BAREL v. GREEN TREE SERVICING, LLC et al

Filing 11

LETTER OPINION. Signed by Judge Susan D. Wigenton on 7/19/17. (sr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

CHAMBERS OF
SUSAN D. WIGENTON
UNITED STATES DISTRICT
JUDGE

July 19, 2017

MARTIN LUTHER KING
COURTHOUSE
50 WALNUT ST.
NEWARK, NJ 07101
973-645-5903

Ariel Barel
114 Warbler Drive
Wayne, NJ 07470
Pro Se Plaintiff
Aaron M. Bender, Esq.
Diane A. Bettino, Esq.
Reed Smith, LLP
Princeton Forrestal Village
Princeton, NJ 08540
Attorneys for Defendant Green Tree Servicing, LLC also known as
Ditech Financial, LLC

LETTER OPINION FILED WITH THE CLERK OF THE COURT GRANTING
DEFENDANT’S MOTION TO DISMISS
Re:

Barel v. Green Tree Servicing, LLC et al, Civil Action No. 16-cv-08880SDW-LDW

Litigants:
Before this Court is Defendant Green Tree Servicing, LLC’s Motion to Dismiss the
Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Dkt. No. 7.)
FACTUAL AND PROCEDURAL BACKGROUND
Pro se plaintiff Ariel Barel (“Plaintiff”) owns the subject property located at 114 Warbler
Drive, Wayne, New Jersey. (Compl. ¶ 11.) On March 8, 2006, Karen Barel, Plaintiff’s “wife at
the time,” (Compl. ¶ 25), executed to Atlantic Stewardship Bank, its successors and/or assigns, a
promissory note in the amount of $255,000. (Dkt. No. 10-1 at 4.) To secure payment, Plaintiff and
1

Karen Barel executed a Mortgage to Atlantic Stewardship Bank, its successors and/or assigns, on
the same date. (Id.) Also on March 8, 2006, Atlantic Stewardship Bank, its successors and/or
assigns, assigned the mortgage to Mortgage Electronic Registration Systems, Inc. (“MERS”), its
successors and assigns, as nominee for GMAC Bank, its successors and assigns. (Id at 5.) MERS
subsequently assigned the mortgage first to GMAC Mortgage, LLC, its successors and assigns, on
September 19, 2008, and then to Defendant on June 13, 2014. (Id. at 5-6.) As the June 13, 2014
assignment was out of the chain of title, GMAC Mortgage, LLC, “by its attorney in fact Green
Tree Servicing LLC.,” assigned the mortgage to Defendant on August 14, 2015. (Id. at 6.)
On November 26, 2014, Defendant filed a foreclosure action against Plaintiff and Karen
Barel in the Superior Court of New Jersey, Chancery Division, Passaic County (“State Foreclosure
Action”). (Id. at 7.) Plaintiff subsequently filed an Answer, Counterclaim, and Third-Party
Complaint in the State Foreclosure Action. (Id.) The State Court then granted Defendant’s Motion
to Dismiss Plaintiff’s Counterclaims on August 19, 2015. (Id.) In addition, after conducting a trial
in the State Foreclosure Action, the State Court held, on January 9, 2017, that Defendant had
standing to foreclose, that the mortgage at issue was valid and enforceable, and that Plaintiff had
defaulted on the mortgage payments as of January 1, 2009. (Id. at 6-11.)
On November 30, 2016, Plaintiff filed the instant Complaint against Defendant. Plaintiff
contends that he sent a note of rescission to Defendant on April 6, 2015, which he claims rescinded
the March 8, 2006 note and mortgage pursuant to the Truth in Lending Act (“TILA”), 15 U.S.C.
§ 1635 (Compl. ¶¶ 6, 18-19.) In addition, Plaintiff contends, as he did in the State Foreclosure
Action, that the mortgage “was never consummated.” (Id. ¶ 18.) Accordingly, Plaintiff requests
that this Court “enforce the steps after rescission under” TILA and seeks, inter alia, declaratory
relief and monetary damages. (Id. ¶¶ 22-57.)

2

LEGAL STANDARD
Motion to Dismiss
A defendant may move to dismiss a complaint for lack of subject-matter jurisdiction under
Fed. R. Civ. P. 12(b)(1) by challenging jurisdiction facially or factually. Constitution Party of
Pennsylvania v. Aichele, 757 F.3d 347, 357 (3d Cir. 2014). A facial challenge to subject-matter
jurisdiction “considers a claim on its face and asserts that it is insufficient to invoke the subjectmatter jurisdiction of the court because, for example, it does not present a question of federal law
. . . .” Id. at 358. In contrast, a factual challenge “is an argument that there is no subject matter
jurisdiction because the facts of the case . . . do not support the asserted jurisdiction.” Id. Drawing
this distinction is important because it “determines how the pleading must be reviewed.” Id. at
357-58 (citing In re Schering Plough Corp. Intron, 678 F.3d 235, 243 (3d Cir. 2012)). In analyzing
a facial challenge, “the court must only consider the allegations of the complaint and documents
referenced therein and attached thereto . . . .” Constitution Party of Pennsylvania, 757 F.3d at 348
(citing In re Schering Plough Corp. Intron, 678 F.3d at 243). Whereas in considering a factual
challenge to subject-matter jurisdiction, the court “may look beyond the pleadings to ascertain the
facts.” Constitution Party of Pennsylvania, 757 F.3d at 348. Furthermore, in considering a factual
challenge to subject matter jurisdiction, “the plaintiff’s allegations enjoy no presumption of
truthfulness, and [the plaintiff] bears the burden of establishing jurisdiction.” Meehan v. Taylor,
No. CIV. 12-4079, 2013 WL 4517943, at *2 (D.N.J. Aug. 26, 2013) (first citing CNA v. United
States, 535 F.3d 132, 139 (3d Cir. 2008); then citing Mortensen v. First Fed. Sav. Loan Ass’n.,
549 F.2d 884, 891 (3d Cir. 1977)).
In considering a Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6), the
court must “‘accept all factual allegations as true, construe the complaint in the light most favorable

3

to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff
may be entitled to relief.”’ Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (quoting
Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)). 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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007)). If the “well-pleaded facts do not permit the court to infer
more than the mere possibility of misconduct,” the complaint should be dismissed for failing to
show “‘that the pleader is entitled to relief’” as required by Rule 8(a)(2). Id. at 679 (quoting Fed.
R. Civ. P. 8(a)(2)).
According to the Supreme Court in Twombly, “[w]hile a complaint attacked by a Rule
12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to
provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and
a formulaic recitation of the elements of a cause of action will not do.” 550 U.S. at 555 (second
alteration in original) (internal citations omitted) (quoting Papasan v. Allain, 478 U.S. 265, 286
(1986)). The Third Circuit summarized the Twombly pleading standard as follows: “‘stating . . . a
claim requires a complaint with enough factual matter (taken as true) to suggest’ the required
element.” Phillips, 515 F.3d at 234 (alterations in original) (quoting Twombly, 550 U.S. at 556).
DISCUSSION
Plaintiff’s claims are barred by the New Jersey Entire Controversy Doctrine
Plaintiff’s claims are barred by the entire controversy doctrine. “The entire controversy
doctrine ‘embodies the principle that the adjudication of a legal controversy should occur in one
litigation in only one court . . .’ ” Arab African Intern. Bank v. Epstein, 10 F.3d 168, 171 (3d Cir.
4

1993) (citing Cogdell v. Hospital Center at Orange, 116 N.J. 7, 560 A.2d 1169, 1172 (1989)). The
entire controversy doctrine “requires adversaries to join all possible claims stemming from an
event or series of events in one suit.” See Paramount Aviation Corp. v. Agusta, 178 F.3d 132 (3d
Cir. 1999). Similar to res judicata, the entire controversy doctrine is an affirmative defense, and it
applies in federal courts “when there was a previous state-court action involving the same
transaction.” Bennun v. Rutgers State University, 941 F.2d 154, 163 (3d Cir. 1991).
Here, all of Plaintiff’s claims relate to the pending State Foreclosure Action. (See Bender
Cert., Ex. A, C, D, F; Dkt. No. 10-1.) Plaintiff’s claims arise from the same underlying set of
operative facts, which involve defaulting on the mortgage at issue. Plaintiff’s claims could have
been asserted in the state matter, rather than in a separate action. Moreover, “[a] claim that the
mortgage transaction ‘was not consummated’ or that the mortgage has been rescinded obviously
bears direct [sic] on the merits of the mortgage foreclosure itself.” Otto v. Wells Fargo Bank, N.A.,
No. 15-CV-8240 (KM)(MAH), 2016 WL 8677313, at *8 (D.N.J. July 15, 2016), aff'd, No. 163385, 2017 WL 2364377 (3d Cir. May 31, 2017). Therefore, as Plaintiff’s claims arise out of the
mortgage that is the basis of the State Foreclosure Action, those claims are now barred by the
entire controversy doctrine.
Plaintiff’s claims are barred by the Younger Abstention Doctrine
Plaintiff’s claims are also barred by the Younger abstention doctrine. The Younger
abstention doctrine states that a federal court must not exercise jurisdiction when “(1) there are
ongoing state proceedings that are judicial in nature; (2) the state proceedings implicate important
state interests; and (3) the state proceedings afford an adequate opportunity to raise the federal
claims.” Lazaridis v. Wehmer, 591 F.3d 666, 670 (3d Cir. 2010). As previously discussed, there

5

is an ongoing State Foreclosure Action that either addressed, or could have addressed all of
Plaintiff’s loan-related claims. As such, Plaintiff is barred from pursuing his claims in this Court.
Failure to state a claim
Even if Plaintiff’s assertions against Defendant were not barred for the aforementioned
reasons, to the extent Plaintiff seeks monetary damages and/or rescission under TILA, those claims
are untimely. As discussed above, Plaintiff sent a note of rescission to Defendant on April 6, 2015,
which Plaintiff contends rescinded the March 8, 2006 note and mortgage pursuant to the 15 U.S.C.
§ 1635 (Compl. ¶¶ 6, 18-19.) However, a claim for monetary damages under TILA must be
brought within one year of the loan closing. See 15 U.S.C. § 1640(e). In addition, a request for
rescission must be made within three years. See Jesinoski v. Countrywide Home Loans, Inc., 135
S. Ct. 790, 791, 190 L. Ed. 2d 650 (2015). Accordingly, Plaintiff’s damages claim expired in 2007
and his rescission claim expired in 2009.
CONCLUSION
For the reasons set forth above, Defendant’s Motion to Dismiss is GRANTED. An
appropriate order follows.
s/ Susan D. Wigenton
SUSAN D. WIGENTON
UNITED STATES DISTRICT JUDGE

Orig:
cc:

Clerk
Leda D. Wettre, U.S.M.J.
Parties

6