McNeill v. Zoref
| Decision Date | 04 February 1997 |
| Docket Number | No. A-006374-95T2,A-006374-95T2 |
| Citation | 687 A.2d 1052,297 N.J.Super. 213 |
| Parties | Janet McNEILL, individually and as heir to the Estate of Richard McNeill, Plaintiff-Appellant v. Hal ZOREF, Mercury Capital Corp., a corporation d/b/i State of New Jersey, Mark Gleitman, John Wisneski, Jay Nussbaum, Defendants-Respondents. |
| Court | New Jersey Superior Court — Appellate Division |
Kenneth E. Calloway, North Wildwood, for appellant.
Jack S. Zakim, Glen Rock, for respondents Hal Zoref, Mercury Capital Corp., Mark Gleitman and Jay Nussbaum.
Before Judges DREIER, D'ANNUNZIO and NEWMAN.
The opinion of the court was delivered by
NEWMAN, J.A.D.
Plaintiff Janet E. McNeill, individually and as heir to the Estate of Richard McNeill, (McNeill) appeals from the dismissal of her complaint on jurisdictional grounds. The motion judge determined that a forum-selection clause contained in a mortgage brokerage services agreement placed jurisdiction of McNeill's action in New York County. We disagree and reverse.
The factual background is as follows. McNeill and her husband acquired a marina in the Township of Lower, Cape May County, New Jersey from her husband's parents on May 18, 1971. The property was subject to a Small Business Association (SBA) loan. In 1989, the McNeills took an additional mortgage on the property for $100,000 which was used for improvements and maintenance. The mortgage was due in five years on a balloon payment. In 1993, McNeill and her husband sought to recast the loan.
At this juncture the McNeills spoke to defendant John Wisneski (Wisneski) regarding the recasting of their balloon mortgage loan. Wisneski was asked to find a mortgage company who would lend the McNeills the money. Local brokers had been unable to secure a mortgage for the McNeills. Following this discussion with Wisneski, an unidentified blond haired man and a company called "Snoopers" visited the property. Toward the end of 1993, McNeill spoke with an individual named Mark from defendant Mercury Capital Corp. (Mercury), the eventual mortgage lender. They spoke between three and five times concerning the progress of the loan. No discussion of monthly payments or debts which would have to be discharged from the proceeds of the mortgage other than the SBA loan were mentioned.
In December 1993 or January 1994, McNeill received a phone call from a Mercury representative informing her that there was a loan available and setting a settlement date of February 17, 1994. During this same time, McNeill's husband was fighting cancer. On February 1, 1994, McNeill's husband was admitted to the hospital. On February 10, Mercury informed McNeill that she needed to obtain a power of attorney for her husband in order to complete the mortgage transaction. McNeill agreed and signed the papers which Mercury faxed to the hospital. Her husband placed an "X" on the documents indicating that he had transferred power of attorney to his wife.
On February 17, 1994, McNeill, her son-in-law and daughter drove to Mercury's office in New York City for the settlement meeting. Wisneski and defendant Mark Gleitman (Gleitman) were present. The meeting was scheduled to begin at 3 p.m. but did not commence until almost 5 p.m. when Eliot Bakst arrived. McNeill was not represented by counsel. The mortgage papers were signed in the presence of an attorney from Mercury named Mark. The mortgage was for $225,000 at an interest rate of sixteen percent per annum. An additional document signed that date was an "Agreement for Mortgage Brokerage Services." The parties to this agreement were only Gleitman and the McNeills. This agreement contained a forum-selection clause which provided that litigation arising out of the brokerage agreement would be venued in New York County.
Upon signing the mortgage, McNeill authorized Mercury to distribute the proceeds of the mortgage in accordance with a handwritten schedule. The distribution was done as follows:
3. The Deponent [McNeill] has authorized Jay Nussbaum, Esq. and Hal Zoref, as nominee to issue the following checks from the proceeds of the sale or the Deponents are making the following disbursements in connection with expenses incurred in the making of this loan:
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a) Jay Nussbaum, Esq $2,250.00
b) Elliot Bakst $375.00
c) East Coast Title Agency $12,794.00
d) National Group, Ins. $5,000.00
e) Snoopers $850.00
f) Jeffery K. Israelow, as attorney $5,817.81
g) Jeffery K. Israelow, as attorney $209.97
h) Bureau of Fire Safety $7,200.00
i) U.S. SBA $6,020.00
j) Independence One $91,403.41
k) Global Valuations $1,900.00
l) Marc Gleitman $30,375.00
m) John Wisneski $7,875.00
n) MCC Insurance $900.00
o) Richard and Janet McNeill $15,000.00
p) Richard and Janet McNeill $37,029.81
TOTAL PROCEEDS (SUMS) DISBURSED $225,000.00
McNeill was later advised that the $15,000 payment to her and her husband was an error. She was told that this money represented the first six months of interest payments, and she returned the check as requested. Out of the $225,000 loan McNeill received $37,029.81.
McNeill's husband died the same evening that she signed the papers settling the mortgage. She initiated this suit in September 1994 seeking to discharge the mortgage. On October 19, 1994, Mercury filed a complaint for foreclosure in the Chancery Division in Cape May County. That complaint was amended to include Hal Zoref, a defendant in this action, as nominal plaintiff for Mercury. The parties agree that the foreclosure action has been mooted in view of the fact that the subject property was sold and Mercury was paid for its mortgage loan under protest. Defendants (Zoref, Mercury, Gleitman, Wisneski, Nussbaum) brought a motion for summary judgment or, in the alternative, a dismissal of the complaint for lack of jurisdiction.
The motion judge concluded that the forum-selection clause was valid, finding that McNeill did not establish that the clause itself, as opposed to the contract as a whole, was the result of fraud or coercion. The motion judge dismissed the complaint for lack of jurisdiction and concluded that the matter should have been brought in New York.
On appeal, McNeill contends that the trial judge improperly granted summary judgment based on the forum-selection clause. McNeill argues there were factual issues of fraud, duress and deceit which would have defeated the forum-selection provision. McNeill also asserts that the forum-selection clause was included in the brokerage services agreement and, by its terms, only applied to Mark Gleitman. The other defendants were not parties to the agreement and, therefore, the court should not have dismissed the complaint as it pertained to them. We only discuss the second issue as it is dispositive of this appeal.
Defendants point out that McNeill did not raise below the issue of the propriety of the dismissal of the other defendants, except for Gleitman, under the forum-selection clause and should be precluded from raising it now. We need not dwell on whether it was properly presented below. McNeill asserts that she never expected the motion judge would dismiss the complaint on jurisdictional grounds as to all defendants when only Gleitman was a party to the brokerage services agreement. She contends that the lower court's result was not foreseeable under any circumstances. Not only do we agree with her observation, but an issue of jurisdiction may always be raised on appeal. Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234, 300 A.2d 142 (1973); Reynolds Offset Co., Inc. v. Summer, 58 N.J.Super. 542, 548, 156 A.2d 737 (App.Div.1959), certif. denied, 31 N.J. 554, 158 A.2d 453 (1960).
Forum-selection clauses are enforceable in New Jersey. Mayer v. Roche, 77 N.J.L. 681, 75 A. 235 (E. & A.1909); see Leavitt v. Leavitt, 223 N.J.Super. 80, 82, 538 A.2d 365 (App.Div.1987). The United States Supreme Court has found them to be "prima facie valid and [they] should be enforced unless enforcement is shown by the resisting party to be 'unreasonable' under the circumstances." M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 92 S.Ct. 1907, 1913, 32 L.Ed.2d 513, 520-21 (1972). New Jersey courts approach these clauses in a substantially similar manner. Coastal Steel Corp. v. Tilghman Wheelabrator Ltd., 709 F.2d 190, 202 (3d Cir.), cert. denied, 464 U.S. 938, 104 S.Ct. 349, 78 L.Ed.2d 315 (1983). "Such clauses will be enforced unless the party objecting thereto demonstrates (1) the clause is a result of fraud or overweening bargaining power, or (2)...
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