JOYCE v. WELLS FARGO BANK, N.A.

Filing 25

OPINION fld. Signed by Judge Claire C. Cecchi on 7/26/16. (sr, )(N/M)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

GI$ELA ARZUAGA JOYCE,

Civil Action No.: 2:1 5-cv-390 (CCC)

P1aintiff
OPINION
V.

WELLS FARGO BANK, N.A.,
Defendant.
CECCHI, District Judge.
I.

INTRODUCTION

This matter comes before the Court by way of the motion [ECF No. 19] of Defendant Wells
Fargo Bank, N.A. (“Defendant” or “Wells Fargo”) to dismiss Plaintiffs Amended Complaint
[ECF No. 18] for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure
12(b)(1) and for failure to state a claim upon which relief may be granted pursuant to Federal Rule
of Civil Procedure 12(b)(6). No oral argument was heard pursuant to federal Rule of Civil
Procedure 78.

for the reasons discussed below, Defendant’s motion to dismiss Plaintiffs

Amended Complaint is granted without prejudice.
II.

BACKGROUND

The following facts are accepted as true for purposes of the instant motion. Plaintiff
received a $138,456.00 loan from non-party Weichert Financial Services on June 29, 2012. See
Amended Complaint, ECF No. 18,

¶ 8.

The loan was memorialized by a note executed on the

same date and secured by a purchase money mortgage. ç Bender Cert. Exhibit 3, ECF No.
194. Plaintiff used the mortgage loan to purchase a property at 260 East Second Avenue in Roselle,
I

New Jersey. Plaintiffs mortgage loan was assigned to Defendant after she had defaulted on her
loan payments, see Amended Complaint
Plaintiff on December 30, 2013.

¶

12. Defendant instituted a foreclosure action against

See Bender Cert. Exhibit C, ECF No. 19-5.

Before the

foreclosure action, Plaintiff “made multiple efforts in the hope of securing an affordable loan
modification and, ultimately, to retain the home

.

.

.

.“

See Amended Complaint

¶

13. Plaintiff

did not respond to the foreclosure complaint, and a default was entered in March 2014, with a final
judgment entered against Plaintiff in August 2014. çç Bender Cert. Exhibit D, ECF No. 19-6.
The property was then sold at auction on June 9, 2015. See Amended Complaint ¶ 14.
Plaintiff filed her Complaint [ECF No. 1] in this Court on January 20, 2015, with causes
of action for Declaratory Relief (Count I), Preliminary Injunctive Relief (Count II), Breach of
Contract (Count Ill), Negligence (Count IV), Gross Negligence (Count V), Negligence Per Se
(Count VI), and Violation of the Fair Debt Collection Practices Act (“FDCPA”) (Count VII).
Because it appeared several pages were missing from Plaintiffs original Complaint, the Court
dismissed the Complaint without prejudice to the Plaintiff to refile a true and complete copy of the
Complaint [ECF No. 15]. Plaintiff has since filed the Amended Complaint [ECF No. 18], and
Defendant has moved to dismiss for lack of subject matter and for failure to state a claim upon
which relief may be granted.

Motion to Dismiss, ECF No. 19. After requesting an extension

oftime to respond, Plaintiff timely filed abriefin opposition to Defendant’s motion. $çç Plaintiffs
Response in Opposition (“P’s Br. in Opp.”), ECF No. 23.
III.

LEGAL STANDARD
A motion to dismiss for lack of standing is properly brought pursuant to Federal Rule of

Civil Procedure 1 2(b)(1), because standing is a matter ofjurisdiction. Ballentine v. U.S., 486 F.3d
806, 810 (3d. Cir. 2007) (citing St. Thomas-St. John Hotel Tourism Ass’n v. Gov’t of the U.S.

2

Virgin Islands, 218 f.3d 232, 240 (3d. Cir. 2000)); Kauffman v. Dreyfus Fund, Inc., 434 f.2d 727,
733 (3d Cir. 1970).
“Article III of the Constitution limits the jurisdiction of federal courts to ‘Cases’ and
‘Controversies.” Lance v. Coffman, 549 U.S. 437, 439 (2007); Lujan v. Defenders of Wildlife,
504 U.S. 555, 560 (1992) (“Though some of its elements express merely prudential considerations
that are part of judicial self-government, the core component of standing is an essential and
unchanging part of the case-or-controversy requirement of Article III.”). One key aspect of this
case-or-controversy requirement is standing. Lance, 549 U.S. at 439. “The standing inquiry
focuses on whether the party invoking jurisdiction had the requisite stake in the outcome when the
suit was filed.” Constitution Party of Pennsylvania, 757 F.3d 347, 360 (3d Cir. 2014) (citing Davis
v. FEC, 554 U.S. 724, 734 (2008)).
To establish standing, a plaintiff must satisfy a three-part test, showing: (1) an ‘injury in
fact,’ i.e., an actual or imminently threatened injury that is ‘concrete and particularized’ to the
plaintiff (2) causation, i.e., traceability of the injury to the actions of the defendant; and (3)
redressability of the injury by a favorable decision by the Court. Nat’l Collegiate Athletic Ass’n
v. Gov. of N.J., 730 f.3d 208, 218 (3d. Cir. 2013) (citing Summers v. Earth Island Inst., 555 U.S.
488, 493 (2009)). “The party invoking federal jurisdiction bears the burden of establishing these
elements.” Lujan, 504 U.S. at 561. At the motion to dismiss stage, a plaintiff must demonstrate a
plausible claim of standing. $c
Additionally, for a complaint to survive dismissal pursuant to federal Rule of Civil
Procedure 12(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, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In evaluating the sufficiency of a complaint, the

3

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. of Allegheny, 515
f.3d 224, 234 (3d Cir. 2008). “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 678 (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 (3dCir. 1994).
IV.

DISCUSSION

The gravamen of Plaintiffs Amended Complaint is that Defendant denied Plaintiffs loan
modification requests and failed to conduct a face-to-face interview with Plaintiff before initiating
the foreclosure proceeding. See generally Amended Complaint. Plaintiff alleges that because the
United States Department of Housing and Urban Development mandates that mortgagors with
branch offices within 200 miles ofthe mortgaged properties “make a reasonable attempt to conduct
a face-to-face meeting with [pjlaintiffs before three (3) full monthly installments due on the loan
went unpaid or after default of a repayment plan,” Defendant wrongfully foreclosed on Plaintiffs
property. See Amended Complaint ¶J 23-26.
A.

This Court Lacks Subject Mailer Jurisdiction Pursuant To The Rooker
Feldman Doctrine

Defendant contends that Plaintiffs Amended Complaint is “nothing more than a collateral
4

attack on the foreclosure Action [in state court] that she already lost.” See Memorandum of Law
in Support of Motion to Dismiss (D’s MOL in $upp.) at 1, ECF No. 19-1. The Court agrees that
it lacks subject matter jurisdiction to hear Plaintiffs case pursuant to the Rooker-feidman doctrine,
as doing so would impermissibly require the Court to review and reverse a judgment rendered by
the state court.
The Rooker-Feldman doctrine divests federal courts of subject matter jurisdiction where
the requested relief would reverse a prior state court decision or void its ruling.

Rooker v.

Fidelity Trust Co., 263 U.S. 413 (1923); District of Columbia Court of Appeals v. Feldman, 460
U.S. 462 (1983); see also 28 U.S.C.

§

1257. There are four factors used to determine whether the

Rooker-Feldman Doctrine applies: “(1) the federal plaintiff lost in state court; (2) the plaintiff
complains of injuries caused by the state court judgments; (3) those judgments were rendered
before the federal suit was filed; and (4) the plaintiff is inviting the district court to review and
reject the state judgments.” Great Western Mining & Mineral Co. v. Fox Rothschild LLP, 615
F.3d 159, 166 (3d Cir. 2010).
Here, all four factors are met.

First, a foreclosure proceeding was instituted against

Plaintiff in state court, which resulted in a final foreclosure judgment against Plaintiff. Second,
the gravamen of Plaintiffs Amended Complaint is that Defendant wrongfully brought the
foreclosure proceeding, either because it denied Plaintiffs requests for loan modifications and/or
because it failed to conduct face-to-face interviews with the Plaintiff. Third, the final foreclosure
judgment was entered against Plaintiff in August 2014, see Bender Cert. Exhibit D, which was
before the Plaintiff instituted the action before this Court in January 2015. And fourth, Plaintiffs
Amended Complaint now seeks this Court’s review to invalidate the foreclosure proceeding that
was fully litigated in state court. Namely, Plaintiff alleges that Defendant failed to comply with

5

certain required conditions before instituting the foreclosure action, and, thus, the foreclosure was
wrongful.
Last, although Plaintiff argues that the Rooker-Feidman doctrine is inapplicable here
because “Defendant’s foreclosure judgment in State Court was obtained by ftaud[,]” P’s Br. in
Opp. at 5, Plaintiff has not alleged fraud as a cause of action in her Amended Complaint.
Therefore, Plaintiffs Amended Complaint is dismissed for lack of subject matter jurisdiction.
The FDCPA Does Not Apply To Defendant As A Creditor

B.

Additionally, to the extent that the Court would not be barred from hearing Plaintiffs
FDCPA claim (Count VII) under the Rooker-Feidman doctrine because, conceivably, that alleged
injury was not caused by the state court judgment, Plaintiffs FDCPA claim is nonetheless
dismissed for failure to state a claim upon which relief may be granted pursuant to federal Rule
of Civil Procedure 12(b)(6). This is because the FDCPA applies only to “debt collectors” and not
to “creditors.” See 15 U.S.C.

§ 1692a. A debt collector is:

any person who uses any instrumentality of interstate commerce or the mails in any
business the principal purpose of which is the collection of any debts, or who
regularly collects or attempts to collect, directly or indirectly, debts owed or due or
asserted to be owed or due another.
15 U.S.C.

§ 1692a(6). A creditor is:

any person who offers or extends credit creating a debt or to whom a debt is owed,
but such term does not include any person to the extent that he receives an
assignment or transfer of a debt in default solely for the purpose of facilitating
collection of such debt for another.
15 U.S.C.

§ 1692a(4). Defendant contends that it is a creditor, because it is “the current holder of

the note and mortgage at issue” and “not engaged in the business of collecting debt on behalf of
others

.

.

.

.“

D’s MOL in Supp. at 23. The Court agrees that, in the context of foreclosing on

Plaintiffs former property, Defendant acted not as a debt collector but as a creditor. See also

6

Zlupko v. Washington Mut. Bank, No. CIV.A. 02-CV-1 179, 2004 WL 2297400, at *2 n.y (E.D.
Pa. Oct. 13, 2004) (noting mortgage lenders and mortgage servicers are generally exempt from the
FDCPA). Thus, Defendant’s alleged conduct does not fall within the ambit of the FDCPA, and
Plaintiff’s claim for a violation of the FDCPA (Count VII) is dismissed for failure to state a claim
under Federal Rule of Civil Procedure 12(b)(6).
C.

Declaratory And Injunctive Relief Are Inappropriate Here

Moreover, to the extent that Plaintiff seeks relief under the Declaratory Judgment Act, the
Court denies that request as there is no active foreclosure action. The Declaratory Judgment Act,
provides: “in a case of actual controversy within its jurisdiction.

.

.

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.” 2$ U.S.C.

§ 2201(a). But, before a federal

court may grant a declaratory judgment, there must exist 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. 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 Plaintiff to seek legal advice from the Court as to whether Defendant complied with
certain regulations before initiating the foreclosure action in state court.
Nor is Plaintiff 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.

7

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, 142627 (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
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 Amended Complaint does not show a likelihood of success on the merits.
Specifically, the relief sought by Plaintiff is not supported by the underlying indisputable facts:
Plaintiff does not dispute that she defaulted on the loan payments, defaulted in the foreclosure
action, or that the subject property has since been sold. Moreover, as the foreclosure judgment has
been entered and the subject property has been sold, Plaintiff cannot show what irreparable harm
would be suffered if the Court denies an injunction, how granting injunctive relief would not result
in an even greater harm to Defendant, or that the public interest weighs in favor of granting Plaintiff
such relief.
Accordingly, Plaintiff fails to set forth the necessary elements for injunctive and
declaratory relief, and, for this additional reason, the Court dismisses Counts I and II of the
Amended Complaint.
V.

CONCLUSION

for the reasons set forth above, Defendant’s motion to dismiss Plaintiffs Amended
Complaint is granted without prejudice. To the extent the deficiencies in Plaintiffs Amended

8

Complaint can be cured by way of amendment, Plaintiff is granted thirty (30) days to file a second
amended complaint solely for purposes of amending the dismissed claims.
An appropriate Order accompanies this Opinion.
Dated:

°

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

9