EDWARDS v. MTGLQ INVESTORS L.P. et al
Filing
27
OPINION. Signed by Judge Kevin McNulty on 09/05/2018. (ek)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
SONJA EDWARDS,
Civ. No. 2:17-cv-06630 (KM) (MAR)
Plaintiff,
OPINION
V.
MTGLQ INVESTORS L.P.,
NATIONSTAR MORTGAGE LLC,
SUNTRUST MORTGAGE INC.,
MCCABE, WEISBERG, CONWAY P.C.,
RAS CITRON
Defendants.
KEVIN MCNULTY. U.S.D.J.:
Sonja Edwards, as borrower and property owner, brings this pro se
action against mortgagees, MTOLQ Investors L.P. (“MTGLQ”), Nationstar
Mortgage LLC (“Nationstar”), and SunTrust Mortgage Inc. (“SunTrust”). The
attorneys for Nationstar—McCabe, Weisberg & Conway, P.C. and PAS Citron
LCC—are named as defendants as well.’ The action arises from a state court
proceeding that resulted in a final judgment of foreclosure. Defendants MTGLQ
and Suntrust move under Fed. R. Civ. P. 12(b)(1) to dismiss the complaint on
Rocker-Feldman jurisdictional grounds, and in the alternative under Fed. R.
Civ. P. 12(b)(6) to dismiss for failure to state a claim. (ECF nos. 15, 23)
Ms. Edwards asserts claims for improper foreclosure and to vacate the
judgment of foreclosure. She also asserts claims for violations of the Fair Debt
Collection Practices Act, 15 U.S.C.
§ 1692, the Fair Credit Report Act,
A summons was returned executed as to MTGLQ. (ECF no. 12) A
summons was returned unexecuted as to Nationstar. (ECF no. 13) In its motion to
dismiss, SunTrust waived any argument as to improper service. (ECF no. 23-2, p. 7)
1
15 U.S.C.
§
motions to
1681, and common law fraud. For the reasons stated below, the
dismiss will be granted.
Background
a. Factual chronology and procedural history of the state
foreclosure proceedings2
The procedural history and key factual findings pertinent to the state
foreclosure action are as follows:
12th Street,
1. Ms. Edwards purchased the property located at 98 South
Newark, New Jersey 07107 (“the property”) in 2006. She obtained a
mortgage from SunTrust for $284,000.00, which was secured by the
property. The mortgage was recorded on May 31, 2006 in the Essex
County Clerk’s Office. (ECF 23-4, pp. 2-3)
2. SunTrust assigned the mortgage to Mortgage Electronic Registration
Systems, Inc. on May 21, 2007, which subsequently assigned the
mortgage to Nationstar on May 22, 2013. (ECF 23-4, p. 3)
3. On July 9, 2014, Nationstar filed a Residential Mortgage Foreclosure
Complaint with the Superior Court of New Jersey, Essex County (the
“state court”) under Docket No. F-027945-14 (the “foreclosure
action”), naming Ms. Edwards as a defendant. (ECF no. 15-2, pp. 2-7)
McCabe, Weisberg & Conway, P.C. filed the complaint on behalf of
Nationstar; at some point RAS Citron, LLC., took over the
representation.
4. On June 23, 2016, the state court entered a final judgment of
foreclosure and issued a Writ of Execution. (ECF no. 15-3, pp. 2-6).
ged
5. On February 7, 2017, the Sheriff of Essex County sold the mortga
property at a public auction.3 Nationstar was the successful bidder
In summarizing the proceedings in the state court foreclosure action, I
attached
rely on copies of the pleadings and orders filed in that proceeding, which are
motion
to the complaint and defendants’ papers. They are properly considered on this
to dismiss. See Section 11, infra.
3
The complaint in this federal action, filed on August 30, 2017, seeks to
action.
enjoin the sheriffs sale. That relief was already moot as to the filing of this
2
2
and subsequently assigned its bid to MTGLQ. RAS Citron, LLC
submitted the deed to the county register. (ECF no. 1-2, pp. 8-16, 2022); (ECF 23-4, pp. 2-3)
6. On August 1, 2017, MTGLQ filed an ejectment action with the state
court in relation to the property. (ECF no. 1-2, pp. 5-7)
7. On August 29, 2017, the state court issued a Writ of Possession,
ordering any occupants of the property on the third floor to surrender
possession to MTGLQ. (ECF no. 23-4, pp. 106-07)
8. On October 4, 2017, the state court issued another Writ of
Possession, ordering any occupants of the property on the second
floor to surrender possession to MTGLQ. (ECF no. 23-4, pp. 109-10)
9. On January 11, 2018, the state court in the foreclosure action issued
orders staying eviction until February 7, 2018 and then April 1, 2018.
(ECF no. 15-7)
b. Allegations of the complaint
On August 30, 2017, Ms. Edwards filed a complaint in federal court.
(ECF no. 1.) The complaint asserts claims for improper foreclosure because
the debt had been released and discharged; seeks to vacate the judgment of
foreclosure; and claims that she moved to dismiss the foreclosure in March
2016 and did not receive notification of the February 2017 Sheriff’s sale until
December 25, 2016. She also asserts claims for violations of the Fair Debt
Collection Practices Act, 15 U.S.C. 1692, the Fair Credit Report Act,
15 U.S.C.
§ 1681, and common law fraud.
H.
Standard on a motion to dismiss
Defendants have moved to dismiss the complaint for lack of jurisdiction,
citing the Rocker-Feldman doctrine (see infrn). Rule 12(b)(1) governs
Ms. Edwards did not pay the requisite filing fee, and did not file an
application for in fonna pauperis status until October 19, 2017. (ECF no. 4) That
application was granted and the complaint was deemed filed on October 23, 2017.
(ECF no. 5)
4
3
jurisdictional challenges to a complaint. These may be either facial or factual
v.
attacks. See 2 Moore’s Federal Practice § 12.301%] (3d ed. 2007); Mortensen
First Fed. Sat’. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977). A facial
challenge asserts that the complaint does not allege sufficient grounds to
establish subject matter jurisdiction. Lincoln Ben. Life Co. v. AEILife, LLC, 800
424,
F.3d 99, 105 (3d Cir. 2015); Iwanowa v. Ford Motor Co., 67 F. Supp. 2d
438 (D.N.J. 1999). A court considering such a facial challenge assumes that
if
the allegations in the complaint are true, and may dismiss the complaint only
le
it nevertheless appears that the plaintiff will not be able to assert a colorab
—
claim of subject matter jurisdiction. Iwanowa, 67 F. Supp. 2d at 438; Cardio
Med. Assoc., Ltd. v. Crozer—Chester Med. Cti., 721 F.2d 68,75 (3d Cir. 1983).
one that
As to a facial jurisdictional attack, then, the standard is similar to the
applies to an ordinary motion to dismiss under Rule 12(b)(6).
As it happens, defendants have also moved to dismiss the complaint for
failure to state a claim, pursuant to Fed. R. Civ. P. l2(b)(6). Rule 12(b)(6)
a
provides for the dismissal of a complaint, in whole or in part, if it fails to state
claim upon which relief can be granted. The defendant, as the moving party,
bears the burden of showing that no claim has been stated. Animal Science
2011).
Products, Inc. v. China Minmetals Corp., 654 F.3d 462, 469 n. 9 (3d Cir.
aint are
For the purposes of a motion to dismiss, the facts alleged in the compl
accepted as true and all reasonable inferences are drawn in favor of the
plaintiff. New Jersey Carpenters & the Trustees Thereof v. Tishman Con-st. Corp.
of New Jersey, 760 F.3d 297, 302 (3d Cir. 2014).
Federal Rule of Civil Procedure 8(a) does not require that a complaint
to
contain detailed factual allegations. Nevertheless, “a plaintiff’s obligation
provide the ‘grounds’ of [his or hen ‘entitlement to relief requires more than
of
labels and conclusions, and a formulaic recitation of the elements of a cause
Thus,
action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
right
the complaint’s factual allegations must be sufficient to raise a plaintiffs
Id.
to relief above a speculative level, so that a claim is “plausible on its face.”
4
at 570; see also West Run Student Hous. Assocs., LLC u. Huntington Nat. Bank,
712 F.3d 165, 169 (3d Cir. 2013). That facial-plausibility standard is met
“when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556).
it
While “[tjhe plausibility standard is not akin to a ‘probability requirement’
...
asks for more than a sheer possibility.” Iqbal, 556 U.S. at 678.
With allegations of fraud, “a party must state with particularity the
circumstances constituting fraud or mistake,” although “intent, knowledge,
and other conditions of a person’s mind may be alleged generally.” Fed. R.
Civ. P. 9(b); see also U.S. cx rel. Moore & Co., P.A. v. Majestic Blue Fisheries,
LLC, 812 F.3d 294, 307 (3d Cir. 2016) (“A plaintiff alleging fraud must therefore
support its allegations ‘with all of the essential factual background that would
accompany the first paragraph of any newspaper stoiy—that is, the who, what,
when, where and how of the events at issue.”’ (quoting In re Rockefeller Ctr.
Props., Inc. Securities Litig., 311 F.3d 198, 217 (3d Cir. 2002))). In doing so, “a
party must plead [its] claim with enough particularity to place defendants on
notice of the precise misconduct with which they are charged,” United States cx
rd. Petras v. Simparel, Inc., 857 F.3d 497, 502 (3d Cir. 2017) (internal
quotations and citations omitted).
Moreover, where the plaintiff, like Ms. Edwards, is proceeding pro se,5
the complaint is “to be liberally construed,” and, “however inartfully pleaded,
must be held to less stringent standards than formal pleadings drafted by
lawyers.” Erickson z,’. Pardus, 551 U.S. 89, 93-94 (2007). Nevertheless, “pro se
litigants still must allege sufficient facts in their complaints to support a
A person named Debbie Littles purports to represent Ms. Edwards, at
various times completing forms and signing documents for Ms. Edwards under a
“POA” (presumably, power of attorney). (ECFno. 1, p.5; ECFn0. 1-1, p.2; ECFno.
17-1, p. 5; ECF no. 17-4, p. 1) Debbie Littles has not entered an appearance in this
case and may not be an attorney at all. (An online search of njcourts.gov yields no
results for “D Littles” in the New Jersey roll of admitted attorneys.) She therefore is not
entitled to represent Ms. Edwards as a client. See Local Civil Rule 101.1.
5
claim.” Mala u. Crown Bay Marina, Inc., 704 F.3d 239, 245 (3d Cir. 2013); see
also Thakar v. Tan, 372 F. App’x 325, 328 (3d Cir. 2010).
Y
:4.
plaintiff and the defendant roffer
In connection with the motions, both
materials extrinsic to the complaint. These consist of records of the state court
foreclosure proceeding. These are cited, not for the facts contained therein, but
n
only in order to establish the nature and scope of prior proceedings betwee
the parties, and the rulings of the state court. Such records are subject to
judicial notice. See £ Cross Overseas Agencies, Inc. v. Wah Kwong Shipping
Grp. Ltd., 181 F.3d 410, 426-27 (3d Cir. 1999) (“[OJn a motion to dismiss, we
may take judicial notice of another court’s opinion—not for the truth of the
t
facts recited therein, but for the existence of the opinion, which is not subjec
to reasonable dispute over its authenticity.”); see generally Fed. R. Evid. 201.
Even setting aside judicial notice, certain records of the foreclosure
action may be considered without converting a facial Rule 12(b)(1) challenge
into a factual one, or a Rule 12(b)(6) motion into one for summary judgment.
the
See Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014) (“[Ajn exception to
general rule is that a ‘document integral to or explicitly relied upon in the
complaint’ may be considered ‘without converting the motion to dismiss into
one for summary judgment.’”) (quoting In re Burlington Coat Factory Sec. Litig.,
l.
114 F.3d 1410, 1426 (3d Cir. 1997)); Pension Ben. Guar. Corp. v. White Conso
Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993).°
Indeed, where a complaint cites or is based on particular documents,
such
whether or not they are physically attached, a defendant may submit and rely on
are (1) that the plaintiff,
documents in its motion to dismiss. The reasons for the rule
having relied on the document, cannot claim unfair surprise; and (2) the plaintiff
See
cannot base a claim on a document while shielding the document itself from view.
ce of the complaint is based on
Burlington, 114 F.3d at 1426. Here, the very substan
the mortgage and the alleged impropriety of the state foreclosure proceedings. The
sure
mortgage, and the publicly filed pleadings and rulings of the court in those foreclo
proceedings, may therefore be considered.
6
6
Ill.
Analysis
a. Rooker-Feidman
Defendants first move, pursuant to Fed. R. Civ. P. 12(b)(1), to dismiss the
complaint for lack of jurisdiction under the Rocker-Feldman doctrine.
A federal district court does not sit to hear appeals from state court
judgments. Under the Rocker—Feldman doctrine, lower federal courts are
barred from hearing federal claims that (1) were previously adjudicated in state
court or (2) are inextricably intertwined with a state court decision. See District
of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 482 (1983); Rocker v.
Fidelity Trust Co., 263 U.S. 413, 416 (1923); Guarino v. Larsen, 11 F.3d 1151,
1156-57 (3d Cir. 1993); Great Western Mining & Mineral Co. v. Fox Rothschild
LLP, 615 F.3d 159, 166 (3d Cir. 2010). The first alternative, actual
adjudication, requires little explication. As for the second, a federal claim is
“inextricably intertwined” with a prior state court decision if granting “the relief
requested in the federal action requires determining that the state court
decision is wrong or would void the state court’s ruling.” FOCUS u. Allegheny
County Court of Common Pleas., 75 F.3d 834, 839-40 (3d Cir. 1996).
Rcoker-Feldman thus operates to prevent a disgruntled party in state
court litigation from collaterally attacking the results of that litigation in federal
court, claiming constitutional or other error. See B.S. v. Somerset Cnty., 704
F.3d 250, 259-60 (3d Cir. 2013). In other words, Rocker-Feldman bars “cases
brought by state-court losers complaining of injuries caused by state-court
judgments rendered before the district court proceedings commenced and
inviting district court review and rejection of those judgments.” Exxon Mobil
Co?p. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005).
A final judgment of foreclosure was entered in the state court on
June 23, 2016. (ECF no. 23-4, pp. 16-17) That state court judgment well
preceded the filing of this federal action on August 30, 2017. (ECF no. 1)
Ms. Edwards submitted a complaint without the requisite filing fee on
August 30, 2017, and it was officially deemed filed on October 23, 2017, when her
7
The question now is whether the claims in this federal court action are
inextricably intertwined with that state foreclosure proceedings. The state
foreclosure proceedings and judgment necessarily involved the following
the
;
essential components: the validity of the mortgage; the alleged default and
622
right to foreclose. See Great Falls Batik v. Pardo, 263 N.J. Super. 388, 394,
t to
A.2d 1353, 1356 (Ch. Div. 1993). Ms. Edwards alleges error with respec
that
these components of the state foreclosure proceedings and seeks relief
would void the state foreclosure judgment. Therefore, to grant the relief
to
Ms. Edwards seeks would necessarily “require an inferior federal court
determine that the New Jersey court’s judgment was erroneous and would
1077,
foreclose implementation of that judgment.” E.B, u. Vemiero, 119 F.3d
cably
1091 (3d Cir. 1997). Consequently, the issues must be regarded as inextri
F.3d 228,
intertwined. See FOCUS, 75 F.3d at 840; see also In re Madera, 586
ion of
232 (3d Cir. 2009) (considering a post-foreclosure federal claim for resciss
would
a mortgage and describing how a finding that no valid mortgage existed
ention of
eliminate the basis for the prior state foreclosure judgment in contrav
the Rooker-Felciman doctrine).
Federal actions following state mortgage foreclosure judgments have
that
frequently been the subject of Rooker-Feidman challenges on the ground
to
the two were inextricably intertwined, and that the federal complaint seeks
ff seeks
undermine or reverse the basis for the foreclosure. Typically, the plainti
an order
rescission of the mortgage, reversal of the judgment of foreclosure, or
sed
barring a sheriff’s sale. Such federal claims have routinely been dismis
under Rooker-Feldman. See In re Madera, 586 F.3d at 232 (claim for
state
rescission); In re Knapper, 407 F.3d 573, 581 (3d Cir. 2005) (claim that
court in foreclosure action lacked personal jurisdiction); Laychock v. Wells
ted on
Fargo Home Mortg., 399 F. App’x. 716, 718 (3d Cir. 2010) (action predica
92 (3d
“wrongful foreclosure”); Ayres-Fountain u. E. Sau. Bank, 153 F. App’x 91,
tion
application to proceed infonnapauperis was granted. See n.4, supra. The distinc
ent.
is immaterial; both dates are well after the June 23, 2016 foreclosure judgm
8
Cir. 2005) (barring post-foreclosure federal claim for rescission of mortgage and
laint
damages); Robinson v. Porges, 382 F. App’x 133, 135 (3d Cir. 2010) (“comp
‘demands the return of his home as his own property with free and clear deed
and title,’ as well as actual and punitive damages. Such an award could only be
made by reviewing and rejecting the state court judgments.”); Moncrief v. Chase
Manhattan Mortgage Corp., 275 F. App’x 149, 153 (3d Cir. 2008) (barring a
claim for “redress” of state court judgment in a foreclosure action).
Under these precedents, Ms. Edwards’s claims are barred. They share a
central feature: all seek a declaration, or rely on the premise, that the
foreclosure judgment was invalid. They implicate the validity of the proceedings
leading to the foreclosure, as well as the foreclosure judgment itself. Thus, the
complaint is fatally intertwined with the state court judgment. It is dismissed
for lack of jurisdiction.
In the unlikely event that some of the claims pass the Rooker-Feldman
threshold, I consider the alternative grounds for dismissal and turn from the
Rule 12(b)(1) component of the motion to the Rule 12(b)(6) component.
b. Fair Debt Collection Practices Act (“FDCPA”)
Ms. Edwards claims that her injuries result from “FDCPA violations.”
(ECU’ no. 1). The FDCPA prohibits certain unfair or deceptive practices in
e
connection with the collection of a debt. See 15 U.S.C. § 1692. These includ
misleading communications, harassing collection tactics, and the like. “To
prevail on an FDCPA claim, a plaintiff must prove that (1) 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
al
debt.” Jensen a Pressler & Pressler, 791 F.3d 413, 417 (3d Cir. 2015) (intern
citation omitted).
Ms. Edwards has not alleged any facts that support her allegation of a
A
FDCPA violation, nor has she pointed to any particular provision of the FDCP
that defendants may have violated. (ECU’ no. 1) Even with the liberal
9
construction afforded pro se plaintiffs, Ms. Edwards’s barebones assertion that
there was an FDCPA violation fails to state a claim upon which relief can be
granted. See Thakar,372 F. App5c at 328 (“While a litigant’s pro se status
requires a court to construe the allegations in the complaint liberally, a litigant
is not absolved from complying with Twombly and the federal pleading
requirements merely because s/he proceeds pro se.”) (internal citation
omitted).
c. Fair Credit Report Act (“FCRA”)
The same can be said of Ms. Edwards’s FCRA allegation, in which she
simply lists “FCRA violations” as one of the alleged injuries she sustained
without providing any further detail. The FCRA “requirefs] that consumer
reporting agencies adopt reasonable procedures for meeting the needs of
commerce for consumer credit, personnel, insurance, and other information in
a manner which is fair and equitable to the consumer, with regard to the
confidentiality, accuracy, relevancy, and proper utilization of such information”
and aims to protect consumers from the transmission of inaccurate
information about them. 15 U.S.C. § 168 1(b); see Cortez v. Trans Union, LLC,
617 F.3d 688, 706 (3d Cir. 2010).
Here, the complaint “fails to allege facts from which a reader, even
construing the complaint liberally, could glean the essential elements of the
claim.” Gittens u. Sterling Jewelers Inc., No. 15-CV-5872 (KM), 2016 WL
828098, at *2 (D.N.J. Feb. 29, 2016) (dismissing conclusorv FCRA claim of pro
se litigant for failing to meet the pleading requirements of Twombly and Iqba.
Ms. Edwards has not pointed to any consumer report from a consumer
reporting agency that may have been problematic. Without more than a bare
claim of “FCRA violations,” and without any plausible inferences that could be
drawn in Ms. Edwards’s favor with respect to the necessary underlying factual
allegations, the complaint fails to state a claim for an FCRA violation.
10
d. Common law fraud
Ms. Edwards additionally asserts a claim for common law fraud. (ECF
no. 1). The elements of fraud are (1) a material misrepresentation of present or
past fact (2) with knowledge of its falsity (3) with the intention that the other
party rely thereon (4) and which resulted in reasonable reliance by plaintiff
Jewish Ctr. of Sussex County v. Whale, 86 N.J. 619, 432 A.2d 521, 524 (1981).
The complaint does not identify or describe any misrepresentation, let
alone a material one, nor does it make factual assertions regarding any of the
other elements for fraud. This claim therefore fails to meet the usual standards
of Fed. R. Civ. p. 8, described in Section II, supra, and afodiori fails to satisfy
the heightened pleading standard for a fraud claim under Rule 9(b). The
complaint does not “allege the date, time [or] place of the alleged fraud or
otherwise inject precision or some measure of substantiation into [the) fraud
allegation.” Frederico z’. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007).
To the extent the complaint may be construed as alleging an independent
claim of fraud, then, it is dismissed.8
e. Other defendants
The complaint was originally received on August 30, 2017, and deemed
filed on October 23, 2017. Although summonses issued (ECF no. 8), there is no
indication on the docket that defendants SunTrust or McCabe, Weisberg &
Conway, P.C. were served. The 90-day deadline to do so expired long ago, and
there has been no request for an extension. The complaint is therefore
dismissed as against those two defendants. See Fed. R. Civ. P. 4(m).
A summons was returned executed as to defendant RAS Citron LLC.
(ECF no. 11) RAS Citron has not answered or otherwise moved in response to
the complaint; on the other hand, no default has been sought or entered. The
grounds for dismissal are primarily based on the court’s lack of subject matter
jurisdiction over the complaint as a whole, and are not particular to any
I do not reach other grounds asserted by the motions to dismiss, such as
collateral estoppel.
S
11
equally to RAS
defendant. Those jurisdictional grounds necessarily apply
jurisdiction even in
Citron, and a court is obliged to consider its subject matter
Ethic. v. Doyle,
the absence of a motion. See Mt. Healthy City Sch. Dist. Bd. of
Unlimited, Inc.,
429 U.S. 274, 278, 97 S. Ct. 568, 572 (1977); Nesbit v. Gears
347 F.3d 72, 76—77 (3d Cir. 2003).°
all
The dismissal is therefore deemed final as to all claims and
defendants.
IV.
Conclusion
nos. 15, 23) to
For the reasons set forth above, defendants’ motions (ECF
lack of subject
dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(l) for
GRANTED without
matter jurisdiction under the Rooker-Feidman doctrine are
relief that
prejudice. To the extent that any claims, or parts of claims, seek
are nevertheless
does not require negation of the foreclosure judgment, they
state a claim.
dismissed pursuant to Fed. R. Civ. P. 12(b)(6) for failure to
Dated: September 5, 2018
Kevin McNulty
United States District Judge
es claims
The alternative basis for dismissal under Rule 12(b)(6) involv
(See Section IlI.b—d)
that do not bear any discernible connection to RAS Citron LLC.
12
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