The Litigation Privilege Applies to Statements, Not to Omissions in Notices of Intent to Foreclose

Wright v. Bank of America, N.A., 456 N.J. Super. 328 (App. Div. 2018).  This short opinion by Judge Fisher reversed a decision of the Law Division that dismissed plaintiff’s Complaint under the Truth in Consumer Contract, Warranty, and Notice Act, N.J.S.A. 56:12-14 to -18 (“TCCWNA”).  Plaintiff had alleged that notices of intention to foreclose that were served on him violated the Fair Foreclosure Act, N.J.S.A. 2A;50-53 to -68 (“FFA”), because they did not include the name and address of the lender.  Although no foreclosure was instituted, plaintiff contended that the alleged FFA violations formed the predicate for a TCCWNA claim.

Most of the opinion explained that reversal was required because the legal landscape under the  TCCWNA had changed, after the Law Division ruled, by virtue of the Supreme Court’s decision in Spade v. Select Comfort Corp., 232 N.J. 504 (2018), which Judge Fisher canvassed in some detail.  The Supreme Court’s ruling was discussed here.  Judge Fisher vacated the dismissal and remanded “to allow plaintiff an opportunity to file an amended pleading that expresses the true nature of his damage claim.”

But the Law Division had also invoked the litigation privilege as a basis for dismissal.  Judge Fisher “readily reject[ed]” that position.  He explained that the litigation privilege applies only to “‘statements’ that would otherwise be defamatory.”  Here, there were no such statements in the notices of intention to foreclose.  Rather, there was omission of information required by the FFA.  “That omission could not be the cause of a defamation action or other similar tort; consequently the rationale for applying the litigation privilege is absent.”

Judge Fisher found the contrary result untenable.  “If applied here, we would be providing lenders and their representatives with immunity from all TCCWNA suits, thereby eviscerating TCCWNA’s application to this area and without vindication of the privilege’s true intent: to free speakers and writers in a judicial setting from the fear of an ensuing action based on their utterances, not from their omissions.”