ANDERSON v. ZFC LEGAL TITLE TRUST I, U.S BANK NATIONAL et al

Filing 27

OPINION. Signed by Chief Judge Jerome B. Simandle on 12/22/2016. (TH, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

CRAIG D. ANDERSON

HONORABLE JEROME B. SIMANDLE

Plaintiff,
Civil Action
No. 16-1499 (JBS/KMW)

V.
ZFC LEGAL TITLE TRUST I, U.S.
BANK NATIONAL ASSOCIATION AS
TRUSTEE; ZAIS FINANCIAL
CORPORATION; FAY SERVICING,
LLC; FEIN, SUCH, KAHN &
SHEPARD, P.C.; WELLS FARGO
BANK; WACHOVIA MORTGAGE
CORPORATION; M.E.R.S. INC.;
CITI; MARK BISCHOF; XEE MOUA;
CINDY SMITH; NICOLE SIMMONS;
LAUREN POWELL; SUSAN E.
BALFANZ

OPINION

Defendants.

APPEARANCES:
Mr. Craig D. Anderson
2432 Bayberry Ct.
Mays Landing, NJ 08330
Plaintiff, pro se
Ben Zev Raindrop, Esq.
Joshua B. Sears, Esq.
FEIN SUCH KAHN & SHEPHARD PC
7 Century Dr.
Parsippany, NJ 07054
Attorneys for Defendants ZFC Legal Trust I, U.S. Bank
National Association as Trustee, Zais Financial
Corporation, Fay Servicing, LLC, Fein, Such, Kahn &
Shephard, P.C., and M.E.R.S., Inc.
Diane A. Bettino, Esq.
Laura K. Conroy
REED SMITH LLP

136 Main St., Suite 250
Princeton, NJ 08540
Attorneys for Defendants Wells Fargo Bank, Wachovia
Mortgage Corp., Mark Bischof and Susan Balfanz
Kathleen H. Dooley, Esq.
McGUIRE WOODS, LLP
100 N. Tryon St.
Charlotte, NC 28202
Attorney for Defendant Xee Moua

SIMANDLE, Chief Judge:
INTRODUCTION
Presently before the Court are the motions to dismiss filed
by ZFC Legal Title Trust I, U.S. Bank National Association as
Trustee (hereinafter “ZFC”), Zais Financial Corp. (hereinafter
“Zais”), Fein, Such, Kahn & Shepard, P.C. (hereinafter “Fein
Such”), Fay Servicing LLC (hereinafter “Fay Servicing”), Wells
Fargo Bank (hereinafter “Wells Fargo”), Wachovia Mortgage Corp.
(hereinafter “Wachovia”), Mark Bischof (hereinafter “Bischof”),
Xee Moua (hereinafter “Moua”), Susan Balfanz (hereinafter
“Balfanz”), and MERS, Inc. (hereinafter “MERS”) (collectively
“Defendants”)[Docket Items 6, 14, 17, 21.]

For the following

reasons, the Court grants the Defendants’ motions to dismiss
Plaintiff’s Complaint with prejudice as to all federal claims,
and without prejudice as to all state law claims for lack of
supplemental jurisdiction.

2

BACKGROUND1
Pro se Plaintiff Craig D. Anderson (hereinafter “Mr.
Anderson”) applied for and was granted a mortgage loan from
Wachovia Mortgage Corp. to purchase residential property at 2432
Bayberry Ct., Mays Landing, NJ 08330 on February 26, 2007. (Ex.
C. to Compl.)

Plaintiff’s loan was evidenced by an Initial

Interest Note for $116,000 and secured by a mortgage on the
property to Wachovia Mortgage Corp., both dated February 26,
2007. (Id.)
On May 8, 2009, Mortgage Electronic Registration Systems,
Inc., (hereinafter “MERS”) as nominee for Wachovia Mortgage
Corp., assigned the mortgage to Wachovia. (Ex. E. to Compl.)

On

June 17, 2013, Wells Fargo Bank, after acquiring Wachovia,
assigned the mortgage back to MERS. (Id.)

Mr. Anderson

defaulted on the monthly mortgage payments beginning with the
October 1, 2013 payment, and has not paid since. (Id. at Ex. Q.)
On September 15, 2014, Defendant Fay Servicing sent Plaintiff a
letter explaining that it was servicing his loan with Defendant
ZFC, and that Plaintiff’s Note and Mortgage was in default as a
result of Plaintiff’s failure to make payments. (Id. at Ex. M,

1

For purposes of the pending motion, the Court accepts as true
the version of events set forth in Plaintiffs’ Complaint,
documents explicitly relied upon in the Complaint, and matters
of public record. See Schmidt v. Skolas, 770 F.3d 241, 249 (3d
Cir. 2014).
3

Q.)

On January 16, 2015, MERS assigned the Mortgage to ZFC

Legal Title Trust I, U.S. Bank National Association as Trustee.
(Id. at Ex. E.)

On March 2, 2015, ZFC filed a Complaint for

Foreclosure in the Superior Court of New Jersey, Chancery
Division, Atlantic County. (Id. at Ex. O.)

Mr. Anderson did not

respond to the Complaint for Foreclosure and default was entered
against him on April 27, 2015. (Id.)

Defendants note that Mr.

Anderson filed a Motion to Vacate Default in the Foreclosure
Action, but it was denied on April 19, 2016. (ZFC Br. at 1, 4.)
On March 17, 2016, Mr. Anderson filed this action against
Defendants. [Docket Item 1.]

Plaintiff generally alleges that

defendants Wachovia and Wells Fargo forged signatures of the
individuals signing on behalf of the grantors, forged signatures
of the witnesses and the notaries, utilized effective dates
unrelated to the date of any actual or attempted transfer, and
prepared assignments on behalf of grantors who had never
themselves acquired ownership of the mortgage and note by a
valid transfer. (Compl. at 7.)

Plaintiff further alleges that

when Defendants ZFC, Fay Servicing, Wachovia and Wells Fargo
“discovered that the mortgage assignments were missing, they
together with the default management and/or mortgage loan
documentation companies, devised and operated a scheme to
replace the missing assignments with fraudulent, fabricated
assignments.” (Id. at 6.)

Defendant ZFC then filed these
4

documents “in the [state] court and filed in the county record
that the trust was the proper party to foreclose on the
mortgage.” (Id. at 7.)

While portions of Plaintiff’s complaint

concern allegations of widespread fraudulent mortgage
assignments around the country, Plaintiff claims that he hired
“two foreclosure special[ists] who discovered a forged mortgage
assignment filed in his foreclosure [action]” by Defendant ZFC.
(Id. at 8.)
Plaintiff asserts claims of mortgage fraud, wire fraud,
mail fraud, and extortion against Defendants Wachovia, Wells
Fargo, MERS, Fay Servicing, ZFC, Zais Financial, Fein Such, and
alleged robo-signers Bischof, Moua, Hood, Smith, Simmons,
Powell, and Balfanz. (Id. at Ex. A.)

He asserts a separate

conspiracy claim against Defendants MERS, Fay Servicing, Fein
Such, and the alleged robo-signers noted above. (Id.)

He

asserts a claim of “using a fraud (sic) law firm” against
Defendant Fay Servicing and a host of additional claims against
Defendants Zais Financial and ZFC.2 (Id.)

Regarding Defendant

Fein Such, Plaintiff claims that the law firm “has a 3/4 min
video on Youtube for doing fraudulent documents on mortgages
[that] are now being used by [Defendant ZFC] in it’s (sic)

2

These include “using false signers,” “using a notary to sign
off on [his] assignment of mortgage,” “using a fraud law firm,”
“wrongful use of M.E.R.S. to sign a mortgage over [to him],” and
“having fraud papers of [his] original note.” (Ex. A to Compl.)
5

default management processes.” (Id. at 9.)

Plaintiff seeks to

“recover damages and civil penalties arising from the false
claims and false statements made by the defendants.” (Id. at Ex.
A.)

The Complaint asserts this Court has federal question

subject matter jurisdiction under 28 U.S.C. § 1331 and
supplemental jurisdiction over related claims arising under
state law pursuant to 28 U.S.C. § 1367. (Id. at ¶ II.A and page
8 “Jurisdiction and Venue.”]
Defendants Fay Servicing, Fein Such, and AFC filed their
motion to dismiss Plaintiff’s Complaint on May 9, 2016. [Docket
Item 6.]

Plaintiff’s opposition to that motion was received on

June 3, 2016. [Docket Item 13.]

Defendants Balfanz, Bischof,

Wachovia, and Wells Fargo filed their motion to dismiss on June
20, 2016 [Docket Item 14], to which Plaintiff filed no
opposition.

Defendant Moua filed her motion to dismiss on

September 20, 2016 [Docket Item 17], to which Plaintiff likewise
filed no opposition.

Defendant MERS filed its motion to dismiss

on October 11, 2016. [Docket Item 21.]3

Plaintiff filed untimely

and unresponsive an opposition to MERS’ motion to dismiss on
December 8, 2016 [Docket Item 24], as addressed below.4

3

Defendants Citi, Hood, Smith, Simmons, and Powell have yet to
be served, and the time to do so under Rule 4(m), Fed. R. Civ.
P., namely 90 days after the Complaint was filed, has expired.
4 On October 5, 2016, Plaintiff requested an extension of time to
file his opposition papers against the outstanding motions.
[Docket Item 22.] The Court granted the request, but only with
6

STANDARD OF REVIEW
A. Rules 12(b)(2), 12(b)(4), and 12(b)(5)
This standard governs Defendant Moua’s motion to dismiss
for lack of personal jurisdiction and improper service of
pleadings.

“Before a federal court may exercise personal

jurisdiction over a defendant, the procedural requirements of
service of summons must be satisfied.” Omni Capital Int'l Ltd.
v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987).

Under Rule

12(b)(4), Fed. R. Civ. P., a party may file a motion asserting
insufficient process as a defense.

Additionally, under Rule

12(b)(5), Fed. R. Civ. P., a party may file a motion asserting
insufficient service of process as a defense. “When a party
moves to dismiss under Rule 12(b)(5), the party making the
service has the burden of demonstrating its validity.” Laffey v.
Plousis, No. 05-2796, 2008 WL 305289, at *3 (D.N.J. Feb. 1,
2008), aff'd, 364 F. App’x 791 (3d Cir. 2010).
To defeat a motion to dismiss for lack of personal
jurisdiction under Rule 12(b)(2), Fed. R. Civ. P., “the
plaintiff bears the burden of establishing with reasonable

respect to Defendant MERS’ Motion to Dismiss, and set a deadline
for December 2, 2016. [Docket Item 23.] Plaintiff filed an
untimely Opposition on December 8, 2016, and not only did he
discuss the wrong legal standard (summary judgment instead of
motion to dismiss), but he also failed to address the merits of
Defendant MERS’ dismissal motion. [Docket Item 24.] There is
also no indication that Plaintiff served his Opposition on
opposing counsel.
7

particularity sufficient contacts between the defendant and the
forum state to support jurisdiction.” Flagship Interval Owner's
Ass'n, Inc. v. Philadelphia Furniture Mfg. Co., No. 09–1173,
2010 WL 1135736, at *3 (D.N.J. Mar. 22, 2010) (quoting Provident
Nat'l Bank v. Cal. Fed. Sav. & Loan Ass'n, 819 F.2d 434, 437 (3d
Cir. 1987)).

The plaintiff “must sustain its burden of proof in

establishing jurisdictional facts through sworn affidavits or
other competent evidence.” Turner v. Boyle, No. 12–7224, 2013 WL
1409903, at *3 n. 1 (D.N.J. Apr. 8, 2013) (citing Time Share
Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61 (3d Cir.
1984)); Patterson by Patterson v. F.B.I., 893 F.2d 595, 603–04
(3d Cir. 1990).

Courts may rely upon matters outside the

pleadings to determine jurisdictional facts. Turner, 2013 WL
1409903, at *3 n. 1.
Where, as here, no evidentiary hearing was held on the
jurisdictional issue, “the plaintiff[s] need only establish a
prima facie case of personal jurisdiction and the plaintiff[s]
[are] entitled to have [their] allegations taken as true and all
factual disputes drawn in [their] favor.” O'Connor v. Sandy Lane
Hotel Co., Ltd., 496 F.3d 312, 316 (3d Cir. 2007) (quoting
Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d
Cir.2004)).

A plaintiff “may meet this burden by establishing

that the court has either ‘general’ or ‘specific’ jurisdiction.”
Merco, Inc. v. S. Cal. Edison Co., No. 06–5182, 2007 WL 1217361,
8

at *3 (D.N.J. Apr. 24, 2007) (citing Provident Nat'l Bank, 819
F.2d at 437).

The Court can exercise specific jurisdiction when

the defendant purposely directs its activities at the forum, the
litigation arises out of at least one of those activities, and
the exercise of jurisdiction would “comport with ‘fair play and
substantial justice.’ ” O'Connor, 496 F.3d at 317 (quoting
Burger King v. Rudzewicz, 471 U.S. 462, 463 (1985)). If a
defendant maintains “continuous and substantial” forum contacts,
general jurisdiction can be exercised. Id. at 321.
B. Rule 12(b)(6)
This standard governs the remaining motions to dismiss for
failure to state a claim.

Pursuant to Rule 8(a)(2), Fed. R.

Civ. P., a complaint need only contain “a short and plain
statement of the claim showing that the pleader is entitled to
relief.”

Specific facts are not required, and “the statement

need only ‘give the defendant fair notice of what the . . .
claim is and the grounds upon which it rests.’” Erickson v.
Pardus, 551 U.S. 89, 93 (2007) (citations omitted).

While a

complaint is not required to contain detailed factual
allegations, the plaintiff must provide the “grounds” of his
“entitle[ment] to relief”, which requires more than mere labels
and conclusions. Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
555 (2007).

9

A motion to dismiss under Rule 12(b)(6), Fed. R. Civ. P.,
may be granted only if, accepting all well-pleaded allegations
in the complaint as true and viewing them in the light most
favorable to the plaintiff, a court concludes that the plaintiff
failed to set forth fair notice of what the claim is and the
grounds upon which it rests. Id.

A complaint will survive a

motion to dismiss if it contains sufficient factual matter to
“state a claim to relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009).

Although a court

must accept as true all factual allegations in a complaint, that
tenet is “inapplicable to legal conclusions,” and “[a] pleading
that offers labels and conclusions or a formulaic recitation of
the elements of a cause of action will not do.” Id. at 678.
Where a plaintiff proceeds pro se, the court must
“liberally construe” the complaint and hold it to “less
stringent standards than formal pleadings drafter by lawyers.”
Erickson v. Pardus, 551 U.S. 89, 93 (2007). Even still, “pro se
litigants must allege sufficient facts in their complaints to
support a claim.” Mala v. Crown Bay Marina, Inc., 704 F.3d 239,
245 (3d Cir. 2013) (citations omitted).
DISCUSSION
A. Lack of Personal Jurisdiction and Improper Process
Defendant Moua seeks to dismiss Plaintiff’s Complaint under
Rule 12(b)(2) for lack of personal jurisdiction and Rules
10

12(b)(4) and 12(b)(5) for insufficiency of process and service
of process, respectively.

In his Complaint, Plaintiff

characterizes her as a “robo-signer” because she notarized the
June 17, 2013 assignment of Plaintiff’s mortgage from Wells
Fargo to MERS. (Exs. A, E, J to Compl.)

Moua asserts that the

Court lacks specific personal jurisdiction over her because she
does not have minimum contacts with New Jersey, and that general
personal jurisdiction is lacking because any contacts with New
Jersey are not continuous or systematic.5 (Moua Br. at 8-9.)
Moua, a Loan Servicing Specialist who lives in North Carolina,
states in an affidavit that she has never resided in New Jersey,
owns no property in the state, conducts no business in New
Jersey, and has no bank accounts or other assets in the state.
(Moua Decl. ¶¶ 2-6.)

Moua’s unopposed affidavit is thus a

sufficient evidentiary basis to support that the conclusion that
there is no specific or general personal jurisdiction over her
in this case.
Defendant Moua further challenges Plaintiff’s process under
Rule 12(b)(4) because the content of the summons only bears
Moua’s name, with no address, and that the service of process
under 12(b)(5) was deficient because (1) Moua has never actually
been served, and (2) Moua has not authorized Wells Fargo, its

5

Plaintiff submitted no opposition to Defendant Moua’s motion to
dismiss.
11

attorneys, or any person in New Jersey to accept service on her
behalf. (Moua Br. at 9-10; Moua Decl. at ¶¶ 7-8, 10.)

The Court

agrees that process and service of process was deficient, as
Moua’s unopposed affidavit states that Plaintiff never actually
served her with a copy of any summons or complaint. (Moua Decl.
at ¶ 10.)

Because Moua has not been served within 90 days after

Plaintiff’s Complaint was filed, see Rule 4(m), Fed. R. Civ. P.,
the Court will dismiss Plaintiff’s Complaint with respect to
Moua without prejudice.6
B. Failure to State a Claim
Defendants ZFC Legal Trust, et al., Wells Fargo Bank, N.A.,
et al., and MERS, Inc. seek to dismiss the Complaint under Rule
12(b)(6), Fed. R. Civ. P., for failure to state a claim.7

For

the following reasons, the Court agrees and will grant
Defendants’ motions.
1. Mail and Wire Fraud
Plaintiff alleges mail and wire fraud violations under 18
U.S.C. §§ 1341-43.8

The mail fraud statutes, 18 U.S.C. §§ 1341-

6

The Court therefore does not reach Defendant Moua’s alternative
arguments regarding her motion to dismiss under Rule 12(b)(6).
7 Plaintiff only pleads federal question jurisdiction under 28
U.S.C. § 1331, and his Complaint cites 31 U.S.C. § 3732 in its
jurisdictional statement [“Jurisdiction and venue, subpart A”],
so the Court will address only Plaintiff’s claims based on
federal law, (Compl. at 2), upon which this Court’s jurisdiction
depends.
8 Plaintiff also alleges a claim under 18 U.S.C. § 1344 (bank
fraud) (Compl. at 9), but this also fails to state a claim for
12

42, apply only where the defendant uses the U.S. mails as “part
of the execution” of a fraudulent scheme. Schmuck v. United
States, 489 U.S. 705, 710 (1989).

The wire fraud statute, 18

U.S.C. § 1343, “is identical to the mail fraud statute except it
speaks of communications transmitted by wire,” i.e., telephone,
radio, or television, and does not apply to intrastate
communications. United States v. Frey, 42 F.3d 795, 797 (3d Cir.
1994).

However, “[t]here is no private cause of action for a

violation of the federal mail and wire fraud statutes.” Marley
v. Donahue, 133 F. Supp. 3d 706, 719 (D.N.J. 2015)(quoting
Addlespurger v. Corbett, 461 F. App’x 82, 87 (3d Cir. 2012)).
Such claims can only be brought by the government as criminal
charges.

Thus, Plaintiff fails to state a claim for relief

against Defendants on both of these counts, and they will be
dismissed.
2. Identity Theft
Next, Plaintiff asserts that Defendants generally violate
18 U.S.C. § 1028, which criminalizes the production, possession,
and use of false identification documents and document-making
equipment. Like the mail fraud and wire fraud claims however, 18
U.S.C. § 1028 “provide[s] no private right of action for use by

the same reason that the mail and wire fraud claims fail. See
Beale v. Rubin & Rothman, LLC, No. 08-4279, 2009 WL 1916322, at
*5 (D.N.J. June 29, 2009) (finding no private right of action
under 18 U.S.C. § 1344).
13

a litigant” such as Plaintiff. Obianyo v. Tennessee, 518 F.
App’x 71, 72 (3d Cir. 2013) (citing Gonzaga Univ. v. Doe, 536
U.S. 273, 283-84 (2002)).

As a result, Plaintiff cannot state a

claim for relief under this statute, and such allegations will
be dismissed.
3. False Claims Act
Plaintiff generally alleges that his claims are brought
pursuant to the federal False Claims Act, 31 U.S.C. §§ 37293733. (Compl. at 7-8.)

To establish a prima facie case under

the False Claims Act, a plaintiff must prove: (1) the defendant
presented or caused to be presented to an agent of the United
States a claim for payment; (2) the claim was false or
fraudulent; and (3) the defendant knew the claim was false or
fraudulent. Hutchins v. Wilentz, Goldman & Spitzer, 253 F.3d
176, 182 (3d Cir. 2011).

A private individual, otherwise known

as a relator, may bring a civil action in the name of the United
States to enforce this provision of the False Claims Act and may
share a percentage of any recovery resulting from the suit. 31
U.S.C. § 3730(b) & (d).

The False Claims Act has nothing to do

with the subject matter of Plaintiff’s Complaint, as Plaintiff
states no facts indicating that his case has anything to do with
defrauding a government program, let alone alleging that any
defendant has made a false claim to the federal government for
money arising from Plaintiff’s mortgage or indebtedness.
14

Moreover, a pro se litigant may not pursue a qui tam action on
behalf of the Government. Gunn v. Credit Suisse Group AG, 610 F.
App’x 155, 157 (3d Cir. 2015).

As a result, to the extent

Plaintiff asserts claims under the False Claims Act, they are
dismissed.
4. Extortion/FDCPA
Plaintiff asserts a general claim of extortion against
Defendants ZFC, Fay Servicing and Fein Such.

To the extent that

this claim is interpreted as a violation of the Hobbs Act, 18
U.S.C. § 1951, it is barred because that is a criminal provision
that does not give rise to a private cause of action. See
Brookhart v. Rohr, 385 F. App’x 67, 70 (3d Cir. 2010) (“The
Hobbs Act provide only for criminal sanctions and not civil
relief.”).

Section 1951(b)(2) defines “extortion” as “the

obtaining of property from another, with his consent, induced by
wrongful use of actual or threatened force, violence, or fear,
or under color of official right.”

The Complaint does not

identify one instance of threatening forceful or violent conduct
by Defendants. Plaintiff therefore fails to state a claim under
the Hobbs Act.
Plaintiff’s extortion claims could also be liberally
construed as an FDCPA claim, given that Plaintiff describes
Defendant ZFC and Defendant Fay Servicing as “Debt Collectors”
and even attaches a copy of a portion of the FDCPA to his
15

Complaint. (Ex. O. to Compl.)

The FDCPA affords “a remedy for

consumers who have been subjected to abusive, deceptive, or
unfair debt collection practices by debt collectors.” Pollice v.
Nat'l Tax Funding, L.P., 225 F.3d 379, 400 (3d Cir. 2000)
(citing Zimmerman v. HBO Affiliate Grp., 834 F.2d 1163, 1167 (3d
Cir. 1987)). The FDCPA’s definition of “debt collector” does not
exclude entities “seeking to collect debts they have purchased
from another that were already in default.” Skinner v. Asset
Acceptance, LLC, 876 F. Supp. 2d 473, 476 (D.N.J. 2012).
Plaintiff identifies five statements in the Defendant Fay
Servicing’s September 15, 2014 Notice of Intent to Foreclosure
that he states are false and misleading under 15 U.S.C. §
1692(e). (Ex. M. to Compl.)

However, this Court has subject

matter jurisdiction over Plaintiffs' FDCPA claims only if
brought “within one year from the date on which the violation
occurs.” See 15 U.S.C. § 1692k(d). See also McLaughlin v. Phelan
Hallinan & Schmieg, LLP, 756 F.3d 240, 245 n.8 (3d Cir. 2014)
(noting that district court's jurisdiction was pursuant to
Section 1692k(d)); Toritto v. Portfolio Recovery Assocs., LLC,
No. 14-7034, 2016 WL 1354946, at *2 (D.N.J. Apr. 5,
2016)(declining to consider Plaintiffs’ FDCPA claims on statute
of limitations grounds).

Here, Defendant Fay Servicing sent its

Notice on September 15, 2014, and Plaintiff did not file his
Complaint in this Court until March 17, 2016, well after the
16

statute of limitations had expired.

Upon its face, Plaintiff’s

FDCPA claims are untimely under 15 U.S.C. § 1692k(d), and such
claims must also be dismissed.
5. State law claims
With Plaintiff’s federal claims—the bases for this Court's
subject matter jurisdiction—having been dismissed, the Court is
left with a discretionary choice as to whether it will retain
supplemental jurisdiction under 28 U.S.C. § 1367 over the
Complaint's various state law claims, including mortgage fraud,
conspiracy, forgery, intentional and negligent infliction of
emotional distress and wrongful foreclosure. See Carlsbad Tech.,
Inc. v. HIF Bio, Inc., 556 U.S. 635 (2009) (“A district court’s
decision whether to exercise [supplemental] jurisdiction after
dismissing every claim over which it had original jurisdiction
is purely discretionary.”); New Rock Asset Partners, LP v.
Preferred Entity Advancements, Inc., 101 F.3d 1492, 1508 (3d
Cir. 1996) (noting that dismissal of the jurisdiction-granting
claim “triggers a discretionary decision on whether jurisdiction
over a state law claim should be declined pursuant to §
1367(c)(3)”).

The Third Circuit has instructed that “where the

claim over which the district court has original jurisdiction is
dismissed before trial, the district court must decline to
decide the pendent state claims unless considerations of
judicial economy, convenience, and fairness to the parties
17

provide an affirmative justification for doing so.” Borough of
West Mifflin v. Lancaster, 45 F.3d 780, 788 (3d Cir. 1995).
Plaintiff’s state court foreclosure proceeding has not yet
reached a final judgment and thus, Plaintiff’s claims may still
be vindicated there or through the state appellate process. See,
e.g., St. Clair v. Wertzberger, 637 F. Supp. 2d 251, 255 (D.N.J.
2009); Ruffolo v. HSBC Bank USA, N.A., No. 14-638, 2014 WL
4979699, at *4.

Given the ongoing foreclosure litigation in

state court where Plaintiff can call upon the state court to
examine and redress the allegedly fraudulent filings and
signatures,9 the court declines to exercise its supplemental
jurisdiction over the Complaint's state law claims and those
claims are therefore dismissed without prejudice.

Furthermore,

the Court notes that if it were to exercise supplemental
jurisdiction over such claims, it would be intruding into the
specialized area of mortgage foreclosure which is already before
the Superior Court of New Jersey; this federal court would be
called upon to duplicate or interfere with the ongoing state
foreclosure proceedings.

Declining the exercise of supplemental

jurisdiction in this case serves the purposes of “wise judicial
administration giving regard to conservation of judicial

9

See, e.g., Sheldrick, 2016 WL 7325473, at *6 (explaining that
it is well-established law in New Jersey that fraud is a defense
to foreclosure).
18

resources and comprehensive disposition of litigation” that also
undergirds the Colorado River abstention doctrine, Colorado
River Water Conservation Dist. v. United States, 424 U.S. 800,
817 (1976).

Accordingly, this Court declines to exercise

jurisdiction over state law claims under 28 U.S.C. § 1367(c)(3),
and such state law claims are dismissed without prejudice to
attempting to assert same in a court of competent jurisdiction.
V.

CONCLUSION
An accompanying Order will be entered, dismissing all

federal claims with prejudice and all state law claims without
prejudice for lack of subject matter jurisdiction.

December 22, 2016
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge

19