THOMAS et al v. JERSEY MORTGAGE CO. et al

Filing 15

MEMORANDUM OPINION. Signed by Judge Kevin McNulty on 1/7/2014. (nr, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

MOSELL THOMAS and VERNA THOMAS,
Plaintiffs,

Civ. No. 2:13-0648
(KM)(MAH)
MEMORANDUM OPINION

JERSEY MORTGAGE CO., AURURA LOAN
SERVICE LLC, SETERUS, and FEDERAL
NATIONAL MORTGAGE ASSOCIATION
Defendants.

MCNULTY, U.S.D.J.:

The Complaint in this action, Docket No. 1, brought by pro se Plaintiffs
Mosell and Verna Thomas, alleges fraud and other acts in connection with a
mortgage closing. Before this Court are Motions to Dismiss the Complaint,
brought by Defendants Seterus and the Federal National Mortgage Association
(“Fannie Mae”), Docket No. 4, Aurora Loan Service, LLC, Docket No. 6, and
Jersey Mortgage Co (“Jersey Mortgage”), Docket No. 7. Giving the pro se
Complaint a liberal reading, as I must, I find that the Thomases have stated a
claim on which relief may be granted. Further factual development is required
in order for this Court to fully consider the proper disposition of Plaintiffs’
claims. Defendants’ Motions to Dismiss will therefore be denied.
Plaintiffs, the Thomases, allege that Defendants committed various acts
in conjunction with a mortgage closing in violation of various statutory
provisions and/or the common law. The Complaint, Docket No. 1 (“Compi.”),
alleges that, beginning in June 2006, Defendants violated the “federal TILD
(Laws),” (I take this to be a reference to the Truth in Lending Act (“TILA”));
United States fraud laws, “US 15.4.6”; fraud and civil conspiracy laws,
“15:4.6.2, 15.4.6.6”; and “7.7 breach of contract.” Compi. at 2. The pleading is
not artful, but it is clear that Plaintiffs intend to allege that Jersey Mortgage
Co. quoted one mortgage interest and closing cost rate, but then increased the
1

. Plaintiffs allege that a
mortgage interest rate and doubled closing costs
physical and mental
foreclosure on their house resulted, and that their
iorated. Compi. at 4.
wellbeing, as well as their credit standing, has deter
ice, LLC, Seterus,
The Defendants, Jersey Mortgage Co, Aurora Loan Serv
plaint. Defendants raise
and Fannie Mae have moved to dismiss Plaintiffs’ Com
lopment of the record. I
arguments that may prove dispositive upon further deve
of action and I will deny
nevertheless find that Plaintiffs have alleged a cause
Defendants’ Motions to Dismiss at this time.
I. BACKGROUND

January 31, 2013.
Mosell and Verna Thomas, filed their Complaint on
the Complaint: The
The following factual allegations can be gleaned from
tgage in or around June
Thomases applied for a mortgage with Jersey Mor
the mortgage terms, as
2006. Jersey Mortgage Co. quoted one interest rate, but
Jersey Mortgage doubled
executed, charged a higher interest rate. Additionally,
rney to represent it at the
the closing costs and hired the Thomases’ then-atto
some point thereafter,
closing, leaving them “without legal representation.” At
Jersey Mortgage and/or
Aurora Loan Service purchased the mortgage from
ie Mae ultimately bought
serviced it, Seterus serviced the mortgage, and Fann
primary alleged events
the mortgage. Compi. at ¶J 1—5. It appears that the
tiation and execution of
giving rise to Plaintiffs’ claims occurred during the nego
ever, that the events giving
the mortgage in 2006. The Complaint alleges, how
“to present.” Id. at 3.
rise to their claims started in June 2006 and continue
II. THE APPLICABLE STANDARD

t, in whole or in
Rule 12(b)(6) provides for the dismissal of a complain
granted. The defendant,
part, if it fails to state a claim upon which relief can be
that no claim has been
as the moving party, bears the burden of showing
Cir. 2005). In deciding a
stated. Hedges v. United States, 404 F.3d 744, 750 (3d
s of the complaint as true
Rule 1 2(b)(6) motion, a court must take the allegation
favorable to the plaintiff.
and draw reasonable inferences in the light most
Cir. 2008) (traditional
Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d
Twombly, see infra).
“reasonable inferences” principle not undermined by
that a complaint
Federal Rule of Civil Procedure 8(a) does not require
plaintiff’s obligation to
contain detailed factual allegations. Nevertheless, “a
more than labels and
provide the ‘grounds’ of his ‘entitlement to relief requires
of a cause of action will
conclusions, and a formulaic recitation of the elements
555 (2007). Thus, the
not do.” Bell Ati. Corp. v. Twombly, 550 U.S. 544,
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to
complaint’s factual allegations must be sufficient to raise a plaintiff’s right
Id. at
relief above a speculative level, so that a claim is “plausible on its face.”
2008).
570; see also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir.
That facial-plausibility standard is met “when the plaintiff pleads factual
the
content that allows the court to draw the reasonable inference that
662,
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S.
rd
678 (2009) (citing Twombly, 550 U.S. at 556). While “[t]he plausibility standa
it asks for more than a sheer
is not akin to a ‘probability requirement’
possibility.” Iqbal, 556 U.S. at 678.
.

.

.

Moreover, when the plaintiff is proceeding pro se, the complaint is “to be
ever
liberally construed.” Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). “[H]ow
inartfully pleaded, [iti must be held to less stringent standards than formal
pleadings drafted by lawyers.” Haines v. Kerner, 404 U.S. 519, 520—21(1972).
Defendants also argue for dismissal for lack of jurisdiction under Federal
.
Rule 12(b)(1). Rule 12(b)(1) challenges may be either facial or factual attacks
549
See 2 MOORE’S FEDERAL PRACTICE § 12.30[4] (3d ed. 2007); Mortensen,
F.2d at 891 (3d Cir. 1977). A facial challenge, which this appears to be, asserts
t
that the complaint does not allege sufficient grounds to establish subjec
438
matter jurisdiction. Iwanowa v. Ford Motor Co., 67 F. Supp. 2d 424,
the
(D.N.J. 1999). A court considering such a facial challenge assumes that
if it
allegations in the complaint are true, and may dismiss the complaint only
le
nevertheless appears that the plaintiff will not be able to assert a colorab
—Chester
claim of subject matter jurisdiction. Cardio—Med. Assoc., Ltd. v. Crozer
Med. Ctr., 721 F.2d 68, 75 (3d Cir. 1983); Iwanowa, 67 F. Supp. 2d at 438.
III. DISCUSSION

The Complaint alleges that the Thomases were quoted one mortgage
interest rate, but charged another. In addition, they were required to pay twice
the
the estimated closing costs. This, they allege, was the result of fraud by
Defendants. They also allege that their then-attorney was hired by Jersey
ed
Mortgage, depriving them of counsel (the sense may be that they were depriv
of conflict-free counsel). They allege damages, including the foreclosure of their
home and deterioration of their credit and health.
Defendants argue that it is not wholly clear under what statutory
d,
provisions Plaintiffs’ claims arise. Defendants have a point. I am require
however, to give the Thomases’ pleading a liberal reading. The Complaint
plausibly alleges facts that may, if proven, establish claims of violation of the
3

Truth in Lending Act, 15 U.s.c § 1601 et seq., breach of contract, fraud, or
other causes of action.
Defendants’ motions raise various grounds for dismissal, including
failure to state a claim, lack of subject matter jurisdiction, and lack of personal
jurisdiction. As a preliminary matter, Defendants argue that they are unable to
decipher the legal basis for Plaintiffs’ claims on the face of the complaint. More
specifically, Defendants submit that Plaintiffs were on notice of any alleged
changes in the terms of the mortgage prior to the execution of the mortgage,
were presumed to have read the documents, and willingly entered in the
mortgage under those terms. Accordingly, as argued by Defendants, the facts
alleged by the Thomases fail to support any violations of the law. Defendants
also argue that there is no cognizable cause of action stemming from the
alleged fact that Jersey Mortgage hired Plaintiffs’ then-attorney to represent it
at the closing. Moreover, Aurora, Fannie Mae, and 5eterus contend that their
alleged purchasing and/or servicing of the mortgage in question do not give
rise to any cause of action or actual controversy. Finally, all Defendants
maintain that any cognizable claims are barred by the applicable statutes of
limitation.
The court recognizes that Defendants raise valid considerations that
likely must be addressed in order to resolve the instant action. Precedent and
principles of justice, however, demand that pro se pleadings are not to be held
to the same exacting standard as pleadings produced by lawyers. See Erickson,
551 U.s. at 94. It is with this understanding that the court has reviewed the
complaint. I find that the complaint, though perhaps wanting for factual
detail, sufficiently states facts upon which relief may be granted. congress
passed the Truth in Lending Act to protect the unsophisticated consumer from
unfair and inaccurate credit practices. See 15 U.5.C.A. § 1601; Shepeard v.
Quality Siding & Window Factory, Inc., 730 F. Supp. 1295, 1299 (D. Del. 1990);
see also Smith v. Fid. Consumer Disc. Co., 898 F.2d 896, 898 (3d cir. 1990)
(reasoning that TILA is a remedial statute that should be “liberally construed in
favor of borrowers”). This same consumer should not be required to artfully
plead a claim under the Act in order to surpass a motion to dismiss.
The matters raised in defense are fact-dependent. Whatever their validity,
they run afoul of the principle that I must, on a motion to dismiss, take the
allegations of the complaint as true. Before I deny Plaintiffs their day in court,
further development of the record is necessary. Once further factual
development has occurred, this court will be better equipped to determine the
issues raised by Defendants, including any statute of limitations issues.
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CONCLUSION
For the reasons stated above, Defendants’ Motions to Dismiss, Docket
Nos. 4, 6, and 7, are DENIED. An appropriate order follows.

Jf334
KEVIN CNULTY
United States District Judge

L)

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