WOODLANDS COMMUNITY ASSOCIATION, INC. VS. ADAM T. MITCHELL(DC-2766-14, ATLANTIC COUNTY AND STATEWIDE)
A-4176-15T2
| N.J. Super. Ct. App. Div. | Jun 6, 2017Background
- Adam Mitchell purchased a condominium in 2007 and mortgaged it; he later defaulted and vacated the unit.
- Nationstar Mortgage LLC became assignee of the mortgage in 2013 and, after default, replaced the locks and winterized the vacant unit to protect the collateral.
- Mitchell owed substantial condominium association fees; the Association sued Mitchell and then amended to include Nationstar, alleging Nationstar was responsible as a mortgagee in possession.
- The trial court granted summary judgment for the Association, finding Nationstar was a mortgagee in possession because it held the keys and excluded others; awarded attorney’s fees.
- On appeal the court reviewed de novo whether Nationstar’s limited acts (changing locks, winterizing) constituted possession and liability for unpaid condominium assessments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether changing locks and winterizing made Nationstar a "mortgagee in possession" | Locking out others and holding keys shows exclusive control and thus possession | Those limited acts only protect collateral and do not amount to control/management of the unit | No — changing locks and winterizing alone do not create mortgagee in possession |
| Whether mortgagee in possession is liable for condominium assessments accruing during possession | If Nationstar is in possession, it must pay fees for services provided during its possession | Not in possession, so no liability for assessments | Liability attaches only if mortgagee has taken over control/management; here none was shown |
| Whether equitable remedies (unjust enrichment/quantum meruit) require recovery against Nationstar | Association conferred benefit (services) on property and would be unjust if Nationstar retained benefit without paying | Nationstar was not a member nor had expectation of remuneration; it did not benefit from Association services | Equitable doctrines inapplicable absent benefit to Nationstar or expectation of payment; no implied contract found |
| Whether summary judgment for Association was proper | No genuine dispute: Nationstar’s exclusive control (keys) was dispositive | Material factual/legal dispute exists about nature/extent of control; summary judgment improper | Reversed: summary judgment for Association vacated; remanded to enter summary judgment for Nationstar |
Key Cases Cited
- Trinity Church v. Lawson-Bell, 394 N.J. Super. 159 (App. Div. 2007) (standards for de novo review of summary judgment in New Jersey)
- Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (1995) (summary judgment legal standard and viewpoint for nonmoving party)
- Estate of Hanges v. Metropolitan Property & Cas. Ins. Co., 202 N.J. 369 (2010) (plenary review of legal conclusions on summary judgment)
- McCorristin v. Salmon Signs, 244 N.J. Super. 503 (App. Div. 1990) (mortgagee’s right of possession subject to mortgagor’s equity of redemption)
- Guttenberg Sav. & Loan Ass'n v. Rivera, 85 N.J. 617 (1981) (mortgagee is not owner absent foreclosure and sale)
- Woodview Condo. Ass'n, Inc. v. Shanahan, 391 N.J. Super. 170 (App. Div. 2007) (mortgagee in possession who collected rents held liable for condominium assessments)
- Scott v. Hoboken Bank for Sav., 126 N.J.L. 294 (Sup. Ct. 1941) (acts like collecting rents and paying bills show mortgagee in possession)
- VRG Corp. v. GKN Realty Corp., 135 N.J. 539 (1994) (elements of unjust enrichment)
- Weichert Co. Realtors v. Ryan, 128 N.J. 427 (1992) (quantum meruit principles)
- Sklodowsky v. Lushis, 417 N.J. Super. 648 (App. Div. 2011) (issues not briefed on appeal are deemed waived)