CASE STUDY 5

*Mussalam: App Div Reversal (2) 
OneWest Bank, F.S.B. v. Musallam, No. A-5687-13T2, 2016 N.J. Super. Unpub. LEXIS 2205 (Super. Ct. App. Div. Oct. 5, 2016


Prior History:  

 [*1] On appeal from Superior Court of New Jersey, Chancery Division, General Equity Part, Hudson County, Docket No. F-9589-12. One West Bank, FSB v. Musallam, 2013 N.J. Super. LEXIS 222 (Ch.Div., Mar. 8, 2013) 


The crux of defendants' CFA counterclaim involves the amount of yearly income indicated on their loan application. Specifically, defendants argue their income was drastically inflated without their knowledge. As a result, defendants argue they were saddled with a loan on which they would inevitably default. 
 

Rule 4:46-5(a) explains that the party opposing summary judgment "may not rest upon the mere allegations or denials [*6]  of the pleading, but must respond by affidavits . . . ." The content of such an affidavit must be limited to the personal knowledge of facts that the affiant would be competent to testify about. Sellers v. Schonfeld, 270 N.J. Super. 424, 427, 637 A.2d 529 (App. Div. 1993). Thus, in arguing summary judgment on a CFA claim, the moving party must allege facts that could lead the fact finder to conclude the nonmoving party engaged in some form of unconscionable conduct. 
 

Evidentiary support for defendants' claim rests on a certification of defendant Abdelnasser Musallam. Musallam certifies he did not personally prepare the loan application, and that his income was reported as $143,244 per year, when in reality his yearly income was only $18,000. Further, defendant certifies that he was unaware of this fabrication. 
 

The question of whether his application was falsified by the original lender is a fact in dispute. Plaintiff's argument in support of summary judgment is that OneWest, as an assignee of the Mortgage, is insulated from any CFA liability potentially incurred by its predecessor, even if it occurred. As such, plaintiff avers no fact regarding the application can properly be described as "material". 

Plaintiff is mistaken on this point. Indeed, plaintiff would [*7]  be liable for a violation of the CFA perpetrated by its predecessor, IndyMac. As long as the party seeking enforcement is not otherwise a holder in due course, he or she is subject to any "claim in recoupment of the obligor against the original payee of the instrument if the claim arose from the transaction that gave rise to the instrument." See N.J.S.A. 12A:3-305(a)(3), (b). As such, defendants would have standing to bring a CFA claim against OneWest. 

The parties' disagreement about the facts, circumstances, and levels of knowledge surrounding the loan application go to the core of defendants' CFA claim. With a material fact in dispute, entry of summary judgment for either party on this point would be inappropriate. 

Accordingly, we reverse the trial court's order striking defendants' answer and remand for further proceedings on the CFA claim. 

 
OneWest Bank, F.S.B. v. Musallam, No. A-5687-13T2, 2016 N.J. Super. Unpub. LEXIS 2205, at *5-7 (Super. Ct. App. Div. Oct. 5, 2016) 

App Division found that the trial court erred in granting summary judgment.  reversed and remanded to the trial court for further proceedings which including going to trial with the main issue of whether there was a violation of the New Jersey Consumer Fraud Act. 



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