lent $92,000 to Colon; the loan was to be secured by a mortgage on Morganville property on which Colon ran a business. At the time, the property was encumbered by a mortgage held by Mortgage Electronic Registration, Inc. (MERS), in the principal amount of $251,250.
Nguyen claimed in Nguyen v. Colon that Colon never created the promised second mortgage; in light of the nature of her claims, Nguyen recorded a notice of lis pendens on September 4, 2003. At an interim stage of Nguyen v. Colon, the judge directed Colon - or, upon her failure, her attorney - to "[e]xecute a second mortgage [in the amount of $92,000] on the [Morganville] property and forward said mortgage" to Nguyen. Presumably, that never occurred. The two-day trial in Nguyen v. Colon produced a final judgment on April 12, 2005 that declared Nguyen was entitled to $120,000, to be secured by "a second mortgage" on the Morganville property.
A month later, Nguyen moved for enforcement of the judgment. In his May 27, 2005 order, the chancery judge authorized Nguyen's counsel to prepare a second mortgage and to sign that mortgage as attorney-in-fact; he further ordered that "the clerk shall accept and file same as if Rose Colon had signed same." Nguyen's counsel prepared and recorded a mortgage on June 20, 2005; the mortgage recited that it secured the repayment of $92,000, not $120,000.
The foreclosure action at hand was commenced on February 1, 2007. Plaintiffs alleged that Colon's debt amounted to $350,000, the repayment of which was secured by a mortgage on the Morganville property. They claimed the proceeds from this loan were used, in part, to retire the prior senior mortgage held by MERS or some later assignee of the first mortgage. Nguyen filed a responsive pleading, which plaintiffs moved to strike. The judge granted plaintiffs' motion and Nguyen appealed. As noted above, we dismissed that appeal in Fleisher I because final judgment had not been entered.
A final judgment of foreclosure was entered in plaintiffs' favor on September 29, 2010, and Nguyen again appealed. For the reasons set forth at length in Fleisher II, we agreed with Nguyen, finding the judge erred in summarily concluding that Nguyen's mortgage was inferior to plaintiffs' mortgage; we found disputed questions of fact and a lack of clarity about the equities that precluded summary judgment. That is, we held that Nguyen was entitled to have the judge view the known facts and circumstances in the light most favorable to her and that this basic summary judgment principle — when considered in conjunction with the absence of relevant information in the record and the judge's need to be aware of all the equities before applying the doctrine of equitable subrogation — required a denial of plaintiffs' summary judgment motion. We, therefore, reversed and remanded.
For instance, although the orders entered in Nguyen v. Colon were available at the time, the judge's underlying rulings and the trial transcript in that matter were not available then and, as the record demonstrates, remained unavailable — apparently due to the passage of time — at the trial which occurred following our remand in Fleisher II.
Contrary to Nguyen's argument in this appeal — her contention that we remanded only for a disposition of the priority dispute between plaintiffs and Nguyen — our opinion expresses no such limitation.
Following our remand, a judge previously uninvolved in the earlier proceedings in this matter, or in Nguyen v. Colon, conducted a four-day trial in February 2013, followed by an oral decision on March 13, 2013, and entry of final judgment of foreclosure on April 3, 2013. The judge found, among other things, that Nguyen's mortgage was entitled to "priority to the extent of $92,000 over" plaintiffs' mortgage. In a subsequent motion for reconsideration, Nguyen argued that the proper amount of her mortgage should have been $120,000, relying solely on the April 12, 2005 order entered in Nguyen v. Colon; as mentioned earlier, the passage of time precluded the parties' ability to provide the trial judge with a transcript of the proceedings in Nguyen v. Colon and the only insight we have into the basis for the April 12, 2005 order is the order itself. The trial judge denied the motion for reconsideration on May 3, 2013.
Following our remand, the judge, whose summary judgment was reversed, denied a motion to disqualify him but then referred the matter to the trial judge for all further proceedings.
In the present appeal, Nguyen argues that the trial judge: (1) "erred by disregarding [the earlier] valid, unappealed judgment [in Nguyen v. Colon] fixing the princip[al] amount of [Nguyen's] mortgage together with interest" at $120,000; and (2) "lacked subject matter jurisdiction over the issue of the amount due under [Nguyen's] mortgage." In their cross-appeal, plaintiffs argue that the trial judge erred in determining that Nguyen's mortgage should have priority. We find no merit in any of these arguments and affirm.
The trial judge adhered to the principles applicable to the doctrine of equitable subrogation, which we summarized in Fleisher II, supra, slip op. at 15-18, in resolving the priority dispute. What occurred, according to the trial judge's findings, was that Colon had ignored the court order that mandated her execution and recordation of a mortgage establishing Nguyen's interest while simultaneously permitting plaintiffs, who the judge found were knowledgeable of Nguyen's interest, to outrace Nguyen in recording their mortgage on the same property. For these chief reasons — more fully explained and amplified in her oral decision — the trial judge found it would be inequitable to allow plaintiffs' to take priority over Nguyen's interest. To be sure, although a party who provides funds to retire a first mortgage might ordinarily be entitled to expect that its secured interest would take priority over a preexisting second mortgage, the judge found the other parties' inequitable conduct should deprive plaintiffs of that opportunity. We have no cause to question or second-guess the experienced trial judge's fair and just determination.
And, in rendering her findings, the trial judge found Nguyen's mortgage was for the principal amount of $92,000 — a fact supported by the mortgage itself and by Nguyen's failure to demonstrate otherwise at trial; it was only by way of motion for reconsideration that Nguyen first argued that the trial judge should have found the principal amount of the mortgage to be $120,000 based on the April 12, 2005 judgment entered in Nguyen v. Colon. The judge's refusal to alter her finding was entirely appropriate because plaintiffs failed to demonstrate why the face value of the Nguyen mortgage should not govern in the absence of proof that the insertion of the amount of $92,000 set forth in that document was the product of a mistake. Although we have no means of ascertaining why the judge in Nguyen v. Colon awarded judgment in the amount of $120,000, we note that, at oral argument in this court, Nguyen's counsel stated that this was based on additional loans made by Nguyen to Colon; if this is so, it only further buttresses the trial judge's refusal to reconsider because there is certainly no evidence that Nguyen or Colon intended these later loans were to be secured by a mortgage.
We observed in Fleisher II that the underlying circumstances that generated the April 12, 2005 order were unclear because the record on appeal did not include the trial transcripts in that matter. The four-day trial did not provide any greater enlightenment. The trial judge acted well within her discretion in refusing to reconsider her determination of this question in light of Nguyen's failure to provide — at a more propitious time — evidence to support the claim that some amount other than $92,000 was the proper amount of the mortgage. Moreover, plaintiffs urge as significant the fact that the April 12, 2005 order in Nguyen v. Colon was "unappealed" as suggesting its inviolability, but plaintiffs were not parties to that action and, thus, had no ability to appeal or challenge the orders entered in that case.
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To summarize, the judge's factual findings on these and all other points are well-grounded in the evidence and, consequently, warrant our deference. Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 483-84 (1974); see also Cole v. Jersey City Med. Ctr., 215 N.J. 265, 275 (2013); Abtrax Pharms., Inc. v. Elkins-Sinn, Inc., 139 N.J. 499, 517 (1995). Because of this standard of review and because the parties' arguments have insufficient merit to warrant further discussion beyond what we have stated here, and what we said in Fleisher II, R. 2:11-3(e)(1)(E), we affirm.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION