Faison v. Wells Fargo Bank N.A.

ALFRED R. FAISON and ELVA J. FAISON Plaintiffs, v. WELLS FARGO BANK N.A., et al., Defendants.

Civil Action No. 18-11755

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

December 21, 2020

Not for Publication

OPINION

John Michael Vazquez, U.S.D.J.

This matter arises from a residential mortgage that resulted in a foreclosure action in New Jersey state court. Currently pending before the Court is the motion to dismiss the Second Amended Complaint ("SAC") filed by Defendants Wells Fargo Bank, National Association as Trustee for Structured Asset Securities Corporation Mortgage Pass-Through Certificates, Series 2007-BC1 ("Wells Fargo"), and Ocwen Loan Servicing, LLC ("Ocwen"). D.E. 46. Plaintiffs Alfred and Elva Faison filed a brief in opposition to the motion, D.E. 48, to which Defendants replied, D.E. 50. The Court reviewed the parties' submissions¹ and decided the motion without oral argument pursuant to Fed. R. Civ. P. 78(b) and L. Civ. R. 78.1(b). For the following reasons, Defendants' motion to dismiss is GRANTED.

I. BACKGROUND²

Plaintiffs owned the real property located at 234 Lakeview Avenue, Paterson, New Jersey (the "Property"). SAC ¶¶ 2, 7. In November 2006, Plaintiffs entered into a loan with BNC Mortgage Inc. Id. ¶¶ 11-15. JP Morgan Chase ("Chase") "took over servicing at the closing." Id. ¶ 16. Sometime between 2012 and 2013, Wells Fargo became "assignee of the [n]ote and [m]ortgage," and Ocwen became the servicer. Id. ¶ 50. Before this occurred, Plaintiffs allege that in October or November 2012, JP Morgan Chase³ "started to reject [Plaintiffs'] payments" and considered the mortgage in default. Id. ¶ 47. Chase allegedly "ejected Plaintiffs from the loan modification program" that Plaintiffs were participating in, and "considered the mortgage in default and also considered [Plaintiffs] ineligible for [a] loan work-out." Id. ¶ 48.

In September 2013, Wells Fargo and Ocwen filed a foreclosure action against Plaintiffs in the Superior Court of New Jersey, Chancery Division, Passaic County ("Foreclosure Action"). Id. ¶ 57; D.E. 47-1. On April 8, 2016, Wells Fargo obtained a final judgment against Plaintiffs in the Foreclosure Action. Id. ¶ 81; D.E. 47-9. Plaintiffs moved to vacate the final judgment in December 2016, id. ¶ 82, which the state court denied on January 17, 2017, id. ¶ 90.

Plaintiffs subsequently filed this matter on July 18, 2018, and sought temporary restraints prohibiting Plaintiffs' eviction. D.E. 1, 2. The Court issued numerous orders relating to Plaintiffs' motion for temporary restraints (denying the motion several times due to the noted deficiencies,including failure to cite legal authority or address the necessary elements of Plaintiffs' causes of action) and converted the motion to one for a preliminary injunction. D.E. 4, 6, 9, 11. The Court thereafter denied Plaintiffs' motion for a preliminary injunction. D.E. 21.

Plaintiffs then filed an Amended Complaint, seeking over $35,000,000 in damages. D.E. 37. Defendants moved to dismiss the Amended Complaint for lack of subject-matter jurisdiction and for failure to state a claim, D.E. 38, which was granted on February 4, 2020, D.E. 40, 41. Specifically, Plaintiffs' claims were dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) without prejudice, and the Court granted Plaintiffs leave to file another amended complaint. D.E. 41. Plaintiffs filed the SAC on March 31, 2020, which asserts claims for fraud (Count One), a due process violation (Count Two), breach of contract and unjust enrichment (Count Three), and a claim for "expenses for wrongful moving" (Count Four). D.E. 45. Defendants subsequently filed the instant motion to dismiss, seeking to dismiss two of Plaintiffs' claims for lack to subject-matter jurisdiction⁴ and the entire pleading for failure to state a claim.

II. STANDARD OF REVIEW

Federal Rule of Civil Procedure 12(b)(6) permits a motion to dismiss for "failure to state a claim upon which relief can be granted[.]" For a complaint to survive dismissal under Rule 12(b)(6), it must contain sufficient factual matter to state a claim that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Further, a plaintiff must "allege sufficient facts to raise a reasonable expectation that discovery will uncover proof of her claims." Connelly v. Lane Const. Corp., 809 F.3d 780, 789 (3d Cir. 2016). In evaluating the sufficiency of a complaint, district courts must separate the factual and legal elements. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-211 (3d Cir. 2009). Restatements of the elements of a claim are legal conclusions, and therefore, not entitled to a presumption of truth. Burtch v. Milberg Factors, Inc., 662 F.3d 212, 224 (3d Cir. 2011). The Court, however, "must accept all of the complaint's well-pleaded facts as true." Fowler, 578 F.3d at 210. Even if plausibly pled, however, a complaint will not withstand a motion to dismiss if the facts alleged do not state "a legally cognizable cause of action." Turner v. J.P. Morgan Chase & Co., No. 14-7148, 2015 WL 12826480, at *2 (D.N.J. Jan. 23, 2015).

III. ANALYSIS

A. Fraud (Count One)

Plaintiffs reassert a claim for fraud in Count One of the SAC. The Court previously dismissed Plaintiffs' fraud claim because it was vague and conclusory. Moreover, Plaintiff failed to attribute any specific statements to either Defendant. Feb. 4 Opinion at 7-8, D.E. 40. A plaintiff must prove the following to establish common-law fraud: "'(1) a material misrepresentation of apresently existing or past fact; (2) knowledge or belief by defendant of its falsity; (3) an intention that the other person rely on it; (4) reasonable reliance thereon by the other person; and (5) resulting damages.'" Banco Popular N. Am. v. Gandi, 184 N.J. 161, 172-73 (2005) (quoting Gennari v. Weichert Co. Realtors, 148 N.J. 582, 610 (1997)).⁵ For allegations sounding in fraud, Federal Rule of Civil Procedure 9(b) imposes a heightened pleading standard. Specifically, a party alleging fraud "must state with particularity the circumstances constituting fraud or mistake," but "[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed. R. Civ. P. 9(b). A plaintiff must plead fraud with sufficient particularity such that he puts the defendant on notice of the "precise misconduct with which [the defendant is] charged." Lum v. Bank of Am., 361 F.3d 217, 223-24 (3d Cir. 2004), abrogated in part on other grounds by Twombly, 550 U.S. at 557. "To satisfy this standard, the plaintiff must plead or allege the date, time, and place of the alleged fraud or otherwise inject precision or some measure of substantiation into a fraud allegation." Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007).

In the SAC, Plaintiffs explain that they are referring to Defendants collectively. SAC ¶ 110. Nevertheless, Plaintiffs fail to put Defendants on notice of their precise misconduct. For example, Plaintiffs must identify which Defendant "failed to give proper notice to Plaintiffs," id. ¶ 123, did not provide a full amortization schedule, id. ¶ 124, or sent erroneous collection letters, id. ¶ 125. Plaintiffs' vague allegations as to Defendants' collective conduct are insufficient to satisfy the heightened pleading requirement of Rule 9(b). See Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007) ("Pursuant to Rule 9(b), a plaintiff alleging fraud must state the circumstances of the alleged fraud with sufficient particularity to place the defendant on notice ofthe precise misconduct with which [it is] charged.") (internal quotations omitted). Moreover, even if the Court were to accept Plaintiffs' representation that both Defendants were involved in the allegedly wrongful conduct, Plaintiffs fail to set forth how the allegedly wrongful conduct amounts to a misrepresentation of a fact. Plaintiffs fails to state a fraud claim, and Count One is dismissed.

B. Due Process Violation (Count Two)

Although Count Two is entitled "Due Process," Plaintiffs appear to assert a number of claims in this count including a due process claim, an equal protection claim, and violations of the "Federal Consumer Protection Act". SAC ¶¶ 121-29. First, Plaintiffs seem to reassert their Section 1983 claim in Count Two, which they also pled in the initial Complaint. Claims for constitutional violations, such as due process and equal protection claims, must be brought through 42 U.S.C. § 1983. See Woodyard v. County of Essex, 514 F. App'x 177, 180 (3d Cir. 2013). To state a § 1983 claim, a plaintiff must demonstrate that "(1) a person deprived him of a federal right; and (2) the person who deprived him of that right acted under color of state or territorial law."⁶ Burt v. CFG Health Sys., No. 15-2279, 2015 WL 1646849, at *2 (D.N.J. Apr. 14, 2015). Plaintiffs do not plead that either Defendant is a state actor, and in their opposition brief, concede that Wells Fargo and Ocwen are not state actors. Plfs' Opp. at 18. As a result, Plaintiffs' due process and equal protection claims are dismissed.

Next, in their opposition brief Plaintiffs also seek to clarify that the "Federal Consumer Protection Act" referenced in the SAC is actually a claim under the Truth in Lending Act ("TILA") and Home Ownership and Equity Protection Act ("HOEPA"). Plfs' Opp. at 17-19. As explained in the February 4 Opinion, Plaintiffs cannot amend their pleading through their opposition brief. Feb. 4 Opinion at 8-9 (quoting Guers v. Jones Lang LaSalle Ams., Inc., No. 13-7734, 2014 WL 4793021, at *3 (D.N.J. Sept. 25, 2014)). Accordingly, the Court will not consider Plaintiffs' allegations in their opposition brief as to the TILA and HOEPA. Because these statutes are not identified in the SAC...