ESPINOZA v. HSBC BANK USA, NATIONAL ASSOCIATION AS TRUSTEE FOR NOMURA HOME EQUITY LOAN, INC. et al

Filing 9

OPINION. Signed by Judge Claire C. Cecchi on 3/19/13. (DD, )

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

OSCAR ESPTNOZA,

Civil Action No.: 12-cv-4874 (CCC)

Plaintiff,
OPINION
V.

HSBC
BANK,
USA,
NATIONAL
ASSOCIATION
AS
TRUSTEE
FOR:
NOMURA HOME EQUITY LOAN, INC.,:
ASSET-BACKED CERTIFICATES, SERIES
2006-FM1, OCWEN LOAN SERVICING:
LLC
Defendants.
CECCHI, District Judge.
I.

INTRODUCTION

This matter comes before the Court on the motion of HSBC Bank USA (“HSBC”),
National Association, as Trustee for Nomura Home Equity Loan, Inc. Asset-Backed Certificates,
Series 2006-FM 1 and Ocwen Loan Servicing, LLC (collectively, “Defendants”) to dismiss the
Complaint of Oscar Espinoza (“Plaintiff’) pursuant to Federal Rule of Civil Procedure l2(b)(6),
The Court has considered the submissions made in support of and in opposition to the instant
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motion. The Court decides this matter without oral argument pursuant to Rule 78 of the Federal
Rules of Civil Procedure. Based on the reasons that follow, Defendants’ motion to dismiss is

‘The Court considers arguments not presented by the parties to be waived.
Brenner v. Local
514, United Bhd. of Carpenters & Joiners, 927 F.2d 1283, 1298 (3d Cir. 1991) (“It is well
established that failure to raise an issue in the district court constitutes a waiver of the
argument.”).

granted. Plaintiff is granted fourteen (14) days in which to file an Amended Complaint that
cures the pleading deficiencies discussed below.
II.

BACKGROUND

Plaintiff owns real property located at 221 Ampere Parkway, Bloomfield, Essex County,
New Jersey 07003 (the “Property”), (Compl., ¶ 1.> Plaintiff obtained title to the Property by
way of a bargain and sale deed from Armanda Jaimes on August 30, 2005. (Compl., ¶ 2 and
Exhibit A.) Plaintiff financed the purchase of the Property with a loan from FGC Commercial
Mortgage Finance (“FGC”). (Def. Mot.) On August 30, 2005, Plaintiff executed to FGC a note
in the sum of $372,000.00. (Compl., ¶ 4.) To secure payment of the note and obligation,
Plaintiff executed a mortgage to Mortgage Electronic Registration Systems, Inc. (“MERS”), as
nominee for FGC. (Compl., ¶ 5.) On the same day, FGC assigned the promissory note to
Fremont Investment & Loan. (Compl., ¶ 6.) Defendants allege that the mortgage was then
assigned to HSBC on March 27, 2012. (Def. Mot.)
On March 2, 2012, foreclosure counsel for HSBC sent Plaintiff a Notice of Intention to
Foreclose. (Compi.,

¶ 8.)

On June 13, 2012, Plaintiff filed suit in the Superior Court of New

Jersey, Chancery Division, Essex County. Plaintiffs Complaint “contests any interest which
defendants may allege in the property, and seek [sic] to quiet title on said property, pursuant to
Rule 4:62-1 et. seq., and pursuant to N.J.S.A. 2a:62-l.” (Compl., ¶ 9.) Defendants filed their
motion to dismiss on August 8, 2012.
III.

LEGAL STANDARD

For a complaint to survive dismissal pursuant to Federal Rule of Civil Procedure
l2(b)(6), it “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that

is plausible on its face.” Ashcroft v. Iqbai, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
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Twombly, 550 U.S. 544, 570 (2007)). In evaluating the sufficiency of a complaint, the Court

must accept all well-pleaded factual allegations in the complaint as true and draw all reasonable
inferences in favor of the non-moving party. See Phillips v. Cnty. oflegheny, 515 F.3d 224,
231 (3d Cir. 2008). “Factual allegations must be enough to raise a right to relief above the
speculative level.” Twombjy 550 U.S. at 555. Furthermore, “[a) pleading that offers ‘labels and
conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’ Nor does
a complaint suffice if it tenders ‘naked assertion[sj’ devoid of ‘further factual enhancement.”
Iqbd, U.S. at 678.
IV.

DISCUSSION

Defendants argue that Plaintiffs complaint should be dismissed because Plaintiff has

failed to allege sufficient facts that can be construed as entitling Plaintiff to relief. (Def, Mot.)
Plaintiff opposes and argues that he has sufficiently pleaded his quiet title claim. (P1.

Opp.)

The Third Circuit in Club Comanche, Inc. v. Government of the Virgin Islands explained
that the pleading requirements for quiet title actions are established by a state’s quiet title
statute(s). 278 F.3d 250, 259 (2002). New Jersey Court Rule 4:62-1 states that a complaint
seeking to quiet title “shall state the manner in which plaintiff either acquired title or the right to
possession and shall describe the property with such certainty that the defendant will be
distinctly apprised of its location or character,” Importantly, N.J.S,A.

§

2A:62-l provides that

“[a]ny person in the peaceable possession of lands in this state and claiming ownership thereof,
may, when his title thereto, or any part thereof, is denied or disputed, or any other person claims
or is claimed to own the same.. and when no action is pending to enforce or test the validity of
.

such title.

.

.

maintain an action in the superior court to settle the title.” (emphasis added).

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As stated above, Plaintiff seeks to quiet title on the Property. His Complaint alleges that
he owns real property located at 221 Ampere Parkway, Bloomfield. 07003. Essex Country, New
Jersey, which was obtained by way of a bargain and sale deed from Jaimes Armando, (Compl.,

¶jJ

1-2.) The Complaint further states that Defendants sent Plaintiff a Notice of Intention to

Foreclose. (Compl.,

¶ 8.)

As such, Plaintiff “contests any interest which defendants may allege

in the property, and seek [sic] to quiet title on said property. pursuant to Rule 4:62-1 et. seq., and
pursuant to N.J.S.A. 2a:62-1.” (Compi.,

¶ 9.)

The Court finds Plaintiff’s pleadings to be insufficient under Federal Rule of Civil
Procedure 8(a)(2), which directs a plaintiff to set forth a “short and plain statement” showing that
he is entitled to relief. Merely reciting the elements of the quiet title statute is insufficient under
the federal pleading standards. For example, in Boykin v. MERS, No. ll-cv-4856, 2012 U.S.
Dist. LEXIS 75225 (D.N.J. rv’Iay 31, 2012), a pro se plaintiff filed an action against a multitude
of defendants in New Jersey state court seeking to “quiet title” to property located in Englewood,
New Jersey. Specifically, the plaintiff sought a declaratory judgment that she owned the
property and also sought damages based on the defendants’ alleged violations of various federal
financial laws. Ii at *3 The defendants removed the action to federal court and then filed
motions to dismiss. Id. at *4, The Court held, inter alia, that because “the Complaint consist[ed]
almost exclusively of legal conclusions absent factual allegations.” the defendants had satisfied
the requirements of Rule l2(b)(6). j at *12, As such, the Court granted the defendants’ motion
to dismiss the plaintiffs quiet title action.
Recent cases from other districts are also instructive on the matter. Similar to New Jersey
law, under Pennsylvania law. an action to quiet title may be brought “where an action of
ejectrnent will not lie, to determine any right, lien, title, or interest in the land or determine the
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validity or discharge of any document, obligation or deed affecting any right, lien, title or interest
in land.” Pa.R.C.P. No. 1061. In Jobe v. Bank of America, the plaintiff’s complaint stated:
“Defendants are not the owner or holder of any Promissory Note or Mortgage encumbering the
[property).” No. lO-cv-1710, 2011 WL 4738225, at * 1 (M.D. Pa. Oct. 6, 2011). The Court
concluded that the complaint did not provide sufficient information to make an informed
decision as to the “right, lien, title, or interest in the land.” Id. at *6. Therefore, the Court held
that the plaintiffs complaint did not satisfy the Pennsylvania quiet title pleading requirements.
Similarly, in Hawaii, an action to quiet title “may be brought by any person against
another person who claims, or who may claim adversely to the plaintiff, an estate or interest in
real property, for the puipose of determining the adverse claim.” Haw. Rev. Stat

§

669-1(a). In

Sakugawa v. Countrywide Bank F.S.B., the plaintiff’s complaint stated that “Defendants...
claim an interest in the Subject Property.

.

.

[and) said Defendants have no legal or equitable

right, claim, or interest in the Property.” 769 F. Supp. 2d 1211, 1224 (2011). The Hawaii
District Court held that the plaintiff did not meet the pleading requirements of Hawaii’s quiet
title statute, as it was “merely a formulaic recitation of an element of the claim.” Id.
Specifically, the complaint “fail[edj to plead any facts suggesting what interests [were] being
claimed by Defendants,”
Plaintiff argues in his opposition that he “is not required to state the claim made by the
defendant which is the object of the suit to silence or extinguish.” (P1. Opp. 2-3.) Plaintiff relies
on several nineteenth- and early twentieth- century New Jersey state court cases in support. See
Arlington Realty Co. v. Gluck, 98 N.J. Eq. 62 (N.J. Ch. 1925); Bishop v. Waldron, 56 NJ. Eq.
484. 486 (N.J. Ch. 1898); Ludington v. Elizabeth, 32 N.J. Eq. 159, 161-62 (N.J. Ch. 1880);
Bogert v. City of Elizabeth, 27 N.J. Eq. 568. 572 (N.J. E&A 1876). However, in light of the
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heightened pleading requirements of Twombly and Iqbal, and the District Court cases discussed
above, these older state court decisions are not persuasive. As this Court and other District
Courts have held, a complaint that consists almost exclusively of legal conclusions without
further factual allegations is insufficient. To the contrary, a plaintiff alleging a quiet title cause
of action must provide necessary information about the disputed interests in the property. See
Sakugawa v. Countrywide Bank F.S.B. 769 F. Supp. 2d 1211(2011); Jobe v. Bank of America,
3:10-CV-1710, 2011 WL 4738225 (M.D. Pa. Oct. 6, 2011). Importantly, such facts must be
alleged in Plaintiffs Complaint

—

not in his brief opposing a motion to dismiss. See Faisti v.

Energy Plus Holdings, LLC, CIV.A. 12-2879 JLL, 2012 WL 3835815 (D.N.J. Sept. 4, 2012)
(holding that a “complaint may not be amended by the briefs in opposition to a motion to
dismiss”) (citations omitted).
Because Plaintiff merely states that he received a Notice of Intention to Foreclose and
that he “contest[s] any interest which defendants may allege in the property” (Compl.), he has
not alleged sufficient facts to satisfy the pleading requirements of Fed. R. Civ. P. 8(a). As such,
Defendants’ motion to dismiss is granted.
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V.

CONCLUSION
Based on the reasons set forth above. Defendants’ motion to dismiss Plaintiffs

Complaint is granted. To the extent the deficiencies in Plaintiffs claim can be cured by way of
amendment, Plaintiff is granted fourteen (14) days to reinstate this matter and file an Amended
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Defendants also argue that the Court should abstain from hearing Plaintiffs case pursuant to the
Colorado River Abstention Doctrine or, in the alternative, that the Court should dismiss the
action pursuant to the “Entire Controversy” doctrine. (DeL Reply.) Because the Court grants
Defendants motion based on the reasons set forth above, it need not reach these issues at this
time. Defendants may renew their arguments in response to Plaintiffs amended pleading, to the
extent one is filed. The Court also declines to address, at this early stage, the parties’ arguments
regarding the validity of the mortgage assignment.
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Complaint solely for puiposes of amending such claims. To the extent Plaintiff seeks to add any

additional claims, a formal motion to amend should be filed in accordance with all applicable
local and Federal rules, as well as any scheduling order which may be in place.
An appropriate Order accompanies this Opinion.

DATED: March 19. 2013

CLAIRE C. CECCHI, U.S.D.J.

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