U.S. BANK NATIONAL ASSOCIATION VS. GERALDINE WISHNIA AND (F-047973-10, MORRIS COUNTY AND STATEWIDE) ( 2018 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1706-16T4
U.S. BANK NATIONAL ASSOCIATION
as Trustee for GSR 2006-6F,
Plaintiff-Appellant,
v.
GERALDINE WISHNIA, BRUCE WISHNIA,
a/k/a BRUCE J. WISHNIA, 148
PLEASANTVILLE ROAD LLC, PARADIGM
CREDIT CORP, SEDONA CAPITAL, LTD.,
and T. GARY GUTJAHR,
Defendants-Respondents,
and
MORTGAGE ELECTRONIC REGISTRATION
SYSTEM INC. ("MERS") AS NOMINEE
FOR COUNTRYWIDE BANK, N.A., and
STATE OF NEW JERSEY,
Defendants.
____________________________________
Argued May 17, 2018 – Decided September 7, 2018
Before Judges Simonelli, Haas and Gooden
Brown.
On appeal from Superior Court of New Jersey,
Chancery Division, Morris County, Docket No.
F-047973-10.
David F. Pustilnik (Winston & Strawn, LLP) of
the Illinois State bar, admitted pro hac vice,
argued the cause for appellant (Winston &
Strawn, LLP, attorneys; Heather E. Saydah on
the briefs).
Jaimee L. Katz Sussner argued the cause for
respondents Paradigm Credit Corp. and Sedona
Capital Ltd. (Sills Cummis & Gross, PC,
attorneys; Jaimee L. Katz Sussner and Michael
S. Carucci, on the brief).
Carey A. Aquilina argued the cause for
respondents Geraldine Wishnia, Bruce J.
Wishnia and 148 Pleasantville Road, LLC
(Eugene P. Brinn, attorney, joins in the brief
of respondents Paradigm Credit Corp. and
Sedona Capital Ltd.).
Edward Rogan & Associates, LLC, attorneys for
respondent T. Gary Gutjahr (Edward T. Rogan,
of counsel; Celia S. Bosco, on the brief).
PER CURIAM
Plaintiff U.S. Bank National Association appeals from the
September 16, 2016 Chancery Division order granting summary
judgment to defendants Paradigm Credit Corp. and Sedona Capital,
LTD. (collectively, the Paradigm defendants), and dismissing its
foreclosure complaint with prejudice. Plaintiff also appeals from
the December 2, 2016 order denying their motion for
reconsideration. We affirm.
We derive the following facts from evidence submitted by the
parties in support of, and in opposition to, the summary judgment
2 A-1706-16T4
motion, viewed in the light most favorable to plaintiff. Brill
v. Guardian Life Ins. Co., 142 N.J. 520, 523 (1995).
On March 29, 2006, Bruce and Geraldine Wishnia executed a
promissory note to Countrywide Bank, N.A., for the sum of $2
million. To secure the note, the Wishnias executed a mortgage
(the first mortgage) on the same date in favor of Mortgage
Electronic Registration Systems, Inc. (MERS), as nominee for
Countrywide, encumbering property located on Pleasantville Road
in Harding, New Jersey. The first mortgage was recorded on April
18, 2006 in the Morris County Clerk's Office in mortgage book
20479, page 134.
On May 1, 2006, the Wishnias executed a second promissory
note to Countrywide for the sum of $1 million. To secure that
note, the Wishnias executed a mortgage (the second mortgage) on
the same date in favor of MERS as nominee for Countrywide,
encumbering the same property. On May 11, 2006, the second
mortgage was recorded in the Morris County Clerk's Office in
mortgage book 20507, page 1574.
On February 5, 2007, the Wishnias executed a third promissory
note to Countrywide for the sum of $1.5 million. To secure the
note, the Wishnias executed a mortgage (the third mortgage) on the
same date in favor of MERS as nominee for Countrywide, encumbering
the same property. On February 21, 2007, the third mortgage was
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recorded in the Morris County Clerk's Office in mortgage book
20749, page 0508.
On March 15, 2007, MERS executed a Discharge of Mortgage,
which was recorded on April 3, 2007, that "canceled and void[ed]"
"[a] certain mortgage dated [May 1, 2006]" "to secure payment of
[$2 million dollars]" and "recorded . . . in mortgage book . . .
20479 on page 134." Although the discharge referenced the date
of the second mortgage, it identified the amount and recording
information of the first mortgage. As a result, the first mortgage
was cancelled.
On March 14, 2013, MERS executed a second Discharge of
Mortgage, cancelling the third mortgage. The discharge
acknowledged receipt of "full payment and satisfaction of the
same," and was recorded on March 26, 2013, in mortgage book 22285,
page 0470. On January 9, 2014, MERS executed a third Discharge
of Mortgage, cancelling the second mortgage. The discharge
acknowledged that "the [m]ortgage has been [paid in full] or
otherwise [satisfied]" and was recorded on January 10, 2014 in
mortgage book 22481, page 1328.
On September 21, 2010, intending to assign the first mortgage
that had been discharged on March 15, 2007, MERS assigned to
plaintiff the mortgage recorded on May 11, 2006, in mortgage book
20507, page 1574, in the amount of $1 million dollars, which
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information corresponded with the second mortgage. The assignment
was recorded on January 26, 2011. At that time, the second
mortgage had not yet been discharged.
After the assignment, on September 30, 2010, plaintiff filed
a foreclosure complaint, and on November 8, 2010, recorded a lis
pendens in the county clerk's office in Book 21660, page 716, due
to the Wishnia's failure to make payments on the first mortgage
on April 1, 2010 and thereafter. The foreclosure complaint listed
the date and amount of the first mortgage, but the recording
information of the second mortgage. The corresponding lis pendens
listed the date and recording information of the second mortgage
and had no indicators of the first mortgage.
Attached to the foreclosure complaint was a certification of
counsel, certifying that a title search of the public records was
made for the purpose of identifying any lien holders or interested
persons or entities with an interest in the property. However,
the foreclosure complaint did not plead or otherwise disclose that
the first mortgage had, in fact, been discharged on March 15,
2007. On December 20, 2013, the foreclosure complaint was
dismissed without prejudice for lack of prosecution.
After all three mortgages were discharged, the Wishnias
conveyed title to their property, by deed dated July 30, 2014 and
recorded on September 8, 2014, to their wholly owned entity, 148
5 A-1706-16T4
Pleasantville Road LLC (148 Pleasantville). On that same date,
148 Pleasantville executed two promissory notes totaling $1.8
million in favor of the Paradigm defendants, secured by a first
priority mortgage in the amount of $1.8 million (the Paradigm
mortgage) encumbering the same property. The Paradigm mortgage
was recorded on September 8, 2014.
On July 7, 2015, plaintiff moved to reinstate the foreclosure
complaint. In a November 9, 2015 order, the motion judge granted
plaintiff's motion, in part, allowing plaintiff to reinstate the
foreclosure action and "correct the recording information for the
[m]ortgage" contained in the complaint and the lis pendens, nunc
pro tunc. However, the judge denied plaintiff's requests to vacate
the discharge of the first mortgage, reinstate the first mortgage,
reform the lis pendens and reform the assignment of the first
mortgage.
Nevertheless, on November 23, 2015, plaintiff's counsel sent
a letter to the judge requesting an amended order to clarify the
November 9, 2015 order. The amended order that was submitted to
and signed by the judge on November 25, 2015, permitted plaintiff
to "memorialize the reformation of the [l]is [p]endens recorded
on November 8, 2010 . . . and the reformation of the Assignment
of Mortgage recorded on January 26, 2011[,]" in direct
contravention of the November 9, 2015 order.
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Upon discovering the discrepancy, the Wishnias moved to
vacate the amended order. In defense of his actions, plaintiff's
counsel certified that it was not his "intention" to "mislead" the
court by altering the relief that was granted but rather "a mistake
or . . . simply working too fast." On August 15, 2016, the judge
entered an order vacating the November 25, 2015 order and
reinstating the November 9, 2015 order. Additionally, the judge
ordered the Morris County Clerk to discharge the November 25, 2015
order from the "mortgage book . . . and to expunge and remove same
from the public record . . . ."
On June 7, 2016, plaintiff filed an amended foreclosure
complaint seeking, among other things, an order declaring the
discharge of the first mortgage null and void, reinstating the
first mortgage, and granting the first mortgage lien priority as
of the original recording date of April 18, 2006, over all
subsequent creditors, including the Paradigm defendants. On
August 22, 2016, plaintiff filed a "[s]pecial [l]is [p]endens" to
provide notice of its efforts to foreclose on the first mortgage,
despite the court's order to the contrary.
On August 2, 2016, the Paradigm defendants moved to dismiss
plaintiff's amended complaint, or, in the alternative, for summary
judgment. In a supporting certification, the managing member of
the Paradigm defendants certified that prior to closing, the
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Paradigm defendants ordered a title commitment and title search
of the property, which was performed by First American Title
Insurance Company (First American). According to the
certification, the search did not "disclose the existence of any
mortgages, lis pendens, or other interests held by or on behalf
of [p]laintiff . . . ." Thus, the Paradigm defendants had no
"notice or knowledge that [p]laintiff may have a mortgage, lien
or any other interest in the [p]roperty until long after they
advanced and closed the Paradigm loan, and after [p]laintiff filed
its motion to re-open this action . . . ."
On September 16, 2016, following oral argument, Judge Stephan
C. Hansbury issued an oral decision, granting summary judgment to
the Paradigm defendants and dismissing the foreclosure complaint
with prejudice. Judge Hansbury determined that the Paradigm
defendants "w[ere] entitled to rely upon the title search and they
did so." The judge explained that he had "read through the title
search very carefully[,]" and "[t]here [was] not one, single thing
in that title search that would put [the Paradigm defendants] on
notice that there w[ere] subsequent loans . . . ." Therefore,
according to the judge, the Paradigm defendants had "every right
to rely upon [the title search] in issuing a substantial mortgage"
as there was "absolutely no notice."
8 A-1706-16T4
Judge Hansbury also determined that "[t]his [was] one of
those cases where laches, estoppel, and unclean hands" prohibited
"plaintiff from proceeding further in a mortgage proceeding." The
judge pointed out that once plaintiff discovered there was no
mortgage, "which it had to, pretty quickly," rather than moving
"to reinstate the mortgage[,]" plaintiff "did nothing for five
years and then tried to mislead the [c]ourt." Judge Hansbury
explained that plaintiff "had no business filing" the foreclosure
complaint because "there was no recorded mortgage." Acknowledging
responsibility for not reading the order more "carefully" before
signing it, the judge found it "completely outrageous" that
plaintiff would submit an amended order granting it something
"[it] didn't earn."
The judge also rejected plaintiff's request for additional
discovery, noting that plaintiff's assertion that it "might come
up with something" during discovery was mere "speculation[.]"
Judge Hansbury concluded that despite the "unavoidable" and
undeserved benefit to the Wishnias, "plaintiff's conduct
justifie[d] saying, you lost your opportunity, through your
inattention and you're, therefore, barred from proceeding against
this property, now and forevermore, laches, estoppel, unclean
hands, period, end of story." The judge entered a memorializing
order on the same date.
9 A-1706-16T4
On September 28, 2016, plaintiff moved for reconsideration
of the summary judgment order pursuant to Rule 4:49-2 and an order
to show cause to stay the dissolution of its lis pendens pending
the disposition of its motion. On December 2, 2016, Judge Robert
J. Brennan entered an order denying plaintiff's motion for
reconsideration and granting the Paradigm defendants' cross-motion
to discharge and cancel plaintiff's special lis pendens. In his
statement of reasons, Judge Brennan determined that plaintiff did
not meet "the standard set forth in D'Atria v. D'Atria."1 Like
Judge Hansbury, Judge Brennan rejected plaintiff's argument "that
further discovery may show that [the Paradigm defendants] had
'inquiry notice' or 'constructive notice,'" and reiterated that
the Paradigm defendants were "entitled to rely on the clear title
search" and were entitled to "bona fide purchasers status[.]"
Judge Brennan agreed "that there was not one item on the title
search that would put [the] Paradigm [defendants] on notice of any
issues with the title."
In rejecting plaintiff's assertion that his attorney's
"improper conduct" may have impacted the decision, Judge Brennan
explained that
[t]he decision was based on the law of
priorities. Mortgage priorities are
[]generally governed in New Jersey by our
1
242 N.J. Super. 392 (Ch. Div. 1990).
10 A-1706-16T4
recording statutes. [N.J.S.A.] 46:26A-1 to -
12. New Jersey is a "race-notice"
jurisdiction, meaning that when two parties
are competing for priority over each other's
mortgage, the party that recorded its mortgage
first will normally prevail, so long as that
party did not have actual knowledge of the
other party's previously-acquired interest.
Sovereign Bank v. Gillis, 432 N.J. Super. 36,
43 (App. Div. 2013). Further, "lenders and
other parties are generally charged with
constructive notice of instruments that are
properly recorded." [Ibid.]
Here, Paradigm . . . was a bona [fide]
purchaser lender who had no notice of the
plaintiff's mortgage. Paradigm did not have
actual notice of plaintiff's discharged
mortgage, and the mortgage was discharged, so
Paradigm did not have constructive notice.
Plaintiff's loan had been discharged in 2007,
and it was not until 2015 that plaintiff
sought to remedy the fatal discharge. As a
result, . . . plaintiff was barred by laches
and estoppel to have their mortgage reinstated
with priority over Paradigm.
This appeal followed.
On appeal, plaintiff argues the court erred in granting the
Paradigm defendants summary judgment and denying its motion for
reconsideration. We disagree.
We review a grant of summary judgment applying the same
standard used by the trial court. Steinberg v. Sahara Sam's Oasis,
LLC, 226 N.J. 344, 366 (2016). That standard is well-settled.
[I]f the evidence of record—the pleadings,
depositions, answers to interrogatories, and
affidavits—"together with all legitimate
inferences therefrom favoring the non-moving
11 A-1706-16T4
party, would require submission of the issue
to the trier of fact," then the trial court
must deny the motion." On the other hand,
when no genuine issue of material fact is at
issue and the moving party is entitled to a
judgment as a matter of law, summary judgment
must be granted.
[Ibid. (quoting R. 4:46-2(c)).]
In order to defeat summary judgment, a party must present
"competent evidential material" beyond mere "speculation" and
"fanciful arguments[.]" Merchs. Express Money Order Co. v. Sun
Nat'l Bank, 374 N.J. Super. 556, 563 (App. Div. 2005). When
incomplete discovery "is raised as a defense to a motion for
summary judgment, that party must establish that there is a
likelihood that further discovery would supply the necessary
information." J. Josephson, Inc. v. Crum & Forster Ins. Co., 293
N.J. Super. 170, 204 (App. Div. 1996). Normally, "summary judgment
should not be granted when discovery is incomplete." Oslacky v.
Borough of River Edge, 319 N.J. Super. 79, 87 (App. Div. 1999).
However, if "summary judgment turns on a question of law, or if
further factual development is unnecessary in light of the issues
presented, then summary judgment need not be delayed." United
Sav. Bank v. State, 360 N.J. Super. 520, 525 (2003).
Further, we have determined that reconsideration
is not appropriate merely because a litigant
is dissatisfied with a decision of the court
or wishes to reargue a motion, but should be
12 A-1706-16T4
utilized only for those cases which fall into
that narrow corridor in which either 1) the
[c]ourt has expressed its decision based upon
a palpably incorrect or irrational basis, or
2) it is obvious that the [c]ourt either did
not consider, or failed to appreciate the
significance of probative, competent
evidence.
[Palombi v. Palombi, 414 N.J. Super. 274, 288
(App. Div. 2010) (citation omitted).]
We will not disturb a trial judge's denial of a motion for
reconsideration absent a clear abuse of discretion. Pitney Bowes
Bank, Inc. v. ABC Caging Fulfillment, 440 N.J. Super. 378, 382
(App. Div. 2015). An "abuse of discretion only arises on
demonstration of 'manifest error or injustice[,]'" Hisenaj v.
Kuehner, 194 N.J. 6, 20 (2008) (quoting State v. Torres, 183 N.J.
554, 572 (2005)), and occurs when the trial judge's decision is
"made without a rational explanation, inexplicably departed from
established policies, or rested on an impermissible basis." Milne
v. Goldenberg, 428 N.J. Super. 184, 197 (App. Div. 2012) (quoting
Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571 (2002)).
Applying these standards, like Judges Hansbury and Brennan,
we reject plaintiff's arguments and affirm substantially for the
reasons expressed in Judge Hansbury's oral opinion and Judge
Brennan's written statement of reasons. We add the following
comments.
13 A-1706-16T4
"Generally speaking, and absent any unusual equity, a court
should decide a question of title . . . in the way that will best
support and maintain the integrity of the recording system."
Palamarg Realty Co. v. Rehac, 80 N.J. 446, 453 (1979). The
underlying purpose of the New Jersey Recording Act (Recording Act)
is "to compel the recording of instruments affecting title, for
the ultimate purpose of permitting purchasers to rely upon the
record title and to purchase and hold title . . . with confidence."
Ibid. (quoting Donald B. Jones, The New Jersey Recording Act -- A
Study of its Policy, 12 Rutgers L. Rev. 328, 329-30 (1957)).
The Recording Act provides, in pertinent part, that "[a]ny
recorded document affecting the title to real property is . . .
notice to all subsequent . . . mortgagees . . . of the execution
of the document recorded and its contents." N.J.S.A. 46:26A-
12(a). A mortgage "shall be of no effect against subsequent
. . . bona fide purchasers and mortgagees for valuable
consideration without notice and whose conveyance or mortgage is
recorded, unless that conveyance is evidenced by a document that
is first recorded." N.J.S.A. 46:26A-12(c).
"By those enactments, New Jersey is considered a 'race-
notice' jurisdiction, which means that as between two competing
parties the interest of the party who first records the instrument
will prevail so long as that party had no actual knowledge of the
14 A-1706-16T4
other party's previously-acquired interest." Cox v. RKA Corp.,
164 N.J. 487, 496 (2000). It is the duty of the mortgagee to "see
to it that his instrument is properly recorded . . . ." Sec. Pac.
Fin. Corp. v. Taylor, 193 N.J. Super. 434, 444 (Ch. Div. 1984).
"As a corollary to that rule, parties are generally charged
with constructive notice of instruments that are properly
recorded." Cox, 164 N.J. at 496. "In the context of the race
notice statute, constructive notice arises from the obligation of
a claimant of a property interest to make reasonable and diligent
inquiry as to existing claims or rights in and to real estate."
Friendship Manor, Inc. v. Greiman, 244 N.J. Super. 104, 108 (App.
Div. 1990). However, a subsequent mortgagee "will be bound only
by those instruments which can be discovered by a 'reasonable'
search of the particular chain of title." Palamarg, 80 N.J. at
456.
N.J.S.A. 17:46B-9 provides, in pertinent part, that "[n]o
policy or contract of title insurance shall be written unless and
until the title insurance company has . . . conducted a reasonable
examination of the title . . . ." In Sonderman v. Remington
Constr. Co., Inc., 127 N.J. 96 (1992), our Supreme Court affirmed
its "commitment to the proposition that 'a purchaser should be
charged only with such notice from the records as can be
ascertained by a reasonable search of those records . . . .'" Id.15 A-1706-16T4
at 109 (quoting Jones, 12 Rutgers L. Rev. at 335). To require "a
purchaser . . . to search not only the book of deeds . . . but
also all dockets and records for liens on real estate" is "at odds
with current searching practice[,]" and the Court "perceive[d] no
reason to impose a greater responsibility on title searchers than
is imposed by standard practice." Id. at 110.
Thus, "[a] purchaser or mortgagee for value without notice,
actual or constructive, acquires a title or lien interest free
from all latent equities existing in favor of third persons.
Howard v. Diolosa, 241 N.J. Super 222, 232 (App. Div. 1990).
However, "[i]f a purchaser or lienor is faced with extraordinary,
suspicious, and unusual facts which should prompt an inquiry, it
is equivalent to notice of the fact in question." Ibid.
Here, there is no question that the Paradigm defendants
constitute bona fide purchasers for value. The title search
conducted by First American clearly revealed that the subject
property had no existing liens, lis pendens, or foreclosure
complaints and constituted a "reasonable search" under the
guidance of Palamarg. In fact, when the title search was
conducted, all three mortgages had been discharged, the discharges
had been duly recorded, and the foreclosure complaint had been
dismissed for lack of prosecution. The Paradigm defendants would
not have been aware of any interest plaintiff claims to have had
16 A-1706-16T4
in the property and were justifiably permitted to rely upon the
title search inasmuch as there were no extraordinary, suspicious,
or unusual facts to prompt any further inquiry. Rather, there
were three prior mortgages with three recorded discharges
cancelling all three mortgages.
Plaintiff contends that because they were not the negligent
party and did not mistakenly discharge the first mortgage, their
mortgage should still receive priority over the Paradigm mortgage.
In Heyder v. Excelsior Bldg. Loan Ass'n, 42 N.J. Eq. 403 (E. & A.
1886), the court held that "[c]ancellation of a mortgage on the
record is only prima facie evidence of its discharge, and it is
left to the owner making the allegation to prove the canceling to
have been done by fraud, accident or mistake." Id. at 407. "Such
proof being made, the mortgage will be established, even against
subsequent purchasers or mortgagees without notice." Ibid.
Thus,
[b]etween a mortgagee, whose mortgage has been
discharged of record, solely through the
unauthorized act of another party, and a
purchaser who buys the title in the belief,
induced by such cancellation, that the
mortgage is satisfied and discharged, the
equities are balanced, and the rights, in the
order of time, must prevail. The lien of the
mortgage must remain, despite the apparent
discharge.
[Id. at 407-08.]
17 A-1706-16T4
However, "[i]f, through his negligence, the record is permitted
to give notice to the world that his claim is satisfied, he cannot,
in the face of his own carelessness, have his mortgage enforced
against a bona fide purchaser, taking his title on the faith that
the registry is discharged." Id. at 408.
Here, plaintiff cannot hide behind the mistakes of others
while it sat idly by and did nothing for almost five years before
attempting to rectify the error, and was, in fact, complicit in
perpetuating the error. The assignment to plaintiff of what was
purportedly the first mortgage, but was instead the second
mortgage, occurred on September 21, 2010, and went undetected by
plaintiff. Plaintiff then filed a foreclosure complaint on
September 30, 2010, and recorded a lis pendens on November 8,
2010, both containing fatal errors, after plaintiff's attorney
certified that a title search was conducted. It was not until
almost five years later and one year after the Paradigm defendants
issued a mortgage on the property that plaintiff finally attempted
to rectify the error.
Moreover, the equitable doctrine of laches bars a party from
bringing a claim when, like plaintiff, it engages in "an
'unexplainable and inexcusable delay' in exercising a right, which
results in prejudice to another party." Fox v. Millman, 210 N.J.
18 A-1706-16T4
401, 417 (2012) (quoting Cty. of Morris v. Fauver, 153 N.J. 80,
105 (1998)). Unlike the periods prescribed in a statute of
limitations, the time constraints for laches are
characteristically flexible, not fixed. Lavin v. Bd. of Educ. of
Hackensack, 90 N.J. 145, 151 (1982). However, although the purpose
of applying the doctrine of "laches is to discourage stale
claims[,]" Fauver, 153 N.J. at 105, "[t]he application of laches
. . . requires more than 'mere' passage of time." Chance v.
McCann, 405 N.J. Super. 547, 568 (App. Div. 2009).
Nonetheless, "[l]aches may only be enforced when the
delaying party had sufficient opportunity to assert the right in
the proper forum and the prejudiced party acted in good faith
believing that the right had been abandoned." Knorr v. Smeal, 178
N.J. 169, 181 (2003). The key factors we consider to determine
whether to apply laches are "the length of the delay, the reasons
for the delay, and the 'changing conditions of either or both
parties during the delay.'" Ibid. (quoting Lavin, 90 N.J. at
152). To be sure, "[t]he core equitable concern in applying laches
is whether a party has been harmed by the delay." Ibid. To that
end, whether laches applies depends on "the facts of the particular
case and is a matter within the sound discretion of the trial
court." Mancini v. Twp. of Teaneck, 179 N.J. 425, 436 (2004)
19 A-1706-16T4
(quoting Garrett v. Gen. Motors Corp., 844 F.2d 559, 562 (8th Cir.
1988)).
Similarly, "[t]he essential principle of the policy of
estoppel . . . is that one may, by voluntary conduct, be precluded
from taking a course of action that would work injustice and wrong
to one who with good reason and in good faith has relied upon such
conduct." Middletown Twp. Policeman's Benevolent Ass'n Local No.
124 v. Twp. of Middletown, 162 N.J. 361, 367 (2000) (quoting Summer
Cottagers' Ass'n of Cape May v. City of Cape May, 19 N.J. 493,
503-04 (1955)). Equitable estoppel "is designed to ensure that
the loss is borne by the party who 'made the injury possible or
could have prevented it.'" First Union Nat'l Bank v. Nelkin, 354
N.J. Super. 557, 568 (App. Div. 2002) (quoting Foley Mach. Co. v.
Amland Contractors, Inc., 209 N.J. Super. 70, 75 (App. Div. 1986)).
Equitable estoppel does not require evidence of fraudulent intent;
rather the doctrine applies if the conduct "works an unjust or
inequitable result to the person it was designed to influence[.]"
Hendry v. Hendry, 339 N.J. Super. 326, 336 (App. Div. 2001)
(quoting Chrisomalis v. Chrisomalis, 260 N.J. Super. 50, 55 (App.
Div. 1992)) .
Thus, "as between two innocent parties[,] equity will visit
the loss upon the one by whose act the injury first could have
been avoided." Global Am. Ins. Managers v. Perera Co., 137 N.J.
20 A-1706-16T4
Super. 377, 388 (Ch. Div. 1975), aff'd o.b., 144 N.J. Super. 24(App. Div. 1976). In short, to establish equitable estoppel, a
party must show another engaged in conduct, either intentionally
or under circumstances that induced reliance and, relying on that
conduct, the person acted or changed a position to his or her
detriment. Miller v. Miller, 97 N.J. 154, 163 (1984).
"[T]he doctrine of unclean hands may be considered
simultaneously with estoppel to help ensure justice and to protect
the integrity of the courts." Heuer v. Heuer, 152 N.J. 226, 238
(1998). The essence of the doctrine is that "[a] suitor in equity
must come into court with clean hands and he must keep them clean
after his entry and throughout the proceedings." Borough of
Princeton v. Bd. of Chosen Freeholders of Mercer, 169 N.J. 135,
158 (2001) (alteration in original) (quoting A. Hollander & Son,
Inc. v. Imperial Fur Blending Corp., 2 N.J. 235, 246 (1949)). The
doctrine "gives expression to the equitable principle that a court
should not grant relief to one who is a wrongdoer with respect to
the subject matter in suit." Ibid. (quoting Faustin v. Lewis, 85
N.J. 507, 511 (1981)). Application of the doctrine rests within
the sound discretion of the trial court. Heuer, 152 N.J. at 238.
Here, we discern no abuse of discretion in Judge Hansbury's
application of laches, estoppel, and unclean hands to bar
plaintiff's claims. Plaintiff had ample time and opportunity to
21 A-1706-16T4
rectify the error. Its failure to do so was inexcusable and
detrimental to the Paradigm defendants, which acted in reliance
on a title search that, due to plaintiff's acts and omissions,
deemed the property free from any encumbrances. To the extent we
have not addressed a particular argument advanced by plaintiff,
it is because either our disposition makes it unnecessary or the
argument was without sufficient merit to warrant discussion in a
written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
22 A-1706-16T4