JUBELT v. UNITED MORTGAGE BANKERS, LTD et al

Filing 51

OPINION AND ORDER granting w/out prejudice as to Counts 2,4,5,6, and denied as to Count 1 and 3 40 Motion to Dismiss ; and granting 41 Motion to Dismiss as to Counts 1-6 w/out prejudice. Signed by Judge Esther Salas on 6/30/15. (sr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
JOHN JUBELT,
Plaintiff,
Civil Action No. 13-7150 (ES) (MAH)
v.
OPINION & ORDER
UNITED MORTGAGE BANKERS, LTD.,
et al.,
Defendants.
SALAS, DISTRICT JUDGE
I.

INTRODUCTION
This action arises out of a residential loan refinancing transaction entered into by Plaintiff

John Jubelt. Before the Court are motions to dismiss by Defendants United Northern Bankers,
Ltd. (“United Northern”), (D.E. No. 40), and Bank of America, N.A. (“Bank of America” or
“BANA”), (D.E. No. 41). The Court decides these motions without oral argument pursuant to
Federal Rule of Civil Procedure 78. For the reasons below, Bank of America’s motion is granted.
United Northern’s motion is granted in part and denied in part.
II.

BACKGROUND
In April 2009, Plaintiff searched the Internet seeking information about refinancing his

mortgage loan to consolidate debt and perform a divorce settlement with his wife. (D.E. No. 36,
Amended Complaint (“Am. Compl.”), Factual Background ¶ 161). In response to Plaintiff’s
request for information, Defendant Bryan Campos, an employee of United Northern, contacted

1

Because each section of the Amended Complaint is separately numbered, the Court will identify
allegations by both section and paragraph number when necessary to avoid confusion.

Plaintiff to discuss obtaining a Federal Housing Administration (“FHA”) loan.2 (Id. ¶ 17).
On April 19, 2009, Plaintiff submitted a refinance loan application to United Northern,
seeking to borrow $242,165 at a fixed rate of 4.5%. (Id. ¶ 18). On the application, Plaintiff
declared a monthly income of $4120 and $234,488 in liabilities, more than half of which was
unsecured debt. (Id., Facts Common to All Parties ¶¶ 14-15). Plaintiff alleges that, at the time,
his monthly housing payment, including principal, interest, taxes, and insurance, “far exceeded”
31% of his monthly income, in violation of FHA Guidelines. (Id. ¶¶ 5, 18).
On April 29, 2009, Campo informed Plaintiff that he was approved for an FHA loan at a
fixed rate of 4.5%, with monthly payments of $2012, including principal, interest, taxes, and
insurance. (Id., Factual Background ¶ 20). Also on that date, Campo told Plaintiff that “FHA will
be your only outlet because of the flexibility in underwriting standards associated with [Plaintiff’s]
job history.” (Id. ¶ 21). Campo further informed Plaintiff that he would receive all disclosures in
the mail within 72 hours. (Id. ¶ 24). The next day, on April 30, 2009, Campo sought Plaintiff’s
assurance that Plaintiff was “on board so their [sic] is no wasted effort.” (Id. ¶ 22).
At some point thereafter, Campo informed Plaintiff that he would not be eligible for a fixed
rate loan and that only an adjustable rate loan would be available to him. (Id. ¶ 23).
Also at some point thereafter, Plaintiff informed Campo that he had not received all of the
required disclosures, and Campo “stated that this was an oversight.” (Id. ¶ 24). Plaintiff asserts
that he received certain disclosures within a week after submitting his application, but that he did
not receive a Good Faith Estimate or other disclosures required by law until closing on June 12,
2009—despite informing Campo on both May 6, 2009 and May 12, 2009 that he had not received

2

An FHA loan is a loan insured by the FHA. (Am. Compl., Facts Common to All Parties ¶ 3). The FHA
insures certain loans “from mortgage lenders which are approved by the federal government and meet the
FHA minimum mortgage underwriting standards.” (Id.). The FHA “guarantees payments to approved
lenders when homeowners with FHA insured mortgages default on their mortgages.” (Id. ¶ 4).

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the Good Faith Estimate. (Id. ¶ 25).
On June 5, 2009, Campo told Plaintiff that a second investor signed off on the mortgage,
but that there was no interest rate lock and the interest rate had increased to 5.25+%. (Id. ¶ 35).
Plaintiff further alleges that, on that date, Campo advised Plaintiff “to accept the 5/1 arm at 4.5%
interest rate because the ‘[g]ood part about FHA is you can streamline at any time from 6 months
down the road to a 30 year fixed with no closing costs besides title insurance.’” (Id. ¶ 36).
Closing occurred on June 12, 2009 at Plaintiff’s home. (Id. ¶ 26). The mortgage was in
the amount of $242,165 with a 4.5% adjustable rate. (Id., Facts Common to All Parties ¶ 11; see
also D.E. No. 40-2, Certification of Anthony J. Laura (“Laura Cert.”), Ex. B, FHA Adjustable Rate
Note (“Note”) at 1).3 Plaintiff paid $13,637 in closing costs, “with $2421.65 in discount points to
United as well as $2380 in a 1% loan discount also to United.” (Am. Compl., Facts Common to
All Parties ¶ 12).
Plaintiff alleges that some of the fees were charged to him in violation of applicable law.
(Am. Compl, Factual Background ¶ 27). Specifically, he alleges that he “was charged a 1%
origination fee but was not told that he would also be charged a 1% Loan Discount fee. Despite
paying a point for a Loan Discount Fee, plaintiff did not receive any interest rate reduction.” (Id.
¶ 28). Plaintiff further alleges that he questioned Campo about the discount fee after the closing,
and that Campo stated that the discount fee is not part of the origination fee. (Id. ¶ 32).
Plaintiff alleges that he “wanted to back out of closing on the Loan,” but “could not because
he had a deadline to meet per the terms of a formal agreement reached between him and his former
spouse, subsequent to the entry of the Judgment of Divorce.” (Id. ¶ 29). This fact was allegedly
known to United Northern and Campo. (Id.).
Prior to the refinancing, Plaintiff’s mortgage was in the amount of approximately $111,777 with a monthly
payment of $1898. (Am. Compl., Facts Common to All Parties ¶ 10).
3

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In addition, Plaintiff alleges that he “did not sign several of the documents – the Loan
Application and the Truth in Lending Disclosure statement – and those documents contain
signatures purporting to be plaintiff’s when, in fact, the signatures are not plaintiff’s and thus the
signatures are forgeries.” (Id. ¶ 32).
Plaintiff alleges that on or about June 12, 2009, the same day as the closing, Plaintiff’s
Note was endorsed in blank and sold by United Northern to Bank of America. (Am. Compl., Facts
Common to All Parties ¶¶ 19-20). He further alleges that Bank of America underwrote Plaintiff’s
loan. (Id. ¶ 21).
Approximately eight months after the closing, Plaintiff contacted Campo regarding a
refinancing transaction. (Id., Factual Background ¶ 33). Plaintiff alleges that he was “advised that
he would be unable to do a streamline refinance that was promised to him and it would have to be
an entirely new loan.” (Id.). He further alleges that “Campo advised that he could not guarantee
plaintiff’s approval on a new loan.” (Id.).
With respect to injury, Plaintiff alleges that “[t]he refinance transaction which is the subject
of the within matter caused plaintiff’s principal to increase, and plaintiff incurred actual costs
including Application Fees, Closing Fees, Title Fees, Wire Fees, and Recording Fees.” (Id., Facts
Common to All Parties ¶ 24). Plaintiff alleges that he “attempted to mitigate his damages by listing
his home for sale” but was unable to because “United failed to return the Recorded Deed to
Plaintiff.” (Id., Factual Background ¶ 37). Plaintiff does not specify a timeframe for this
allegation.
Plaintiff alleges that on February 17, 2010, approximately eight months after closing,
“BOA advised that they would not respond to plaintiff’s Qualified Written Request4 because it
A Qualified Written Request is a written correspondence sent to a mortgage service “to dispute an error
relating to the servicing of your mortgage loan or to request information about the servicing of your
4

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sought information ‘that goes beyond that which is available through a Qualified Written
Request.’” (Id. ¶ 38). Plaintiff does not specify when he submitted his Qualified Written Request,
or the information that he sought to obtain. He does allege, however, that “BOA advised that
plaintiff’s loan was owned by Ginnie Mae,” which was not disclosed previously to Plaintiff. (Id.
¶ 38).
On or around April 2011, nearly two years after closing, Plaintiff began to have difficulty
making mortgage payments “due to a decrease in income and depletion of savings and higher
credit card interest rates.” (Id. ¶ 39). Plaintiff asserts that he did not cease making payments at
this time, but rather sought the assistance of Bank of America, which was the loan servicer at the
time. (Id.). During this time, Plaintiff alleges that he “tried to make payments,” but when he was
unable to do so, “Plaintiff made payments of 75% of the monthly amount due.” (Id. ¶ 41).
Plaintiff alleges that, at “various times between April and July, 2011, [he] spoke to
representatives from BOA: Servicer . . . [who] represented that Plaintiff could apply for a one
month forbearance and loan modification and suggested that he do so.” (Id. ¶ 40). He further
alleges that Bank of America “failed to process the paperwork for a loan forbearance” and did not
advise him to contact an attorney or to seek credit or government counseling. (Id.).
On July 12, 2011, Plaintiff applied for an FHA loan modification with Bank of America.
(Id. ¶ 42). On August 4, 2011, Plaintiff was informed that he was not approved for a loan
modification. (Id. ¶ 43). He alleges that he was not provided with a specific reason for the denial
at that time, but that he was later advised that his back end debt-to-income ratio was too high.
(Id.).

mortgage loan.” Consumer Fin. Prot. Bureau, What is a Qualified Written Request?, Consumerfinance.gov,
http://www.consumerfinance.gov/askcfpb/207/what-is-a-qualified-written-request-what-is-a-qwr.html
(last updated Oct. 7, 2014).

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On August 16, 2011, Plaintiff filed a complaint with the Office of the Comptroller of the
Currency.5 (Id. ¶ 44). He alleges that he received a phone call from a Bank of America
representative regarding his complaint, and that the representative “stated that she was going to try
to reduce plaintiff’s minimum payments on his BOA credit cards to enable plaintiff to obtain a
loan modification under FHA Guidelines.” (Id. ¶ 45).
On October 27, 2011, Plaintiff asserts that “the Note and Mortgage were assigned by
MERS6 to BOA.” (Id. ¶ 46). On July 25, 2013, Defendant M&T issued correspondence informing
Plaintiff that it would be the servicer of Plaintiff’s loan, effective August 2, 2013. (Id. ¶ 47). On
September 20, 2013, M&T issued a Notice of Intention to Foreclose indicating that Plaintiff’s loan
was owned by Defendant Lakeview Loan Servicing, LLC. (Id. ¶ 48).
Plaintiff filed his original Complaint in the Superior Court of New Jersey, Law Division,
Bergen County on or about October 23, 2013. (D.E. No. 1, Notice of Removal at 1-2). United
Northern removed the action to this Court on November 25, 2013. (Id. at 1). Plaintiff moved to
remand, (D.E. No. 8), and Magistrate Judge Joseph A. Dickson issued a Report &
Recommendation suggesting that the Court deny the motion, (D.E. No. 19). The parties did not
object, and the Court adopted Judge Dickson’s Report and Recommendation by Letter Order dated
February 25, 2014. (D.E. No. 21).
Subsequently, Plaintiff moved to amend his Complaint, (D.E. Nos. 27, 32), and Magistrate

5

The Office of the Comptroller of the Currency is an independent bureau of the U.S. Department of the
Treasure that “charters, regulates, and supervises all national banks and federal savings associations as well
as federal branches and agencies of foreign banks.” Office of the Comptroller of the Currency, About the
OCC, OCC.gov, http://www.occ.gov/about/what-we-do/mission/index-about.html (last visited June 12,
2015).
6
The MERS System is a “national electronic registry system that tracks the changes in servicing rights and
beneficial ownership interests in mortgage loans that are registered on the system.” MERSCORP Holdings,
Inc., About Us, Mersinc.org, https://www.mersinc.org/about-us/about-us (last visited June 12, 2015).

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Judge Michael A. Hammer7 granted Plaintiff’s request. Plaintiff’s Amended Complaint includes
six counts: (1) a claim under the New Jersey Consumer Fraud Act (“NJCFA”) against all
Defendants, (Am. Compl. ¶¶ 50-100); (2) a claim for civil conspiracy to commit violations of the
NJCFA against all Defendants, (id. ¶¶ 101-118); (3) a claim for common law fraud against all
Defendants, (id. ¶¶ 119-130); (4) a claim for civil conspiracy to commit common law fraud against
all Defendants, (id. ¶¶ 131-136); (5) a claim under the New Jersey Licensed Lender Act
(“NJLLA”) against unspecified Defendants, (id. ¶¶ 137-152)8; and (6) a claim for violation of the
covenant of good faith and fair dealing against unspecified Defendants, (id. ¶¶ 153-158).
On September 8, 2014, United Northern and Bank of America moved separately to dismiss
Plaintiff’s Amended Complaint. (D.E. Nos. 40, 41). Plaintiff responded to both motions on
October 13, 2014. (D.E. No. 47). United Northern and Bank of America replied separately on
October 24, 2014. (D.E. Nos. 49, 48).
III.

JURISDICTION
This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a) because the

parties are citizens of different states and the amount in controversy exceeds $75,000. (Am.
Compl., Jurisdiction and Venue ¶ 12).
IV.

LEGAL STANDARD
Federal Rule of Civil Procedure 8(a)(2) requires a complaint to set forth “a short and plain

7

This case was reassigned from Judge Dickson to Judge Hammer on March 7, 2014. (D.E. dated 3/7/2014).
In Plaintiff’s opposition brief, he “stipulates to withdrawal of this [NJLLA] Count against BOA, without
prejudice.” (D.E. No. 47, Plaintiff’s Memorandum of Law in Opposition to the Motions to Dismiss of
United Northern Mortgage Bankers and Bank of America (“Pl. Opp. Br.”), at 34). However, he continues
to pursue this claim as to United Northern. (Id. at 33-34). In addition, the Court notes that the NJLLA has
been superseded by the New Jersey Residential Mortgage Lending Act, N.J.S.A. § 17:11C-51 (2009)
(“NJRMLA”), and the New Jersey Consumer Finance Lending Act, N.J.S.A. § 17:11C-1 (2010)
(“NJCFLA”). See also Mogavero v. Allied Home Mortg., 2014 WL 3444614, at *1 (N.J. Super. Ct. App.
Div. July 15, 2014) (recognizing supersession of NJLLA).
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statement of the claim showing that a pleader is entitled to relief.” The pleading standard
announced by Rule 8 does not require detailed factual allegations; however it demands “more than
an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (internal citation omitted). In addition, the plaintiff’s short and plain statement of the
claim must “give the defendants fair notice of what the . . . claim is and the grounds upon which it
rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
For a complaint to survive dismissal, it “must contain sufficient factual matter, accepted as
true, ‘to state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (citing Twombly,
550 U.S. at 570). 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. (internal citation omitted).
In evaluating the sufficiency of a complaint, a court must accept all well-pleaded factual
allegations contained in the complaint as true, and draw all reasonable inferences in favor of the
non-moving party. See Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008). But, “the
tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable
to legal conclusions,” and “[a] pleading that offers ‘labels and conclusions’ or a ‘formulaic
recitation of the elements of a cause of action will not do.’” Iqbal, 556 U.S. at 678 (quoting
Twombly, 550 U.S. at 555). Furthermore, “[when] deciding a Rule 12(b)(6) motion, a court must
consider only the complaint, exhibits attached [thereto], matters of the public record, as well as
undisputedly authentic documents if the complainant’s claims are based upon these documents.”
Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2011).
“[I]f a complaint is subject to a Rule 12(b)(6) dismissal, a district court must permit a
curative amendment unless such an amendment would be inequitable or futile.” Phillips, 515 F.3d

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at 245.
V.

DISCUSSION
1. New Jersey Consumer Fraud Act
“The Consumer Fraud Act, N.J.S.A. § 56:8–1 to –195, provides a private cause of action

to consumers who are victimized by fraudulent practices in the marketplace.” Gonzalez v. Wilshire
Credit Corp., 207 N.J. 557, 576 (2011). The NJCFA is intended to be applied broadly in order to
accomplish its remedial purpose—namely, to root out consumer fraud—and therefore it is liberally
construed in favor of the consumer. Id. A claim pursuant to the NJCFA requires three elements:
(1) unlawful conduct; (2) an ascertainable loss; and (3) a causal relationship between the unlawful
conduct and the loss. See Dabush v. Mercedes–Benz USA, LLC, 874 A.2d 1110, 1115 (N.J. Super.
Ct. App. Div. 2005) (citations omitted).
The NJCFA defines “unlawful practice” as:
any unconscionable commercial practice, deception, fraud, false
pretense, false promise, misrepresentation, or the knowing,
concealment, suppression, or omission of any material fact with
intent that others rely upon such concealment, suppression or
omission, in connection with the sale or advertisement of any
merchandise or real estate or with the subsequent performance of
such person as aforesaid . . . .
N.J.S.A. § 56:8–2. An unconscionable commercial practice “necessarily entails a lack of good
faith, fair dealing, and honesty. The capacity to mislead is the prime ingredient of all types of
consumer fraud. Mere customer dissatisfaction does not constitute consumer fraud.” In re Van
Holt, 163 F.3d 161, 168 (3d Cir. 1998) (internal citations and quotation marks omitted). Courts in
this Circuit have relied on Gonzalez to hold that misrepresentations regarding mortgage
modifications fall within the NJCFA, since they are made in connection with the “subsequent
performance” of “real estate” under the statute. See, e.g., Laughlin v. Bank of Am., No. 13–4414,

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2014 WL 2602260, at *6 (D.N.J. June 11, 2014) (“The loan modification process, from negotiation
to the signing of a permanent modification, effectively operates as a subsequent performance on
the original mortgage.”).
With respect to the second prong—“ascertainable loss”—the plaintiff must “demonstrate
a loss attributable to conduct made unlawful by the [NJ]CFA,” which is “quantifiable or
measurable,” and not merely “hypothetical” or “speculative.” Thiedemann v. Mercedes–Benz
USA, LLC, 183 N.J. 234, 246-52 (2005). However, plaintiffs “need not plead the exact dollar
amount of their loss. Instead, plaintiffs must provide enough specificity to give defendants notice
of their possible damages.” Giordano v. Saxon Mortg. Servs., Inc., No. 12–7937, 2014 WL
4897190, at *6 (D.N.J. Sept. 30, 2014) (internal citation omitted).
Finally, the “causal relationship” required by the NJCFA excuses the victim of fraud from
the burden of showing reliance, instead requiring “only proof of a causal nexus between the
[unlawful conduct] and the loss.” See Zorba Contractors, Inc. v. Hous. Auth., City of Newark, 827
A.2d 313, 322 (N.J. Super. Ct. App. Div. 2003). Indeed, the NJCFA specifically states that liability
accrues “whether or not any person has in fact been misled, deceived or damaged thereby.”
N.J.S.A. § 56:8–2.
United Northern and Bank of America assert both independent and overlapping arguments
regarding why the Court should dismiss Plaintiff’s NJCFA claim. First, United Northern argues
that, to the extent Plaintiff’s NJCFA claims rely on violations of certain federal statutes—namely,
the Truth in Lending Act (“TILA”) and the Real Estate Settlement and Procedures Act
(“RESPA”)—the claims must be dismissed because the statute of limitations under those statutes
has run. (D.E. No. 40-1, Defendant United Northern Mortgage Bankers, Ltd.’s Brief in Support
of its Motion to Dismiss the Amended Complaint (“United Northern Mov. Br.”) at 11-12). Second,

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it argues that Plaintiff has failed to plead both its NJCFA and common law fraud claims with the
particularity required under Federal Rule of Civil Procedure 9(b). (Id. at 14-16). Third, it argues
that Plaintiff has failed to plead ascertainable loss. (Id. at 17-19). And fourth, it argues that
Plaintiff has failed to allege reasonable reliance. (Id. at 19-21).
Like United Northern, Bank of America argues that Plaintiff cannot rely on TILA or
RESPA because the statute of limitations has run. (D.E. No. 41-1, Memorandum of Law In
Support of Defendant Bank of America N.A.’s Motion to Dismiss Plaintiff’s Amended Complaint
Pursuant to Fed. R. Civ. Pro. 12(b)(6) (“BANA Mov. Br.”) at 12-13). Also like United Northern,
Bank of America argues Plaintiff has not pled fraud with sufficient particularity under Federal
Rule of Civil Procedure 9(b), (id. at 17-18), and Plaintiff has failed to plead an ascertainable loss,
(id. at 16-17). Bank of America also independently argues that Plaintiff’s NJCFA claims against
it must be dismissed because Plaintiff has failed to make the requisite factual allegations necessary
to impose liability on a loan assignee—i.e., allegations detailing Bank of America’s involvement
with the loan’s origination. (Id. at 8-11). As part of that argument, Bank of America argues that
even if Plaintiff’s TILA and RESPA claims were not time-barred, those claims cannot support
Plaintiff’s NJCFA against Bank of America because it is merely the assignee. (Id. at 13-15).
Finally, Bank of America argues that to the extent Plaintiff seeks to base his NJCFA claim against
it on activities that occurred after the loan’s origination, Plaintiff’s allegations are still insufficient.
(Id. at 15-16).
The Court will first address the arguments made by both Defendants. Then, to the extent
necessary, it will consider their separate arguments.
a. Arguments Asserted by Both United Northern and Bank of America
First, United Northern and Bank of America argue that Plaintiff’s NJCFA claim must be

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dismissed because it relies entirely on violations of TILA and RESPA, and any claims based on
those statutes fail on statute of limitations grounds. (United Northern Mov. Br. at 11-12; BANA
Mov. Br. at 12-13). Both TILA and RESPA carry a one-year statute of limitations for damages
claims. 15 U.S.C. § 1640(e) (A TILA action “may be brought in any United States district court,
or in any other court of competent jurisdiction, within one year from the date of the occurrence of
the violation . . . .”); 12 U.S.C. § 2614 (applying one-year statute of limitations for RESPA actions
arising under § 2607, which covers prohibited fees).
To support its argument that time-barred TILA and RESPA claims cannot support a
NJCFA claim, United Northern relies on Payan v. GreenPoint Mortg. Funding, Inc., No. 08-6390,
2010 WL 5253016, at *5 (D.N.J. Dec. 17, 2010). In Payan, the court held that because “the Court
already has dismissed plaintiffs’ TILA claim against GreenPoint . . . any possible violation of the
TILA cannot formulate the basis of a [NJ]CFA claim in this case.” Payan, 2010 WL 5353016 at
*5. United Northern argues that, similarly, “Plaintiff’s common law fraud and CFA claims,
premised as they are on alleged TILA and RESPA violations, are untimely and cannot survive.”
(United Northern Mov. Br. at 12). Furthermore, on reply, United Northern adds that “it would be
illogical to allow claims premised upon technical violations which have a Congressionallymandated one-year limitations period . . . to be the basis many years out of time for a consumer
fraud claim.” (Defendant United Northern Mortgage Bankers, Ltd.’s Reply Brief in Further
Support of its Motion to Dismiss the Amended Complaint (“United Northern Rep. Br.”) at 13).
Plaintiff responds by arguing that he “has not filed a claim” based on TILA and “does not
seek to avail himself of any of the remedies, damages or otherwise,” under that statute. (D.E. No.
47, Plaintiffs’ Memorandum of Law in Opposition to the Motions to Dismiss of United Northern
Mortgage Bankers and Bank of America (“Pl. Opp. Br.”) at 22-23). “Instead, he merely relies

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upon violations of TILA in support of his claim under the CFA.” (Id. at 23).9 Plaintiff argues that
Payan is not applicable because, in that case, the district court dismissed the TILA claim because
there were no substantive TILA violations. (Id.). As a result, the alleged TILA violations could
certainly not support an NJCFA claim. (Id.). Plaintiff argues that, by contrast, he has set forth
valid TILA violations that are only barred by the applicable statute of limitations. (Id.). To support
his argument, Plaintiff relies on Johnson v. Novastar Mortgage, Inc., 698 F. Supp. 2d 463, 472
(D.N.J. 2010). In Johnson, the court dismissed claims brought under TILA, RESPA, and the Home
Ownership and Equity Protection Act (“HOEPA”) as time-barred, but permitted NJCFA claims to
proceed. Id. at 473. In evaluating NJCFA claims, the court specifically noted that:
Plaintiff has sufficiently alleged that Defendant Novastar violated
the TILA, HOEPA, and RESPA. She has similarly alleged that she
suffered ascertainable loss (including the loss of her home) as a
consequence of this allegedly unlawful conduct. Therefore, she has
met the three elements of a prima facie case under the CFA.
Id. at 472 (internal footnotes and citations omitted). Plaintiff argues that the result in Johnson
“compels the rejection of the Defendants’ position that TILA violations cannot be utilized in
support of the Plaintiff’s CFA claims where the TILA limitations period has expired.” (Pl. Opp.
Br. at 25).
The Court agrees with Plaintiff that his CFA claims do not require automatic dismissal
based on the statutes of limitations of TILA or RESPA. As Plaintiff points out, Payan is
distinguishable from the present case because dismissal of the TILA claims was based on the
court’s finding that no substantive violation occurred—not that the claims were time-barred.
Payan, 2010 WL 5253016 at *3-5. Thus, this case is more similar to Johnson, where TILA and

United Northern appears to construe Plaintiff’s NJCFA claims as relying entirely on violations of both
TILA and RESPA. However, Plaintiff’s asserts in its opposition brief that it is relying only on TILA
violations, not RESPA violations. (Pl. Opp. Br. at 22-30).
9

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other claims were time-barred, but NJCFA claims were permitted to proceed. In fact, the analysis
by the court in Johnson dispenses with United Northern’s concern that it would be “illogical” to
permit time-barred TILA and RESPA claims to serve as the basis for an NJCFA claim. In Johnson,
the court held that the plaintiff’s alleged violations of TILA, HOEPA, and RESPA supported her
allegation of unlawful conduct under the NJCFA. Johnson, 698 F. Supp. 2d at 472. In conjunction
with the plaintiff’s allegations of ascertainable loss and causation, those alleged violations were
sufficient to establish a prima facie case under the statute. Id. Thus, Johnson made clear that a
TILA or RESPA violation can support the “unlawful conduct” element of an NJCFA claim even
if TILA and RESPA claims are time-barred, and that an NJCFA claim can proceed based on those
violations as long as the remaining elements of the claim are met. Payan accords with this holding,
and United Northern has not cited any case holding otherwise.10
Carrier v. Bank of Am., No. 12-104, 2014 WL 356219, at *6 (D.N.J. Jan. 31, 2014), is also
instructive. In Carrier, the plaintiffs sought “to support their fraud claims on the grounds that the
. . . [TILA] disclosure statements presented to plaintiffs were allegedly not consistent with the
mortgage notes and that those TILA disclosure statements [were] ‘false and misleading.’” Id.
Though the statute of limitations for TILA had expired, the court noted that “[t]o use TILA as a
way to sustain a claim here (either via fraud, fraud in the inducement or under the New Jersey
Fraud Claims Act, as discussed further below), requires plaintiffs to be able to plead with the
requisite particularity and to satisfy all of the elements of those claims.” Id. Though the pleadings
in Carrier were not sufficient, the court recognized that TILA violations could support a state law

10

Similarly, Courts outside of this district have applied the statute of limitations for fraud even when the
fraud claim was based was on TILA and RESPA violations. See, e.g., Rosal v. First Fed’l Bank of Cal.,
671 F. Supp. 2d 1111, 1131 (N.D. Cal. 2009) (applying three-year statute of limitations for fraud to
Plaintiff’s “fraud claim [that] is premised on the same failure to disclose that forms the basis of his TILA
and RESPA claims”).

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fraud claim after the TILA statute of limitations passed—as long as the pleading requirements for
fraud were met.
Furthermore, the Court disagrees with Defendants’ characterization that alleged TILA and
RESPA violations are the sole basis for Plaintiff’s NJCFA claim, as the Amended Complaint
alleges other instances of unlawful conduct. For example, Plaintiff alleges that on June 5, 2009,
Campo misrepresented to Plaintiff that he would be able to conduct a streamline refinance in six
months. (Am. Compl., Factual Background ¶ 36). He further alleges that Campo misrepresented
that “United utilized its own money rather than that of investors.” (Id. ¶ 34). Therefore, even if
Plaintiff were barred from relying on TILA and RESPA violations to support his NJCFA claim,
that bar would not alone warrant dismissing the NJCFA claim because Plaintiff included other
allegations of unlawful conduct.11
Next, United Northern and Bank of America argue that Plaintiff’s NJCFA and common
law fraud claims must be dismissed because they are not pled with the requisite level of
particularity. (United Northern Mov. Br. at 14-17; BANA Mov. Br. at 17-18). Federal Rule of
Civil Procedure 9(b) applies to claims under the NJCFA. Smajlaj v. Campbell Soup Co., 782 F.
Supp. 2d 84, 98 (D.N.J. 2011). Rule 9(b) states that “[i]n alleging fraud or mistake, a party must
state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b).
Moreover, “plaintiff must plead fraud with particularity with respect to each defendant, thereby
informing each defendant of the nature of its alleged participation in the fraud.” Naporano Iron
& Metal Co. v. Am. Crane Corp., 79 F. Supp. 2d 494, 511 (D.N.J. 1999) (citations omitted). This

11

As a final aside, the Court notes that TILA itself states that it is not an exclusive cause of action. In fact,
TILA’s “savings clause” states that TILA preempts state law only if the state law is inconsistent with TILA.
15 U.S.C. § 1610(b); see also Barela v. Downey Sav. & Loan Ass’n, No. 09-3757, 2009 WL 257889, at *4
(C.D. Cal. Aug. 18, 2009). Though preemption has not been raised in this case, it would be illogical for
the Court to bar Plaintiff’s NJCFA claims under TILA’s statute of limitations when TILA expressly
acknowledges the availability of such state law remedies.

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is because the purpose of the particularity requirement is to put the defendant “on notice of the
precise misconduct with which [it is] charged.” Frederico v. Home Depot, 507 F.3d 188, 201 (3d
Cir. 2007) (citation omitted). As discussed above, even when TILA (or RESPA) violations are
used to support an NJCFA claim, Plaintiffs still must “be able to plead with the requisite
particularity and to satisfy all of the elements of those claims.” Carrier, 2014 WL 356219, at *6.
United Northern and Bank of America argue that Plaintiff fails to meet the pleading
requirements of Rule 9(b) because Plaintiff does not sufficiently state the “who,” “what,” “when”
and “where” of the alleged fraud. (United Northern Mov. Br. at 14; BANA Mov. Br. at 5). Both
also point out that the Amended Complaint attributes the fraudulent statements to “defendants”
without specifying between them. (United Northern Mov. Br. at 15-16; BANA Mov. Br. at 6-7).
The Court determines that Plaintiff has pled its NJCFA claim against United with particularity, but
it has not done so against Bank of America.
With respect to United Northern, Plaintiff pleads several specific allegedly fraudulent
statements or omissions. For example, Plaintiff alleges that Campo made specific affirmative
representations to him on June 5, 2009 that he would be able to complete a streamline refinancing,
(Am. Compl., Factual Background ¶ 36), but, eight months later, Campo told him that “he would
be unable to do a streamline refinance that was promised to him and it would have to be an entirely
new loan,” (id. ¶ 33). Plaintiff further alleges that Campo did not provide him with certain
disclosures in advance of the loan closing, despite Plaintiff’s express requests made on May 6,
2009 and May 12, 2009. (Id. ¶¶ 24-25). In a similar vein, Plaintiff alleges that, at the June 12,
2009 closing, he asked Campo questions about the loan documents and applicable fees but was
not told that he would be charged a 1% loan discount fee in addition to an origination fee. (Id. ¶¶
28, 31).

Though Plaintiff does not specify a date, he additionally alleges that Campo

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misrepresented that “United utilized its own money rather than that of investors.” (Id. ¶ 34). These
allegations, and others throughout the Amended Complaint, are specific misrepresentations that
identify the “who, what, when, where, and how” of the alleged fraud. Plaintiff’s NJCFA claim
against United Northern meets the pleading requirements of Rule 9(b).
On the other hand, Plaintiff has not stated with specificity any statement or omission by
Bank of America—either in connection with the origination or servicing of Plaintiff’s loan. The
Court addresses Plaintiff’s allegations with respect to Bank of America’s role in origination and
servicing separately.
First, Plaintiff concedes that Bank of America is not the original lender of Plaintiff’s loan.
(Am. Compl., Jurisdiction and Venue ¶ 5). As this district held in Tutanji v. Bank of America, No.
23-887, 2012 WL 1964507, at *6 (D.N.J. May 31, 2012), “[s]ince [d]efendant is the servicer of
[p]laintiff’s mortgage rather than the lender, facts alleged pertaining specifically to inducing
Plaintiff to sign the mortgage cannot, without more, be deemed unlawful conduct by Defendant as
servicer.” 2012 WL 1964507, at *6. Plaintiff argues that “more” has been pled because “Mr.
Jubelt’s [Amended Complaint], on page 11, paragraph 21 alleges that BOA underwrote plaintiff’s
loan. Any further inquiry into whether Mr. Jubelt alleged wrongdoing by BOA in the origination
of the loan is unnecessary.” (Pl. Opp. Br. at 9). The Court disagrees. Plaintiff’s barebones
statement that, “[u]pon information and belief, Bank of America underwrite [sic] plaintiff’s loan”
does not meet the heightened pleading requirements of Rule 9(b). (See Am. Compl., Facts
Common to All Parties ¶ 21). “Plaintiff cannot survive a motion to dismiss by offering only
conclusory, unsupported allegations made upon information and belief. Such allegations, without
more, fail to demonstrate Plaintiff’s plausible entitlement to relief.” Woerner v. FRAM Grp.
Operations, LLC, No. 12-6648, 2013 WL 1815518, at *5 (D.N.J. Apr. 29, 2013). A conclusory

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allegation based on “information and belief” is all that Plaintiff has alleged. Plaintiff has alleged
no factual basis for his conclusory allegation that Bank of America underwrote the loan. He has
not alleged any statement or omission made by Bank of America in connection with the origination
of Plaintiff’s loan—not to mention the date and location of any such statement or the identity of
any individual who made such statement.
Plaintiff has also not alleged any misstatement or omission by Bank of America in
connection with the servicing of Plaintiff’s loan. The only allegations pertaining to Bank of
America’s servicing of the loan relate to Plaintiff’s seeking of a forbearance or a loan modification.
Plaintiff alleges that Bank of America informed Plaintiff that he could apply for a forbearance and
loan modification, and that Plaintiff did so. (Am. Compl., Factual Background ¶ 40). He alleges
that Bank of America failed to process paperwork for the forbearance and that he was denied the
loan modification. (Id. ¶¶ 40, 43). He also alleges that a Bank of America representative “stated
that she was going to try to reduce plaintiff’s minimum payments on his BOA credit cards.” (Id.
¶ 45). Plaintiff has not alleged that any of these statements amount to misrepresentations or
omissions. He did not allege that he was entitled to a loan modification, forbearance, or reduction
in credit card payments—nor did he allege that Bank of America ever represented that he would
receive any of these. Plaintiff’s allegations that, for example, he “reasonably believed” that Bank
of America would consider his loan application, (see Am. Compl. ¶¶ 96-97), cannot give rise to a
NJCFA claim without accompanying and specific allegations that Bank of America in fact made
false representations or omissions. Bank of America’s statements do not give rise to a cause of
action for Bank of America’s own actions in servicing the loan.
Finally, the Court is not persuaded by Plaintiff’s argument that Bank of America may be
liable as an assignee under the NJCFA for United Northern’s conduct. (See Pl. Opp. Br. at 9-13).

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“Assignees may be held liable under the NJCFA for their own subsequent performance of the
contract, and, in some cases, for the original seller’s conduct.” Carmen v. Metrocities Mortg.
Corp., No. 08-2729, 2009 WL 1416038, at *6 (D.N.J. May 18, 2009) (citing Jefferson Loan Co.,
Inc. v. Session, 938 A.2d 169, 177 (N.J. Super. Ct. App. Div. 2008)). However, Plaintiff has
pointed to no case law suggesting that assignee liability is proper under the facts alleged here.
Courts in New Jersey have held that assignee liability is available under the NJCFA when the
assignee committed “active and direct” fraud before the assignment of the loan or was
unconscionable in its subsequent performance of the assigned contract. See Psensky v. Am. Honda
Fin. Corp., 875 A.2d 290, 296 (N.J. Super. Ct. App. Div. 2005); Jefferson, 938 A.2d at 177.
Alternatively, assignee liability may be available under the NJCFA when tied directly to assignee
liability available under a federal statute. See Psensky, 875 A.2d at 296; In re NorVergence, Inc.,
424 B.R. 663, 689-91 (Bankr. D.N.J. 2010). Plaintiff has not directed the Court to any cases
holding an assignee liable under the NJCFA under the facts alleged here, where there is no
substantive allegation that the assignee was involved in the original fraud, committed fraud during
its substantive performance of the contract, or is liable as an assignee under any statute. Therefore,
Plaintiff’s NJCFA claim and common law fraud claim against Bank of America must be
dismissed.12
b.

Additional Arguments by United Northern

Having denied United Northern’s motion based on its statute-of-limitations and Rule 9(b)
arguments, the Court now considers additional arguments by United Northern. Specifically, the
Court considers United Northern’s arguments that Plaintiff’s NJCFA claim must be dismissed
because Plaintiff has not pled ascertainable loss or reasonable reliance. (United Northern Mov.
Because the Court dismissed Plaintiff’s NJCFA claim against Bank of America for failure to plead with
specificity under Rule 9(b), it does not need to address Bank of America’s additional arguments.
12

- 19 -

Br. at 17-21).
First, United Northern argues that Plaintiff has “not suffered any loss or damage at all from
United Northern’s alleged conduct.” (Id. at 17). It argues that Plaintiff sought and was promised
a loan for $242,165.00 with an interest rate of 4.5% and a payment of $2,202, and he received
exactly that. (Id. at 17-18). Though the rate is adjustable, rather than fixed, United Northern
argues that at the time of Plaintiff’s Amended Complaint, it had not yet adjusted. (Id. at 18). In
addition, United Northern argues that Plaintiff will actually benefit from the adjustable feature of
the note, since it will adjust to a lower amount. (Id.). Finally, United Northern argues that the
allegedly “improper fees” cited by Plaintiff could not constitute an ascertainable loss because they
were rolled into the loan amount, and therefore would only have decreased the loan proceeds that
Plaintiff was allegedly obligated to pay his former wife. (Id. at 18-19).
Plaintiff responds that his ascertainable loss is “the indebtedness for the mortgage loan.”
(Pl. Opp. Br. at 18). He relies on Cox v. Sears Roebuck & Co., 138 N.J. 2, 21 (1994) to argue that
an improper debt or lien incurred as a result of an NJCFA violation may constitute an ascertainable
loss. The Court agrees that, for the purposes of a motion to dismiss, Plaintiff’s allegations of
ascertainable loss are sufficient. Plaintiff has alleged that he “suffered ascertainable losses
including but not limited to service fees related to the refinanced mortgage to which Plaintiff was
ineligible, paid interest on the refinanced mortgage to which Plaintiff was ineligible, any and all
costs related to the foreseeable refinancing, consequential damages, and cost of attorney fees.”
(Am. Compl. ¶¶ 73-74). Courts in this district have found the ascertainable loss requirement
satisfied based on similar or less substantial allegations. See, e.g., Mercado v. Bank of Am., N.A.,
2013 WL 2933217, at *6 (D.N.J. June 13, 2013); Johnson, 698 F. Supp. 2d at 472. Though
Defendants argue that Plaintiff has benefited from the adjustable feature of the note and that the

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fees would only have decreased proceeds to Plaintiffs’ former wife, these arguments raise factual
questions that are not appropriate for the Court to determine on a motion to dismiss. See Flora v.
Cnty. of Luzerne, 776 F.3d 169, 175 (3d Cir. 2015) (holding that on a motion to dismiss, “[t]he
district court may not make findings of fact and, insofar as there is a factual dispute, the court may
not resolve it”). Accordingly, Plaintiff has adequately alleged an ascertainable loss under the
NJCFA.
Finally, United Northern argues that Plaintiff has not adequately alleged “reasonable
reliance” on United Northern’s alleged misrepresentations. (United Northern Mov. Br. at 19-21).
Plaintiff responds that he reasonably relied on United Northern’s advice to his detriment. (Pl. Opp.
Br. at 35-38). However, while reasonable reliance is required to plead common law fraud, it is not
required to state an NJCFA claim. Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 606 (3d Cir.
2012) (“Importantly, unlike common law fraud, the NJCFA does not require proof of reliance.”)
(citing Gennari v. Weichert Co. Realtors, 148 N.J. 582, 610 (1997)). Rather, “the CFA requires a
consumer to prove that [his or her] loss is attributable to the conduct that the CFA seeks to punish
by including a limitation expressed as a causal link.” Id. (quoting Bosland v. Warnock Dodge,
Inc., 197 N.J. 543, 555 (2009)). “In other words, the alleged unlawful practice must be a proximate
cause of the plaintiff’s ascertainable loss.” Id. United Northern’s arguments that Plaintiff has not
adequately alleged reliance are therefore misplaced. Plaintiff has alleged that United Northern’s
misrepresentations induced him to purchase a refinanced mortgage for which he could not pay,
which resulted in his alleged loss. (Am. Compl. ¶ 73, 76). Plaintiff has further alleged that United
Northern’s knowing omissions regarding certain closing fees caused Plaintiff to suffer the alleged
loss regarding those fees. (Id. ¶ 73, 77). Again, Plaintiff’s allegations of causation against United
Northern are sufficient to withstand a motion to dismiss.

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2. Common Law Fraud
A cause of action for New Jersey common law fraud requires a plaintiff to prove: “(1) a
material misrepresentation of a presently existing or past fact; (2) knowledge or belief by the
defendant of its falsity; (3) an intention that the other person rely on it; (4) reasonable reliance
thereon by the other person; and (5) resulting damages.” Gennari, 148 N.J. at 610. Common law
fraud is also subject to the pleading requirements of Rule 9(b). Because Plaintiff has not pled his
NJCFA claim against Bank of America with the specificity required by Rule 9(b), his common
law claim against Bank of America fails as well. However, the Court determines that Plaintiff has
pled the above elements with the requisite specificity as to United Northern.
As discussed above with respect to Plaintiff’s NJCFA claim, Plaintiff has alleged specific
material representations by United Northern and resulting damages. For purposes of common law
fraud, Plaintiff must also allege United Northern’s knowledge or belief that its statements were
false, United Northern’s intention that Plaintiff rely on its statements, and Plaintiff’s reasonable
reliance on the statements. Plaintiff has alleged that “United and Campo knew that Plaintiff,
unknowledgeable and unsophisticated about the process and advantages of certain loans, was
relying on them for advice and expertise; as such these Defendants knowingly omitted critical
financial details at the time of consultation, at the time Plaintiff submitted the Loan application
and before, during and after closing.” (Id. ¶ 89). Construing Plaintiff’s Amended Complaint
liberally, this allegation is sufficient to plead that United Northern had knowledge that the alleged
misrepresentations and omissions were false and intended Plaintiff to rely on them. Plaintiff has
also alleged that he reasonably relied on Campo’s representations. (See id., Factual Background ¶
34 (“Plaintiff’s decision to utilize United as his mortgage lender was because as Campo advised,
unlike other lenders, United utilized its own money rather than that of investors.”); see also id,

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Facts Common to All Parties ¶ 23 (“Plaintiff relied on United, Campo and John Does’ expertise
and industry knowledge to advise him on his ability to qualify and repay the mortgage for which
he applied.”)).
In sum, Plaintiff’s has adequately pled common law fraud against United Northern, but this
claim must be dismissed against Bank of America.
3. Civil Conspiracy to Violate the NJFCA or to Commit Common Law Fraud
United Northern and Bank of America argue that Plaintiff has failed to adequately plead
facts giving rise to a civil conspiracy to violate the NJCFA or to commit common law fraud.
(United Northern Mov. Br. at 22-23; BANA Mov. Br. at 19-20). Plaintiff’s response brief did not
address these claims. On reply, Bank of America argues that “[b]ecause Plaintiff has failed to
oppose BANA’s request to dismiss these claims they should be deemed abandoned.” (D.E. No.
48, Reply Memorandum of Law In Support of Defendant Bank of America N.A.’s Motion to
Dismiss Plaintiff’s Amended Complaint Pursuant to Fed. R. Civ. Pro. 12(b)(6) (“BANA Rep. Br.”)
at 9).
The Court does not need to consider whether the claims have been abandoned because
Plaintiff has not stated a valid claim for conspiracy. To state a valid claim for conspiracy, Plaintiff
must allege “(1) a combination of two or more persons; (2) a real agreement or confederation with
a common design; (3) the existence of an unlawful purpose, or of a lawful purpose to be achieved
by unlawful means; and (4) proof of special damages.” Morganroth & Morganroth v. Morris,
McLaughlin & Marcus, P.C., 331 F.3d 406, 414 (3d Cir. 2003) (citation omitted). In addition, “to
succeed on a civil conspiracy claim, the plaintiff must assert an underlying tort claim.” Trico
Equip., Inc. v. Manor, No. 08-5561, 2011 WL 705703, at *8 (D.N.J. Feb. 22, 2011) (citing Eli
Lilly and Co. v. Roussel Corp., 23 F. Supp. 2d 460, 496 (D.N.J. 1998)). Further, civil conspiracy

- 23 -

is not an independent cause of action, and conspiracy liability depends on liability for the
underlying tort. See, e.g., Eli Lilly, 23 F. Supp. 2d at 497.
Here, because the Court has dismissed Plaintiff’s NJCFA claim against Bank of America,
it must also dismiss the corresponding civil conspiracy claim because “a conspiracy is not
actionable absent an independent wrong.” Id.; see also Dickerson v. Nationstar, No. 14-6205,
2015 WL 418141, at *3 (D.N.J. Jan. 29, 2015) (dismissing conspiracy claim in mortgage context
where no underlying fraud existed). In addition, the Court must dismiss the conspiracy claim
against United Northern because Plaintiff has not alleged a “real agreement or confederation with
a common design.” See Morganroth & Morganroth, 331 F.3d at 406. Plaintiff has not alleged
any agreement—or even any communication—between any Defendants regarding a scheme to
defraud Plaintiff.

Plaintiff’s conclusory allegations that Defendants “acted in concert” are

insufficient to demonstrate the existence of any agreement. Thus, Plaintiff’s civil conspiracy claim
against United Northern must be dismissed.
4. NJLLA
Plaintiff’s Amended Complaint asserts a claim under the NJLLA against unspecified
defendants. (Am. Compl. ¶¶ 137-140). As mentioned above, supra n. 8, Plaintiff’s opposition
brief “stipulates to withdrawal of this [NJLLA] Count against BOA, without prejudice.” (Pl. Opp.
Br. at 34). Plaintiff continues to pursue this claim against United Northern. (Id. at 33-34).
As also mentioned above, supra n. 8, the NJLLA has been superseded by the NJRMLA,
N.J.S.A. § 17:11C-51, and the NJCFLA, § 17:11C–1.13 See Mogavero, 2014 WL 3444614 at *1.
The Amended Complaint alleges that United Northern engaged in conduct that violates §§ 17:11C23, -28. (Am. Compl. ¶¶ 140-146). However, these sections of the NJLLA were repealed

13

The Court notes that while Defendants do not raise this issue in their briefs, the Court is constrained to
dismiss this claim because no cause of action exists.

- 24 -

following the enactment of the NJCFLA and NJRMLA. 2009 N.J. Laws c. 53, § 73; see also
Mogavero, 2014 WL 3444614 at *13 (“Provisions of N.J.S.A. 17:11C-22 to -31, which pertained
to broker fees, were repealed.”). Because the sections of the NJLLA that Plaintiff relies on have
been repealed, and because Plaintiff has failed to allege any illegal conduct under the NJRMLA or
NJCFLA, Plaintiff’s claim under the NJLLA must be dismissed.14 See Mogavero, 2014 WL
344614 at *13-15. In addition, even if Plaintiff had asserted illegal conduct under the NJCFLA,
there is no private right of action available under that statute. See Veras v. LVNV Funding, LLC,
No. 13-1745, 2014 WL 1050512, at *7-9 (D.N.J. Mar. 17, 2014) (“A review of the NJCFLA
reveals that the Legislature did not provide for a private right of action in order to enforce the
requirements of the Act.”).15 For all of the above reasons, Plaintiff’s NJLLA claim cannot survive
and the Court does not need to consider United Northern’s additional arguments regarding this
claim.
5. Covenant of Good Faith and Fair Dealing
United Northern and Bank of America both move to dismiss Plaintiff’s claim for a violation
of the covenant of good faith and fair dealing. (United Northern Mov. Br. at 12-14; BANA Mov.
Br. at 20-21). “All contracts, under New Jersey law, include an implied covenant that the parties
to the contract will act in good faith.” Tredo v. Ocwen Loan Servicing, LLC, 2014 WL 5092741,
at *6 (D.N.J. Oct. 10, 2014) (citing Sons of Thunder, Inc. v. Borden, Inc., 148 N.J. 396, 420
(1997)). The implied covenant of good faith and fair dealing “mandates that neither party shall do
anything which will have the effect of destroying or injuring the right of the other party to receive

For this reason, the Court does not need to assess Plaintiff’s argument, (Pl. Opp. Br. at 33-34), that United
Northern is subject to the provisions of the NJLLA because it qualifies as “Residential mortgage broker”
under N.J.S.A. § 17:11C-53, and is not merely a mortgage lender.
15
The Court has not identified any cases indicating whether a private right of action exists under the
NJRMLA, but does not need to reach this question because Plaintiff has not alleged any violations of that
statute.
14

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the fruits of the contract.” Id. (quoting Seidenberg v. Summit Bank, 348 N.J. Super. 243, 254 (N.J.
Super. Ct. App. Div. 2002)) (internal quotation marks omitted). As Bank of America points out,
and Plaintiff does not contest, the only contracts identified in the Amended Complaint are the Note
and the Mortgage. (See BANA Mov. Br. at 20-21).
United Northern argues that this claim must be dismissed because “the covenant pertains
to the parties’ performance of their contract, not to negotiations and other dealings leading up into
the entry of the contract.” (United Northern Mov. Br. at 12). United Northern argues that “[h]ere,
Plaintiff’s allegations of wrongdoing against United Northern consistently and exclusively deal
with pre-contract conduct” and that “Plaintiff alleges no conduct by United Northern at all in the
post-closing performance under the loan agreement, much less any conduct that might have
crossed the line of good faith and fair dealing.” (Id. at 13). Plaintiff does not substantively address
this argument in his opposition brief, and falls back on the conclusory allegations asserted in the
Amended Complaint—namely, that “Defendants failed to act in good faith when negotiating the
Loan, contracts, Mortgage and Note, and when rendering performance under same [sic].” (Am.
Compl. ¶ 156; Pl. Opp. Br. at 35).
The Court agrees with United Northern that, because Plaintiff has not alleged facts relating
to United Northern’s performance and enforcement of any contract, his breach of implied covenant
claim against United Northern must be dismissed. Under New Jersey law, “[t]he covenant of good
faith and fair dealing focuses on the performance and enforcement of a valid agreement more than
it regulates contract formation.” In re Estate of Fischer, No. 107359, 2011 WL 2314353, at *4
(N.J. Super. Ct. App. Div. June 14, 2011). “Therefore, the implied covenant of good faith and fair
dealing does not require ‘either side in negotiations to reveal any and all information that might
help the adversary and hurt his or her own client.’” Id. (quoting Brundage v. Estate of Carambio,

- 26 -

195 N.J. 575, 609 (2009)). Instead, the covenant directs that “‘neither party shall do anything
which will have the effect of destroying or injuring the right of the other party to receive the fruits
of the contract[,]’ once it is entered into.” Id. (emphasis added) (quoting Sons of Thunder, 148
N.J. at 420). As United Northern points out, Plaintiff’s factual allegations against it relate to
conduct prior to the loan’s closing. (United Northern Mov. Br. at 13). In fact, Plaintiff alleges
that on or about the same day as the closing, United Northern sold Plaintiff’s Note to Bank of
America—removing United Northern from the picture. (Am. Compl., Facts Common to All
Parties ¶¶ 19-20). As a result, Plaintiff cannot sustain a claim against United Northern for breach
of the covenant of good faith and fair dealing.
Bank of America argues that Plaintiff’s breach of implied covenant claim must be
dismissed against it because “Plaintiff does not set forth any facts that would support a claim that
BANA violated the Note or Mortgage.” (BANA Mov. Br. at 20-21). It argues that “Plaintiff’s
conclusory and generalized statement that ‘Defendants’ breached their duty to act fairly and in
good faith is insufficient to sustain this claim.” (Id.). Plaintiff provides the same conclusory
response to Bank of America’s argument that it provides for United Northern. (Pl. Opp. Br. at 35).
The Court agrees with Bank of America that Plaintiff has not sufficiently pled facts to
support a claim that Bank of America breached the implied covenant of good faith and fair dealing.
As discussed above with respect to Plaintiff’s NJCFA claim, the only facts alleged in the Amended
Complaint regarding Bank of America’s performance and enforcement of the Note or Mortgage
pertain to Plaintiff’s efforts to obtain a loan forbearance and modification. (Am. Compl., Factual
Background ¶¶ 40, 42-45). Specifically, Plaintiff alleges that Bank of America suggested that he
apply for a one-month forbearance and loan modification, and that Plaintiff submitted applications
for both. (Id. ¶¶ 40, 42). He alleges that Bank of America “failed to process the paperwork for a

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loan forbearance” and that “he was not approved for the loan modification, with no specific reason
for the denial.” (Id. ¶¶ 40, 43). Plaintiff states that he was “later advised” that the reason for the
denial was that “his back end debt-to-income ratio was too high.” (Id. ¶ 43). Neither of these
incidents amount to a breach of the covenant of good faith and fair dealing. New Jersey requires
a “state of mind or malice[-]like element to breach of good faith and fair dealing.” Sarlo v. Wells
Fargo Bank, N.A., No. 12-5522, 2015 WL 1334038, at *9 (D.N.J. Mar. 24, 2015) (citing Wilson
v. Amerada Hess Corp., 168 N.J. 236, 251 (2001)). As a result, “[e]xercises of discretion for
‘ordinary business purposes’ do not constitute an improper motive.” Id. Plaintiff has not alleged
any malicious motivation for Bank of America’s failure to process his loan forbearance paperwork
or approve his loan modification request. With respect to the forbearance, Plaintiff simply alleges
that Bank of America failed to process the paperwork—he provides no additional factual support
for this claim, nor does he provide any facts from which the Court could infer malice or improper
motive. With respect to the loan modification, Plaintiff admits in his opposition brief that he is
not entitled to a modification as a matter of law, and argues instead that he is “entitled to have is
[sic] loan modification viewed in good faith and in accordance with FHA Guidelines.” (Pl. Opp.
Br. at 21). However, Plaintiff does not include any allegation that Bank of America failed to
consider his loan application in accordance with those guidelines. Furthermore, Plaintiff’s own
allegations regarding his loan modification denial reveal that his request was denied for ordinary
business purposes—because his debt-to-income ratio was too high.

(Am. Compl., Factual

Background ¶ 43). Accordingly, Plaintiff’s claim against Bank of America for breach of the
implied covenant of good faith and fair dealing must be dismissed.
6. Plaintiff’s Allegations of Forgery
Plaintiff’s Amended Complaint contains allegations that the signatures on Plaintiff’s Loan

- 28 -

Application and Truth-In-Lending statement are not his, and that they were therefore forged
without his knowledge or consent. (Am. Compl., Factual Background ¶ 32). In his opposition to
Defendants’ motions to dismiss, Plaintiff argues that “[w]hat the forgery does, however, is further
support the departure from the appropriate lending standards including, but not limited to FHA’s
guidelines, and due diligence that should have been conducted by United and BOA.” (Pl. Opp.
Br. at 40). However, Plaintiff’s asserted claims do not allege liability stemming from a departure
from FHA guidelines or failure to conduct due diligence. Moreover, Plaintiff does not allege that
either Defendant forged the documents; he simply states that “thus the signatures are forgeries.”
(Id.). Neither Plaintiff’s Amended Complaint nor his opposition brief explain how this allegation
ties to the claims asserted in this case. Accordingly, Plaintiff’s allegations and arguments
regarding the alleged forgery do not alter the outcome of any of Plaintiff’s claims.
VII.

CONCLUSION
For the reasons above, Bank of America’s motion to dismiss the Amended Complaint,

(D.E. No. 41), is granted and United Northern’s motion to dismiss the Amended Complaint, (D.E.
No. 40), is granted in part and denied in part.
Accordingly, it is on this 30th day of June 2015, hereby
ORDERED that Bank of America’s motion to dismiss, (D.E. No. 41), is granted as to
Counts 1-6 without prejudice; and it is further
ORDERED that United Northern’s motion to dismiss, (D.E. No. 40), is granted without
prejudice as to Counts 2, 4, 5, and 6 and denied as to Count 1 and 3; and it is further
ORDERED that the Clerk of the Court may terminate D.E. Nos. 40 and 41.
SO ORDERED.
s/Esther Salas
Esther Salas, U.S.D.J.
- 29 -