FINCH et al v. PHH MORTGAGE CORPORATION
Filing
32
MEMORANDUM OPINION & ORDER denying w/out prejudice Deft's 6 Motion to Dismiss and 8 Motion to Dismiss pending a hearing to be held on 2/11/2015 at 10:30 AM in Courtroom 3A. Signed by Judge Noel L. Hillman on 12/29/2014. (drw)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
KEVIN FINCH, MARC WERNER, and
DONNA WERNER,
individually and on behalf of
all others similarly
situated,
Civil No. 14-1694 (NLH/KMW)
MEMORANDUM OPINION & ORDER
Plaintiffs,
v.
PHH MORTGAGE CORPORATION,
Defendant.
APPEARANCES: 1
PETER A. MUHIC
SAMANTHA E. JONES
TYLER STEPHEN GRADEN
KESSLER TOPAZ MELTZER & CHECK, LLP
280 KING OF PRUSSIA RD
RADNOR, PA 19087
On behalf of plaintiffs
PETER J. LEYH
BRAVERMAN KASKEY P.C.
ONE LIBERTY PLACE, 56TH FLOOR
1650 MARKET STREET
PHILADELPHIA, PA 19103-7334
On behalf of defendant
HILLMAN, District Judge
Presently pending before the Court is the motion of
defendant, PHH Mortgage Corporation, to dismiss the putative
class action claims 2 brought by plaintiffs Kevin Finch, Marc
1
Not including counsel admitted pro hac vice.
2
Plaintiffs assert that this Court has jurisdiction over this
Werner and Donna Werner regarding PHH’s “forced-placed” or
“lender-placed” hazard insurance policies, which are imposed as
a part of their home mortgage agreements; and
Plaintiffs claiming that if a borrower fails to carry
hazard insurance on the mortgaged property and to provide
evidence of insurance to PHH, PHH is authorized to “force place”
insurance on the property, whereby PHH independently obtains
insurance and then charges borrowers amounts to purportedly pay
for such insurance by diverting the borrowers’ monthly mortgage
payments or debiting the borrowers’ escrow accounts; and
Plaintiffs claiming that this practice violates numerous
federal and state laws because, among other things: borrowers
have no say in the selection of the force-placed insurance
carrier or the terms of the force-placed insurance policies;
such policies provide less coverage and are substantially more
costly than the borrowers’ original policies, while providing
improper, undisclosed and lucrative financial benefits to PHH
matter pursuant to 28 U.S.C. § 1332(d)(2), the Class Action
Fairness Act (CAFA), which provides, in relevant part, that
“district courts shall have original jurisdiction of any civil
action in which the matter in controversy exceeds the sum or
value of $5,000,000, exclusive of interest and costs, and is a
class action in which . . . (A) any member of a class of
plaintiffs is a citizen of a State different from any
defendant.” Plaintiffs are citizens of Illinois and California,
and PHH is a citizen of New Jersey. Plaintiffs also assert that
the Court may exercise supplemental jurisdiction over their
state law claims pursuant to 28 U.S.C. § 1367.
2
which are unrelated to the provision of force-placed hazard
insurance; borrowers are charged retroactively for coverage
before the borrowers are notified of the force-placement of the
coverage; and such policies often provide unnecessary or
duplicative coverage in that they are improperly backdated to
collect premiums; and
PHH having moved to dismiss plaintiffs’ claims, arguing,
among other things, that recent decisions in the Seventh Circuit
Court of Appeals and the Central District of California, which
are applicable in this case because Finch’s property is located
in Illinois and the Werners’ property is located in California,
have dismissed identical claims as advanced in this case; and
Plaintiffs having opposed PHH’s motion, arguing that their
claims may proceed; and
The Court finding that the parties’ briefing has raised
numerous issues aside from the standard review of the
sufficiency of plaintiffs’ pleading pursuant to the
Twombly/Iqbal analysis of Rule 12(b)(6) motions, including:
(1)
A case containing several identical claims is
presently proceeding in this Court, Gallo v. PHH, Docket No. 12cv-1117, and currently pending in that case is a motion to
certify the action as a class action;
(2)
This suit is advanced by citizens of Illinois and
California, and those states’ laws appear to be the applicable
3
law to apply, at least with regard to plaintiffs’ state law
claims; and
(3)
For their federal law and state law based claims,
plaintiffs cite to case law from cases throughout the country to
support the viability of their claims; and
The Court recognizing that these issues are not instantly
fatal to plaintiffs’ claims, but they cause the Court to
question (1) whether plaintiffs’ interests, at least partially,
can be protected in the Gallo case, (2) whether it is advisable
for the Court to consider out-of-circuit state law claims as
part of its supplemental jurisdiction discretion, 3 and (3)
whether, with the numerous out-of-circuit cases that appear to
advance identical claims against different mortgage companies, a
uniform consensus as to the merit of plaintiffs’ claims has not
already been established 4;
3
Under 28 U.S.C. § 1367(c), a district court may decline to
exercise supplemental jurisdiction over a claim brought before
the court under § 1367(a) if (1) the claim raises a novel or
complex issue of State law, (2) the claim substantially
predominates over the claim or claims over which the district
court has original jurisdiction, (3) the district court has
dismissed all claims over which it has original jurisdiction, or
(4) in exceptional circumstances, there are other compelling
reasons for declining jurisdiction.
4
In addition to the cases cited in their opposition brief,
plaintiffs have separately submitted three cases of
“supplemental authority” in support of their claims. It would
be helpful for the parties to show how each case relied upon
supports or discounts specific counts in plaintiffs’ complaint,
rather than generally proffering cases for their ultimate
4
Accordingly,
IT IS on this
29th
day of December, 2014
ORDERED that defendant’s motion to dismiss/amended motion
to dismiss [6,8] is DENIED WITHOUT PREJUDICE pending a hearing
to be held on Wednesday, February 11, 2015 at 10:30am in
Courtroom 3A, at which time the motion to dismiss will be
reinstated.
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
At Camden, New Jersey
conclusion.
5
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