WONG et al v. WELLS FARGO BANK N.A. et al
Filing
10
OPINION. Signed by Judge Claire C. Cecchi on 10/20/15. (DD, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
KiN WONG AND EVA CHIN,
Civil Action No.: 14-5204 (CCC)
Plaintiffs,
OPINION
v.
I
WELLS FARGO BANK N.A. as Trustee for
OPTION ONE MORTGAGE LOAN TRUST
2005-3 ASSET-BACKED CERTIFICATES
SERIES
2005-3;
OCWEN
LOAN
SERVICING, LLC; AND DOES THROUGH
10, INCLUSIVE,
Defendants.
CECCHI, District Judge.
I.
INTRODUCTION
This matter comes before the Court by way of the motion of Defendants Wells Fargo Bank,
N.A. (“Wells Fargo”) and Ocwen Loan Servicing, LLC (“Ocwen”) (collectively, “Defendants”)
to dismiss Plaintiffs’ Complaint for failure to state a claim upon which relief may be granted
pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 5.) Plaintiffs did not respond to
the motion. No oral argument was heard pursuant to federal Rule of Civil Procedure 78. For the
reasons discussed below, Defendants’ motion to dismiss Plaintiffs’ Complaint is granted.
II.
BACKGROUND
The following facts are accepted as true for purposes of the instant Motion. Plaintiffs Kin
Wong and Eva Chin (collectively, “Plaintiffs”) own the subject property located at 155 Central
Place, Orange, New Jersey (the “Property”). (Compi. ¶ 1 .)‘ On May 13, 2005, Plaintiffs accepted
a loan of $228,000.00 and executed a promissory note to secure the debt in favor of Option One
Mortgage Corporation (“Option One”). (Id.
¶ 17-18; see also Declaration of Brett L. Messinger
(“Mess. DecI.”) ¶4, Ex. B.) The Note was secured by a mortgage signed by Plaintiffs, secured by
the Property, and recorded with the Essex County Register of Deeds and Mortgages on May 27,
2015. (Compi.
¶ 19;
see also Messinger Deci.
¶ 5, Ex.
C.) Wells Fargo is the trustee for the trust
that currently owns Plaintiffs’ Note and Mortgage. (Compi. ¶ 21; see also Mess. Deci. 6, Ex. D.)
¶
Ocwen is the current servicer of the mortgage. (Compi.
¶ 29;
see also Def. Mot. at 2.)
On August 19, 2014, Plaintiffs filed their Complaint against Defendants, alleging
Declaratory Relief (Count I); Injunctive Relief (Count II); Wrongful Foreclosure (Count III);
Slander of Title (Count IV); Quiet Title (Count V); Negligence Per Se (Count VI); Accounting
(Count VII); Breach of the Covenant of Good Faith and Fair Dealing (Count VIII); Breach of
Fiduciary Duty (Count IX); Violation of the Real Estate Procedures Act (“RESPA”) (Count X);
and Violation of the Home Ownership Equity Protection Act (“HOEPA”) (Count XI). (ECF No.
1.) On March 31, 2015, the Defendants filed the instant Motion to Dismiss and, on May 21, 2015,
filed a Notice of Supplemental Authority. (ECF Nos. 5, 9.)
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. Iqbal, 556 U.S. 662 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
‘Defendants dispute whether Plaintiff Eva Chin owns the Property. (Def. Mot. at 4.) It
appears that Plaintiff Kin Wong is the sole owner of the Property. However, for purposes of the
instant motion, the Court assumes, without deciding, that Eva Chin owns the Property with Kin
Wong.
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U.s. 544, 570 (2007)). “Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain
statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant
fair notice of what the.
.
.
claim is and the grounds upon which it rests.” Twombly, 550 U.S. at
545 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).
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. çç Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 200$). “Factual allegations
must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555.
“A pleading that offers labels and conclusions will not do. Nor does a complaint suffice if it
tenders naked assertion[s] devoid of further factual enhancement.” Iqbal, 556 U.S. at 67$ (internal
citations omitted). However, “the tenet that a court must accept as true all of the allegations
contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements
of a cause of action, supported by mere conclusory statements, do not suffice.” Id. Additionally,
in evaluating a plaintiffs claims, generally “a court looks only to the facts alleged in the complaint
and its attachments without reference to other parts of the record.” Jordan v. Fox, Rothschild,
O’Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994).
A court may dismiss a claim with prejudice if amendment would be futile. Shane v. F auver,
213 F.3d 113, 115 (3d Cir. 2000). “Futility’ means that the complaint, as amended, would fail to
state a claim upon which relief could be granted.” Id. (citing Inre Burlington Coat Factory Sec.
Litig., 114 F.3d 1410, 1434 (3d Cir. 1997)).
IV.
DISCUSSION
The gravamen of Plaintiffs’ Complaint is that Defendants do not have a right or interest in
the Note or Mortgage because (1) Plaintiffs’ loan was improperly securitized, and (2) there are
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defects in the chain of title. (Compi.
¶ 33;
see also Def. Mot. at 3.) Notably, it appears that no
foreclosure action has been instituted against Plaintiffs to date. Moreover, as pointed out by
Defendants in their Notice of Supplemental Authority, this Court has recently dismissed two other
actions, with prejudice, based on (1) complaints similar to that of the Plaintiffs in this case, and
(2) arguments similar as those set forth by Defendants in the instant motion.
Espaillat v.
Deutsche Bank Nat’! Trust Co., 2:15-cv-00314-SDW-SCM, 2015 WL 2412153 (D.N.J. May 21,
2015); Coleman v. Deutsche Bank Nat’l Trust Co., 2:15-cv-01080-JLL-JAD, 2015 WL 2226022
(D.N.J. May 12, 2015).
A. Declaratory Relief (Count I) and Injunctive Relief (Count II)
Plaintiffs seek declaratory relief and an injunction preventing a foreclosure action against
Plaintiffs on the grounds that: (1) one or more of the Defendants failed to abide by the terms of a
Pooling and Servicing Agreement (“PSA”) under which Plaintiffs’ loan was securitized, and
(2) the transfers and/or assignments of the Note and Mortgage were improper. (Compi. ¶J 22-93.)
Because these allegations fail to state a cause of action against Defendants for declaratory and
injunctive relief, the Court will dismiss these claims with prejudice.
Plaintiffs lack standing to assert a violation of the PSA or assignments of the Mortgage
because Plaintiffs are neither parties to nor intended third-party beneficiaries of the PSA or
assignments. (Compi.
¶ 26.)
See Eun Ju Song v. Bank of Am., N.A., No. 2:14-3204, 2015 WL
248436, at *2 (D.N.J. Jan. 20, 2015); Glennv. Hayman, No. 07-cv-112, 2007 WL 894213, at *10
(D.N.J. Mar. 21, 2007). Moreover, both the Note and the Mortgage expressly state that they may
be transferred. (See Mess. Deci., Exs. B and C.)
In addition, Plaintiffs are not entitled to declaratory relief under the Declaratory Judgment
Act, which provides: “in a case of actual controversy within its jurisdiction
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.
.
.
any court of the
United States
.
.
.
may declare the rights and other legal relations of any interested party seeking
such declaration, whether or not further relief is or could be sought.” 28 U.S.C.
§ 2201(a). Before
a federal court may grant a declaratory judgment, there must be a substantial controversy between
the parties having adverse legal interests of sufficient immediacy and reality to warrant issuance
of a declaratory judgment. Zimmerman v. HBO Affiliate Grp., 834 F.2d 1163, 1170 (3d Cir.
1987). The fundamental test is whether the plaintiff seeks merely advice or whether a real question
of conflicting legal interests is presented for judicial determination. Id.
Here, there is no immediate controversy warranting declaratory judgment as there is no
active foreclosure action.
Thus, it is premature for Plaintiffs to seek judicial determination
regarding Defendants’ standing to ultimately foreclose on the Property. Further, a request for a
declaratory judgment is improper because the Complaint, on its face, does not present questions
of conflicting legal interests. Rather, it is an attempt by Plaintiffs to seek legal advice from the
Court.
Plaintiffs are also not entitled to injunctive relief. Federal Rule of Civil Procedure 65
permits district courts to grant injunctive relief in the form of a temporary restraining order. Fed.
R. Civ. P. 65(b). Injunctive relief is “an extraordinary remedy.
.
.
which should be granted only
in limited circumstances.” Empire United Lines v. Baltic Auto Shipping, Inc., 2015 WL 337655,
at *1 (D.N.J. Jan. 23, 2015) (quoting AT&T v. Winback & Conserve Program, Inc., 42 F.3d 1421,
1426-27 (3d Cir. 1994)). For a court to grant injunctive relief, a party must show: “(1) a likelihood
of success on the merits; (2) that it will suffer irreparable harm if the injunction is denied; (3) that
granting preliminary relief will not result in even greater harm to the nonmoving party; and (4) that
the public interest favors such relief.” Kos Pharms., Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d
5
Cir. 2004). The party seeking injunctive relief bears the burden of showing that all four factors
weigh in favor of preliminary relief. Winback & Conserve, 42 F.3d at 1427.
Here, Plaintiffs’ Complaint does not show a likelihood of success on the merits.
Specifically, the relief sought by Plaintiffs is not supported by the underlying indisputable facts.
Plaintiffs do not dispute that they executed the Note to Option One, which was secured by a
mortgage. (Compl.
¶J 16-19.)
Thus, Plaintiffs acknowledge a debt was created. Plaintiffs do not
allege any facts to support their conclusory allegations that the Note has been paid in full or
satisfied and that Plaintiffs are not in default on the loan. There is no active foreclosure action or
pending sheriffs sale of the Property.
Accordingly, Plaintiff fails to set forth the necessary elements for injunctive and
declaratory relief and the Court dismisses the first and second causes of action with prejudice.
B. Wrongful foreclosure (Count III)
In Count III, Plaintiffs allege that Defendants wrongfully foreclosed on the Property.
Plaintiffs provide no basis for asserting such a claim. They fail to provide any facts supporting
that there is a foreclosure action pending against them. Accordingly, the Court dismisses the third
cause of action with prejudice.
C. Slander of Title (Count IV), Negligence Per Se (Count VI), and Breach of
Fiduciary Duty (Count IX)
The economic loss doctrine, which “prohibits plaintiffs from recovering in tort economic
losses to which their entitlement only flows from a contract,” bars Plaintiffs’ claims for slander of
title (Count IV), negligence per se (Count VI), and breach of fiduciary duty (Count IX). Duguesne
Light Co. v. Westinghouse Elec. Corp., 66 f.3d 604, 618 (3d Cir. 1995). These tort-based claims
are rooted in the contractual relationship between the parties based upon the executed Note and
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Mortgage. Accordingly, the Court dismisses the fourth, sixth, and ninth causes of action with
prejudice.
D. Quiet Title (Count V)
New Jersey’s quiet title statute allows a plaintiff to maintain an action to “clear up all
doubts and disputes concerning” competing claims to land.
N.J. Stat. Ann.
§ 2A:62-1.
In
accordance with the statute, a plaintiff should spell out the nature of the competing claims in her
complaint. Espinoza v. HSBC Bank, USA, Nat’l Ass’n, No. 12-4874, 2013 WL 1163506, at *3
(D.N.J. Mar. 19, 2013). In addition, a plaintiff must allege facts showing a defendant’s competing
interest is wrongful. English v. Fed. Nat. Mortg. Ass’n, No. 13-2028, 2013 WL 6188572, at *3
(D.N.J. Nov. 26, 2013).
Here, Plaintiffs’ claim to quiet title is based on nothing more than conclusory allegations
and Plaintiffs’ questioning of the ownership of the Mortgage, which is insufficient to establish a
claim for quiet title. See Schiano v. MBNA, No. 05-1771 JLL, 2013 WL 2452681, at *26 (D.N.J.
Feb. 11, 2013) (dismissing complaint and holding that plaintiffs’ allegations that they do not know
the owner of their mortgage and that the assignments of their mortgage are invalid are not sufficient
to establish a quiet title action); English, 2013 WL 6188572, at *2.4. Because Plaintiffs fail to set
forth any specific facts supporting the invalidity of the Note or Mortgage, or that Plaintiffs have
fully satisfied repayment of the Loan, Plaintiffs quiet title action fails as a matter of law.
Accordingly, the Court dismisses the fifth cause of action with prejudice.
E. Accounting (Count VII)
In Count VII, Plaintiffs request an accounting because “[s]ince the Originator sold the
NOTE without endorsing the NOTE and without making and recording an assignment of the DOT,
Plaintiffs have been making improper mortgage payments to Defendants.” (Compl.
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¶ 157.)
An
accounting, however, is considered a remedy, not a separate cause of action. Tolia v. Dunkin
Brands, No. 11-3656, 2011 WL 6132102, at *6 n.5 (D.NJ. Oct. 7, 2011). Plaintiffs have not
identified a contract or statutory provision entitling them to the remedy of an accounting.
Accordingly, the Court dismisses the seventh cause of action with prejudice.
F. Breach of the Covenant of Good Faith and Fair Dealing (Count VIII)
In Count VIII, Plaintiffs bring a claim for breach of the implied covenant of good faith and
fair dealing. Plaintiffs do not allege facts to support the necessary elements for such a claim. In
New Jersey, every contract contains an implied covenant of good faith and fair dealing. Graddy
v. Deutsche Bank, No. 11-3038, 2013 WL 1222655, at *4 (D.N.J. Mar. 25, 2013). “[T]he implied
covenant of good faith and fair dealing does not operate to alter the clear terms of an agreement
and may not be invoked to preclude a party from exercising its express rights under such an
agreement.” Fields v. Thompson Printing Co., 363 F.3d 259, 271 (3d Cir. 2004). To succeed on
a claim for breach of the implied covenant of good faith and fair dealing, a plaintiff must prove:
(1) a contract exists between the plaintiff and the defendant; (2) the plaintiff performed under the
terms of the contract unless excused; (3) the defendant engaged in conduct, apart from its
contractual obligations, without good faith and for the purpose of depriving the plaintiff of the
rights and benefits under the contract; and (4) the defendant’s conduct caused the plaintiff to suffer
injury, damage, loss, or harm. Graddy, 2013 WL 1222655, at *4
Here, Plaintiffs acknowledge that a debt is owed under the Note, but do not allege they
fully performed under the Note and Mortgage by fully repaying the debt owed. Thus, Plaintiffs
do not and cannot state a cognizable claim for relief against Defendants because even if a
foreclosure action was pending, the filing of such an action is contractually permitted under the
Note and Mortgage. See id. (“Plaintiff has not alleged that [Defendant] engaged in any conduct,
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apart from that which the contract expressly permitted, in bad faith or for the purposes of depriving
the plaintiff of their rights under the contract. Therefore, this claim will also be dismissed.”).
Accordingly, the Court dismisses the eighth cause of action with prejudice.
G. Violation of the RESPA (Count X) and Violation of the HOEPA (Count XI)
Plaintiffs bring causes of action alleging violations of RESPA (Count X) and HOEPA
(Count XI), each based on allegations relating to the origination of Plaintiffs’ Note and Mortgage
and their subsequent securitization in May 2005. (Compi.
¶J 26-30, 176, 188, 192.) Claims for
violation of Section 2607 of RESPA are governed by a one-year statute of limitations. 12 U.S.C.
§ 2614. Claims for rescission under HOEPA are governed by a three-year statute of limitations.
15 U.S.C.
§ 1635(f).
These claims are time-barred because Plaintiffs filed this Complaint on August 19, 2014
and the Loan originated in May 2005. (See Compi.
¶ 17-19.) Accordingly, the Court dismisses
the tenth and eleventh causes of action with prejudice.
V.
CONCLUSION
F or the reasons set forth above, Defendants’ motion to dismiss is granted. The Court
dismisses the Complaint as to all Defendants because Plaintiffs have not, and cannot, state a
cognizable claim for relief as to any Defendant. Since an amendment of Plaintiffs’ claims would
be futile, Plaintiffs’ Complaint is hereby dismissed with prejudice.
An appropriate Order
accompanies this Opinion.
Dated: October
2015
CLAIRE C. CECCHI, U.S.D.J.
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