Qasim v. Fulton Bank of N.J.

• Decision Date: 13 February 2023
• Docket Number: A-0925-21
• Parties: CAWTHER QASIM, Plaintiff-Appellant, v. FULTON BANK OF NEW JERSEY, Defendant-Respondent.
• Court: New Jersey Superior Court — Appellate Division

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CAWTHER QASIM, Plaintiff-Appellant, v. FULTON BANK OF NEW JERSEY, Defendant-Respondent.

No. A-0925-21

Superior Court of New Jersey, Appellate Division

February 13, 2023

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.

Submitted January 31, 2023

On appeal from the Superior Court of New Jersey, Chancery Division, Middlesex County, Docket No. C-000152-19.

Steven D. Janel, attorney for appellant.

Dilworth Paxson, LLP, attorneys for respondent (Benjamin W Spang, on the brief).

Before Judges Sumners and Geiger.

PER CURIAM

In this case involving the enforceability of a promissory note secured by a mortgage, plaintiff Cawther Qasim appeals from (1) an order denying Qasim's motion for leave to amend the complaint; (2) an order granting summary judgment to defendant Fulton Bank of New Jersey on its counterclaim for breach of contract; and (3) a final judgment in favor of Fulton Bank in the amount of $246,985.25, inclusive of attorney's fees and costs, and directing the Superior Court Trust Fund to pay all funds on deposit to Fulton Bank to be applied against the judgment. We are unpersuaded by the arguments advanced by Qasim and affirm the orders and judgment that she challenges.

In July 2009, Qasim purchased property on Linda Lane in Edison Township (the property). She remained its sole owner. In 2013, Qasim's husband, Wajdi Zein El Dean,^[1] sought to purchase a gasoline service station.

In 2013, Qasim and El Dean applied to Fulton Bank for a home equity loan and mortgage to fund the purchase of the gas station. Although the initial loan application listed Qasim and El Dean as the borrowers, El Dean did not qualify as a borrower for the loan after disclosing he had recently immigrated to the United States, owned no real property, did not have sufficient established credit, and had not filed any tax returns in the United States. After El Dean was removed from the loan application, Fulton Bank approved the revised loan application with Qasim as the sole borrower. The Note was to be secured by a mortgage on the property (Mortgage) in the amount of $260,000.

On July 9, 2013, Qasim executed and delivered a promissory note (Note) in the principal amount of $260,000 as the sole borrower. The Note required Qasim to remit 180 monthly payments of $1,924.14 each, commencing August 23, 2013. On the same day, Qasim and El Dean executed and delivered the Mortgage to Fulton Bank. Fulton Bank deposited the loan proceeds into Qasim's joint bank account with El Dean on July 15, 2013.

Qasim made timely monthly payments for almost five years until February 2018, when she defaulted on the payments due on the Note and Mortgage. Her last payment was on September 24, 2018.

On September 24, 2019, more than six years after the loan documents were executed and the loan closed, Qasim filed a verified complaint and order to show cause seeking preliminary restraints and the discharge of the Mortgage. That same day, Qasim sold the property to a third party. The title company retained $225,000 in escrow pending the outcome of this litigation.

On October 29, 2019, the trial court denied Qasim's application to discharge the Mortgage and directed that the escrowed $225,000 be deposited with the Superior Court Trust Fund, to be held pending further court order.

Despite the terms of the loan documents, Qasim alleged there was a separate oral understanding that she was only acting as a limited co-signor for her husband (who was not even listed on the Note as a borrower) and that she would be relieved of all liability on the Note after six months. Qasim also claimed that the Mortgage she gave to Fulton Bank to secure the Note was to be discharged after six months, even though the Mortgage was the only collateral securing the Note.

Qasim and El Dean were members of 7514 Tonnelle Avenue LLC. In a separate transaction, Fulton Bank issued a $100,000 line of credit to the LLC, secured by a second mortgage on the property executed and delivered by Qasim and El Dean on March 25, 2015. The LLC's loan was paid in full in December 2018, and Fulton Bank issued a discharge of the second mortgage. The LLC was dissolved prior to the initiation of this case.

Fulton Bank filed an answer and counterclaim for breach of contract and unjust enrichment, seeking to recover the amount due on the Note and for release of the escrowed funds. Discovery ensued.

In her answers to her requests for admissions, Qasim admitted the following material facts. Qasim signed the Note as the borrower, but El Dean did not. The Note does not state that Qasim was acting as a limited co-signor for her husband. Qasim and El Dean signed the Mortgage. Fulton Bank deposited $260,000 into their joint bank account on July 15, 2013. Qasim does not claim that she made payments that were not credited to the loan account.

Qasim further admitted that the Note does not state that anyone else is responsible for repaying the amounts due under the Note. The Note does not state that Qasim would be relieved of liability after six months. The Mortgage does not state that it would be discharged after six months.

On March 16, 2021, Qasim moved to amend the complaint to add three additional counts alleging fraud, equitable fraud, and consumer fraud. Trial was scheduled for June 23, 2021. Fulton Bank opposed the motion, arguing that allowing the amendment so late in the litigation would prejudice its rights as discovery had "effectively concluded" and it "would be unable to conduct discovery with regards to the new claims." Fulton Bank further argued the new claims were futile, lacked merit, and failed to state a claim upon which relief can be granted because they were not pled with sufficient specificity and were barred by the statute of limitations. Fulton Bank contended Qasim, who was an attorney, should have been aware of the discrepancies between the alleged representations and the terms of the loan documents by the loan closing on July 9, 2013, yet waited until September 2019, more than six years after the cause of action accrued.

On April 16, 2021, the trial court issued an order denying Qasim's motion to amend. In an accompanying comprehensive written statement of reasons, the court found that Qasim's "allegations of fraud, equitable fraud, and consumer fraud [were] not pled with specificity as required by Rule 4:5-8," noting she "fail[ed] to plead how she suffered any damages due to the alleged misrepresentations as she agreed to the terms of the Note and Mortgage and from which she received the proceeds of the loan."

The court also found Qasim's new claims were "clearly barred by the statute of limitations," reasoning:

[Qasim] alleges that the misrepresentations were made in June/July 2013 and was aware or should have been aware that the alleged misrepresentations were false at that time because they are contradicted by the very terms of the documents. See Dreier Co. v. Unitronix Corp., 218 N.J.Super. 260, 274 (App. Div. 1986) (the limitation period for fraud begins to run upon the discovery of the fraud, or "the time when, by reasonable diligence, it could have been discovered"). [Qasim] did not file the original complaint until September 2019 or more than six years after the cause of action accrued. Accordingly, the [c]ourt finds that the fraud, equitable fraud and consumer fraud claims are all barred by the statute of limitations and the proposed amendment is thus futile.

The court further found that granting leave to amend the complaint "would unnecessarily delay the trial" and adversely impact Fulton Bank, noting:

Fulton Bank would be prejudiced by such amendments if they are allowed this late as discovery has effectively concluded. Fulton Bank would be unable to conduct discovery into the new causes of action asserted by [Qasim]. See Bldg. Materials Corp. of Am. [v. Allstate Ins. Co., 424 N.J.Super. 448, 485 (App. Div. 2012)] (upholding denial of amendment where litigant offered no real explanation as to the delay and where adversary would suffer prejudice by inability to conduct discovery or a delay in the trial date). Here all the facts contained in the proposed [a]mended [c]omplaint were known to [Qasim] at the time the original [c]omplaint was filed. Moreover, in the present matter the [c]ourt finds that [Qasim] has not presented any satisfactory explanation as to why the new causes of actions were not pled in the original [c]omplaint.

Fulton Bank moved for summary judgment. Qasim opposed the motion, arguing there was a genuine issue of material fact as to whether the omission from the loan documents regarding the alleged six-month period of enforceability constituted a mutual mistake and that parol evidence otherwise barred by an integration clause can be considered if the written agreement was entered into by mutual mistake. The court summarized Qasim's argument:

[Qasim] and Aloke Chakravarti, [d]efendant Fulton Bank's Branch Manager of their Edison location, reached an agreement whereby she would be liable on the loan and mortgage for six months, and her home would be encumbered for the same time period, contingent upon timely installment payments on the loan being made. [Qasim] argues that the record before the [c]ourt supports the finding of a meeting of the minds between [Qasim], El Dean and Mr. Chakravarti consum[m]ating the agreement for loan and mortgage. [Qasim] argues that the April 5, 2018 correspondence of Mr. Chakravarti, as an "Authorized Signatory" of [d]efendant Fulton Bank supports and confirms an initial agreement between the [p]arties to the loan transaction as containing a

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