CHARLES WRIGHT VS. BANK OF AMERICA, N.A. (L-0433-15, GLOUCESTER COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2358-15T3

CHARLES WRIGHT,

Plaintiff-Appellant, APPROVED FOR PUBLICATION

October 4, 2018

v.

APPELLATE DIVISION

BANK OF AMERICA, N.A., and

BAC HOME LOANS SERVICING,

LP,

Defendants-Respondents.

____________________________________

Argued September 13, 2018 – Decided October 4, 2018

Before Judges Fisher, Hoffman and Firko.

On appeal from Superior Court of New Jersey, Law

Division, Gloucester County, Docket No. L-0433-15.

Lewis G. Adler argued the cause for appellant (Lewis

G. Adler and Law Office of Paul DePetris, attorneys;

Lewis G. Adler and Paul DePetris, of counsel and on

the brief).

Connie Flores Jones (Winston & Strawn, LLP) of the

Texas bar, admitted pro hac vice, argued the cause for

respondents (Winston & Strawn LLP, attorneys;

Stephen J. Steinlight, and Melissa Steedle Bogad, on

the briefs).

The opinion of the court was delivered by

FISHER, P.J.A.D.

Plaintiff Charles Wright filed a complaint that alleged five notices of

intention to foreclose served on him in 2010 by defendant BAC Home Loans

Servicing, LP (BAC) violated the Fair Foreclosure Act (FFA), N.J.S.A. 2A:50-

53 to -68. He asserted that BAC – the alleged servicer of loans made in 2007

when plaintiff purchased his Williamstown residence – neglected to include the

name and address of the lender, defendant Bank of America, N.A. (the bank). 1

Although no foreclosure action followed on the heels of these notices, plaintiff

claims these FFA violations – not actionable on their own – may form the basis

of a claim under the New Jersey Truth-in-Consumer Contract, Warranty and

Notice Act (TCCWNA), N.J.S.A. 56:12-14 to -18. Consequently, he argues that

the trial judge erred in dismissing the complaint by applying the litigation

privilege and by holding that the alleged FFA violation cannot support a

TCCWNA claim. We reject the application of the litigation privilege but

because the legal grounds upon which the latter determination was based have

shifted since the trial judge's decision and the perfection of this appeal, see

1

We assume without deciding – because it was not raised in the trial court –

that the bank, and not BAC, is the lender, although the bank and BAC asserted

at oral argument in this court the possibility that BAC actually was the lender at

the time the notices were sent to plaintiff.

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Spade v. Select Comfort Corp., 232 N.J. 504 (2018), we vacate the order of

dismissal and remand to allow plaintiff an opportunity to file an amended

pleading that expresses the true nature of his damage claim.

In explaining our ruling, we start by recognizing that a lender or its agent

must accurately recite in any notice of intention to foreclose those things the

FFA specifically requires. Our Supreme Court has held – albeit after the alleged

faulty notices were served on plaintiff – that the FFA's command that the lender's

identity and address must be provided, N.J.S.A. 2A:50-56(c)(11), is not satisfied

when only the name and address of the lender's servicing agent is provided. U.S.

Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 474-75 (2012). As mentioned,

plaintiff claims BAC violated the FFA when, in 2010, it served notices that

appeared to lack the lender's information. See n.1, above.

Even though there is no suggestion that the content of the notices was false

or misleading – only that a legal requirement was omitted – we assume this type

of FFA violation may support a TCCWNA claim because, in enacting

TCCWNA, the Legislature "chose expansive language to describe the

consumers and potential consumers whom the statute was enacted to protect."

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Spade, 232 N.J. at 521. 2 TCCWNA may be triggered by a departure from any

"clearly established legal right" or "responsibility." N.J.S.A. 56:12-15. Such a

departure occurs when a consumer protection statute or regulation prohibited

"the contractual provision or other practice" that is the basis of the claim. Dugan

v. TGI Fridays, Inc., 231 N.J. 24, 69 (2017) (emphasis added). We agree that

the required analysis not only encompasses the content of or omission of

provisions from a loan agreement – the breach of which generated a lender's

right to foreclose – but also FFA violations revealed by a lender's pre-suit notice

of intention to foreclose. The statutorily-required notice of intention to foreclose

is part of the foreclosure "practice" and, thus, a critical element that would fall

within TCCWNA's scope.

That conclusion does not end our analysis. Although viewing expansively

what it means to be a "consumer" when the Legislature declared what a lender

may not do when engaging a "consumer" or "prospective consumer" in N.J.S.A.

56:12-15,3 the Spade Court viewed less expansively what was meant by an

2

We are mindful that the Spade Court did not determine whether an "omission"

of a contractual provision required by law would give rise to a TCCWNA claim.

232 N.J. at 517-18.

3

This statute prohibits a "lender" from offering "to any consumer or prospective

consumer" or from entering into "any written consumer contract" or from giving

or displaying "any written consumer warranty, notice or sign" that includes "any

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"aggrieved consumer" when the Legislature fixed the scope of "civil liability"

in N.J.S.A. 56:12-17 (emphasis added) for such a violation.4 The Spade Court

explained that, in enacting N.J.S.A. 56:12-17, the Legislature "chose a more

precise term: 'aggrieved consumer,'" and "clearly intended to differentiate

between 'consumers and prospective consumers' – the broad category of people

whom the Legislature seeks to shield from offending provisions – and 'aggrieved

consumers' entitled to a remedy under the TCCWNA." 232 N.J. at 521-22. In

ascertaining the meaning of these provisions, the Court held that "an 'aggrieved

consumer' is a consumer who has been harmed by a violation of N.J.S.A. 56:12-

15." Id. at 523. The Court – reasoning from TCCWNA's declaration that an

aggrieved consumer may seek actual damages or the statutory penalty –

provision that violates any clearly established legal right of a consumer or

responsibility of a . . . lender . . . as established by State or Federal law at the

time the offer is made or the consumer contract is signed or the warranty, notice

or sign is given or displayed"; those declarations are followed by a sentence that

defines a "consumer" as including one who "borrows . . . any money . . . which

is primarily for personal, family or household purposes." N.J.S.A. 56:12-15

(emphasis added).

4

In N.J.S.A. 56:12-17 (emphasis added), the Legislature declared that "[a]ny

person who violates the provisions of this act shall be liable to the aggrieved

consumer for a civil penalty of not less than $100.00 or for actual damages, or

both at the election of the consumer, together with reasonable attorney's fees

and court costs." The remainder of this statute refers only to "consumers" but it

cannot logically be argued that the remedies provided throughout N.J.S.A.

56:12-17 are available to un-aggrieved consumers.

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concluded that the required harm is not "limited to injury compensable by

monetary damages." Ibid.

In describing a harm that doesn't give rise to compensable damages, the

Court provided the example of a furniture seller whose contract unlawfully

included a "no refunds" provision. The Court held that if the consumer would

have sought a refund but was deterred by the prohibited no-refund language,

"that consumer may be an 'aggrieved consumer' entitled to a civil penalty under

N.J.S.A. 56:12-17." Ibid. The same consumer would be aggrieved if the

untimely delivery and the forbidden language left the consumer "without

furniture needed for a family gathering." Id. at 523-24. But that consumer,

facing the same unlawful no-refund provision, would not be an "aggrieved

consumer" if conforming furniture was delivered on schedule and without any

"adverse consequences." Id. at 524.

In considering whether plaintiff might be an "aggrieved consumer" and

where he might fit in this spectrum of choices described in Spade's example, we

observe that plaintiff acknowledges no foreclosure action was commenced after

he was served with the pre-suit notices in question, so the damage alleged as a

result of the FFA violations is not readily apparent or assumable even from an

expansive view of the complaint's contents. See Seidenberg v. Summit Bank,

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348 N.J. Super. 243, 250 (App. Div. 2002) (recognizing motions to dismiss for

failure to state a claim require "that the pleading be searched in depth and with

liberality to determine whether a cause of action can be gleaned even from an

obscure statement"). The complaint expressly demands only an award of the

statutory $100 penalty for each alleged TCCWNA violation, so it may be that

plaintiff recognizes his inability to show an injury compensable by monetary

damages. But, because the case was dismissed for failure to state a claim upon

which relief may be granted, the factual record is more than a little barren as to

how the alleged injury may have impacted plaintiff. It may be that under Spade's

interpretation of TCCWNA, plaintiff may not even be an aggrieved consumer

entitled to a statutory penalty. Because the matter was dismissed before the

parties and the trial court had the benefit of Spade, the best course calls for a

remand to allow plaintiff to file an amended complaint that would identify the

alleged harm he believes was caused by the pre-suit notices. See Greenbriar

Oceanaire Cmty. Ass'n v. U.S. Home Corp., 452 N.J. Super. 340, 345-46 (App.

Div. 2017).

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We lastly consider, and readily reject, the trial judge's alternative basis for

dismissing the complaint: the litigation privilege. 5 The judge cited and quoted

well-established principles that govern the privilege's application but

misapprehended the fact that the privilege is intended to apply to "statements"

that would otherwise be defamatory. See, e.g., Erickson v. Marsh & McLennan

Co., Inc., 117 N.J. 539, 563 (1990) (recognizing that "[a]lthough defamatory, a

statement will not be actionable if . . . made in the course of judicial,

administrative, or legislative proceedings"). No defamatory or injurious

statement was made here; BAC merely omitted information required by the

FFA. That omission could not be the cause of a defamation action or other

similar tort;6 consequently the rationale for applying the litigation privilege is

absent. Chief Justice Hughes, when a member of this court, elegantly explained

5

The judge cited and substantially relied on an unpublished Law Division

decision contrary to Rule 1:36-3 (declaring that, with few exceptions, "no

unpublished opinion shall be cited by any court"), a rule which seems lately

"more honored in the breach than the observance."

6

We acknowledge, the litigation privilege is not limited to insulating utterances

from subsequent defamation actions. The Supreme Court long ago recognized

the privilege may reach claims asserting other similar tortious conduct. See

Rainier's Dairies v. Raritan Valley Farms, Inc., 19 N.J. 552, 563-64 (1955). In

expanding the privilege's scope to a claim for the malicious interference with

one's business, the Court explained that the application of the privilege should

not result from the way a claim is labeled but by the reason for the privilege's

existence. Id. at 564.

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that the attachment of the litigation privilege "is responsive to the superve ning

public policy that persons in such circumstances be permitted to speak and write

freely without the restraint of fear of an ensuing defamation action, this sense of

freedom being indispensable to the due administration of justice." Fenning v.

S.G. Holding Corp., 47 N.J. Super. 110, 117 (App. Div. 1957). See also Hawkins

v. Harris, 141 N.J. 207, 214 (1995). Without that need for protection and without

the benefit derived from protecting a speaker from suit, the litigation privilege

should have no application. Because BAC made no defamatory or arguably

defamatory statement, BAC's alleged failure to identify the lender's name and

address is not worthy of the litigation privilege's protection.7 If applied here, we

would be providing lenders and their representatives with immunity from all

TCCWNA suits, thereby eviscerating TCCWNA's application in this area and

without vindication of the privilege's true intent: to free speakers and writers in

a judicial setting from the fear of an ensuing action based on their utterances,

not from their omissions.

7

Our holding should not be misconstrued as suggesting that an alleged

defamatory statement in a pre-suit notice, such as a notice of intention to

foreclose or a tort claims notice, might not be encompassed by the litigation

privilege. To the contrary, such required notices fall within the requirement that

the insulated statement be made in judicial or quasi-judicial proceedings.

Hawkins, 141 N.J. at 216-17. That does not mean, however, that the sender of

all such notices, when the notice departs from applicable legal requirements,

will also be insulated from a claim in response to that breach.

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The order of dismissal is vacated and the matter remanded. We do not

retain jurisdiction.

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