No. A-0332-15T2

July 10, 2017 (Date Decided)

FOR APPELLANT: Joseph M. Shapiro (Middlebrooks Shapiro, P.C., attorneys; Mr. Shapiro and Melinda D. Middlebrooks, of counsel and on the brief).

FOR RESPONDENT: Betsy Ann Rosenbloom (Williams, Caliri, Miller & Otley, P.C., and Knuckles, Komosinski & Manfro, LLP, attorneys; Mr. Rosenbloom, of counsel and on the brief).

Plaintiff appealed from a final judgment and default judgment. Plaintiff and defendant Jay Myers were married. Myers’ father, Maurice, purchased a residential property; plaintiff contributed $67,000 to the purchase price, and she, Myers, and their son moved into the property. The parties began renovations, with Maurice and plaintiff’s mother and uncle contributing funds. Maurice later deeded the property unencumbered to Myers.

Myers commenced a series of transactions transferring the property between himself and himself and plaintiff as tenants by the entirety, in addition to taking out a series of mortgages on the property. Plaintiff maintained that she had no knowledge of the mortgages and that the deeds transferring the property were fraudulently executed on her behalf. Plaintiff ultimately filed a complaint against defendant Wells Fargo and Myers, seeking declaratory relief and alleging negligence, common law fraud, unjust enrichment, breach of fiduciary duty, and other claims.

The trial court entered default against defendant and Myers, which defendant later vacated. Plaintiff and defendant then cross-move for summary judgment. The trial court entered partial summary judgment in favor of defendant and granted it an equitable mortgage, dismissed plaintiff’s claims for damages, and concluded that factual issues remained as to whether plaintiff was in joint possession or had extinguished her statutory rights, as well as the priority of plaintiff’s interest, if any.

At trial, Myers conceded that he forged plaintiff’s name; plaintiff denied knowledge of the deeds, but conceded she wanted her name on the title because she had put money into the property. At the close of evidence, the trial court ruled that plaintiff’s interest was subordinate to defendant’s, which itself was subrogated to a prior mortgage, and to tax, utility, and insurance liens. The trial court found that plaintiff was an equitable mortgagor because she benefitted from, acquiesced to, and ratified defendant’s mortgage. Finally, the trial court concluded that plaintiff’s rights under the Joint Possession Statute were extinguished by the deed.

On appeal, the court rejected plaintiff’s argument that JPS intended to protect a spouse regardless of how the property was titled, and agreed that her JPS rights were extinguished when she became a tenant by the entirety, which the trial court credibly found due to plaintiff’s desire to have her contributions to the home acknowledged by deed, and the fact that she benefited from the mortgages. The court further concurred that plaintiff was subrogated to the first mortgage, since she took title with knowledge the property was encumbered.