DONCHEVA v. CITIZENS BANK et al
Filing
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MEMORANDUM, OPINION. Signed by Judge Jerome B. Simandle on 12/7/2018. (rss, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
FAITH DONCHEVA,
HONORABLE JEROME B. SIMANDLE
Plaintiff,
v.
Civil Action No.
18-3294 (JBS/JS)
CITIZENS BANK, et al.,
Defendants.
MEMORANDUM OPINION
SIMANDLE, District Judge:
In this action, Plaintiff Faith Doncheva alleges that
Defendants Citizens Bank, Nations Default Services, Inc.
(“NDS”), Udren Law Offices (“Udren Law”), and ABC Corps. I-X
(collectively, “Defendants”) illegally used false, deceptive,
and/or misleading representations or means to collect a
purported debt owed. [Docket Item 1.] Defendants filed the
instant motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(6).
[Docket Items 13, 16, and 19.] Plaintiff requested, and was
granted, extensions of time to reply to the motions to dismiss
[Docket Items 18 & 20], but no opposition was filed. For the
reasons discussed below, Defendants’ unopposed motions to
dismiss will be granted. The Court finds as follows:
1.
Factual and Procedural Background.1 On June 18, 2003,
Plaintiff executed a Note in favor of Citizens Bank of
Pennsylvania n/k/a Citizens Bank, N.A. (“Citizens Bank”) in the
amount of $98,400.00 for a property located at 709 Hessian
Avenue in National Park, New Jersey 08063. [Docket Item 1 at ¶
11; see also Docket Item 17-1 at ¶ 1.] To secure the Note,
Plaintiff executed and delivered a mortgage to Citizens Bank on
June 23, 2003, which was recorded in the office of the Clerk of
Gloucester County on July 2, 2003. [Docket Item 1 at ¶ 11; see
also Docket Item 17-1 at ¶ 2.] On January 24, 2015, she executed
a second Note concerning the property in favor of Citizens Bank
for $40,000.00, and executed and delivered another mortgage
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The facts alleged are drawn from the Complaint, from public
court documents, and from undisputedly authentic documents upon
which Plaintiff explicitly relies in his Complaint. See In re
Rockefeller Ctr. Props., Inc., Sec. Litig., 184 F.3d 280, 287
(3d Cir. 1999). Because the Complaint is predicated upon the
mortgage documents, correspondence between Defendants and
Plaintiff regarding the mortgage, and the foreclosure actions in
state court, documents related to these matters submitted by
both Plaintiff and Defendants will be considered in connection
with the pending motions to dismiss. See Pension Ben. Guar.
Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d
Cir. 1993) (“[A] court may consider an undisputedly authentic
document that a defendant attaches as an exhibit to a motion to
dismiss if the plaintiff's claims are based on the document.”);
see also Farah v. Lasalle Bank Nat'l Ass'n, No. 15-2602, 2016 WL
1162644, at *5-6 (D.N.J. Mar. 23, 2016) (stating that “records
of the foreclosure action that are intrinsic to the complaint
may be considered without converting a facial Rule 12(b)(1)
challenge into a factual one, or a Rule 12(b)(6) motion into one
for summary judgment”) (citing Schmidt v. Skolas, 770 F.3d 241,
249 (3d Cir. 2014)).
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against the property to Citizens Bank, which was recorded in the
office of the Clerk of Gloucester County on February 22, 2005.
[Docket Item 1 at ¶ 12; see also Docket Item 17-1 at ¶ 2.]
2.
As of January 28, 2010, Plaintiff defaulted on her
loan obligations. [Id. at ¶ 8.] On June 21, 2010, Citizens Bank
filed a complaint against Plaintiff seeking to foreclose on the
first mortgage loan in the New Jersey Superior Court, Chancery
Division, Gloucester County, Docket No. F-32824-10. [Docket Item
1 at ¶ 11.] Citizens Bank filed another complaint against
Plaintiff seeking to foreclose on the second mortgage loan on
October 1, 2012, Docket No. F-21911-12. [Id. at ¶ 12.] Citizens
Bank filed an amended complaint in the second case on October
22, 2013. [Docket Item 17-1.] On November 24, 2014, the Superior
Court entered final judgment in favor of Citizens Bank in the
sum of $125,817.83. [Docket Item 17-2.]
3.
The property was originally scheduled for sheriff’s
sale on June 17, 2015. [Docket Item 1 at ¶ 13.] One month before
the sale was to take place, Plaintiff called Defendant NDS to
request mortgage assistance and, in response, NDS sent Plaintiff
a loss mitigation package via email. [Id. at ¶¶ 14-15.]
Plaintiff faxed the completed loss mitigation package back to
NDS on or prior to June 9, 2015, and, on June 16, 2015, the
Gloucester County Sheriff’s Office adjourned the sale of the
property to July 1, 2015. [Id. at ¶¶ 16, 20.] On or about June
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23, 2015, an attorney from Defendant Udren Law informed
Plaintiff “that the loans were charged off, the file was closed
and that a Sheriff’s Sale would not take place” [Docket Item 1-2
at 10] and asked the Gloucester County Sheriff, by letter, to
cancel the sheriff’s sale scheduled for July 1, 2015 and “return
the Writ unsatisfied.” [Docket Item 1-2 at 20.] On June 30,
2015, Citizens Bank requested the Gloucester County Sheriff’s
Office to advise it of the next available sale date. [Docket
Item 1-2 at 23.] The property was subsequently sold at sheriff’s
sale back to Citizens Bank on April 27, 2016. [Docket Item 173.]
4.
On April 12, 2017 Plaintiff electronically mailed and
sent via facsimile a letter to “Eddie” in the Citizens Bank
Asset Recovery Department, which memorialized an oral settlement
agreement she had apparently negotiated with him during the
prior week. [Docket Item 1-2 at 31.] According to the letter,
Citizens Bank agreed to settle the first loan for $19,807.74 and
the second loan for $2,064.00. [Id.] Plaintiff then retained an
attorney, Joshua Denbaux, Esq., to represent her in this matter.
[Docket Item 1 at 36.] On April 24, 2017, David Braz of Citizens
Bank faxed Plaintiff and her attorney a “Settlement Proposal,”
which confirmed that “Citizens Bank would accept $19,807.74
[plus $2,064.00 for the second mortgage] as settled in full.”
[Id.] Alexa Calligano from the Citizens Bank Asset Recovery
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Department subsequently mailed letters to Plaintiff and
Plaintiff’s counsel confirming that Citizens Bank would accept a
minimum of $19,807.74 for the first mortgage and $2,064.00 for
the second mortgage “to settle in full on the outstanding
balance,” and further stated: “This offer is only valid if the
entire payment is received by May 25, 2017. If the payment is
received after this date or if the payment subsequently does not
clear, this letter will be considered null and void.” [Docket
Item 1-2 at 40-44.] As discussed in more detail below, a state
court judge later determined that these letters from Citizens
Bank were sent in error.
5.
On May 8, 2017, Plaintiff mailed two checks to
Citizens Bank, one for $19,807.74 and one $2,064.00. [Docket
Item 1 at ¶ 41.] By way of a letter dated May 12, 2017 and
received by Plaintiff’s attorney on May 15, 2017, an attorney
from Defendant Udren Law, on behalf of Citizens Bank, rejected
Plaintiff’s effort to settle because one of the checks was
“unsigned.” [Id. at ¶ 42 (emphasis in original); see also Docket
Item 1-2 at 46.] Plaintiff then mailed another set of checks to
Citizens Bank [Docket Item 1 at ¶ 43], which Defendant Udren Law
again rejected because Plaintiff had not completed the legal
line on one of the checks. [Id. at ¶ 44; see also Docket Item 12 at 74.] On May 22, 2017, Defendant Udren sent Plaintiff’s
attorney a letter stating, in relevant part, “[a]ny offers
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contained in the letter of April 25, 2017 from Citizens Bank are
hereby revoked.” [Docket Item 1 at ¶ 45; see also Docket Item 12 at 73.]
6.
Plaintiff filed an Application for Stay of Eviction
and for Enforcement of Alleged Settlement in New Jersey Superior
Court, Chancery Division, Gloucester County, Docket No. F-2191112. [Docket Item 1 at ¶ 49.] On July 11, 2017, Judge Anne
McDonnell entered a “final order,” finding “that the offers to
settle made by employees of [Citizens Bank] by letter dated
April 25, 2017 were issued under the mistaken belief that the
loans represented thereby were not the subject of a final
judgment of foreclosure entered on November 24, 2014 and a
Sheriff’s Deed given to [Citizens Bank] on April 27, 2016 and
recorded on May 31, 2016,” denying enforcement of the April 25,
2017 settlement with prejudice, and ordering that the eviction
date remain July 14, 2017. [Docket Item 17-9 at 1.] On December
1, 2017, Judge McDonnell granted Citizen Bank’s Cross-Motion to
confirm the entry of judgment entered on November 24, 2014, and
ordered that “Final Judgment in Foreclosure entered on November
24, 2014 is hereby confirmed nunc pro tunc in all respects.”
[Id. at 2-3.]
7.
According to the Complaint, the enforceability of the
April 25, 2017 settlement agreement is pending on appeal in the
New Jersey Appellate Division under Docket Number A-004909-16,
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while a separate appeal concerning Judge McDonnell’s December 1,
2017 Order is pending under Appellate Docket Number A-002371-17.
[Docket Item 1 at ¶ 52-53; see also Docket Item 17-4.]
8.
On March 7, Plaintiff filed the Complaint in the
instant action alleging: (1) Defendants Citizens Bank and NDS
violated the Real Estate Settlement Procedures Act (“RESPA”), 12
U.S.C. § 2601 et seq.; (2) Defendants Citizen Bank and Udren Law
violated the Fair Debt Collection Practices Act (“FDCPA”), 15
U.S.C. § 1692 et seq.; (3) all Defendants violated the New
Jersey Consumer Fraud Act (“NJCFA”), N.J.S.A. § 56:8-1 et seq.;
and (4) all Defendants violated the Truth-In-Consumer Contract,
Warranty, and Notice Act (“TICCWNA”), N.J.S.A. § 56:12-14 et
seq. [Id. at ¶¶ 55-99.]
9.
Defendants filed the instant motions to dismiss
pursuant to Fed. R. Civ. P. 12(b)(6). [Docket Items 13, 16, and
19.] Plaintiff requested, and was granted, extensions of time to
reply to the motions to dismiss [Docket Items 18 & 20], but no
opposition was filed. The unopposed dismissal motions are ripe
for disposition, and will be decided without oral argument
pursuant to Fed. R. Civ. P. 78.
10.
Standard of Review. Under Federal Rule of Civil
Procedure 12(b)(6), the court must “accept all factual
allegations as true, construe the Complaint in the light most
favorable to the plaintiff, and determine whether, under any
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reasonable reading of the Complaint, the plaintiff may be
entitled to relief.” Fleisher v. Standard Ins. Co., 679 F.3d
116, 120 (3d Cir. 2012) (internal citations omitted).
11.
Because Plaintiff asserts claim under RESPA and the
FDCPA, both federal statutes, the Court exercises jurisdiction
over this action pursuant to 28 U.S.C. §§ 1331 and 1337(a), as
well as 15 U.S.C. § 1692k(d), and supplemental jurisdiction over
the state-law claims pursuant to 28 U.S.C. § 1367.
12.
Discussion. Defendants argues that Plaintiff’s claims
should be dismissed for several reasons: (1) Plaintiff’s claims
are barred by New Jersey’s entire controversy doctrine; (2)
Plaintiff’s claims involving the April 25, 2017 settlement
offers are barred by collateral estoppel; and (3) Plaintiff’s
claims are legally insufficient as a matter of law. For the
reasons explained herein, the Court finds that the entire
controversy doctrine applies to all claims in this federal
action and will, therefore, dismiss the Complaint in its
entirety. Since Plaintiff’s claims cannot proceed on this basis,
the Court declines to reach Defendants’ other arguments for
dismissal.
13.
Entire Controversy Doctrine. The entire controversy
doctrine, codified in Rule 4:30A of the New Jersey Court Rules,
“embodies the principle that the adjudication of a legal
controversy should occur in one litigation in only one
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court.” Cogdell v. Hosp. Ctr. at Orange, 560 A.2d 1169, 1172
(N.J. 1989). The doctrine requires litigants to assert all
affirmative claims relating to the controversy between them in
one action, and to join all parties with a material interest in
the controversy, or be forever barred from bringing a subsequent
action involving the same underlying facts. See Paramount
Aviation Corp. v. Agusta, 178 F.3d 132 (3d Cir. 1999) (New
Jersey's entire controversy doctrine “requires adversaries to
join all possible claims stemming from an event or series of
events in one suit.”). The doctrine applies in federal courts
where there was a previous state-court action involving the same
transaction. See Rycoline Prods., Inc. v. C & W Unlimited, 109
F.3d 883, 887 (3d Cir. 1997).
14.
The application of the entire controversy doctrine
turns on three criteria: “(1) the judgment in the prior action
must be valid, final, and on the merits; (2) the parties in the
later action must be identical to or in privity with those in
the prior action; and (3) the claim in the later action must
grow out of the same transaction or occurrence as the claim in
the earlier one.” Watkins v. Resorts Int'l Hotel and Casino,
Inc., 591 A.2d 592, 599 (N.J. 1991)). “It is [a] commonality of
facts, rather than the commonality of issues, parties or
remedies that defines the scope of the controversy and
implicates the joinder requirements of the entire controversy
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doctrine.” DiTrolio v. Antiles, 662 A.2d 494, 504 (N.J. 1995).
Importantly, the doctrine “bars not only claims that were
brought in the previous action, but also claims that could have
been brought.” In re Mullarkey, 536 F.3d 215, 225 (3d Cir.
2008). The New Jersey entire controversy doctrine is intended to
preclude a party from “withhold[ing] part of a controversy for
separate litigation even when the withheld component is a
separate and independently cognizable cause of action.” Maertin
v. Armstrong World Indus. Inc., 241 F. Supp. 2d 434, 456 (D.N.J.
2002) (quoting Paramount Aviation, 178 F.3d at 137).
15.
With respect to foreclosure actions, specifically, the
entire controversy doctrine requires that all “germane” claims
must be joined in the first action or they are forever barred.
N.J. Ct. R. 4:64–5. “The use of the word ‘germane’ in the
language of the rule undoubtedly was intended to limit
counterclaims in foreclosure actions to claims arising out of
the mortgage transaction which is the subject matter of the
foreclosure action.” In re Mullarkey, 536 F.3d at 229. In other
words, any claim challenging the foreclosure-plaintiff's “right
to foreclose” is “germane” to a foreclosure action and must be
raised there. Sun NLF Ltd. v. Sasso, 713 A.2d 538, 540 (N.J.
App. Div. 1988). Thus, New Jersey Rule 4:65–5 and the entire
controversy doctrine encompass all statutory, common law, and
constitutional claims relating to a foreclosure action and the
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underlying mortgage or tax transaction that led to the
foreclosure. Bembry v. Twp. of Mullica, 2017 WL 3033126, at *3
(D.N.J. July 17, 2017).
16.
The entire controversy doctrine bars Plaintiff’s
claims against Defendants Citizens Bank, Udren Law, and NDS
because the same set of facts form the basis of her claims both
in this Court and in the underlying foreclosure action,
including Defendants’ action to confirm the earlier foreclosure
judgment, and because the crux of her claims in both cases
assert impropriety and misrepresentation with respect to the
foreclosure action, Docket No. F-21911-12, and enforcement of a
settlement agreement purportedly reached between Plaintiff and
Defendants Citizens Bank and Udren Law on April 25, 2017, which
was denied by the Superior Court with prejudice. In other words,
even if Plaintiff’s claims in this action are styled as RESPA,
FDCPA, NJCFA, or TICCWNA causes of action, where they were
labeled otherwise before the Superior Court, she cannot escape
the fact that they share the same essence in both courts: that
Defendants allegedly failed to properly review her for a loan
modification in 2014, and that her purported settlement
agreement with Defendants Citizen Bank and Udren in 2017 should
be enforced. Each of the current claims was available and could
have been raised by Plaintiff when litigating the foreclosure
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case in Superior Court. Thus, Plaintiff's claims are barred by
the New Jersey entire controversy doctrine.
17.
Conclusion. For the foregoing reasons, the Court will
grant Defendants’ motions to dismiss. A court may deny leave to
amend where it is apparent that “(1) the moving party has
demonstrated undue delay, bad faith or dilatory motives, (2) the
amendment would be futile, or (3) the amendment would prejudice
the other party.” United States ex rel. Schumann v. AstraZeneca
Pharma. L.P., 769 F.3d 837, 849 (3d Cir. 2014) (citation
omitted). Because the Complaint is legally insufficient, and not
merely factually insufficient, any amendment would be futile.
Accordingly, dismissal will be with prejudice. An accompanying
Order shall be entered.
December 7, 2018
Date
s/ Jerome B. Simandle
JEROME B. SIMANDLE
U.S. District Judge
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