ELEANOR AND RALPH SCHIANO v. MBNA et al

Filing 695

OPINION. Signed by Chief Judge Jose L. Linares on 01/31/2019. (sms)

NOT FOR PUBLICATION

UNITED STATES DISTRICT CO
URT
DISTRICT OF NEW JERSEY

ELEANOR AND RALPH SCHIAN
O,
Plaintiffs,

Civil Action No.: 05-f 771 (JLL) (JA
D)
OPINION

V.

MBNA et al.,
Defendants.
LINARES, Chief District Judge.
This matter comes before the Cou
rt by way of Plaintiffs Eleanor and
Ralph Schiano’s
(collectively “Plaintiffs”) letter app
lication for emergent relief. (ECF
Nos. 685, 686). Defendants
Ocwen Loan Servicing, LLC
, Barclays Bank, PLC, and We
lls Fargo, N.A. (collectively
“Defendants”) filed a letter opposin
g the requested relief, (ECF No. 691
), and Plaintiffs filed a reply,
(ECF No. 692). Defendant Wells Far
go, N.A. also filed a separate letter
opposing Plaintiffs’ motion,
(ECF No. 693), and Plaintiffs file
d a reply, (ECF No. 694). In acc
ordance with Federal Rule of
Civil Procedure 78, the Court did
not hear oral argument on Plaintiffs’
application. Upon careful
consideration of the parties’ sub
missions, as well as the balance
of the docket for this matter,
Plaintiffs’ application is DENIED.
I.

BACKGROUND

This case is just two months sho
rt of having been litigated for fou
rteen years since its
initiation in April of 2005. The
nature of this action, as stated in
Plaintiffs’ Fifth Amended
Complaint, “arises out of mortga
ge fraud, et al, resulting in the
wrongful ongoing inability to

refinance out of the loan due to invalid mortgage title.” (fifth Am. Compl.

¶ 2,

ECF No. 633).

While the Court declines to engage in an unwieldy recitation of the background of this case. we note
that the parties are intimately familiar with the facts in this action.

As stated in the Court’s

September 22, 2016 Opinion, “the facts of this action have been described at great length in a
number of opinions isscted by this Court, including in the two opinions from which Plaintiffs seek
reconsideration. [I]n the interest ofjudicial economy, the Court refers the parties to those opinions
for a factual background.” (ECF No. 572).
Since that Opinion, the parties engaged in significant motion practice requesting various
forms of relief, and they continued to work with Special Master Nicholas A. Grieco, Esq., and this
Court in an effort to resolve conflicts and move the case toward settlement. Unfortunately, there
has been minimal if any progress toward a resolution of this matter. (See e.g. Dec. 18, 2018 Tr. of
Hr’g at 6:16-7:18, ECF No. 687). For example, Plaintiffs’ efforts to refinance, which flow from the
Court’s suggestion that the parties may significantly resolve their disputes if Plaintiffs refinance
their mortgage loan, have been ongoing since the appointment of Special Master Grieco on October
9. 2014. (ECF No. 489). Following Special Master Grieco’s resignation on May 23, 2018, (ECF
No. 669), the Court appointed Title Agent Peter Uzzolino of Acres Land Title Agency, Inc., on May
24, 2018, to facilitate the ongoing refinancing process. (ECF No. 661). It appeared that Plaintiffs
came close on several occasions to securing the elusive refinance of their mortgage, but each time
there has been some impediment, usually related to Defendant Ocwen’s alleged interest in the loan,
or lack thereof. Furthermore, and critical to this application, the parties cannot agree on the identity
of the owner of the loan.
At the December 18, 201$ status conference, Plaintiffs raised the possibility of a Court
ordered discharge of the mortgage once Plaintiffs secured refinancing. (Dec. 18, 2018 Tr. of Hr’g

2

at 12:2-5. ECF No. 687). The Court acknowledged that a Court-ordered discharge of the mortgage
would be possible if all parties agreed to a consent order.
On January 11, 2019, Plaintiffs filed the present application notifying the Court they were
approved for a mortgage and seeking Court intervention. (ECF No. 685). Plaintiffs request the
following relief: a Court-ordered “discharge of all liens and debts associated with Plaintiffs’ current
loan so that the Plaintiffs’ pending refinance can be effectuated”; indemnification from Ocwen and
Wells Fargo Bank, N.A.; and the Court’s permission to name JPMorgan Chase as a required party
to this litigation. (Id.). Plaintiffs argue that “an immediate Court discharge is urgent to mitigate
further Plaintiff loss,” and “[i]ndemnification is necessary to protect against payoff to improper
part[ies], and prevent Plaintiffs’ loan from again taking a distressed debt path.” (ECF No. 685-1).
Plaintiffs claim that they submitted a proposed discharge to Defendants with the stipulation that
both Ocwen and Wells Fargo Bank, N.A. would indemnify Plaintiffs, but that Defendants would
not consent. (Id.).
Plaintiffs now claim that Old Republic Title, the title company retained by Plaintiffs and
associated with the most recent refinancing, will not issue a title policy to Plaintiffs without a Courtordered discharge of the mortgage. (ECF No. 686-1). Plaintiffs’ application states that “[t]he
[identity of the] owner, holder, [and] mortgagee continues to be in dispute” between the various
parties and entities related to this action. (ECF No. 685-1). Plaintiffs’ refinancing commitment will
expire on February 2, 2019, and they claim that “[t]his is likely [their] last opportunity to obtain a
refinance.” (ECF No. 692-3).
Defendants filed a joint letter in opposition to Plaintiffs’ application for emergent relief,
(ECF No. 691), and Defendant Wells Fargo, N.A. filed an additional letter in opposition, (ECF No.
693). As to Plaintiffs’ request for a Court-ordered discharge and indemnification, Defendants
correctly note that Plaintiffs have failed to cite any legal authority that demonstrates the Court’s
3

authority to issue such an order. (ECF No. 691). Defendants also allege that Plaintiffs failed to
plead this relief in the Fifth Amended Complaint.’ As to the Plaintiffs’ request to add JPMorgan
Chase as a party to this litigation, Defendants oppose any further amendments to the Fifth Amended
Complaint, arguing that “Plaintiffs present no legal or factual basis to include Chase in this action,”
(ECF No. 691), and that the Court declared that the Fifth Amended Complaint was to be Plaintiffs’
final pleading in this case. (ECF No. 693) (Oct. 12, 2017 Tr. of Hr’g at 60:2-9, ECF No. 627).
II.

LEGAL DISCUSSION

It is apparent from Plaintiffs’ application that they are seeking dispositive relief.2 The Court
cannot grant this relief on an emergent basis for several reasons. first, the case is, once again, in
the pleading stage and Defendants have recently filed motions to dismiss on January 22, 2019, (ECF
No. 688), and January 23, 2019, (ECF No. 690). The Court cannot grant relief for claims that the
Court may well find invalid upon consideration of Defendants’ motions. Plaintiffs’ application
raises issues that ultimately need to be addressed through discovery and at trial, or at the very least
on a full record. There is an insufficient record to properly consider Plaintiffs’ application for the
Court to issue a discharge of Plaintiffs’ mortgage and require Defendants to indemnify Plaintiffs.
Plaintiffs cannot satisfy the standard for emergent relief.3

Although not specifically

requesting injunctive relief, Plaintiffs seek a Court-ordered discharge of their mortgage, a form of
relief that is equitable in nature.
A. Likelihood of Success on the Merits

The Court finds that this statement is not entirely accurate. The Second Count of the Fifth
Amended Complaint states in pertinent part: “Accordingly, the Court should nile that
any liens,
mortgages, or debts are discharged{.]” (Fifth Am. Compi. ¶ 111. ECF No. 633).
2
The Court will not consider Plaintiffs’ request to add a new party at this time, as they have not
properly moved to add a new party and there is certainly no emergent reason to do so.
No party has suggested a legal standard by which this Court should decide Plaintiffs’ application.
Because Plaintiffs’ seek emergent equitable relief, the Court shall use the legal standard commonly
applied to applications for preliminary injunctive relief.
.

4

.

.

While there may be a legitimate issue regarding whether Plaintiffs’ mortgage can be
discharged, it is unclear whether the fault giving rise to the issue—if such fault exists—lies with the
Defendants. While Plaintiffs may ultimately succeed on the merits in this matter, the Court cannot
say with any reasonable certainty at this time that there is a reasonable likelihood of success on this
issue.
B. Irreparable Harm

The second element for emergent equitable relief is that the denial of such relief will result
in irreparable harm to the movant. Kos Pharm., Inc. v. Andrx Corp., 369 F.3d 700, 70$ (3d Cir.
2004) (citing Allegheny Energy, Inc. v. DOE, Inc., 171 F.3d 153, 15$ (3d Cir. 1999)). A plaintiff
must establish more than a risk of irreparable injury. Hoxworth

1’.

Blinder, Robinson & Co., 903

F.2d 186, 205 (3d Cir. 1990) (quoting E(RI v. McGraw—Hill, Inc., $09 F.2d 223, 226 (3d Cir. 1987))
(emphasis added). Rather, a plaintiff must demonstrate a “clear showing of immediate irreparable
injury.”

Id. It is well settled that “[e]conornic loss does not constitute irreparable harm.” Acierno

v. New ‘astle Cnty., 40 F. 3d 645, 633 (3d Cir. 1994).
Plaintiffs cannot satisfy this burden.

Plaintiffs seek a court-ordered discharge of the

mortgage because Defendants allegedly would not sign a consent order and Plaintiffs new title
company, Old Republic, will allegedly not issue Plaintiffs a title policy without a Court-ordered
discharge of the mortgage.

Plaintiffs argue that their request for relief is urgent because their

mortgage commitment expires February 2, 2019. Urgency resulting from a looming deadline or a
perceived lack of solutions is not enough to demonstrate the type of immediate and irreparable
injury that warrants the relief sought here. Additionally, Plaintiffs have not demonstrated, and the
Court cannot identify, a scenario in which Plaintiffs would be left without any redress should they
not succeed in

acquiring

a Court-ordered discharge.

As frustrated as Plaintiffs may be if the

mortgage commitment expires, Plaintiffs have not established that they would be left without further
5

options to refinance. Further, should this case proceed to trial, and should the outcome be favorable
to Plaintiffs, Defendants will be called upon to remedy any losses that Plaintiffs suffered. All of
Plaintiffs’ damages are essentially economic.

Thus, Plaintiffs have failed to meet the second

element required for equitable relief.
C. Balance of the Interests

As noted above, Defendants have recently filed two motions to dismiss Plaintiffs’ Fifth
Amended Complaint. Surely, if the Court has allowed Plaintiffs to amend their pleading for a fifth
time at this stage of the litigation, then in the interests of fairness, Defendants should be given a full
opportunity to be heard on their motions to dismiss.

This is especially crucial given that a

determination of the validity of Plaintiffs’ claims could directly impact Plaintiffs’ request for
equitable relief. Accordingly, a balance of the interests weighs in favor of denying Plaintiffs’
request.
D. Public Interest

As there is no public interest calling for a resolution of Plaintiffs’ claims, this factor does not
weigh in favor of granting Plaintiffs’ request for relief.
III.

CONCLUSION

For the reasons set forth above, Plaintiffs’ motion for emergent relief is DENIED. An
appropriate Order follows this Opinion.

Date: January/, 2019

/J$E L.’LINARES
,,çciief Judge, United States District Court

6