New Jersey Appellate Court Holds Fair Foreclosure Act Violation Might Trigger TCCWNA Liability

In a decision approved for publication, New Jersey’s Appellate Division recently vacated and remanded a trial court’s order dismissing a borrower’s complaint and held that a lender’s violation of the Fair Foreclosure Act (the “FFA”) might constitute a violation of the Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”).  See Wright v. Bank of Am., N.A., 2018 WL 4779028 (N.J. Super. Ct. App. Div. Oct. 4, 2018).  In the case, the lender sent five notices of intention to foreclose to the borrower in 2010, but none of the notices included the lender’s name and address as required by the FFA.  Although the lender never filed a foreclosure action, plaintiff filed a complaint alleging that these omissions violated TCCWNA.  The trial court dismissed the complaint, finding that FFA violations cannot support a TCCWNA claim.

On appeal, the Court vacated and remanded.  The Court found that “[e]ven though there is no suggestion that the content of the notices was false or misleading – only that a legal requirement was omitted – we assume this type of FFA violation may support a TCCWNA claim” because TCCWNA should be interpreted expansively.  The FFA is a consumer protection statute, and the departure from any of its regulations may “fall within TCCWNA’s scope.”  Nonetheless, the Court found that it was not clear whether the borrower was an “aggrieved consumer” under TCCWNA because the record did not show whether he suffered any damages from this alleged violation, a requirement solidified in the New Jersey Supreme Court’s recent decision, Spade v. Select Comfort Corp., 232 N.J. 504 (2018).  Thus, because neither the trial court nor the parties had the benefit of the Spade decision, the Court remanded this action so that plaintiff could amend his complaint and identify any alleged damages.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Michael Crowley at mcrowley@riker.com, or Dylan Goetsch at dgoetsch@riker.com.