FEDERAL NATIONAL MORTGAGE ASSOCIATION v. DUBOIS et al
Filing
140
OPINION. Signed by Judge John Michael Vazquez on 12/4/2019. (ld, )
Not for Publication
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
MORTGAGE
NATIONAL
FEDERAL
ASSOCIATION, a federally chartered banking
corporation, & MTGLQ INVESTORS. L.P.,
Civil Action No. 15-3787 (JMV) (MF)
Flaint4jJs,
OPINION
v.
NICHOLAS J. DUBOIS & MRS. NICHOLAS J.
DUBOIS, his wife,
Defendants.
NICHOLAS J. DUBOIS,
Third-Party Plaint jJf
V.
FEDERAL HOUSING FINANCE AGENCY,
NEW PENN FINANCIAL, LLC d/b/a
SHELLPOINT MORTGAGE SERVICES; XYZ
Title Co. (fictitious); XYZ CORPS. 2-10
(fictitious); JOHN/JANE DOES 1-10 (fictitious),
Third-Party Defendants.
John Michael Vazguez, U.S.D.J.
Currently pending before the Court are two motions to dismiss Defendant Nicholas
DuBois’ (“DuBois”) Second Amended Counterclaim and Third-Party Complaint (the “SATPC”).
The first was filed by Counterclaim Defendant MTGLQ Investors, L.P. (“MTGLQ”) and Third-
Party Defendant New Penn Financial, LLC d/b/a Shellpoint Wortgage Services (“Shellpoint”),
D.E. 118; and the second was brought by Counterclaim Defendant Federal National Mortgage
Association (“Fannie Mae”) and Third-Party Defendant Federal Housing Finance Agency
(“FHFA”), D.E. 119. DuBois filed a single brief in opposition to both motions to dismiss, D.E.
136, and Defendants filed reply briefs, D.E. 137, 138. MTGLQ, Sheilpoint, Fannie Mae and FHFA
are referred to collectively as “Defendants” in this Opinion.
DuBois also filed a cross-motion for reconsideration of this Court’s August 8, 2019
Opinion and Order (the “August 8 Opinion”). In the August 8 Opinion, the Court determined that
DuBois improperly filed a Third Amended Answer, Counterclaims and Third-Party Complaint
(the “TATPC”), pursuant to Rule 15(a), and denied DuBois leave to file the amended pleading
mine pro tune. D.E. 136. Defendants oppose DuBois’ request for reconsideration of the August
8 Opinion. D.E. 138, 139. The Court reviewed the parties’ submissions) and decided the motions
without oral argument pursuant to Fed. R. Civ. P. 78(b) and L. Civ. R. 78.1(b). For the reasons
set forth below, both motions to dismiss are GRANTED, and DuBois’ cross-motion is
GRANTED in part and DENIED in part. Upon reconsideration, the Court DENIES DuBois’
request to file an amended pleading nunc pro tune.
I.
Background and Procedural History
This matter stems from DuBois’ execution of a note and mortgage in 2001 (the
“Mortgage”), Defendants’ attempts to foreclose upon the property that was subject to the note and
mortgage, and DuBois’ efforts to stop the foreclosure. For purposes of the pending motion, the
Court does not retrace this case’s fUll factual and procedural history.
The Court instead
The following briefs were submitted in connection with the pending motions and will be referred
to by docket number for purposes of this Opinion: DuBois’ brief in opposition to the motions to
dismiss and in support of his motion for reconsideration (D.E. 136-2); Fannie Mae and FHFA’s
briefs (D.E. 119, 138); and MTGLQ & Shelipoint’s briefs (D.E. 118-4, 137, 139).
2
incorporates by reference the detailed background in its October 30, 2018 Opinion (“October30
Opinion”) that, in part, dismissed DuBois’ amended counterclaims and third-party complaint (the
“ATPC”). D.E. 103.
In the October 30 Opinion, and the accompanying Order, this Court granted DuBois leave
to file a second amended complaint only as to claims asserted in the ATPC. The October30 Order
provided Duflois with thirty days to file an amended pleading and stated that if DuBois failed to
file an amended pleading within thirty days, the claims in the ATPC would be dismissed with
prejudice. D.E. 104. On December 14,2018, this Court dismissed the claims asserted in the ATPC
with prejudice because DuBois did not file an amended third-party complaint or counterclaims.
D.E. 105. On December 21, 2018, however, DuBois filed a motion to vacate the December 14,
2018 Order and requested additional time to file an amended third-party complaint. DuBois
included a proposed pleading as an exhibit to his motion. D.E. 106. In addition, Defendants
previously consented to DuBois’ request for an extension of time to file an amended pleading.
D.E. 106-1 at 5. Accordingly, on March 11, 2019, the Court vacated its December 14 Order and
provided DuBois two weeks to file the proposed amended pleading that he included as an exhibit
to his motion to vacate. D.E. 112.
DuBois filed the SATPC on March 25, 2019. D.E. 113. The SATPC asserts the same
causes of action as the ATPC but includes new factual allegations. Defendants subsequently filed
the instant motions to dismiss. D.E. 118, 119. DuBois did not initially oppose Defendants’
motions. Rather, on May 14, 2019, DuBois filed the TATPC without leave of Court or consent
from the opposing parties. D.E. 121. As a result, on May 29, 2019, the Court ordered DuBois to
show cause as to why he should be permitted to file the TATPC pursuant to Rule 15(a). D.E. 129.
3
In the August 8 Opinion, the Court determined that the TATPC was improperly filed
pursuant to Rule 15(a) and refused to grant DuBois leave to file the TATPC mine pro tunc. D.E.
134. The Court also granted DuBois leave to file opposition briefs to the pending motions to
dismiss in the August 8 Opinion. Id. On August 22, 2019, DuBois filed his opposition to the
motions to dismiss and his cross-motion for reconsideration of the August 8 Opinion. D.E. 136.
II.
MOTION FOR RECONSIDERATION
1. Legal Standard
In the District of New Jersey, motions for reconsideration can be made pursuant to Local
Civil Rule 7.10). The rule provides that such motions must be made within fourteen days of the
entry of an order, DuBois complied with this time requirement.
Substantively, a motion for reconsideration is viable when one of three scenarios is present:
(1) an inten’ening change in the controlling law, (2) the availability of new evidence not previously
available, or (3) the need to correct a clear error of law or prevent manifest injustice. Carmichael
v Everson, No. 03-4787, 2004 WL 1587894, at *1 (D.N.J. May 21, 2004) (citations omitted).
Allowing a motion for reconsideration to go forward is an “extraordinary remedy” to be granted
“sparingly.” NLlndus., Inc. v. Commercial Union Ins. Co., 935 F. Supp. 513, 516 (D.N.J. 1996)
(citations omitted). A motion for reconsideration, however, does not entitle a party to a second
bite at the apple. Therefore, a motion for reconsideration is inappropriate when a party merely
disagrees with a court’s ruling or when a party simply wishes to re-argue or re-hash its original
motion. Sch. Specialty, Inc. v. Ferrentino, No. 14-4507, 2015 WL 4602995, at *2..3 (D.N.J. July
30, 2015); see also Florham Park Chevron, Inc. v. Chevron U.S.A.. 680 F. Supp. 159, 162 (D.N.J.
1988). Moreover, a motion for reconsideration is not an opportunity to raise matters that could
4
have been raised before the original decision was reached. Bowers v. NCAA, 130 F. Supp. 2d 610,
613 (D.N.J. 2001).
2. Analysis
DuBois seeks reconsideration of (I) the denial of his request for leave to file the TATPC
nunc pro tune; and (2) the decision that the TATPC was not flied as a matter of course under Rule
I 5(a)( 1). D.E. 136-2 at 5-13. DuBois does not argue that there was any intervening change in the
law or that there is new, previously unavailable evidence. Accordingly, the Court construes
DuBois’ motion as arguing that reconsideration should be granted to correct a clear error of law or
to prevent manifest injustice.
To succeed under this prong, “the movant must show that
‘dispositive factual matters or controlling decisions of law were brought to the court’s attention
but not considered.” Atkinson
i’.
Middlesex County, No. 09-4863, 2014 WL 2767771, at *2
(D.N.J. June 18, 2017) (quoting D’Argenzio v. Bank of Am. Corp., 877 F. Supp. 2d 202, 207
(D.NJ. 2012)).
DuBois first argues that when denying leave to amend nunc pro tune, the Court overlooked
its March 11,2019 Order, which required DuBois to submit the proposed amended complaint that
he submitted as an exhibit to his December 21, 2018 motion to vacate. Because the Court, in the
March 11 Order, directed DuBois to file the amended complaint he submitted on December 21,
DuBois maintains that the Court incorrectly denied leave to amend based on DuBois’ failure to
include allegations that pertain to events on January 24, 2019 and March 1, 2019. D.E. 136-2 at
5. The Court recognizes that DuBois would have violated the March 11 Order if he included the
January 24, 2019 and March 1,2019 factual allegations in the SATPC. Thus, DuBois’ motion for
reconsideration in granted on these grounds. But to be clear, the Court will only reconsider
whether DuBois should be granted leave to amend to add the January 24 and March 1 allegations,
5
which pertain solely to his NJCFA and FDCPA claims and also involve a new proposed Defendant,
Setems, Inc.
Pursuant to Rule I 5(a)(2), a court must “freely give leave” to amend “when justice so
requires.” Fed. R. Civ. P. 15(a)(2). While “[tihe Third Circuit has shown a strong liberality in
allowing amendment under Rule 15 in order to ensure that claims will be decided on the merits
rather than on technicalities,” Bair i City ofAtlantic City, 100 F. Supp. 2d 262, 265 (D.N.J. 2000)
(citing Dole
i’.
Arco Chern. Co., 921 F.2d 484, 487 (3d Cir. 1990)), it has also consistently held
that “a District Court may deny leave to amend on the grounds the amendment would cause undue
delay or prejudice, or that amendment would be futile.” In re Aipharma Sec. Litig., 372 F.3d 137,
153 (3d Cir. 2004) (quoting Oran v Stafford, 226 F.3d 275, 291 (3d Cir. 2000)), abrogated on
other grounds by Teliabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007). “Futility of
an amended complaint is reviewed under the ‘same standard of legal sufficiency as applies under
[Rule] 12(b)(6).” Bunch v. Milberg Factors, Inc., 662 F.3d 212, 231 (3d Cir. 2011) (quoting
Ahmed i. Dragovich, 297 F.3d 201, 209 (3d Cir. 2002)). As a result, the Court considers DuBois’
January 24, 2019 and March 1, 2019 allegations below, when assessing Defendants’ motions to
dismiss for failure to state a claim.
In his cross-motion, DuBois also contends that the Court erred in concluding that his claim
for slander was futile. D.E. 136-2 at 8-10. In the August 8 Opinion, the Court relied on Lone v.
Brown, 199 N.J. Super. 420, 427-28 (App. Div. 1985) to deny leave to amend DuBois’ proposed
slander claim on futility grounds. In Lone, the Appellate Division concluded that the filing of a
notice of hspendens is recognized as absolutely privileged under New Jersey’s litigation privilege.
Id. DuBois argues that this Court erred in relying on Lone because Lone does not address the filing
of a its pendens that includes incorrect information or mistakes. D.E. 136-2 at 8-10. However, if
6
the information were accurate, there would be no basis for a slander claim. DuBois fails to provide
any case law to support his argument that the litigation privilege would not apply here or that Lone
is not controlling. As a result, DuBois’ motion for reconsideration is denied on these grounds.
Finally, DuBois seeks reconsideration of the Court’s determination that DuBois could not
amend his complaint without consent from the Court or his adversaries pursuant to Rule 15(a).
D.E. 136-2 at 10-13. As to this argument, DuBois merely disagrees with this Court’s conclusion,
contending that the Court incorrectly adopted the “minority position.” Id. at 10. As discussed, a
motion for reconsideration is inappropriate when a party merely disagrees with a court’s ruling or
simply wishes to re-argue or re-hash its original motion. Sc/i. Specialty, Inc. v. Ferrentino, No.
14-4507, 2015 WL 4602995, at *2..3 (D.N.J. July 30, 2015); see also Florharn Park Chevron, Inc.
v. Chevron US.A., 680 F. Supp. 159, 162 (D.N.J. 1988). Because DuBois fails to point to any
clear error, DuBois’ cross-motion for reconsideration is also denied on these grounds.2
2
DuBois argues that the Court overlooked United States v. Union Corp., 194 F.R.D. 223 (E.D. Pa.
2000) in the August 8 Opinion. The fact that Union Corp. was not mentioned in the August 8
Opinion does not mean that it was overlooked. See Ashton v. AT & T Corp., No. 03-3158, 2006
WL 6909588, at *2 (D.N.J. Feb. 2,2006) (stating that for purposes of a motion for reconsideration,
“[am argument is not deemed overlooked because it is not specifically addressed in a court’s
opinion”). Moreover, Union Corp. does not address the precise procedural issue addressed in the
August 8 Opinion—whether a party may amend as a matter of course after each answer or
responsive motion. Rather, Union Corp. addresses whether a party’ has a right to replead as a
matter of course after a motion to dismiss is granted. Union Corp., 194 F.R.D. at 232. Because
Union Corp. did not address the issue before the Court, the Court did not discuss Union Corp. in
the August 8 Opinion.
7
III.
MOTION TO DISMISS
1. Standard of Review
The motions to dismiss pertain to counterclaims3 pursuant to Federal Rule of Civil
Procedure 121b)(6), which is evaluated in the same manner as a motion to dismiss a claim in a
complaint. Signature Bank
i.
Check-X-change, LLC, No. 12-2802, 2013 WL 3286154, at *2
(D.N.J. June 27, 2013). For a counterclaim to survive dismissal under Rule 12(b)(6), it must
contain sufficient factual matter to state a claim that is plausible on its face. Asherofi v. Iqbal, 556
U.s. 662, 678 (2009) (quoting Bell ML Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is
facially plausible “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.
Further, a
plaintiff must “allege sufficient facts to raise a reasonable expectation that discovery will uncover
proof of her claims.” Connelly v. Lane Const. Coip., 809 F.3d 780, 789 (3d Cir. 2016). In
evaluating the sufficiency of a counterclaim, district courts must separate the factual and legal
elements. See Fowler v. UPMC Shadyside, 578 F.3d 203, 210-211 (3d Cir. 2009). Restatements
of the elements of a claim are legal conclusions, and therefore, not entitled to a presumption of
truth. Bunch, 662 F.3d at 224. The Court, however, “must accept all of the complaint’s wellpleaded facts as true.” Fowler, 578 F.3d at 210. Even if plausibly pled, however, a claim will not
withstand a motion to dismiss if the facts alleged do not state “a legally cognizable cause of action.”
Turner v. J.P. Morgan Chase & Co., No. 14-7148, 2015 WL 12826480, at *2 (D.N.J. Jan. 23,
2015).
The SATPC does not differentiate between counterclaims and third-party claims. Because the
same standard of review applies to both categories, the Court refers to all of DuBois’ claims as
counts or counterclaims.
8
2. Analysis
Although DuBois asserts new factual allegations in the SATPC, DuBois still fails to
sufficiently plead any cognizable claims. The Court addresses each counterclaim below.
a. Joint and Several Liability
Fannie Mae and FHFA seek to dismiss Count Twenty, DuBois’ claim for joint and several
liability, which is unchanged from the joint and several liability claim in the ATPC. This claim
remains dismissed as to all Defendants because DuBois did not amend this count, and it is not an
independent cause of action. See October30 Opinion at 24.
b. New Jersey Consumer Fraud Act Claim
In Count Twenty-One, DuBois alleges that Fannie Mae, FHFA, MTGLQ, Shellpoint, and
Setems4 violated the NJCFA. A plaintiff must establish three elements for an NJCFA claim: (1)
unlawful conduct, (2) an ascertainable loss, and (3) a causal connection between the defendant’s
unlawful conduct and the plaintiffs ascertainable loss. In re AZEK Building Prods., Inc. Mktg. &
Sales Practice Litig., 82 F. Supp. 3d 608, 623 (D.N.J. 2015). DuBois includes new allegations in
the SATPC that Defendants failed to inform DuBois of his eligibility for the Principal Reduction
Program and gave him a “faux offer of settlement” so that he would not participate in the program.
SATPC
¶fflJ 56C,
NJCFA. Id.
56D. DuBois alleges that this conduct amounts to unlawful conduct under the
¶J 57-58.
DuBois also clarifies in his brief that he is alleging that Fannie Mae adjusted
the amount claimed due under the mortgage, in part, to exclude DuBois from the Principal
Reduction Program. D.E. 136-2 at 15.
Setems is named as an additional third-party defendant in the TATPC and allegedly replaced
Shellpoint as the servicer of DuBois’ loan. TATPC ¶J 56-60C, 137A.
‘
9
Despite these new factual allegations, the NJCFA claim is still premised on the implausible
theory that Fannie Mae sold DuBois’ mortgage to MTGLQ, within the $418 million portfolio of
non-performing loans, to preclude DuBois from participating in the Principal Reduction Program.
Id.
¶ 47; see also D.E.
136-2 at 15 (explaining that the mortgage amount was manipulated “in favor
of adding a high-interest [non-performing loan] to the portfolio for MTGLQ”). Thus, even with
DuBois’ new allegations and explanation, the NJCFA claim remains implausible. Count TwentyOne, therefore, is dismissed for failure to state a claim.
In the proposed TATPC, DuBois maintains that statements that Seterus mailed him in
January, February, and March 2019 state different amounts of indebtedness. TATPC ¶J 60A-60C.
Even if this amounted to unlawful conduct under the NJCFA, which the Court is not deciding,
DuBois fails to allege an ascertainable loss because of Setems’ statements. See Thiedemann v.
Mercedes-Benz USA, LLC, 183 N.J. 234, 247 (2005) (stating that an NJCFA claim may only be
asserted by “those who can demonstrate a loss attributable to conduct made unlawful by the
[NJJCFA”). Accordingly, the Court denies DuBois leave to amend to assert a NJCFA claim as to
Seterus on futility grounds.
c,
Fraudulent Transfer Claim
Count Twenty-Two alleges that Fannie Mae, FHFA, and MTGLQ violated the Uniform
Fraudulent Transfer Act (“UFTA”), N.J.S.A. 25:2-20 et al. The fraudulent transfer claim as pled
in the ATPC was dismissed because DuBois failed to adequately allege he was a creditor. October
30 Opinion at 25. As explained in the October30 Opinion, “[t]he purpose of the NJ UFTA is to
prevent a debtor from placing his or her property beyond a creditor’s reach.” In re Tzanides, 574
B.R. 489, 512-13 (Bank. N.J. 2017). As such, remedies under the NJ UTFA “are only available
to creditors who have a valid ‘right to payment[,]” TJI Gas Enters., LLC v. Lacey Gas, LLC, No.
10
A-3170-13T1, 2016 WL 6776119, at *4 (N.J. App. Div. Nov. 16, 2016) (quoting N.J.S.A. 25:221) (emphasis in original). In the SATPC, DuBois alleges that he has “unliquidated equitable and
legal claims for payment as of right against Defendants that are not yet reduced to judgment.”
SATPC
¶
64A.
But outside of this conclusoiy allegation, DuBois still fails to plead facts
demonstrating that he actually has a claim to any payments from Defendants. And again, “a
pending lawsuit does not equate to a valid right to payment.” October 30 Opinion at 25 (citing
N.J.S.A. 25:2-21). As a result, DuBois fails to plausibly plead that he is a creditor under the UFTA
and Count Twenty-Two is dismissed for failure to state a claim.5
d. Negligent Supervision
DuBois asserts a claim for negligent supervision as to FHFA in Count Twenty-Four. A
claim for negligent supervision requires an employer/employee relationship.
A party must
establish that “(1) the employer must have known or had reason to know that the employee
ethibited dangerous characteristics; (2) there must be a reasonable foreseeability of harm to others;
and (3) the negligent supervision must be the proximate cause of the alleged injury.” Panarello v.
City of Vineland, 160 F. Supp. 3d 734, 769 (D.N.J. 2016), on reconsideration in part, No. 12-4165,
2016 WL 3638108 (D.N.J. July 7, 2016) (quoting Cordial v. Atlantic City, No. 11-1457, 2014 WL
1095584, at *11 (D.N.J. Mar. 19, 2014)). In this instance, DuBois alleges that the relationship
between Fannie Mae and FHFA is akin to an employer/employee relationship. SATPC
¶
83.
DuBois, however, fails to provide any authority that the tort of negligent supervision can apply
outside of the confines of an employer/employee relationship. See G.A.-H v. K.G.G., 238 N.J.
Count Twenty-Three of the SATPC asserts a claim for declaratory relief, which is materially
identical to the claim for declaratory relief in the ATPC that this Court dismissed. October 30
Opinion at 30-31. Although no party moves to dismiss Count Twenty-Three at this time, because
DuBois makes no substantive changes in the SATPC, the claim for declaratory relief remains
dismissed.
11
401, 415-16 (2019) (“Unlike respondeat superior, negligent hiring, supervision, and training are
not forms of vicarious liability and are based on the direct fault of the employer.”); DiCosala
1’.
Kay, 91 N.J. 159, 174 (1982) (explaining that the “tort of negligent hiring or retention of an
incompetent, unfit or dangerous employee” is to “redress[]
.
.
.
negligence of the employer in hiring
or retention of employees whose qualities unreasonably expose the public to a risk of harm”).
Thus, the allegation that Fannie Mae and FHFA have something that resembles an
employer/employee relationship is insufficient to state a negligent supervision claim as a matter
of law. Therefore, this claim is dismissed.
e. Tortious Interference Claims
In Count Twenty-Five, DuBois asserts a claim for tortious interference with prospective
economic advantage against Fannie Mae, FHFA, and MTGLQ. In Count Twenty-Six, DuBois
asserts a claim for tortious interference with contract against MTGLQ and Shellpoint. DuBois
asserted similar claims in the ATPC that were dismissed as implausible because, like the NJCFA
claim, they were premised on DuBois’ allegation that his loan was included in the massive sale of
non-performing loans to foreclose his ability to participate in the Principal Reduction Program.
October 30 Opinion at 27. The tortious interference with contract claim in the SATPC is identical
to the tortious interference with contract claim in the ATPC, and the few additions to the tortious
interference with prospective economic advantage in the SATPC (see SATPC ¶fl 90-90A (alleging
a continuing violation and that Defendants acted in concert)) do not materially change the claim
as pled in the ATPC. Consequently, DuBois fails to state a claim for tortious interference with a
prospective economic advantage or contract in the SATPC, and these claims are dismissed.
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f.
Deceit
Count Twenty-Nine asserts a claim for deceit against Fannie Mae, FHFA, MTGLQ and
Shellpoint. In New Jersey, a claim for deceit is the same as a claim for fraud. “To establish a
claim for fraud or deceit, a plaintiff must prove ‘a material representation of a presently existing
or past fact, made with knowledge of its falsity and with the intention that the other party rely
thereon, resulting in reliance by that party to his detriment.” Silvestre v. Bell All. Corp., 973 F.
Supp. 475, 485 (D.N.J. 1997) (quoting Nappe v. Anschelewitz, Barr, Anseti & Bonello, 97 N.J. 37,
51(1984)); see also Holmin v. TRW, Inc., 330 N.J. Super. 30, 35 (App. Div. 2000) (“Here, the
asserted cause of action is fraud, which is sometimes called ‘deceit.”). A fraud claim is also
subject to the heightened pleading requirement of Rule 9(b), which requires “that plaintiffs support
their allegations of fraud with
.
.
.
the ‘who, what, when, where and how’ of the events at issue.”
Morano v. BMW of N.A., LLC, 928 F. Supp. 2d 826, 832 (D.N.J. 2013) (quoting In re Suprema
Specialties, Inc. Sec. Litig., 438 F.3d 256, 276-77 (3d Cir. 2006)). Finally, DuBois’ claim is based
on an omission that Defendants failed to tell him about the Principal Reduction Program. SATPC
—
¶J 117-18. As a result, DuBois must establish that the Defendants had a duty to disclose
information about the Principal Reduction Program. Stockroom, Inc. v. Dydacomp Dev. Corp.,
941 F. Supp. 2d 537, 547 (D.N.J. 2013) (stating that for a fraud claim, “a fraudulent omission
under the common law requires a duty to disclose”).
The deceit claim in the ATPC was dismissed because DuBois failed to sufficiently plead
that any Defendant breached a duty to disclose information about the Principal Reduction Program.
The SATPC fails to remedy this shortcoming. DuBois alleges that because FHFA directed Fannie
Mae, MTGLQ, and Shellpoint to notify eligible mortgagers of the Principal Reduction Program,
they “had a duty of good faith and fair dealing to notify DuBois of the Principal Reduction
13
Program.” SATPC ¶ 117. In most cases, a bank owes no duty to disclose programs its customers.
The duty to disclose may, however, arise in the presence of “egregious breaches of the lender’s
duty ofgood faith and fair dealing.” United Jersey Batik i.’. Kensey, 306 N.J. Super. 540, 557 (App.
Div. 1997). Here, DuBois’ conclusory statement that Defendants’ failure to inform him of the
Principal Reduction Program constituted a breach of the duty of good faith and fair dealing is not
sufficient state a fraud claim, particularly in light of the requirements of Rule 9(b). As a result,
Count Twenty-Nine is dismissed.
g. Prima Facie Tort
DuBois brings a prima facie tort claim in Count Thirty of the SATPC. This claim was
dismissed in the October 30 Opinion because it was premised on the same facts as numerous other
counts in the ATPC and because a prima facie tort cause of action has not been officially
recognized as a claim in New Jersey. October 30 Opinion at 29. In the SATPC, DuBois asserts a
new paragraph that purportedly clarifies Defendants’ alleged wrongfi.d conduct. SATPC ¶ 123A.
DuBois’ prima fade tort claim, however, is still pled in the alternative, and still relies on the same
allegations in other counts. As a result, for the same reasons set forth in the October 30 Opinion,
the prima facie tort claim is dismissed.
h. Federal Debt Collection Practices Act Claim
Count Thirty-One alleges that Shellpoint is a debt collector as defined by the FDCPA, and
that it violated the FDCPA. SATPC
¶
133. In the proposed TATPC, DuBois also alleges that
Seterus violated the FDCPA because of letters it sent in January through March 2019. TATPC
¶
128-38. The FDCPA “creates a private right of action against debt collectors who fail to comply
with its provisions.” Grubb
i
Green Tree Servicing, LLC, No 13-07421, 2014 WL 3696126, at
*4 (D.N.J. July 24, 2014). To succeed on an FDCPA claim, a plaintiff must demonstrate that “U)
14
she is a consumer, (2) the defendant is a debt collector, (3) the defendant’s challenged practice
involves an attempt to collect a ‘debt’ as the Act defines it, and (4) the defendant has violated a
provision of the FDCPA in attempting to collect the debt.” Douglass v. Convergent Outsourcing,
765 F.3d 299, 303 (3d Cir. 2014).
DuBois’ FDCPA claim was dismissed as to Shellpoint in the ATPC because DuBois failed
to plead sufficient facts to establish a prima fade FDCPA claim. The SATPC still contains
material deficiencies and includes only conclusoiy allegations. For example, DuBois fails to plead
when he received the notice that allegedly violated FDCPA, explain what other “documents”
Shellpoint provided to him, or why Shellpoint’s validation letter was not “lawifilly sufficient.” See
SATPC ¶J 134-39. Therefore, Count Thirty-One of the SATPC is dismissed.
DuBois, however, appears to state a claim as to Seterus in the proposed TATPC. DuBois
alleges that Seterus violated the FDCPA because between January 24, 2019 and March 1, 2019,
Setems provided DuBois with three different amounts of indebtedness that ranged from
$219,506.06 to $337,639. In addition to pleading the specific amounts, the TATPC includes the
dates when Setews sent the statements with differing amounts. Yet, DuBois appears to improperly
join Setems as a defendant in this matter. See Fed. R. Civ. P. 21 (explaining that a court may sua
sponte address misjoinder).
A plaintiff may assert claims against multiple defendants in one action if the right to relief
arises out of the same transaction or occurrence, or there is a common question of law or fact as to
all defendants. Fed. R. Civ. P. 20(a)(2). Leave to amend can be denied if the proposed amended
pleading fails to satisfy the permissive joinder requirements of Rule 20. Mosher v. New Jersey,
No. 06-2526, 2007 WL 1101230, at *5 (D.N.J. Apr. 10, 2007). Here, this single FDCPA claim
against Setems is independent from the numerous other claims in the SATPC. It involves a new
15
entity and because the alleged violative correspondence was sent in 2019, Seterus’ actions could
not have been a part of the alleged scheme to preclude DuBois from participation in the Principal
Reduction Program that was offered in 2016, even assuming that the Court found those allegations
plausible. DuBois’ claim against Seterus is “notably distinct in both time and subject matter.” See
Hayden
i&
Westfield Ins. Co., 586 F. App’x 835, 839-40 (3d Cir. 2014) (affirming denial of a Rule
20 motion to assert new claims against a new defendant that were unrelated to the initial insurance
dispute). Thus, the Court denies DuBois’ request for leave to file an amended complaint as to
Setenas nunc pro tune.
i.
Conspiracy and Aiding & Abetting Fraud Claims
In Count Twenty-Seven, DuBois asserts a claim for civil conspiracy, and in Count TwentyEight, he brings a claim for aiding and abetting fraud. In New Jersey, four elements comprise civil
conspiracy: “‘(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.” MaxLite, Inc. v. ATO Elees.,
Inc., 193 F. Supp. 3d 371, 390 (D.N.J. 2016) (quoting Morganroth & Morganroth
McLaughlin & Marcus, 331 F.3d 406, 414 (3d Cir. 2003)); Banco Popular N. Am,
i’.
Norris,
Gandi, 184
NJ. 161, 177(2005). Moreover, the underlying unlawful conduct must give rise to an independent
right of action. Banco Popular N Am., 184 N.J. at 178. Similarly, to state a claim for aiding and
abetting common law fraud, a plaintiff must show that the defendants willfully and knowingly
associated with another’s unlawful act. Failla i’. City ofPassaic, 146 F.3d 149, 158 (3d Cir. 1998).
As a result, “[a] claim for aiding and abetting fraud also requires proof of the underlying tort.”
State, Dep ‘(of Treasury, Div. ofmv. ex ret McCormac v. Qwest Commnc ‘sIn! ‘1, Inc., 387 N.J.
Super. 469, 484 (App. Div. 2006). Finally, because DuBois’ conspiracy and aiding and abetting
16
counts are premised on Defendants’ purported fraud, they are subject to the Rule 9 heightened
pleading standard. Lum v. Bank ofAm., 361 F.3d 217, 228 (3d Cir. 2004). Because the SATPC is
otherwise dismissed in its entirety, DuBois’ conspiracy, and aiding and abetting fraud claims also
fail due to the lack of a cognizable underlying tort. Counts Twenty-Seven and Twenty-Eight are
therefore dismissed.
3. Dismissal with Prejudice
When dismissing a case brought by a pro se plaintiff, a court must decide whether the
dismissal will be with prejudice or without prejudice, the latter of which affords a plaintiff with
leave to amend. Grayson v. Mayview State Hosp., 293 F.3d 103, 110-11 (3d Cir. 2002). The
district court may deny leave to amend only if (a) the moving party’s delay in seeking amendment
is undue, motivated by bad faith, or prejudicial to the non-moving party or (b) the amendment
would be fUtile. Adams v. Gould, Inc., 739 F.2d 858, 864 (3d Cir. 1984). DuBois has had
numerous attempts to assert cognizable claims both in this matter and in the prior Washington D.C.
Litigation. Most recently with the SATPC, DuBois failed to state any cognizable counts, and many
of the claims were virtually identical to claims that were dismissed in the October 30 Opinion.6
Accordingly, the Court concludes that providing DuBois with leave to file another amended
pleading would be fUtile. The SATPC, therefore, is dismissed with prejudice. See, e.g., TBI
Unlimited, LLCv. Clear Cut Lawn Decisions, LLC, No. 12-3355, 2014 WL 3853900, at *9 (D.N.J.
Aug. 5, 2014) (dismissing claims with prejudice where court already provided plaintiff with leave
to amend and amended pleading “suffer[ed] from many of the same pleading deficiencies
previously identified by the Court”).
6
The sole exception is DuBois’ FDCPA claim against Setems. Although the Court is not
permitting DuBois to assert this claim in this matter, DuBois is not precluded from asserting the
claim in a separately filed case.
17
IV.
CONCLUSION
For the reasons stated above, Counterclaim and Third-Party Defendants’ motions to
dismiss the counter/third-party claims (D.E. 118, 119) are GRANTED and the Second Amended
Counterclaim and Third-Party Complaint is DISMISSED in its entirety. In addition, DuBois’
Cross-Motion for Reconsideration (D.E. 136) is GRANTED to the extent that it seeks
reconsideration of the denial of leave to amend
request for leave to amend is DENIED.
JiUnC
pro tune. On reconsideration, DuBois’
The cross-motion for reconsideration is otherwise
DENIED. An appropriate Order accompanies this Opinion.
Dated: December 4, 2019
John Michael vaz6uezj49.J.
18
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