WAGONER v. EVERHOME MORTGAGE, INC. et al

Filing 42

OPINION. Signed by Chief Judge Jose L. Linares on 05/15/2018. (sms)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

LINDA WAGONER,
Plaintiff,

Civil Action No.: 17-8081 (JLL)
OPINION

v.
EVERHOME MORTGAGE INC., et at.,

Defendants.

LINARES. Chief District Judge.
This matter comes before the Court by way of Defendant TIAA, FSB U/b/a EverBank f/k/a
EverBank’s Motion to Dismiss Plaintiffs First Amended Complaint (ECF No. 28), Defendants
Federal Home Loan Mortgage Corp. and New Penn Financial, LLC d/b/a Shellpoint Mortgage
Servicing’s Motion to Dismiss Plaintiffs First Amended Complaint (ECF No. 31), and Defendant
Ditech Financial LLC’s Motion to Dismiss Plaintiffs First Amended Complaint. (ECF No. 33).
All three of these Motions to Dismiss are brought pursuant to Federal Rule of Civil Procedure
12(b)(6). Plaintiff has submitted a unified Opposition to said Motions (ECF No. 37), which all
Defendants have separately replied to. (ECF Nos. 38, 39, 40). The Court decides this matter
without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons set forth
below, the Court grants the Motions to Dismiss.

I.

BACKGROUND’

A. The Parties

Plaintiff, who is a New Jersey resident, brings this multi-count action in connection with
her home mortgage. (See generally Plaintiffs First Amended Complaint, ECF No. 25 (“FAC”)
3). The jurisdictional basis for this action is federal question jurisdiction, under 2$ U.S.C.
(FAC

¶

§

¶

1331.

1). Defendant TIAA f/k/a EverBank (“TJAA”) is a Florida corporation that regularly

conducts business in the State of New Jersey. (FAC

¶J

5-6). Defendant federal Home Loan

Mortgage (“Freddie Mac”) has a principal place of business in Virginia, while Defendant Ditech
maintains its headquarters in Minnesota. (FAC

¶

6-7). Both of these Defendants regularly

conduct business in New Jersey. (Id.). Finally, Defendant New Penn is a Virginia limited liability
company, that does business under the name Sheilpoint Mortgage Servicing, and regularly
conducts business in the State of New Jersey.
B. Pertinent Facts

In 2006, Plaintiff obtained a home loan from non-party First Horizon Home Loan
Corporation. (FAC

¶

10). Plaintiff executed a mortgage and note in connection with said home

loan. (Id.). At some unknown point, Plaintiff defaulted on the loan. (FAC
Plaintiffs laon was serviced by Defendant TIAA. (FAC
Freddie Mac was the owner of the loan. (FAC

¶

¶

¶J

11). Thereafter,

12). During this time, Defendant

13).

In an effort to keep her home, Plaintiff applied for a loan modification through Defendant
TIAA. (FAC

¶

14). Defendants TIAA and Freddie Mac approved Plaintiffs loan modification

application, and placed Plaintiff on a “Trial Period Plan,” which was to start on June 1, 2009.
(FAC ¶J15). Plaintiff consented to the tenns of the Trial Period Plan and signed an agreement to

This background is derived from Plaintiffs first Amended Complaint, which the Court must accept as true at this
stage of the proceedings. See A/ston v. Countmvide fin. Coip.. 585 f.3d 753, 758 (3d Cir. 2009).

2

that effect. (FAC ¶16). Under said agreement, Plaintiff was required to make three consecutive
payments in the amount of$l,265.84 on orbefore June 1, 2009, July 1,2009, and August 1,2009.
(FAC

¶

17). Successfully

making

these three payments under the agreement would result in a

complete approval of the loan modification application. (F AC

¶

18). Plaintiff made the three

consecutive payments. (FAC ¶ 19). Despite making said payments, Plaintiff never received a loan
modification agreement. (FAC

¶ 20).

According to Defendant TIAA, the loan modification was

being delayed by the underwriting process. (FAC

Plaintiff continued to make payments of

¶ 21).

$1,265.84 on a monthly basis and paid her mortgage through January 1, 2010. (FAC

¶ 23).

On December 11, 2009, Plaintiff finally received her permanent loan modification offer.
(FAC

¶ 24).

The modification offer stated that it was set to begin on November 1, 2009 and the

first payment under the new loan was due on December 1, 2009. (FAC
the offer by executing permanent loan documents. (FAC
year of the new loan were $1,265.84 per month. (FAC
$1,289.78 per month in April of 2010.

(FAC

¶

29).

¶ 26).

¶ 28).

¶J 25).

Plaintiff accepted

Plaintiffs payments for the first
Plaintiffs payments increased to

In April of 2011, Plaintiffs payments

increased again and the monthly payments became $1,333.18. (FAC

¶

30). Plaintiff presumed

that the increase was normal due to an increase in her annual property taxes. (Id.).
In 2012, Plaintiffs payments decreased to $1,266.14.

(FAC

¶

31).

This reduction

concerned Plaintiff, as she was aware that her taxes had recently increased. (Id.). The reduction
was based on a lower tax-escrow requirement, despite the fact that Defendant TIAA claimed that
Plaintiffs tax escrow was deficient. (Id.). In April 2013, Plaintiffs monthly payments increased
to $1,445.21 per month. (FAC ¶ 32). Defendant TIAA sent correspondence to Plaintiff explaining
that the increase in payment was because her tax escrow account was deficient by $2,670.82. (FAC

¶ 33).

In 2014, Plaintiffs mortgage payments increased again to $1,524.96. (FAC

3

¶ 34).

Thereafter, Plaintiff received a letter on June 18, 2014 advising her that Defendant TIAA
was transferring the servicing of her loan to Defendant Ditech. (FAC

¶ 35).

Defendant Ditech

contacted Plaintiff to advise that she was in default of her loan obligations. (FAC

¶ 37).

Plaintiff

contacted Defendants TIAA and Ditech to resolve the discrepancy and was told that the problem
was told that she had a $3,000.00 tax escrow deficiency. (FAC

¶J 3 9-40).

Additionally, Plaintiff

was never provided with an explanation for the escrow deficiency. (FAC ¶ 46). Shortly thereafter,
Defendant Ditech refused to accept payments from Plaintiff and returned to her $2,685.50. (FAC
Defendant Ditech then instituted a foreclosure action against Plaintiff in New Jersey

¶J 48-49).

State Court. (FAC

¶

50). The matter was resolved on October 16, 2015, when the State Court

dismissed Defendant Ditech’s foreclosure complaint. (FAC

¶ 52-53).

On June 27, 2017, Plaintiff received a letter from Defendant Ditech advising that her loan
was now being serviced by Defendant New Penn, doing business as Sheilpoint. (FAC
letter also advised Plaintiff that her monthly payment was $1,524.96. (FAC

¶ 61).

¶ 60).

That

Defendant New

Penn sent Plaintiff a “Validation of Debt Notice” on June 29, 2017, which provided the following
information: 1) the principal balance on the loan was $258,093.56; 2) the totaL amount of accrued
unpaid interest was $23,298.48; 3) the escrow advances totaled $21,605.06; 4) a total amount of
unpaid late fees and related charges was $4,123.53; 5) the total amount of the outstanding debt
was $307,120.63; and 4) Defendant New Penn now owned the loan. (FAC

¶ 63).

On July 5, 2017,

Plaintiff sent Defendant New Penn a “Qualified Written Request/Notice of Error” indicating errors
on her account pursuant to 12 U.S.C.
15 U.S.C.

§

1692g. (fAC

¶ 65).

§

2605(e)(1)(3) and a Validation of Debt notice pursuant to

According to Plaintiff, these documents placed Defendant New

Penn on notice that she was not in default and that the amount being sought against Plaintiff was
wrong. (FAC

¶ 6$).

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Defendant New Penn, through its servicing arm Shelipoint, sent Plaintiff a mortgage
statement on July 19, 2017. (F AC

¶ 73).

Therein, Shelipoint explained the “contractual due date

was June 1, 2014, and indicate[d] an amount due of $59,065.35,” that Plaintiff had an escrow
balance of $21,605.06, and a property inspection was conducted on July 10, 2017. (FAC

¶

74).

On August 8, 2017, Shellpoint sent Plaintiff a letter advising that it was conducting further
investigation “due to the complex nature of the matter.” (FAC

¶

72).

On August 9, 2017,

Sheilpoint responded to Plaintiffs Validation of Debt notice, wherein it reiterated the same
information that Defendant Ditech had previously stated to Plaintiff. (FAC

¶ 79).

On August 19,

2017, Sheilpoint sent Plaintiffs counsel a mortgage statement which provided the following
information: 1) Plaintiffs monthly mortgage payment was $1,679.14; 2) the total amount overdue
at that time was $59,078.35; 3) the total amount due was $60,757.49; 4) the contractual due date
was June 1, 2014; and 5) the escrow balance was S22,002.49. (FAC ¶j 82-83).
Said mortgage statement also advised that Shellpoint had paid Plaintiffs quarterly real
estate taxes.

(FAC

¶

$4).

However, Plaintiff was paying her real estate taxes and property

insurance directly to the responsible entities. (FAC

¶ 85).

the cost for the aforementioned property inspection. (FAC
sent Plaintiff a Notice of Intent to Foreclose. (FAC

¶

The mortgage statement also included

¶ $6).

On August 25, 2017, Shellpoint

$7). The Notice of Intent to Foreclose

contained the following information: 1) the account was past due for failure to remit payment due
on June 1, 2014; 2) Plaintiff had missed 39 payments resulting in an outstanding balance of
$54,928.82; 3) Plaintiff had incurred late fees in the amount of $923.17; 4) Plaintiff was liable for
attorneys’ fees in the amount of $3,200.36; 5) Plaintiff was liable for $26.00 stemming from the
property inspection; 6) Plaintiffs escrow balance was short $22,002.49; and 7) the total amount
due at the time of the Notice of Intent to Foreclose was $59,078.35. (FAC

5

¶ $9).

Sheilpoint sent an additional mortgage statement in September of 2017. (FAC ¶ 93). That
mortgage statement provided the following: 1) Plaintiffs monthly payments were $1,679.14; 2)
Plaintiff was liable for additional fees and charges in the amount of$ 103.08; 3) Plaintiffs overdue
balance on the mortgage was now $60,770.49; 4) the total amount due at the time of the mortgage
statement was $62,552.71; 5) Plaintiff incurred two additional late charges totaling $51.54; and 6)
Plaintiff was liable for an inspection charge in the amount of $13.00. (FAC

¶ 94).

Against this backdrop, Plaintiff filed this action seeking to recover damages for the
following causes of action: Count I
(“FDCPA”); Count II
III

—

—

—

Violation of the Fair Debt Collection Practices Act

Violation of the Real Estate Settlement Procedures Act (“RE SPA”); Count

Breach of Contract; Count IV

Count V

—

—

Violation of the New Jersey Consumer Fraud Act (“NJCfA”);

Violation of the Implied Covenant of Good Faith and F air Dealing; Count VI

Intentional Infliction of Emotional Distress; and Count VII
II.

—

Fraud. (FAC

—

¶J 97-2 14).

LEGAL STANDARD

To withstand a motion to dismiss for failure to state a claim, “a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.”
Ashcrofi v. Iqbctl, 556 U.S. 662, 67$ (2009) (quoting Bell At!. Coip. v. Twombly, 550 U.S. 544,
570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 67$ (citing Twomblv. 550 U.S. at 556). “The plausibility standard is not akin to
a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted
unlawfully.” Id.
To determine the sufficiency of a complaint under Twombly and Iqbat in the Third Circuit,
the court must take three steps: first, the court must take note of the elements a plaintiff must plead

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to state a claim; second, the court should identify allegations that, because they are no more than
conclusions, are not entitled to the assumption of truth; finally, where there are well-pleaded
factual allegations, a court should assume their veracity and then determine whether they plausibly
give rise to an entitlement for relief See Connetty v. Lane Constr. Coip., 809 F.3d 780, 787 (3d
Cir. 2016) (citations omitted). “In deciding a Rule 12(b)(6) motion, a court must consider only
the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly
authentic documents if the complainant’s claims are based upon these documents.” Mayer v.
Beticliick, 605 f.3d 223, 230 (3d Cir. 2010).
III.

ANALYSIS

A. FDCPA Claim-

“To prevail on an FDCPA claim, a plaintiff must prove that (I) 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 {FDCPA] 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) (citation omitted). The purpose of the FDCPA is “to eliminate abusive debt collection
practices by debt collectors, to insure that those debt collectors who refrain from using abusive
debt collection practices are not competitively disadvantaged, and to promote consistent State
action to protect consumers against debt collection abuses.” 15 U.S.C.

§ 1692(e).

When Congress passed the legislation in 1977, it found that “[a]busive debt collection
practices contribute to the number of personal bankruptcies, to marital instability, to the loss of
jobs, and invasions of individual privacy.” Id.

§ 1692(a). “As remedial legislation, the FDCPA

irtust be broadly construed in order to give full effect to these purposes.” Caprio v. Healthcare

The Court notes that FAC does not contain any fDCPA allegations or claims against Defendant TIAA. and, therefore,
this analysis is not applicable to it.

2

7

Revenue Recovery Gip., LLC’, 709 f.3d 142, 148 (3d Cir. 2013). Accordingly, the Court must
“analyze the communication giving rise to the FDCPA claim ‘from the perspective of the least
sophisticated debtor.” Kaymark v. Bank ofAm., N.A., 783 F.3d 168, 174 (3d Cir. 2015) (quoting
Rosenatt v. Unifitnd Corp., 539 f.3d 218, 221 (3d Cir. 2008)). “[W]hile the least sophisticated
debtor standard protects naive consumers, ‘it also prevents liability for bizarre or idiosyncratic
interpretations of collection notices by preserving a quotient of reasonableness and presuming a

basic level of understanding and i’illingness to read ii’ith care.” Brown v. Card Sen. Ctr., 464
F.3d 450, 454 (3d Cir. 2006) (quoting Wilson v. Quadramed Corp., 225 F.3d 350, 354 (3d Cir.
2000)) (emphasis added). The Third Circuit has held that even the least sophisticated consumer is
“bound to read collection notices in their entirety.” Compuzano—Burgos v. Midland Credit Mgmt.,

Inc., 550 F.3d 294, 298-99 (3d Cir. 2008) (emphasis added).
Here, Plaintiff has sufficiently alleged two of the four elements needed in order to assert a

prima fade FDCPA claim.

(FAC

¶J 98-99).

However, Plaintiff fails to allege that the related

“debt” is one that is covered under the FDCPA. (See generally FAC). Moreover, and more
importantly, Plaintiff has failed to identify any violative conduct on behalf of Defendants.
According to

Plaintiff,

Defendants

violated the

FDCPA because

the various

correspondence she received from Defendants throughout the loan modification process were
directly sent to her, despite having counsel, and contained “wrong” infornation. (FAC

¶

100).

For example, Plaintiff asserts the June 27, 2017 letter violated the FDCPA because it “falsely
stat[ed] that the payment due date/default date [was] June 1, 2014, and that the monthly amount
due for June 1, 2014 [was] $ 1,524.96. (FAC

¶ I 00(a)(ii).

Another example of Defendants’ alleged

FDCPA violations stems from July 1, 2017 correspondence, which, Plaintiff asserts, “provid[ed]
false information in regard to the escrow balance and amount due.” (FAC

8

¶

100(c)(ii)). In total,

Plaintiff alleges that 14 pieces of Defendants’ correspondence violated the FDCPA, but never
actually explains what was wrong with the correspondences. (FAC

¶

100).

The Court finds that Plaintiff has failed to state a prima fcicie FDCPA claim against any
Defendant. First, the various correspondence sent to Plaintiff were done so pursuant to Federal
and State laws and regulations. As Defendants Freddie Mac and New Penn correctly note, periodic
billing statements must be sent to a borrower under the Truth in Lending Act (“TILA”), 15 U.s.c.

§

1601, et. seq. TILA explicitly requires “[a] servicer

...

[to] provide the consumer, for each

billing cycle, aperiodic statement” and that said statement contain specific information. 12 C.F.R.

§

1026.41(d)(2)(i)(iii). Said statements must also include “the amount of the outstanding principal

balances.” Id.; see also 12 C.F.R.
under TILA. 12 C.F.R.

§

§

1026.41(d)(7)(i)-(ii). These period statements are mandatory

1026.41. Defendants were also required, by New Jersey law, to send

Plaintiff the Notice of Intent to Foreclose. See N.J.S.A. 2A:50-56. The Notice of Intent to
Foreclose is also mandatory and must be given “30 days in advance of such action.” N.J.S.A.
2A:50-56(a).

Hence, Defendants cannot be liable for fDCPA violations for sending Plaintiff

notices that they were required by law to send. See Blocky. Seneca Mortg. Servicing, 221 F. Supp.
3d 559, 589-90 (D.N.J. 2016) (finding that a plaintiffs FDCPA claim could not lie when the basis
for said claim was a legally required periodic mortgage statement).
Additionally, Plaintiff claims Defendants violated the FDCPA when they directly sent her
correspondence, despite the fact that they knew she was represented by counsel in her previous
foreclosure actions. (Compi.

¶

100). First, Plaintiff never alleges that she was represented by

counsel in connection with her loan modification efforts or any subsequent interactions with
Defendants. Also, as Defendants correctly note, Plaintiff cannot sue for such conduct since it was
her actions that prompted the correspondence from Defendants; i.e. Defendants sent Plaintiff

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correspondence acknowledging receipt of her qualified written request, pursuant to 12 C.f.R.
1024.36. (Compi.

¶

§

100-04). This exact course of conduct has been rejected as a basis to assert

FDCPA claims by Courts in this District. See, e.g., At/en v. LaSalle Bank, NA., 2012 WL I $98612
(D.N.J. May 23, 2012); Cohen v. Am. Credit Bureau, 2012 WL 847429 (D.N.J. Mr. 13, 2013); see
also Lee v. Thomas & Thomas, 109 F.3d 302, 306-07 (6th Cir. 1997). Accordingly, the Court finds
that Plaintiff’s fDCPA claim must be dismissed as she has failed to plead that the subject “debt”
is one that is covered by the FDCPA and has also failed to plead any violative conduct on
Defendants’ behalf
B. RESPA Claim

Count II of Plaintiffs FAC is brought under REPSA, and specifically pursuant to 12 U.S.C.

§

2605(e)(3). (FAC

¶J

105-19). Therein, Plaintiff asserts that she sent Defendants a qualified

written request, to which Defendants did not timely respond. (FAC ¶f 107-10). The section under
which Plaintiff asserts her RESPA claim requires loan servicers to provide borrowers with the
information they requested “or an explanation of why the information requested is unavailable or
cannot be obtained by the servicer[.]” 12 U.S.C.

§

2605(e)(2)(c)(i). However, a “[/]aihtre to

plead actual damages in conjttnction i,vith a RESFA claim will res tilt in its dismissal.” Oliver v.
Bank ofAm., I’LA., 2014 2014 WL 562943, at *3 (D.N.J. Feb. 11,2014) (citing Mercado v. Bank
ofAmerica, 2012 WL 5629749, at *171$ (D.N.J. Nov. 15, 2012)) (emphasis added).
Upon review of Plaintiffs FAC, the Court finds that Plaintiff’s RESPA claim may not
proceed. This is because Plaintiff has failed to plead actnat damages in connection with the alleged
RESPA violation. (See generally FAC

¶JJ

105-19). Rather, Plaintiff generally alleges that “[a]s a

result of the action of Defendants, Plaintiff suffered damages.” (FAC

¶

116). These allegations

are insufficient to meet the damages standard discussed in Oliver. Therefore, Plaintiffs RESPA

10

claim must be dismissed.
C. Common Law Claims
Plaintiffs remaining claims are grounded in state law. (FAC
the remaining claims are: Count III
Count V

—

—

Breach of Contract; Count IV

¶J
—

120-2 14). Specifically,

Violation of the NJCFA;

Violation of the Implied Covenant of Good Faith and F air Dealing; Count VI

Intentional Infliction of Emotional Distress; and Count VII

—

—

fraud. (Id). Where a district court

dismisses all claims over which it has original jurisdiction, it

may, in its

discretion, decline to

exercise supplemental jurisdiction over the remaining state law claims. 28 U.S.C.
Elkadrawy v. Vanguard Grp., Inc., 584 F.3d 169, 174 (3d Cir. 2009).

§

1367(c)(3);

Because this Court has

dismissed Counts I-Il, over which it had original jurisdiction, it declines to exercise supplemental
jurisdiction over Counts hI—Vu. As a result, this Court dismisses Counts Ill, IV, V, VI and VII
for lack of subject matter jurisdiction.
CONCLUSION

IV.

for the aforementioned reasons, all of Defendants’ Motions to Dismiss are granted. An
appropriate Order accompanies this Opinion.

DATED: May, 2018
J

L. LINARES
ief Judge, United States District Court

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