Scalercio-Isenberg v. Select Portfolio Servicing, Inc.

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SHERRY SCALERCIO-ISENBERG, Plaintiff, v. SELECT PORTFOLIO SERVICING, INC., et al., Defendants.

No. 2:22-cv-02705 (BRM) (AME)

United States District Court, D. New Jersey

January 31, 2024

NOT FOR PUBLICATION

OPINION

HON BRIAN R. MARTINOTTI United States District Judge. ^[1]

Before the Court is Defendants' Select Portfolio Servicing, Inc. (“SPS”), Brett L. Messinger (“Messinger”), and Kassia Fialkoff's (“Fialkoff”) (together, the “Duane Morris Defendants”)^[2] Motion to Dismiss (ECF No. 54) pro se Plaintiff Sherry Scalercio-Isenberg's (“Plaintiff”) Amended Complaint (ECF No. 40) pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiff filed an opposition on June 13, 2023. (ECF No. 62.) The Duane Morris Defendants filed a reply on June 21, 2023. (ECF No. 63.) Having reviewed the submissions filed in connection with the Motion and having declined to hold oral argument pursuant to Federal Rule of Civil Procedure 78(b) for the reasons set forth below and for good cause having been shown, the Duane Morris Defendants' Motion to Dismiss (ECF No. 54) is GRANTED. Counts I IV, V, and VI of Plaintiff's Amended Complaint (ECF No 40) are DISMISSED WITH PREJUDICE without leave to amend, and Counts II, III, and VII of Plaintiff's Amended Complaint (ECF No. 40) are DISMISSED WITHOUT PREJUDICE with leave to amend.

I. BACKGROUND

A. Factual Background

For the purpose of this Motion to Dismiss, the Court accepts the factual allegations in the Complaint as true and draws all inferences in the light most favorable to Plaintiff. See Phillips v. Cnty. of Allegheny, 515 F.3d 224, 228 (3d Cir. 2008). The Court also considers any “document integral to or explicitly relied upon in the complaint.” In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (quoting Shaw v. Digit. Equip. Corp., 82 F.3d 1194, 1220 (1st Cir. 1996)).

This action arises from a home foreclosure due to an unpaid mortgage. Plaintiff attempted to make mortgage payments to SPS, but these payments were placed in an SPS account titled “Unapplied.” (ECF No. 40 ¶¶ 21-22.) As a result, the money was never applied to the outstanding mortgage balance, meaning the account balance increased and the non-payment was reported to credit agencies, resulting in negative assessments against Plaintiff's credit rating. (Id. ¶ 23.)

In June 2022, Plaintiff received a debt collection notice from Duane Morris, LLP (“Duane Morris”) and immediately attempted to contact Duane Morris to indicate she disputed the outstanding amounts listed in the notice. (Id. ¶¶ 28-30.) Plaintiff spoke with Fialkoff, who noted her dispute and, in response to a question from Plaintiff, stated she had not filed a notice of appearance on behalf of the Goldman Sachs entity Legacy Mortgage Asset Trust (“LMAT”) in any court. (Id. ¶¶ 29-31.) Plaintiff filed her initial complaint for this action in the Southern District of New York (“SDNY”) on April 19, 2022. (ECF No. 1.) Plaintiff then sent a letter dated June 17, 2022, containing details of this civil action to the Philadelphia office of Duane Morris. (ECF No. 40 ¶ 32.)

Plaintiff states that various lawyers engaged in a coordinated campaign of harassment in response to her disputing the outstanding mortgage debt. (Id. ¶ 25.)

On July 29, 2022, a Foreclosure Action was filed against the property subject to the mortgage. (Id. ¶ 55.) Messinger, in completing the New Jersey Chancery Division Foreclosure Case Information Statement (“FCIS”), did not include the federal lawsuits filed by Plaintiff disputing the debt. (Id.)

On or about December 20, 2022, Plaintiff and her husband, Marcus Isenberg (“Isenberg”), made a payment of $100,000 to SPS via their lawyer, Mr. William Askin (“Askin”). (Id. ¶ 42.) Askin issued a check for the total amount demanded in the mortgage loan pay-off statement. (Id.) Plaintiff and Isenberg then proceeded to sell the home subject to the mortgage. (Id. ¶ 43.)

Plaintiff filed the operative Amended Complaint on March 8, 2023. (ECF No. 40.)

B. Procedural History

Plaintiff filed her initial Complaint in the SDNY on April 19, 2022. (ECF No. 1.) On May 2, 2022, Judge Laura Taylor Swain ordered the case transferred from the SDNY to the District of New Jersey (“DNJ”) on the basis that the events detailed in the Complaint, including the debt collection against Plaintiff and alleged harassment of Plaintiff, occurred in New Jersey. (ECF No. 5 at 3-5.)

On June 28, 2022, Plaintiff moved for Default Judgment against SPS. (ECF No. 18.) On July 6, 2022, Defendants Mitchell Scott Kurtz, Esq. (“Kurtz”) and Robert D. Bailey, Esq. (“Bailey”) filed a Motion to Dismiss the Complaint against them pursuant to Federal Rule of Civil Procedure 12(b)(1), for lack of subject-matter jurisdiction, and 12(b)(6), for failure to state a claim upon which relief may be granted. (ECF Nos. 21, 21-1.) On August 1, 2022, Plaintiff moved for Default Judgment against Defendant Credit Suisse Group (“Credit Suisse”). (ECF No. 25.) On August 19, 2022, SPS filed a Motion to Dismiss the Complaint for failure to effect service pursuant to Federal Rule of Civil Procedure 4(m). (ECF Nos. 27, 27-1.) The Court issued an opinion on February 28, 2023, denying Plaintiff's motions for Default Judgment against SPS and Credit Suisse, denying SPS's Motion to Dismiss pursuant to Federal Rule of Civil Procedure 4(m), and granting Kurtz and Bailey's Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6). (ECF No. 35.) The Court dismissed Plaintiff's claims against Kurtz and Bailey without prejudice for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). (Id.)

Plaintiff filed an amended complaint on March 8, 2023. (ECF No. 40.) The Amended Complaint^[3] alleges the following causes of action: (1) violation of the Racketeer Influenced and Corrupt Organization (“RICO”) statute by all Defendants (Count I); (2) violation of the Fair Debt Collection Practices Act (“FDCPA”), 18 U.S.C. § 1692, by Messinger (Count II); (3) Conspiracy to Commit Mortgage Fraud and Mortgage Servicing Fraud by all Defendants (Count III); (4) violation of the Fair Credit Reporting Act (“FCRA”) 15 U.S.C. §§ 1681, 1683, by all Defendants (Count IV); (5) violation of the FDCPA, 18 U.S.C. § 1692(g), by all Defendants (Count V); (6) Mortgage Fraud by all Defendants (Count VI); and (7) Home Foreclosure Fraud and Perjury by Messinger (Count VII). The Duane Morris Defendants filed a motion to dismiss Plaintiff's Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) on May 17, 2023. (ECF No. 54.) Plaintiff filed an opposition on June 13, 2023. (ECF No. 62.) The Duane Morris Defendants filed a reply on June 21, 2023. (ECF No. 63.)

C. Related Cases

1. Prior DNJ Action

Plaintiff filed a previous case against SPS in the DNJ on April 20, 2020 (the “Prior DNJ Action”). (Civ. A. No. 20-04501, ECF No. 1.) The complaint alleged five causes of action: (1) violation of the FCRA, 15 U.S.C. § 1681 (Count I); (2) Mortgage Fraud under the New Jersey Consumer Fraud Act (“NJCFA”), N.J. Stat. Ann. § 56:8-19 (Count II); (3) violation of the FDCPA, 15 U.S.C. § 1692 (Count III); (4) Extortion (Count IV); and (5) Money Laundering (Count V). (Id.) SPS filed a motion to dismiss the original complaint on May 28, 2020. (Id., ECF No. 7.) The Honorable Anne E. Thompson, U.S.D.J. (“Judge Thompson”) granted the motion and dismissed the complaint without prejudice on September 30, 2020. (Id., ECF No. 13.)

Plaintiff filed an amended complaint on October 6, 2020. (Id., ECF No. 16.) SPS filed a motion to dismiss the amended complaint on October 23, 2020. (Id., ECF No. 19.) Judge Thompson granted the motion and dismissed the amended complaint with prejudice on January 27, 2021. (Id., ECF No. 32.) Judge Thompson dismissed the claims on the following grounds: (1) Count I because SPS was not put on notice of the credit report dispute by a credit reporting agency; (2) Count II because SPS did not engage in sale or advertisement of merchandise or real estate; (3) Count III because SPS does not qualify as a “debt collector”; and (4) Counts IV and V because New Jersey does not recognize civil extortion and money laundering actions. (Id., ECF No. 32 at 3-5.)

2. The Foreclosure Action

On July 29, 2022, LMAT filed a Foreclosure Action against Plaintiff, Marcus Isenberg, and Charter One (the “Foreclosure Action”) in the Superior Court of New Jersey, Chancery Division, Sussex County (“Superior Court”). (Case No. SWC-F-007893-22, Trans ID. CHC2022176074.) Plaintiff filed an answer, claiming: Messinger failed to include related cases to the foreclosure in the FCIS; and LMAT was a participant in a mortgage fraud scheme against Plaintiff. (Id., Trans Id. CHC2022271214.) The Superior Court found the answer to be noncontesting and transferred the case to the Office of Foreclosure. (Id., Trans. Id. CHC2022283434.) On December 29, 2022, LMAT voluntarily dismissed the Foreclosure Action without prejudice. (Id., Trans. Id. CHC2022310631.)

II. LEGAL STANDARD

In deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a district court is “required to accept as true all factual allegations in the complaint and draw all inferences from the facts alleged in the light most favorable to [the non-moving party].” Phillips, 515 F.3d at 228. “[A] complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations.” Bell Atl. Corp. v Twombly, 550 U.S. 544, 555 (2007) (citations omitted). However, “a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of a cause of action's elements will not do.” Id. (alterations in original). A court is “not bound to...