Opinion
DOCKET NO. A-2958-14T1
08-12-2016
WELLS FARGO BANK N.A., f/k/a WACHOVIA MORTGAGE, FSB, f/k/a WORLD SAVINGS BANK, FSB, Plaintiff-Respondent, v. JANE ANNE HART, Defendant-Appellant.
Roosevelt N. Nesmith, attorney for appellant. Reed Smith, LLP, attorneys for respondent (Henry F. Reichner and Siobhan A. Nolan, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Fuentes and Koblitz. On appeal from Superior Court of New Jersey, Chancery Division, Atlantic County, Docket No. F-25759-12. Roosevelt N. Nesmith, attorney for appellant. Reed Smith, LLP, attorneys for respondent (Henry F. Reichner and Siobhan A. Nolan, on the brief). PER CURIAM
In this foreclosure matter, defendant Jane Anne Hart appeals from the September 12, 2014 order granting plaintiff Wells Fargo Bank N.A.'s motion for summary judgment, denying defendant's motion for summary judgment without prejudice, deeming defendant's answer uncontesting, dismissing her affirmative defenses and counterclaims with prejudice and returning the matter to the office of foreclosure to proceed as uncontested. Because as a matter of law defendant did not materially breach the forbearance agreement, we reverse and remand for further proceedings.
Defendant executed a $310,000 non-purchase-money mortgage on her Brigantine home in 2004 in favor of World Savings Bank, FSB. In 2006, she entered into a loan modification, reducing the interest rate from 3.7% to 2.9%. In 2007, World Savings Bank changed its name to Wachovia Mortgage, FSB and thereafter, in 2009, was acquired by plaintiff Wells Fargo Bank, N.A. In November 2010 defendant failed to make three required payments, totaling $3633.11. The following month the parties entered into a forbearance agreement, requiring defendant to make three monthly payments of $113.24 beginning January 2011; and one lump sum of $7545.53 on March 4, 2011. In exchange, plaintiff agreed not to "make collection calls and collection attempts on the loan, other than legally required collection notices." The forbearance agreement, however, also contained seemingly contradictory language stating that plaintiff "d[id] not agree to suspend the collection and/or foreclosure process." The agreement provided the manner of confirming the forbearance:
In order to confirm the Forbearance Agreement, please sign below and return no later than 10 days from the date of this letter either via fax . . . or by mail to Wachovia . . . . If we do not receive the signed agreement by the required date, Wachovia will continue with the collection process.As to the manner of payment, the agreement merely stated, "Payments may be mailed to: Wachovia, Cashiering Dept." (Emphasis added).
On December 28, 2010, defendant electronically submitted her first payment of $113.24 to plaintiff via its electronic drafting service. That same day, plaintiff sent an e-mail to defendant, confirming the payment. Two days later, in accordance with the forbearance agreement, defendant faxed the signed agreement to plaintiff.
By letter dated January 4, 2011, plaintiff notified defendant that "funds totaling $113.24 . . . have not been applied to the account because they are not enough to cover the Total Balance showing Due." On January 5, 2011, plaintiff sent defendant a letter, advising defendant that "since the terms of the agreed upon [forbearance] payment plan have not been met, the [forbearance] program has been cancelled" and plaintiff "will continue with collection." The following day, plaintiff served defendant a notice of intent to foreclose on the Brigantine mortgage via certified first-class mail.
In November 2012, plaintiff filed a complaint to foreclose on the mortgage. The parties thereafter filed cross-motions for summary judgment. The trial court granted summary judgment in favor of plaintiff and denied defendant's motion. In a written opinion, the court found plaintiff was entitled to void the forbearance agreement because defendant breached the agreement by making an electronic payment, rather than a payment via regular mail. The court concluded "any causes of action alleged by Defendant resulting from Plaintiff's alleged breach of the Forbearance Agreement are unpersuasive." We disagree.
"The interpretation of a contract is subject to de novo review by an appellate court. Accordingly, we pay no special deference to the trial court's interpretation and look at the contract with fresh eyes." Kieffer v. Best Buy, 205 N.J. 213, 222-23 (2011) (citations and footnote omitted). "A material breach of a contract relieves an aggrieved party of its obligations under the contract." Vosough v. Kierce, 437 N.J. Super. 218, 243 (App. Div. 2014), certif. denied, 221 N.J. 218 (2015). "Whether conduct constitutes a material breach is ordinarily a question reserved for disposition by the jury." Chance v. McCann, 405 N.J. Super. 547, 566 (App. Div. 2009).
A breach is material if it "goes to the essence of the contract." Neptune Research & Dev., Inc. v. Teknics Indus. Sys., Inc., 235 N.J. Super. 522, 531 (App. Div. 1989) (quoting Ross Sys. v. Linden Dari Delite, Inc., 35 N.J. 329, 340-41 (1961)). The Restatement Second of Contracts provides five criteria for determining whether a breach is material:
(a) the extent to which the injured party will be deprived of the benefit which he reasonably expected;
(b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;
(c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture;
(d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances;
(e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.
[Restatement (Second) of Contracts § 241 (1981).]
Here, as the trial court held, a valid contract was entered upon defendant's faxing of the forbearance agreement, in which plaintiff agreed not to make collection attempts on the mortgage. See Morton v. 4 Orchard Land Tr., 180 N.J. 118, 129-30 (2004) (stating that a contract is formed upon "a 'meeting of the minds'" evidenced by an offer and acceptance (quoting Johnson & Johnson v. Charmley Drug Co., 11 N.J. 526, 538-39 (1953))). Although defendant paid the January 1, 2011 payment electronically, defendant was not limited by the forbearance agreement to a certain manner of payment. The agreement explicitly provides that "[p]ayments may be mailed to" plaintiff's Cashiering Department. (Emphasis added). Courts "should give contractual terms 'their plain and ordinary meaning.'" Kieffer, supra, 205 N.J. at 223 (quoting M.J. Paquet, Inc. v. N.J. Dep't of Transp., 171 N.J. 378, 396 (2002)). The plain reading of that contractual provision, and the lack of any express or implied limitations to the manner of payment, precludes finding defendant materially breached the forbearance agreement as a matter of law. Thus, plaintiff was not entitled to ignore its agreement not to make collection attempts on the mortgage, nor was plaintiff entitled to a grant of summary judgment.
We also reject plaintiff's argument that the forbearance agreement did not bar plaintiff from proceeding with the foreclosure process. In interpreting a contract, our courts construe ambiguous language against the drafting party because the drafter "is likely to provide more carefully for the protection of his [or her] own interests than those of the other party." Id. at 224 (quoting Pacifico v. Pacifico, 190 N.J. 258, 268 (2007)). "When the parties' intent cannot be derived from a contract's plain text," a court is permitted to consider "a broad use of extrinsic evidence to achieve the ultimate goal of discovering the intent of the parties." Globe Motor Co. v. Igdalev, ___ N.J. ___, ___ (2016) (slip op. at 16 n.4) (quoting Conway v. 287 Corp. Ctr. Assocs., 187 N.J. 259, 270 (2006)). Here, plaintiff, the drafting party, titled the agreement as "the Forbearance Agreement." The parties also explicitly agreed plaintiff would not make "collection attempts on the loan." To the extent the contract has conflicting language, we reject such language as the surrounding circumstances unequivocally demonstrate the parties intended to suspend the foreclosure process.
Even if we did agree with the trial court's interpretation of the contract, a jury would most likely find defendant's electronic submission of the first payment in its entirety to the proper creditor does not qualify as a material breach. See Perini Corp. v. Greate Bay Hotel & Casino, Inc., 129 N.J. 479, 503 (1992) (stating that a party does not breach a contract if the other party "obtains substantially what is called for by the contract." (quoting Jardine Estates, Inc. v. Donna Brook Corp., 42 N.J. Super. 332, 337 (App. Div. 1956))). Thus, the trial court erred in finding plaintiff was entitled to void the contract and erred as well in granting summary judgment. We reverse and remand for further proceedings.
We do not reverse the trial court's denial of summary judgment to defendant, agreeing with the trial court that she failed to meet the strict summary judgment standard as to any of her claims. See R. 4:46-2(c). Her remaining claims on appeal are without sufficient merit to warrant further discussion in a written opinion. R. 2:11-3(e)(1)(E).
Reversed and remanded. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION