LLOYD v. PLUESE BECKER SALTZMAN LLC
Filing
23
OPINION. Signed by Judge Renee Marie Bumb on 5/9/2019. (rss, n.m.)
[Docket No. 8]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
CAROL LLOYD,
Plaintiff,
Civil No. 18-9420 (RMB/AMD)
v.
OPINION
PLUESE, BECKER, & SALTZMAN,
LLC,
Defendant.
APPEARANCES:
CAROL LLOYD, pro se
60 Coachlight Drive
Sicklerville, New Jersey 08081
PLUESE, BECKER, & SALTZMAN, LLC
By: Stuart H. West, Esq.
20000 Horizon Way, Suite 900
Mount Laurel, New Jersey 08054
Attorneys for Defendant
BUMB, UNITED STATES DISTRICT JUDGE:
Pro se Plaintiff, Carol Lloyd, brings this suit alleging
that the law firm which represents her mortgage lender in the
underlying state foreclosure action, Defendant Pluese, Becker,
Saltzman, LLC (“PBS”), violated the Fair Debt Collection
Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”), by filing a
motion with the court in the foreclosure action.
1
Before the
Court is PBS’s “Motion to Dismiss Amended Frivolous Action
pursuant to Fed. R. Civ. P. 11, 12(b)(6), 12(d) and 56.” [Docket
No. 8-2]
For the reasons stated herein, the motion will be
denied in part and denied without prejudice in part.
I.
FACTUAL BACKGROUND
The Amended Complaint alleges the following.
Lloyd
purchased the property at issue in 1996 and has lived there ever
since.
(Amend. Compl. ¶ 6)
Lloyd’s mortgage lender, New Jersey
Housing and Mortgage Finance Agency (“HMFA”) contends that Lloyd
has been in default on her mortgage for over nine years.
¶¶ 16, 24)
(Id.
“[A]round July 2013,” HMFA allegedly “gave the case
to [PBS] to litigate”--i.e., “to file [a] foreclosure
complaint.”
(Id. ¶¶ 25, 36)
Lloyd alleges HMFA did this even
though it knew that it had not complied with 24 C.F.R. §
203.604(b), which requires a face-to-face meeting between the
lender and the borrower prior to bringing a foreclosure action. 1
(Id. ¶¶ 25-26)
1
As alleged in the Amended Complaint, and evidenced by the
mortgage documents attached as exhibits to the Amended
Complaint, the loan at issue is an FHA loan which incorporates
the pertinent regulations promulgated by the Secretary of
Housing and Urban Development, including 24 C.F.R. § 203.604.
Section 203.604(b) provides, “[t]he mortgagee must have a faceto-face interview with the mortgagor, or make a reasonable
effort to arrange such a meeting, before three full monthly
installments due on the mortgage are unpaid. If default occurs
in a repayment plan arranged other than during a personal
interview, the mortgagee must have a face-to-face meeting with
2
The Amended Complaint explains, “[a]fter a period of time
and numerous pleadings, [PBS] failed to take any action in the
case for one year, at which point the court twice dismissed the
state foreclosure action for lack of prosecution.
(Amend. Compl. ¶ 37) 2
currently stands dismissed.”
[The case]
On May 19,
2017, after the case was dismissed for the first time, PBS, on
behalf of HMFA, filed a “Motion to Reinstate the Foreclosure.”
(Amend. Compl. Ex. E)
Lloyd bases her various FDCPA claims on
the filing of this motion.
(Id. ¶ 61) (“Plaintiff states the
Counts below [are] based on Plaintiff’s receipt of litigation
papers dated and filed with the state court on May 19, 2017[.]”)
(See also Id. ¶¶ 1, 2, 69-71, 74, 76)
Specifically, Lloyd
alleges that “[a]t all times herein mentioned, [PBS] was a ‘debt
collector’ as defined in 15 U.S.C. § 1692a(6)” (Id. ¶ 10) 3, and
the mortgagor, or make a reasonable attempt to arrange such a
meeting within 30 days after such default and at least 30 days
before foreclosure is commenced, or at least 30 days before
assignment is requested if the mortgage is insured on Hawaiian
home land pursuant to section 247 or Indian land pursuant to
section 248 or if assignment is requested under § 203.350(d) for
mortgages authorized by section 203(q) of the National Housing
Act.”
2
PBS confirms that “final judgment has not yet been sought
in the administratively dismissed foreclosure [case].” (Reply
Brief, p. 5) (See also, West Certification Ex. O-- May 11, 2018
Chancery Court Order stating, “the above-captioned matter has
been dismissed without prejudice for lack of prosecution.”).
3
The Amended Complaint and all papers in connection with
the instant motion were filed before the Supreme Court issued
its ruling in Obduskey v. McCarthy & Holthus, LLP, 139 S.Ct.
3
that PBS’s filing of the Motion to Reinstate the Foreclosure
violated the following sections of Title 15:
•
•
§ 1692e(2), (5) and (10) (prohibiting debt
collectors from using any false, deceptive, or
misleading representation or means in connection
with the collection of any debt, including
falsely representing the legal status of a debt,
threatening to take any action that cannot
legally be taken or that is not intended to be
taken, and using any false representation or
deceptive means to collect or attempt to collect
any debt);
•
§ 1692f and (1) (prohibiting debt collectors from
using unfair or unconscionable means to collect
or attempt to collect any debt, including
collecting any amount not authorized by the
agreement creating the debt); and
•
II.
§ 1692d (prohibiting harassing, oppressive, or
abusive conduct by debt collectors);
§ 1692f(6) (prohibiting debt collectors from
taking or threatening to take any nonjudicial
action to effect dispossession or disablement of
property).
LEGAL STANDARDS
A.
1029 (March 20, 2019), which held that, under the factual
circumstances of that case, the defendant law firm was not a
“debt collector” within the meaning of 15 U.S.C. § 1692a(6). As
PBS has not yet raised the issue, the Court does not opine on
the effect-- if any-- this recent decision has on Lloyd’s
claims. The Court notes that no dispositive motion deadline has
been set, and that nothing in the Federal Rules of Civil
Procedure would preclude PBS from filing, in the future, a
motion pursuant to Fed. R. Civ. P. 12(c) or 56.
4
Rule 12(b)(1) motions may challenge subject-matter
jurisdiction based upon the complaint’s face or its underlying
facts.
Pittman v. Metuchen Police Dept., No. 08–2373, 2009 WL
3207854, *1 (D.N.J. Sept. 29, 2009) (citing James Wm. Moore, 2
Moore's Federal Practice § 12.30[4] (3d ed. 2007)).
“A facial
attack questions the sufficiency of the pleading, and in
reviewing a facial attack, a trial court accepts the allegations
in the complaint as true.”
Id.
B.
To withstand a motion to dismiss under Federal Rule of
Civil Procedure 12(b)(6), “a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.’”
Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007)).
“A claim has facial plausibility 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. at 662.
“[A]n unadorned, the
defendant-unlawfully-harmed-me accusation” does not suffice to
survive a motion to dismiss.
Id. at 678.
“[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 the elements of a cause of action will
5
not do.” Twombly, 550 U.S. at 555 (quoting Papasan v. Allain,
478 U.S. 265, 286 (1986)).
In reviewing a plaintiff’s allegations, the district court
“must accept as true all well-pled factual allegations as well
as all reasonable inferences that can be drawn from them, and
construe those allegations in the light most favorable to the
plaintiff.”
2012).
Bistrian v. Levi, 696 F.3d 352, 358 n.1 (3d Cir.
Only the allegations in the complaint, and “matters of
public record, orders, exhibits attached to the complaint and
items appearing in the record of the case” are taken into
consideration.
Oshiver v. Levin, Fishbein, Sedran & Berman, 38
F.3d 1380, 1384 n.2 (3d Cir. 1994) (citing Chester Cnty.
Intermediate Unit v. Penn. Blue Shield, 896 F.2d 808, 812 (3d
Cir. 1990)).
C.
Summary judgment shall be granted if “the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Civ. P. 56(a).
Fed. R.
A fact is “material” only if it might impact the
“outcome of the suit under the governing law.”
Gonzalez v.
Sec’y of Dept of Homeland Sec., 678 F.3d 254, 261 (3d Cir.
2012).
A dispute is “genuine” if the evidence would allow a
reasonable jury to find for the nonmoving party. Id.
6
In determining the existence of a genuine dispute of material
fact, a court’s role is not to weigh the evidence; all
reasonable inferences and doubts should be resolved in favor of
the nonmoving party.
Melrose, Inc. v. City of Pittsburgh, 613
F.3d 380, 387 (3d Cir. 2010).
III.
ANALYSIS
PBS asserts several arguments in support of the instant
motion: first, that Lloyd’s claims are barred by the RookerFeldman doctrine; second, that the claims are barred by the
entire controversy doctrine; third, that the claims are barred
by principles of res judicata and issue preclusion; and fourth,
that Lloyd’s conduct in filing this allegedly frivolous lawsuit
warrants dismissal of this case pursuant to Fed. R. Civ. P. 11. 4
The Court addresses each argument in turn.
4
Puzzlingly, PBS has not asserted any arguments directly
attacking the elements of Lloyd’s FDCPA claims. For example, §
1692f(6), by its very terms, appears to apply in situations
involving only “nonjudicial” foreclosures, yet Lloyd’s claims
are based on PBS filing a motion in a judicial foreclosure.
PBS, however, makes no argument in this regard, and so the Court
does not reach the issue at this time. As noted above, there is
no apparent procedural bar to PBS filing another appropriate
motion should it wish to do so. While the Court generally
prefers to avoid the docket congestion created by serial motion
practice, in rare circumstances, an additional motion may lead
to a more efficient disposition of a suit by substantially
narrowing the issues or claims in a case. This case appears to
be one of those rare situations where an additional motion may
be appropriate.
7
A. Rooker-Feldman 5
The Rooker-Feldman doctrine does not apply prior to entry
of final judgment in the state court foreclosure litigation.
Shibles v. Bank of Am., N.A., 730 F. App’x 103, 105 (3d Cir.
2018).
It is undisputed that no final judgment of foreclosure
has been entered in HMFA’s foreclosure suit against Lloyd.
Accordingly, PBS’s Rooker-Feldman argument fails.
B. Entire Controversy Doctrine 6
In Shibles, the Court of Appeals for the Third Circuit
recently explained:
New Jersey’s entire controversy doctrine embodies the
principle that the adjudication of a legal controversy
should occur in one litigation in only one court;
accordingly, all parties involved in a litigation should
at the very least present in that proceeding all of their
claims and defenses that are related to the underlying
controversy. We have characterized the doctrine as New
Jersey’s specific, and idiosyncratic, application of
traditional res judicata principles. The doctrine
applies in federal courts when there was a previous
state-court action involving the same transaction.
There is no doubt that the entire controversy
doctrine applies to foreclosure proceedings, but only to
claims that could have been filed in the foreclosure
action, that is, only to claims that were germane to the
foreclosure proceeding. The New Jersey Superior Court,
Appellate Division recently re-affirmed that basic
tenant of state law, explaining that a defendant in a
foreclosure case may not fail to diligently pursue a
5
See Section II. A. for the legal standard applicable to
this issue.
6
See Section II. B. for the legal standard applicable to
this issue.
8
germane defense and then pursue a civil case against the
lender alleging fraud by foreclosure.
730 F. App’x at 106–07 (internal citations and quotations
omitted).
Lloyd’s FDCPA claims against PBS-- i.e., claims premised on
actions taken by a non-party to the foreclosure case after the
foreclosure case was filed-- are not germane to the foreclosure
proceeding, as they do not involve the same transaction.
Thus,
this case is distinguishable from cases that have held FDCPA
claims against a mortgage lender or servicer are germane to the
underlying foreclosure action.
See, e.g., Lee v. Ocwen Loan
Servicing, LLC, 2018 WL 935426, at *3 (D.N.J. Feb. 15, 2018)
(“The use of the word ‘germane’ in the language of the [entire
controversy] 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.”).
Accordingly, PBS’s entire controversy argument fails.
C. Res Judicata / Issue Preclusion 7
PBS argues that the issue of HMFA’s admitted failure to
conduct a face-to-face meeting “was litigated several times
7
See Section II. C. for the legal standard applicable to
this issue.
9
throughout the foreclosure proceedings and HMFA prevailed every
time.”
(Moving Brief, p. 5)
The evidence PBS submits in
support of this argument is insufficient to support summary
judgment on this issue at this time.
The record contains only
orders issued by the Chancery Court (see West Certification Exs
G, J and O), only one of which-- Ex. G-- specifically references
24 C.F.R. § 203.604. 8
The record is devoid of any opinion or
reasoning of the Chancery Court upon which a factfinder might
find that the issue of HMFA’s non-compliance with 24 C.F.R. §
203.604 was fully litigated and decided on the merits in the
foreclosure case. 9
8
The order appears to be a proposed order that Lloyd
submitted to the Chancery Court. It is stamped “denied” and
signed by the Chancery Court Judge.
9
See Bd. of Trustees of Trucking Employees of N. Jersey
Welfare Fund, Inc. - Pension Fund v. Centra, 983 F.2d 495, 505
(3d Cir. 1992) (“Issue preclusion, formerly titled collateral
estoppel, proscribes relitigation when the identical issue
already has been fully litigated. Issue preclusion may be
invoked when: (1) the identical issue was decided in a prior
adjudication; (2) there was a final judgment on the merits; (3)
the party against whom the bar is asserted was a party or in
privity with a party to the prior adjudication; and (4) the
party against whom the bar is asserted had a full and fair
opportunity to litigate the issue in question.”); In re Estate
of Dawson, 136 N.J. 1, 20-21 (1994) (“For the doctrine of
collateral estoppel to apply to foreclose the relitigation of an
issue, the party asserting the bar must show that: (1) the issue
to be precluded is identical to the issue decided in the prior
proceeding; (2) the issue was actually litigated in the prior
proceeding; (3) the court in the prior proceeding issued a final
judgment on the merits; (4) the determination of the issue was
essential to the prior judgment; and (5) the party against whom
10
Accordingly, summary judgment on PBS’s issue preclusion
argument will be denied without prejudice.
D. Rule 11
PBS urges this Court “not [to] countenance” Lloyd’s conduct
in filing this allegedly frivolous lawsuit. (Moving Brief, p.
18-20)
However, it does not appear that PBS has followed the
mandatory safe-harbor procedure set forth in Rule 11(c)(2).
See
Metro. Life Ins. Co. v. Kalenevitch, 502 F. App’x 123, 124–25
(3d Cir. 2012) (“Kalenevitch did not present her sanctions
motion separately from her motion for judgment on the pleadings,
and she failed to serve the motion upon MetLife and wait twentyone days before filing it. . . . [Thus,] Kalenevitch’s sanctions
request was plainly subject to denial due to non-compliance with
Rule 11(c)(2).”).
Moreover, the fact that PBS has not-- as of
yet-- prevailed on any of its arguments in support of dismissal
militates against a conclusion, at this stage of the litigation,
that Lloyd’s claims are frivolous.
Accordingly, PBS’ Rule 11
Motion will be denied without prejudice. 10
the doctrine is asserted was a party to or in privity with a
party to the earlier proceeding.”).
10
The Court also observes that “Rule 11 sanctions are
generally disfavored unless the misconduct by the party and/or
attorneys is extraordinary” under the circumstances of the
particular case. Ampro Computers, Inc. v. LXE, LLC, No. CV 131937-LPS, 2016 WL 3703129, at *3 (D. Del. July 8, 2016). While
Rule 11 sanctions may be imposed upon parties proceeding pro se,
11
IV.
CONCLUSION
For the foregoing reasons, PBS’ Motion will be denied in
part and denied without prejudice in part as set forth above.
An appropriate Order shall issue on this date.
s/ Renée Marie Bumb
Dated: May 9, 2019
__
______
RENÉE MARIE BUMB
UNITED STATES DISTRICT JUDGE
the fact that a particular party is not trained in law or court
procedures is one relevant consideration that may weigh against
the imposition of sanctions, see generally, Haim v. Neeman, 2014
WL 12617792 at *2 (D.N.J. June 11, 2014) (“the District Court
has sufficient discretion to take account of the special
circumstances that often arise in pro se situations”)-particularly the most extreme sanction of claim dismissal.
However, pro se parties do not have a “free pass to conduct
litigation outside of the bounds imposed on represented
litigants in federal court,” Skoorka v. Kean Univ., 2017 WL
6539449 at *3 (D.N.J. Dec. 21, 2017), and this Court will not
hesitate to sua sponte impose any and all appropriate and
proportional sanctions if circumstances so warrant.
12
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