                                NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        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.




                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-3028-18T2

WELLS FARGO BANK, NA,

          Plaintiff-Appellant,

v.

ARLINE FRIEDMAN, MILTON
D. FRIEDMAN, and MRS.
MILTON D. FRIEDMAN, his wife,

     Defendants-Respondents.
______________________________

                    Submitted January 13, 2020 – Decided January 29, 2020

                    Before Judges Fasciale and Mitterhoff.

                    On appeal from the Superior Court of New Jersey,
                    Chancery Division, Morris County, Docket No. F-
                    020503-16.

                    Reed Smith, LLP, attorneys for appellant (Henry F.
                    Reichner, of counsel and on the briefs).

                    Nish & Nish, LLC, attorneys for respondent Milton D.
                    Friedman (Robert J. Nish, on the brief).

PER CURIAM
      In this mortgage foreclosure case, plaintiff appeals a June 22, 2018 order,

which denied its motion to dismiss counts three, four, and five of Milton D.

Friedman's (defendant) counterclaim, and which transferred counts three

through eight of its amended complaint to the Law Division. It also appeals a

January 30, 2019 judgment in defendant's favor, dismissing counts one and two

of the amended complaint seeking foreclosure; and discharging an open-ended

mortgage dated June 27, 2006 on the basis that defendant's signature was forged.

      Defendant and co-defendant Arline Friedman, his wife (now estranged),

bought the Property in 1970. In 2001, Arline borrowed money, executed a

mortgage, and secured the loan with the Property.         In May 2006, Arline

refinanced the loan by obtaining a loan and mortgage from Wachovia.

Defendant disputes that he signed the May 2006 mortgage. In June 2006,

Wachovia extended a line of credit and encumbered the Property with a new

mortgage (the June 2006 Mortgage), which defendant also disputes signing.

Plaintiff contends that Arline used the line of credit to pay down the May 2006

loan, pay the Property's taxes, and pay defendant's living expenses. In June

2015, Arline defaulted on the June 2006 Mortgage, which is the subject of this

foreclosure action.




                                                                         A-3028-18T2
                                       2
      Plaintiff filed its foreclosure complaint on July 26, 2016. In September

2017, plaintiff filed its amended complaint and asserted claims for: (1)

foreclosure of the subject property (count one); (2) possession of the subject

property (count two); (3) an equitable lien based on the loan (count three); (4)

an equitable lien based on property charges paid by plaintiff (count four); (5) an

action on the subject note (count five); (6) an action on the related note against

Arline (count six); (7) equitable subrogation based on the related loan (count

seven); and (8) unjust enrichment (count eight).        Defendant answered the

amended complaint, and filed a counterclaim seeking to: (1) discharge the

subject mortgage as void (count one); (2) discharge another mortgage on the

subject property (count two); (3) recover damages for common law fraud (count

three); (4) recover damages under the New Jersey Consumer Fraud Act (count

four); and (5) recover damages for common law fraud (count five).

      Plaintiff filed a motion to dismiss counts three through five of defendant's

counterclaims and strike his jury request. Defendant filed a cross-motion to

transfer the matter to the Law Division. The judge conducted a hearing and

entered the orders under review.

      Plaintiff raises the following points for this court's consideration:




                                                                              A-3028-18T2
                                        3
POINT I

THE CHANCERY DIVISION ERRED AS A MATTER
OF LAW IN CREDITING THE UNSUPPORTED
TESTIMONY OF [DEFENDANT AND ARLINE].

A. A Notary's Acknowledgement Is Prima Facie
   Evidence Of The Due Execution Of An Instrument.

B. To Overcome The Strong Presumption Of Due
   Execution, The Proof Of Forgery Must Be So Clear,
   Satisfactory, And Convincing As To Enable One To
   Come To A Clear Conviction, Without Hesitancy, Of
   The Precise Facts.

C. Unsupported Testimony Of Interested Witnesses Is
   Insufficient As A Matter Of Law To Overcome The
   Strong Presumption Of Due Execution Arising From
   Notarization.

POINT II

THE [JUDGE] ERRED IN TRANSFERRING
[PLAINTIFF'S] EQUITABLE LIEN AND UNJUST
ENRICHMENT CLAIMS TO THE LAW DIVISION IN
THAT THE [JUDGE] FAILED TO RECOGNIZE THE
CLAIMS AROSE OUT OF THE MORTGAGE
TRANSACTION AND WERE THUS GERMANE.

A. The Entire Controversy Doctrine Requires A Liberal
   Rather Than A Narrow Approach To The Question Of
   What Issues Are Germane; Germane Claims Are
   Claims Arising Out Of The Mortgage Transaction.

B. The Equitable Lien And Unjust Enrichment Claims
   Arose Out Of The Mortgage Transaction And Are Thus
   Germane.


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                         4
Plaintiff raises the following argument in its reply brief, which we have

renumbered:

             POINT III

             THE RULES REQUIRE THAT ACTIONS IN WHICH
             THE PRINCIPAL RELIEF SOUGHT IS EQUITABLE
             IN NATURE "SHALL BE FILED AND HEARD IN THE
             CHANCERY DIVISION."

      After the judge conducted a hearing and took testimony from defendant and

Arline, he made findings of fact and conclusions of law. This court reviews a trial

judge's factual findings for an abuse of discretion. Cumberland Farms, Inc. v. N.J.

Dep't of Envtl. Prot., 447 N.J. Super. 423, 437 (App. Div. 2016). "The general rule

is that findings by the trial [judge] are binding on appeal when supported by

adequate, substantial, credible evidence. Deference is especially appropriate when

the evidence is largely testimonial and involves questions of creditability." Ibid.

(quoting Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150, 169 (2011)). This

court "should not disturb the factual findings and legal conclusions of the trial judge

unless [we are] convinced that they are so manifestly unsupported by or inconsistent

with the competent, relevant and reasonably credible evidence as to offend the

interests of justice." Id. at 437-38 (alteration in original) (quoting Seidman, 205 N.J.

at 169). However, this court reviews issues of law de novo. Id. at 438 (citing State



                                                                               A-3028-18T2
                                           5
v. Parker, 212 N.J. 269, 278 (2012)). The review of mixed questions of law and fact

is de novo. In re Malone, 381 N.J. Super. 344, 349 (App. Div. 2005).

      The judge determined that defendant's signature on the June 2006 mortgage

was forged. We reject plaintiff's first contention that the judge erred as a matter of

law when he credited defendant and Arline's testimonies. Plaintiff argues there was

insufficient evidence for the judge to find the signature was forged. Specifically,

plaintiff contends their testimonies were "insufficient as a matter of law to overcome

the strong presumption of due execution arising from notarization," given that this

was defendant's only evidence of forgery and such testimony was from "interested

witnesses."

      A notary's acknowledgement is prima facie evidence of the due execution

of an instrument. See Dencer v. Erb, 142 N.J. Eq. 422, 426 (Ch. 1948). N.J.S.A.

2A:82-17 provides:

              If any instrument heretofore made and executed . . .
              shall have been acknowledged, by any party who shall
              have executed it . . . and, when a certificate of such
              acknowledgement or proof shall be written upon or
              under, or be annexed to such instrument and signed by
              such officer in the manner prescribed by law, such
              certificate of acknowledgement or proof shall be and
              constitute prima facie evidence of the due execution of
              such instrument by such party.




                                                                              A-3028-18T2
                                          6
Forgery is an avenue to overcome the strong presumption of due execution. See

Dencer, 142 N.J. Eq. at 426. However, like fraud, forgery must be established

by clear and convincing evidence. Ibid.; see also Stochastic Decisions, Inc. v.

DiDomenico, 236 N.J. Super. 388, 395 (App. Div. 1989). Clear and convincing

evidence is evidence that is "so clear, direct and weighty and convincing as to

enable [the judge] to come to a clear conviction, without hesitancy, of the truth

of the precise facts in issue."    In re Boardwalk Regency Casino License

Application, 180 N.J. Super. 324, 339 (App. Div. 1981) (citation omitted). The

judge's factual determination that defendant established forgery is entitled to

deference when supported by "adequate, substantial, credible evidence."

Cumberland Farms, 447 N.J. at 437 (internal quotation marks and citation

omitted); see also In re Adoption of Child of Indian Heritage, 111 N.J. 155, 185

(1988) (reviewing a judge's determination on fraud claim for an abuse of

discretion).

      The judge found defendant and Arline credible. Arline, who at the time

was in the middle of divorce proceedings with defendant, testified that the

signatures on the June 2006 mortgage and line of credit documents were not

defendant's.   Defendant also testified that he did not sign the documents.

Plaintiff's representative testified that she was not present when the documents


                                                                         A-3028-18T2
                                       7
were signed. The judge had the opportunity to view the signatures on the

documents and made credibility findings. We see no abuse of his discretion.

      Plaintiff next contends the judge erred in transferring three of plaintiff's

amended complaint claims. 1 Plaintiff is challenging the transfer of its equitable

lien claim based on the loan, its equitable lien based on property charges paid

by plaintiff, and the unjust enrichment claim. Plaintiff argues that these claims

arose out of the mortgage transaction, establishing that they were "germane,"

which would bar transfer to the Law Division.

      Plaintiff argues the equitable lien and unjust enrichment claims arose out

of the June 2006 Mortgage transaction. Plaintiff points to the judge's statements

acknowledging that its claims were an alternative cause of action in this

foreclosure action. Likewise, plaintiff argues the entire controversy doctrine

requires the entire matter be tried in the Chancery Division.

      The entire controversy doctrine is codified in Rule 4:30A, which

specifically has an exception to foreclosure actions: "[N]on-joinder of claims



1
  Plaintiff does not challenge the transfer of counts five and six of its amended
complaint. This is likely because Arline did not own the Property when the bank
issued the May 2006 mortgage and the June 2006 line of credit. Defendant
testified that Arline transferred the Property to him in 1988. Arline no longer
owned the Property—and therefore could not encumber it without defendant's
consent.
                                                                          A-3028-18T2
                                        8
required to be joined by the entire controversy doctrine shall result in the

preclusion of the omitted claims to the extent required by the entire controversy

doctrine, except as otherwise provided by R[ule] 4:64-5 (foreclosure actions)[.]"

"[T]he entire controversy doctrine does not apply to non-germane claims since

they may not be joined in the foreclosure action." Pressler & Verniero, Current

N.J. Court Rules, cmt. 1 on R. 4:64-5 (2020).

      Rule 4:64-5 provides:

            Unless the court otherwise orders on notice and for
            good cause shown, claims for foreclosure of mortgages
            shall not be joined with non-germane claims against the
            mortgagor or other persons liable on the debt. Only
            germane counterclaims and cross-claims may be
            pleaded in foreclosure actions without leave of court.
            Non-germane claims shall include, but not be limited
            to, claims on the instrument of obligation evidencing
            the mortgage debt, assumption agreements and
            guarantees.

To determine if a claim is germane, "a liberal rather than a narrow approach"

should be used. Leisure Tech.-Ne, Inc. v. Klingbeil Holding Co., 137 N.J.

Super. 353, 358 (App. Div. 1975). This court reviews a judge's decision relating

to germane claims de novo, as it is a legal question. See Joan Ryno, Inc. v. First

Nat'l Bank, 208 N.J. Super. 562, 570 (App. Div. 1986) (applying a de novo

standard of review); Assocs. Home Equity Servs., Inc. v. Troup, 343 N.J. Super.



                                                                          A-3028-18T2
                                        9
254, 273 (App. Div. 2001); Family First Fed. Sav. Bank v. DeVincentis, 284

N.J. Super. 503, 508-09 (App. Div. 1995).

      This court addressed whether a claim is germane in Sun NLF Limited

Partnership v. Sasso, 313 N.J. Super. 546 (App. Div. 1998), in which the

defendant developer borrowed money from a savings and loan association to

finance a development project in a series of transactions. In the foreclosure

proceeding, the trial judge granted the plaintiff's motion for summary judgment

and dismissed the defendant's fraud and breach of contract counterclaims as non-

germane. Id. at 549-51. On appeal, this court reversed the grant of summary

judgment, stating that "[h]ad the foreclosure action been brought by the bank

itself, the claims and defenses arising out of the breach of the . . . contract would

have been properly before the court." Id. at 50 (citing Leisure Tech.-Ne, 137

N.J. Super. at 358 (stating that germane claims are those that arise out of the

mortgage transaction)).

      As to plaintiff's equitable lien claims, such liens may be created:

             [W]hen unjust enrichment or an express agreement to
             grant a lien against a specific property is shown.
             Additionally, an equitable lien can be imposed, if based
             on the dictates of equity and conscience . . . a contract
             of reimbursement could be implied at law.

             [EnviroFinance Grp., LLC v. Envtl. Barrier Co., 440
             N.J. Super. 325, 350 (App. Div. 2015) (second

                                                                             A-3028-18T2
                                        10
            alteration in original) (internal quotation marks and
            citation omitted).]

Generally, the theory of equitable liens requires an ultimate foundation in

contracts, either express or implied. See ibid. The grant of an equitable lien

entitles its holder to a security interest on the property if the property is sold.

See Resolution Tr. Corp. v. Griffin, 290 N.J. Super. 88, 93-94 (Ch. Div. 1994);

Bergen Cty. Welfare Bd. v. Gross, 96 N.J. Super. 472, 477 (Ch. Div. 1967)

(showing there is priority for equitable lien holders under a recording statute).

      As to plaintiff's unjust enrichment claim, "[t]he doctrine of unjust

enrichment . . . rests on the equitable principle that a person shall not be allowed

to enrich himself unjustly at the expense of another." Inv'rs Bank v. Torres, 457

N.J. Super. 53, 62 (App. Div. 2018) (second alteration in original) (citation

omitted). "A cause of action for unjust enrichment requires proof that '[a]

[party] received a benefit and that retention of that benefit without payment

would be unjust.'" Ibid. (first alteration in original) (citation omitted); see also

VRG Corp., v. GKN Realty Corp., 135 N.J. 539, 548 (1994). Again, the doctrine

allows a judge to fashion a remedy that is fair and just under the circumstances.

      Here, the judge stated that plaintiff's equitable lien and unjust enrichment

claims were non-germane, thus severing those claims and transferring them to

the Law Division. The judge stated: "All of these claims seek . . . not to

                                                                            A-3028-18T2
                                        11
establish the bank's interest in the [P]roperty, [but] rather . . . to establish sums

due and owing under various theories."

      Generally, "[f]or an equitable lien to arise there must be a debt owing from

one person to another, specific property to which the debt attaches, and an intent,

expressed or implied, that the property will serve as security for the payment of

the debt." Highland Lakes Country Club & Cmty. Ass'n v. Franzino, 186 N.J.

99, 111-12 (2006) (alteration in original) (citation omitted).         The right to

foreclosure is the main inquiry in a foreclosure action. See Old Republic Ins.

Co. v. Currie, 284 N.J. Super. 571, 574 (Ch. Div. 1995). The main elements of

the forclosure action are execution, recording, and default of the mortgage. See

Great Falls Bank v. Pardo, 263 N.J. Super. 388, 394 (Ch. Div. 1993), aff'd, 273

N.J. Super. 542 (App. Div. 1994).

      The judge correctly noted that these claims were non-germane as they do

not arise out of the right to foreclose—the claims do not go to the execution,

recording, nor default. Also, plaintiff's equitable lien claims cannot be a basis

to foreclose on the Property.       Rather, such an equitable lien would give

plaintiff—at best—a security interest in the Property.         As such, the judge

properly determined that these equitable lien claims were non-germane to the

foreclosure action.


                                                                             A-3028-18T2
                                        12
      Furthermore, a claim for unjust enrichment allows the court to fashion an

equitable remedy. In its complaint, plaintiff states it is seeking "the amount . . .

of [defendant and Arline's] unjust enrichment." In its merits brief, plaintiff

further states it is seeking an equitable lien rather than money. However, an

equitable lien would not be a basis to foreclose on the Property; rather it would

result in a money judgment. Because the equitable lien and unjust enrichment

claims do not give plaintiff a right to foreclose, the judge properly severed them

from the foreclosure action pursuant to Rule 4:64-5.

      Finally, plaintiff argues that court rules require its equitable claims be

heard in the Chancery Division. It cites to Rule 4:3-1 to support this argument,

which states: "Actions in which the plaintiff's primary right or the principal

relief sought is equitable in nature . . . shall be filed and heard in the Chancery

Division[.]" Equitable lien and unjust enrichment claims are equitable in nature.

See Goldsmith v. Camden Cty. Surrogate's Office, 408 N.J. Super. 376, 382

(App. Div. 2009). Although equitable claims should remain in the Chancery

Division, Rule 4:64-5 specifically allows non-germane claims in a foreclosure

action to be dismissed or severed.

      The judge had discretion to transfer claims from the Chancery Division to

the Law Division. O'Neill v. Vreeland, 6 N.J. 158, 166-68 (1951); Steiner v.


                                                                            A-3028-18T2
                                        13
Stein, 2 N.J. 367, 377-78 (1949). This court will review such a transfer for an

abuse of discretion. See O'Neill, 6 N.J. at 166-68. "[T]he Law Division can

adjudicate equitable issues and grant equitable relief not only in actions which,

though primarily legal, involve equitable issues, but also in certain actions

which are primarily or wholly equitable." Id. at 167; see Boardwalk Props., Inc.

v. BPHC Acquisition, Inc., 253 N.J. Super. 515, 526 (App. Div. 1991).

      Plaintiff's equitable lien and unjust enrichment claims are non-germane

because they do not arise out of the mortgage—they do not give plaintiff the

right to foreclose on the June 2006 mortgage documents and line of credit.

Because these claims are non-germane, the judge properly severed them from

the foreclosure action pursuant to Rule 4:64-5.       Although such claims are

equitable in nature, the Law Division has the authority to hear plaintiff's claims.

See BPHC Acquisition, 253 N.J. Super. at 526.

      Affirmed.




                                                                           A-3028-18T2
                                       14
