MARTE v. DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE FOR SECURITIZED TRUST RALI SERIES 2007-QO2 TRUST et al

Filing 24

OPINION. Signed by Judge Claire C. Cecchi on 10/26/2016. (JB, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
EDITH MARTE,

Civil Action No.: 2:15-0869 (CCC)
Plaintiff,

v.

OPINION

DEUTSCHE BANK NATIONAL TRUST
COMPANY, etaL,
Defendants.

CECCHI, District Judge.
I.

INTRODUCTION
This matter comes before the Court on the motion of Defendants Deutsche Bank National

Trust Company, as Trustee for Securitized Trust Rali Series 2007-Q02 Trust (“Deutsche Bank”),

and Mortgage Electronic Registration Systems (“MERS”) (collectively, “Defendants”)1 to dismiss
the Complaint of p
II.

plaintiff Edith Marte (“Plaintiff’). ECF No. 12.

BACKGROUND
On August 25, 2006, Plaintiff, along with another individual not a party to this action,

executed a mortgage on a property located at 123 first Street, Perth Amboy, New Jersey 08861
(the “Mortgage”). See Certification of Laurence P. Chirch (“Chirch Cert.”), ECF No. 12-2, Ex.
B.2 The Mortgage named MERS as trustee of the mortgage. Complaint (“Compi”), ECF No. 1,

1

Defendant Residential Funding Company, LLC, has been administratively terminated
from this action. See ECF No. 19.
2
On a motion to dismiss, the Court may consider the allegations in the complaint, any
exhibits attached to the complaint, matters of public record, and undisputedly authentic
documents upon which the plaintiffs complaint is based. Pension Benefit Guar. Corp. v. White
Consol. Indus., 99$ F.2d 1192, 1196 (3d Cir. 1993). A document satisfies the latter category

¶

29.

Subsequently, MERS assigned Plaintiffs Mortgage to Aurora Loan Services, LLC

(“Aurora”). See Chirch Cert. Ex. C. Aurora then assigned the Mortgage to Nationstar Mortgage,
LLC (“Nationstar”). See id. Ex. D. Finally, Nationstar assigned the Mortgage to Defendant
Deutsche Bank. See id. Ex. E.
Plaintiff ultimately defaulted on the Mortgage, and on or around August 22, 2014,
Deutsche Bank instituted foreclosure proceedings against Plaintiff and other owners of the subject
property in the Superior Court of New Jersey, Chancery Division (the “foreclosure Action”).
id. Exs. F, G. On March 11, 2015, Judge Paul Innes entered a default judgment of foreclosure
against Plaintiff in the Foreclosure Action. See id. Exs. G, H.
Plaintiff filed a Complaint in the instant action on February 4, 2015, asserting thirteen
counts against Defendants: Declaratory Relief (Count One); Injunctive Relief (Count Two); Quiet
Title (Count Three); Negligence Per Se (Count Four); Accounting (Count Five); Breach of the
Covenant of Good Faith and Fair Dealing (Count Six); Breach of Fiduciary Duty (Count Seven);
Wrongflil Foreclosure (Count Eight); Violation of the Real Estate Settlement Procedure Act
(“RESPA”) (Count Nine); Violation of the Home Ownership Equity Protection Act (“HOEPA”)
(Count Ten); Fraud in the Concealment (Count Eleven); Intentional Infliction of Emotional
Distress (Count Twelve); and Slander of Title (Count Thirteen). Compi., ¶J 15 1—273. On June 2,

even where the complaint does not cite or “explicitly rely[]” on it; “[r]ather, the essential
requirement is that the plaintiffs claim be “based on that document.” Brusco v. Harleysville Ins.
Co., No. CIV.A. 14-914 JEI/JS, 2014 WL 2916716, at *5 (D.NJ. June 26, 2014) (quoting Inre
Burlington Coat factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)). As discussed below,
Plaintiffs claims are based on the Mortgage and its assignments, which Defendants attach as
Exhibits B through E in support of their motion. As Plaintiff does not contest their authenticity,
the Court will consider these documents,
This Court may consider the record of the foreclosure Action, attached to Defendants’
motion at Exhibits F through H, because it is a public record and Plaintiff does not appear to
dispute its authenticity. See Pension Benefit Guar. Corp, 99$ f.2d at 1196.
2

2015, Defendants moved to dismiss Plaintiffs Complaint in this action. See ECF No. 12.
In her opposition to Defendants’ motion, Plaintiff withdrew Counts Nine, Ten, and
Twelve,4 and asked for leave to amend her complaint. See ECF No. 13 at 4—5, 8. On January 2$,
2016, this Court granted Plaintiff thirty days to amend her complaint. ECF No. 20. As Plaintiff
failed to do so, Defendants’ motion to dismiss is once again before this Court.
III.

LEGAL STANDARD
A.

Dismissal Pursuant to Federal Rule of Civil Procedure Rule 12(b)(6)

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, 663 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). In evaluating the sufficiency of a complaint, the Court must accept all
well-pleaded factual allegations in the complaint as true and draw all reasonable inferences in favor
of the non-moving party.

Phillips v. City 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. Furthermore, “[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.” Igbal, 556 U.S. at 67$ (internal citations omitted).
B.

Liberal Pleading Standard for

Sc Litigants

A p se litigant’s complaint is held to “less stringent standards than formal pleadings
drafted by lawyers.” Haines v. Kerner, 404 U.S. 519, 520-21 (1972). Courts have a duty to

Specifically, Plaintiff stated she will withdraw her claim under “REPA,” which the
Court takes to refer to Count Nine. See ECF No. 13 at 5. Plaintiff also stated she was
withdrawing her claim under “TILA,” but asserted no such cause of action in her Complaint.
3

construe pleadings liberally and apply the applicable law, irrespective of whether a pro se litigant
has mentioned it by name. Mala v. Crown Bay Marina, Inc., 704 F.3d 239, 244 (3d Cir. 2013);
Diuhos v. Strasberg, 321 F.3d 365, 369 (3d Cir. 2003); Higgins v. Beyer, 293 F.3d 683, 688 (3d
Cir. 2002). A p se complaint “can only be dismissed for failure to state a claim if it appears
beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle
him to relief.” Estelle v. Gamble, 429 U.s. 97, 106 (1976) (citing Haines, 404 U.s. at 520-21);
Bacon v. Minner, 229 F. App’x 96, 100 (3d Cir. 2007).
IV.

DISCUSSION
Relying on a purported “certified, forensic audit,” Plaintiff contends Defendants lacked

standing to foreclose on the Mortgage. Compl.

¶J

33, 38, 134—150. Defendants contend the

doctrines of res judicata, Rooker-Feldman, and entire controversy bar Plaintiffs claims.
Defendants further argue Plaintiffs complaint should be dismissed pursuant to Federal Rule of
Civil Procedure 12(b)(6) because it fails to state a claim upon which relief can be granted. For the
reasons set forth below, Defendants’ motion is granted.
A. Res Judicata Bars Plaintiffs Claims
The doctrine of res judicata bars “relitigation of claims or issues that have already been
adjudicated.” Velasquez v. Franz, 123 N.J. 498, 505 (1991). Resjudicata applies when there has
been “(1) a final judgment on the merits in a prior suit involving (2) the same parties or their privies
and (3) a subsequent suit based on the same cause of action.” Morgan v. Covington Tp., 64$ F.3d
172, 177 (3d Cir. 2011) (citations omitted). The doctrine “bars not only claims that were brought
in a previous action, but also claims that could have been brought.” In re Mullarkey, 536 F.3d at
225.
Res judicata precludes all of Plaintiffs claims against Deutsche Bank. First, the March 11,
4

2015 judgment in the Foreclosure Action was a final judgment on the merits. $ç Chirch Cert. Ex.
H.5 Second, Defendant Deutsche Bank was the plaintiff in the foreclosure Action. See id. Third,
this suit is based on the same cause of action that was at issue in the foreclosure Action,
specifically the foreclosure of Plaintiffs Mortgage.

Scc Perino v. fed. Nat. Mortgage Ass’n, No.

2:15-CV-01063 $DW, 2015 WE 4743950, at *3 (D.N.J. Aug. 11, 2015) (finding the plaintiffs
suit, which alleged claims identical to those Plaintiff asserts here, was based on the same cause of
action at issue in a prior foreclosure action). Accordingly, Plaintiff may not proceed on her claims
against Deutsche Bank.
Additionally, “[r]es judicata will apply if a party in the second action is in privity with a
party in the first action.” Brookshire Equities, EEC v. Montaquiza, 346 N.J. Super. 310, 319
(Super. Ct. App. Div. 2002). By virtue of the assignor-assignee relationship, MERS is in privity
with Deutsche Bank,6 and the doctrine of res judicata will bar Plaintiffs claims against MERS.7
In the interest of completeness, the Court will analyze Plaintiffs claims against MERS pursuant
to federal Rule of Civil Procedure 12(b)(6).

“In New Jersey, ‘a default judgment is a valid and final adjudication on the merits and
therefore has res judicata effect barring future litigation.” Garris-Bey v. Aurora Loan Servs.,
LLC, No. CIV.A. 11-6115 ILL, 2012 WE 694719, at *2 (D.N.J. Mar. 1, 2012) (quoting
Evangelical Baptist Church v. Chambers, 96 N.J. Super. 367, 370—7 1 (N.J. Ch. Div. 1967)).
6
See Brookshire Equities, LLC, 346 N.J. Super. at 319 (“An assignee of a right will be
considered to be in privity with its assignor.”); Lewis v, Citibank, N.A., No. 16-2607, 2016 U.S.
Dist. LEXIS 117993, at *9 (E.D. Pa. Aug. 31, 2016) (finding in a foreclosure action, “defendants
Citi and MERS are in privity with Wilmington Trust as previous nominees, mortgagees, or
assignees to the mortgage in question”). Cf Taylor v. Sturgell, 553 U.S. 880, 894 (2008)
(explaining in dicta,”nonparty preclusion may be justified based on a variety of pre-existing
‘substantive legal relationship[s]’ between the person to be bound and a party to the judgment.
Qualifying relationships include, but are not limited to, preceding and succeeding owners of
property, bailee and bailor, and assignee and assignor.”) (emphasis added) (citations omitted).
Defendants also argue Plaintiffs claims should be dismissed pursuant to the Rooker
Feldman and entire controversy doctrines. See ECF No. 12 at 5, 11. Because Plaintiffs claims
are barred by res judicata, the Court need not reach these arguments.
5

B. Plaintiff Fails to State a Claim for Relief Against MERS
for the reasons set forth below, the Court finds Plaintiff fails to state a cognizable claim
against MERS. first, as Plaintiff claims MERS sold her Mortgage and MERS was not a party to
the foreclosure Action, it does not appear there is an immediate controversy between the parties
warranting declaratory judgement (Count One). $çç Zimmerman v. HBO Affiliate Grp., 834 F.2d
1163, 1170 (3d Cir. 1987) (“There must be a substantial controversy between parties having
adverse legal interests of sufficient immediacy and reality to warrant issuance of a declaratory
judgment.”). Accordingly, Count One fails to state a claim for relief
Second, the Court finds no basis on which to grant Plaintiffs request for injunctive relief
(Count Two). 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
Cir. 2004). Plaintiff alleges MERS sold the Mortgage and does not allege MERS has any further
interest in the property. Thus, Plaintiff fails to provide a basis for injunctive relief against MERS.
Moreover, Plaintiff fails to demonstrate, at a minimum, a likelihood of success on the merits, as
Plaintiff does not appear to dispute that she defaulted on her loan payments and that a foreclosure
judgment has been entered against her. See Coleman v. Deutsche Bank Nat. Trust Co., No. CIV.A.
15-1080 JLL, 2015 WL 2226022, at *4 (D.N.J. May 12, 2015) (dismissing claim for injunctive
relief where the plaintiff did not allege facts to dispute that he defaulted on mortgage payments).
6

Third, Plaintiffs quiet-title claim (Count Three) is based on nothing more than conclusory
allegations disputing the validity of the assignment of the Mortgage. This is insufficient to
establish a claim for quiet title. See id.; Schiano v. MBNA, No. 05—1771 JLL, 2013 WL 2452681,
at *26 (D.N.J. Feb. 11, 2013); English v. Federal Nat. Mortg. Ass’n, No. 13—2028, 2013 WL
6188572, at *2_4 (D.N.J. Nov. 26, 2013).
Fourth, the economic loss doctrine bars Plaintiffs tort-based claims for negligence per se
(Count Four), breach of covenant of good faith and fair dealing (Count Six), breach of fiduciary
duty (Count Seven), and slander of title (Count Thirteen). The economic loss doctrine “prohibits
plaintiffs from recovering in tort economic losses to which their entitlement only flows from a
contract.” Werwinksi v. Ford Motor Co., 286 F.3d 661, 671 (3d Cir. 2002) (citations omitted).
Here, the forgoing claims arise solely from the Mortgage loan contract and, accordingly, must be
dismissed. See Coleman, 2015 WL 2226022 at *4 (dismissing the plaintiffs claims for negligence
per se, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, and slander
of title where those claims were based on a contract for a mortgage loan).
Fifth, Plaintiff fails to state a claim for an accounting (Count Five) and wrongful
foreclosure (Count Eight). Plaintiff has not cited

—

and the Court cannot find

—

any statute or case

law that supports an independent cause of action for “accounting” or “wrongful disclosure.”

$

Monclova v. U.S. BankN.A., No. 15-7383, 2016 U.S. Dist. LEXIS 106127, at *8.9 (D.N.J. Aug.
11, 2016); Coleman, 2015 WL 2226022, at * 5. Plaintiff further fails to identify a contractual or
statutory provision that entitles her to relief from Defendants or provides her with a remedy of an
accounting.

See Coleman, 2015 WE 2226022 at *5 (dismissing claim for an accounting).

Moreover, as Plaintiff alleges MERS sold the Mortgage and it appears MERS was not a party to
the Foreclosure Action, Plaintiff fails to set forth facts indicating MERS foreclosed on Plaintiffs
7

Mortgage, let alone that such foreclosure was “wrongful.” Accordingly, Counts five and Eight
fail to state a claim for relief.
Sixth, Plaintiff fails to state a claim for fraud in the concealment (Count Eleven). Plaintiff
appears to allege Defendants committed fraud by concealing the fact that Plaintiffs Mortgage
would be sold as a security. Plaintiff, however, does not have standing to contest the assignment
of her Mortgage because she was not a party to or third-party beneficiary of those assignments.
See, e.g., Gilarmo v. U.S. Bank NA ex rel. CSAB Mortgage Backed Trust 2006-1, 643 F. App’x
97, 100 (3d Cir. 2016) (agreeing with the “overwhelming majority of courts” that “a borrower in
default has no standing to challenge an assignment” of her mortgage if she was neither a party to
nor third-party beneficiary of the assignment). Accordingly, Count Eleven fails to state a claim
for relief.
V.

CONCLUSION
For the reasons set forth above, Defendants’ motion to dismiss is granted. To the extent

the pleading deficiencies can be cured by way of amendment, Plaintiff is hereby granted thirty (30)
days to file an amended pleading. Should Plaintiff fail to do so, Plaintiffs Complaint as to
Defendants Deutsche Bank and MERS will be dismissed with prejudice. An appropriate Order
accompanies this Opinion.

C

Date:

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

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