D'ALESSANDRO v. OCWEN LOAN SERVICING, LLC

Filing 15

MEMORANDUM AND ORDER that Defendants' 7 Motion to Dismiss is denied. Signed by Judge Peter G. Sheridan on 5/23/2018. (mps)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

DENISE D’ALESSANDRO

)

Plaintiff

Civil Action No:
18-cv-01290 (PGS)(LHG)
MEMORANDUM AND
ORDER

v.
OCWEN LOAN SERVICING, LLC,

De/ndant.

This matter comes before the Court on Defendant’s motion to dismiss Count VI of the
Complaint, alleging Defendant’s violation of the Consumer Fraud Act, N.J.S.A. 56:8-2, pursuant
to Fed. R. Civ. P. 12(b)(6).

Plaintiff Denise D’Alessandro obtained a mortgage loan evidenced by a note on March 11,
2015 (hereinafter collectively referred to as the “Loan”). (Compl. ¶8). She defaulted on the Loan
on December 1, 2013. (Compl. ¶20). Defendant Ocwen Loan Servicing, LLC (“Ocwen”) is the
servicer of the Loan. (Compi. ¶3).
On November 5, 2014, Wells Fargo Bank, N.A., as Indenture Trustee under the Indenture
relating to IMPAC CMB Trust Series 2005-6, initiated foreclosure proceedings against Plaintiffs
home based upon a mortgage loan in the Superior Court of New Jersey, Monmouth County,
Chancery Division, (Id. ¶2 1).

1

•

On August 2, 2017, Metrick sent correspondence to Ocwen captioned “Notice of
Error under 12 CFR 1024.35(b)(1 1)” (NOE/RFI #1). Additionally he requested
information related to the servicing of the Loan including a copy of any call notes
from Ocwen’s August 2, 2017 telephone call with Metrick and explanation as to
why a paystub was requested for a future date. (Id. ¶30, Ex 5).

•

On August 10, 2017 Ocwen sent written notice to Plaintiff thorugh Metrick stating
that the Application was still incomplete (“Incomplete Notice #4). Ocwen
requested: “Borrower’s paystubs for the second job were not received. Please
provide two consecutive paystubs dated in the last 90 days that reflect YTD income
figures.” (Id. ¶32, Ex. 7)

•

On August 11, 2017, Plaintiff, through Metrick, sent the paystubs requested
through Incomplete Notice 3 and 4 to Ocwen. Ocwen acknowledged receipt. (Id.
¶J33-34, Ex. 8).

•

On August 14, 2017, Ocwen sent written notice to Plaintiff stating that the
Application was still incomplete (“Incomplete Notice #5). Ocwen requested
“Borrower’s paystubs for the second job.” (Id. ¶35, Ex. 9)

•

On August 15. 2017, Ocwen sent written notice to Plaintiff stating that the
Application was still incomplete (“Incomplete Notice #6). Ocwen asked for
additional information regarding Plaintiffs employment. (Id. ¶36, Ex. 10).

•

On August 17, 2017 Metrick spoke with Ocwen’s representative and was advised
as to the specific information that was required to satisfy Incomplete Notice #6. (Id.
37).

•

Accordingly, on August 22, 2017, Plaintiff, through Metrick, sent correspondence
to Ocwen captioned “Request for Information Pursuant to Section 1024.36 pf
Regulation X Notice of Error Pursuant to Section 1 024.35(b)”(NOE/RFI #2) (Id.
38 Ex 11). Metrick attached a letter of explanation providing all of the information
requested by the representative. (Id. 39). In this letter, Plaintiff also requested
information related to the servicing of the Loan, including a copy of any call notes
from Ocwen’s August 17, 2017 telephone call to Metrick and an updated payoff
quote for the Loan. (Id. ¶40).

•

On August 23, 2017, Plaintiff, through Metrick, sent correspondence to Ocwen
captioned “Notice of Error under 12 CFR 1024.35(b)(1 1)” (NOE/RFI #3) stating
that Ocwen committed an error related to the servicing of the Loan by requesting
pay stubs through Incomplete Notice #4 that were confirmed with the representative
on August 17, 2017 via telephone to have already been in Ocwen’s possession prior
to sending such letter and for then requesting the same paystubs yet against less that
48 hours later. (Id. 42, Ex. 13). Plaintiff also enclosed a copy of pay stubs with the
NOE which had been previously submitted. (Id. ¶43).

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•

On August 24, 2017, Ocwen sent correspondence in response of NOE/RFI #1
though which Ocwen allegedly refused to provide the requested call notes claiming
that “we are unable to process your request to provide [Plaintiff] with the call
transcripts, as these are for internal purposes only.” (Id. ¶45).

•

On August 24, 2017, Ocwen sent written notice to Plaintiff stating that the
application was incomplete (Incomplete Notice #7). In this notice Ocwen requested
the same information that were requested in Notices #3,4,5, which the
representative confirmed Ocwen was in possession of in August 23, 2017. (Id. ¶46,
Ex. 13).

•

On August 25, 2017, Ocwen sent written notice to Plaintiff stating that the
application was still incomplete (Incomplete Notice # 8). In this notice Ocwen
requested the same information they had requested in notices # 3, 4, 5, 7. (Id. ¶47
Ex. 13)

•

On August 30, 2017 Ocwen sent written notice to Plaintiff stating that the
Application was still incomplete (Incomplete Notice #9) Ocwen requested the same
information requested in notices #3, 4, 5, 7 and 8. (Id. ¶50 Ex. 19)

•

On September 8, 2017, Ocwen sent written notice to Plaintiff stating that the
Application was still incomplete (Incomplete Notice #10) requesting additional
information regarding “the Profit and Loss statement provided.” (Id. ¶51, Ex. 20).
Plaintiff supports that the documents requested were received on June 23, 2017.
(Id. ¶52).

•

On September 15, 2017, Ocwen sent correspondence in response to NOE/RFI #2
and #3 thought which Ocwen again refused to provide the call notes requested. (Id.
53, Ex. 21). Ocwen also stated that they received financials on
August 23, 2017, August 24 and August 29, “[h]owever the borrower’s paystubs
were still missing.” (Id. ¶54, Ex. 20). Plaintiff supports that the financials consisted
of paystubs. (Id.)

•

On September 20, 2017, Ocwen sent a copy of the payoff quote of the Loan that
Plaintiff requested on August 22, 2017 via NOE #2. (Id. ¶55, Ex. 22)

•

On September 22, 2017, Ocwen sent written notice to Plaintiff stating that the
Application was still incomplete (“Incomplete Notice #11”) requesting the same
information as Notice #10. (Id. ¶56, Ex. 23).

•

On September 25, 2017, Plaintiff, through Metrick, submitted a letter of
explanation providing the requested clarification for the profit and loss statement.
(Id. ¶57, Ex. 24).

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•

On September 26, 2017, Ocwen sent another notice that the Application was
incomplete. (“Incomplete Notice #12) requesting the same information that were
requested in notice #10 and 11. (Id. ¶59, Ex. 25).

•

On October 3, 2017, Plaintifi through Metrick. sent correspondence to Ocwen
captioned “Notice of Error under 12 CFR §1024.35(b)(1 1)—DUAL TRACKING”
(“NOE/RFI #4”), stating that Ocwen committed an error related to the servicing of
the Loan by failing “to exercise reasonable diligence in obtaining the documents
and information necessary to complete the review of the [Plaintiffs Application]
in violation of 12 C.F.R. §1024.41(b)” and demanding that Ocwen immediately
perform a review of the Application. (Id. ¶60, Ex. 26).

•

On October 17, 2017. Ocwen sent written notice to Plaintiff stating that the
Application was still incomplete (“Incomplete Notice #13”) and requesting the
same information as Incomplete Notice #10, 11, and 12: (Id. ¶62,Ex 28).

•

On or about October 19, 2017, Plaintiff, through Metrick, sent correspondence to
Ocwen captioned “Request for Information Pursuant to 12 CFR § 1024.36 and
Notice of Error under C.F.R. § 1024.35” (NOE/RFI #5) stating that Ocwen
committed an error related to the servicing of the Loan by being “in possession of
a completed application for more than 30 days” and having failed to review the
same. (Id. 63, Ex. 29). Plaintiff, through Metrick, again advised Ocwen that on
October 12, 2017 and October 19, 2017, the representative stated that Ocwen had
been in possession of any and all requested information to complete the Application
since prior to September 8, 2017 (Id. ¶64).

•

On October 25, 2017, Ocwen sent correspondence in response to NOE/RFI #4 and
directly contradicting the previous statements by the representative (Id. ¶66, Ex.
31).

•

On November 8, 2017 Ocwen sent correspondence stating that the Application was
still incomplete (“Incomplete Notice #14”). Ocwen, through Incomplete Notice
#14, requested the same information as Notice #10, 11, and #12 :“Please send a copy
of your most recent signed and dated quarterly profit and loss statement
documenting your self-employment income.(Additional information is needed
regarding the Profit and Loss statement provided. (Id. ¶67, Ex. 32).

•

Plaintiff alleges that to the time the Complaint was filed, Ocwen still refused to
review Plaintiffs application for loan modification. (Id. ¶68).

On January 30, 2018, Plaintiff filed a Complaint against Ocwen alleging the following
counts: (1) Violations of 12 C.F.R. §1024.41(b); (2) violation of 12 C.F.R. 1024. 24(c); (3)

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Violations of 12 C.F.R. § 1024.36; (4) Violation of 12 C.F.R. § 1024.3 5(e); (5) 15 U.S.C. 1692; and
(6) Violation of the NJCFA, N.J.S.A. §56:8-2.
Defendant now moves for the dismissal of the New Jersey Consumer Fraud Act NJCFA)
claim (Count VI), pursuant to Fed. R. Civ. P. 12(b)(6).
II.
“Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the
claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of
what the

.

.

.

claim is and the grounds upon which it rests.’ Bell Ati. Corp. v. Twombly, 550 U.S.

544. 555, 127 5. Ct. 1955, 167 L. Ed. 2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47,
78 S. Ct. 99, 2 L. Ed. 2d 80 (1957)).
Rule 9(b) provides that “[i]n alleging fraud or mistake, a party must state with particularity
the circumstances constituting fraud or mistake.” The requirements of Rule 8 apply even where
the Rules command particularity, as in the pleading of fraud under Rule 9(b). In re Westinghouse
Sec. Litig., 90 F.3d at 702. Therefore, where alleging fraud, Plaintiffs must state the circumstances
constituting fraud with particularity, but must still endeavor to make their allegation clear and
concise. “Pleadings containing collectivized allegations against ‘defendants’ do not suffice.”
Naporano Iron & Metal Co. v. Am. Crane Corp., 79 F. Supp. 2d 494, 511 (D.N.J. 1999).
On a motion to dismiss for failure to state a claim, the “defendant bears the burden of
showing that no claim has been presented.” Hedges v. United States, 404 F.3d 744, 750 (3d Cir.
2005). A district court is to conduct a three-part analysis when considering a Rule I 2(b)(6) motion
to dismiss. See A/Ialleus v. George, 641 F.3d 560, 563 (3d Cir. 2011). “First, the court must ‘tak[el
note of the elements a plaintiff must plead to state a claim.” Id. (quoting Ashcroft v. Iqbal, 556
U.S. 662, 675, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009)). Second, the court must “review[] the
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complaint to strike conclusorv allegations.” Id. ‘The court must accept as true all of the plaintiffs
well-pleaded factual allegations and “construe the complaint in the light most favorable to the
plaintiff.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (citation omitted). In
doing so, the court is free to ignore legal conclusions or factually unsupported accusations that
merely state “the-defendant-unlawfully-harmed-me.” Iqbal, 556 U.S. at 678 (citing Twombly, 550
U.S. at 555). Finally, the court must determine whether “the facts alleged in the complaint are
sufficient to show that the plaintiff has a ‘plausible claim for relief.’ Fowler, 578 F.3d at 211
(quoting Jqbal, 556 U.S. at 679). A facially plausible claim “allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Id. at 210 (quoting Iqbal, 556
U.S. at 678).
Within the consumer fraud count, Plaintiff alleges that Ocwen implemented an
inconceivable commercial practice by its “knowing concealment, suppression and omission of
material facts” regarding the loan modification application.
More specifically Plaintiff alleges that “Ocwen’s actions, in continuously disregarding
federal guidelines requiring them to exercise reasonable diligence in reviewing the Plaintiffs loan
modification application, is an unconscionable act under the Consumer Fraud Act.” (Id. ¶159).
“Ocwen’s actions, in refusing to review the Application and causing Wells Fargo to continue
prosecuting the Foreclosure against the Plaintiff, is [another] unconscionable act under the
Consumer Fraud Act.” (Id. ¶160). As to damages suffered as a result of Defendant’s conduct,
Plaintiff states that she “has been caused to suffer from severe emotional distress and severe
anxiety

.

.

.“

As a result, Plaintiff seeks treble damages. (Id. at ¶162). In order to prevail on a

consumer fraud claim, “I) unlawful conduct by defendant; 2) an ascertainable loss by plaintiff;
and 3) a causal relationship between the unlawful conduct and the ascertainable loss.” Petinga v.

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Sears, Roebuck & Co., No. 05-5166, 2009 U.S. Dist. LEXIS 48693 (D.N.J. June 9, 2009) (citing
Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 557, 964 A.2d 741 (2009) (citations omitted)).
On review of the first factor, unlawful conduct is defined as “affirmative acts, knowing
omissions, and regulation violations.” N.J.S.A

§

56:8-2. That statute reads:

The act, use or employment by any person of any unconscionable commercial
practice, deception, fraud, false pretense, false promise, misrepresentation, or the
knowing, concealment, suppression, or omission of any material fact with intent
that others rely upon such concealment, suppression or omission, in connection
with the sale or advertisement of any merchandise or real estate, or with the
subsequent performance of such person as aforesaid, whether or not any person has
in fact been misled, deceived or damaged thereby, is declared to be an unlawful
practice; provided, however, that nothing herein contained shall apply to the owner
or publisher of newspapers, magazines, publications or printed matter wherein such
advertisement appears, or to the owner or operator of a radio or television station
which disseminates such advertisement when the owner, publisher, or operator has
no knowledge of the intent, design or purpose of the advertiser.
“[T]he reach of the [NJCFA] is intended to encompass only consumer oriented commercial
transactions involving the marketing and sale of merchandise or services.” Id. (citing Del Tub v.
Nail’! Republican Senatorial Co,’nm., 591 A.2d 1040, 1042 (N.J. Super. Ct. Ch. Div. 1991)).
Defendant argues that Plaintiff never bought any merchandise or real estate from Ocwen, meaning
that Plaintiff, as a debtor, is unable to bring a claim against Ocwen under the NJCFA. However,
the Courts have interpreted this provision broadly.

Previously it has been held that

“misrepresentation regarding mortgage modifications fall within the NJCFA since they are made
in connection with the ‘subsequent performance’ of a mortgage under a statute.” Block v. Seneca
Mortg. Servicing, 221 F. Supp. 3d 559, 594 (D.N.J. 2016); In Laughlin v. Bank ofArn., N.A., this
Court held that
Considering the ‘broad legislative intent evident from the language and the policy
goals of the [NJICFA,’ it would be disingenuous to hold that a servicer would be
free from the ramifications of violating the NJCFA if it engaged in unlawful
conduct while participating in a loan modification. Just as fraud, deception, and
other similar types of conduct are not justified in forming a loan, so are they not
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permitted in attempts to modify a loan. Therefore, a loan servicer’s business
practices during the loan modification process are covered by the CFA.
2014 U.S. Dist. LEXIS 79441, 2014 WL 2602260, at *6 (D.N.J. June 11, 2014) (quoting
Lemelledo v. BenefIt Mgmt. Corp.. 150 N.J. 225, 264, 696 A.2d 546 (1997)). Although this
proposition is an exceptionally broad reading, this claim survives based upon Ocwen’s alleged
actions during a loan modification process.
The showing of an unreasonable business practice also entails a lack of good faith, fair
dealing, and honesty.” “The capacity to mislead is the prime ingredient of all types of consumer
fraud.” Cox v. Seat-s Roebuck & Co., 647 A.2d 454, 462 (N.J. 1994). Mere dissatisfaction does not
constitute consumer fraud.” In re Van Holt, 163 F.3d 161, 168 (3d Cir. 1998). Here, the loan
modification actions, as described in the Complaint, may possibly show a pattern to delay or thwart
a process. The facts at a minimum could show a lack of good faith.
The second prong of the consumer fraud standard is to show an ascertainable loss. The
Plaintiff, as noted above, asserts a claim for emotional distress. The Consumer Fraud Act does not
authorize such damages. Generally, ascertainable loss is limited to “money as property, real or
personal.” N.J.S.A. 56:8-19. Cole v. Laughrey Funeral Home, 376 N.J. Super. 135, 144 (App.
Div. 2005). Here, a fair reading of the Complaint demonstrates that she has paid for legal fee,
postage, and other expenses, in pursuing the loan modification process. This is adequate to show
an ascertainable loss at this juncture.
The Last point is that Plaintiff must show a causal connection between the unconscionable
practice and the ascertainable loss. Here the attorney’s fees and costs associated with the ongoing
loan modification process and the failure to straighten out the process are causally related.
Plaintiff alleged unconscionable acts, and ascertainable damages, though limited to fees
and expenses, which were accrued in pursuing the loan modification, thus establishing a

9

connection. Plaintiff has provided sufficient facts to survive a motion to dismiss specifically as to
Count VI.
It is to be noted that even if Plaintiff ultimately failed to establish an ascertainable loss, and
recover treble damages, she “could nonetheless demonstrate a violation of the CFA and, by doing
so, recover attorney’s fees and costs.” Watkins v. DineEquily, Inc., 591 Fed. Appx. 132, 141 (3d
Cir. 2014). Rornano v. Galaxy Toyota, 399 N.J. Super. 470, 945 A.2d 49, 58 (N.J. Super. Ct. App.
Div. 2007) (“Even though plaintiff unsuccessfully proved the existence of an ascertainable loss,
and was unable to recover treble damages, plaintiff can recover reasonable attorney’s fees and costs
because defendant committed an unlawful practice.”). Cox

i’.

Sears Roebuck & Co., 138 N.J. 2,

454, 647 A.2d 454 (1994) (“For the sake of completeness we add that a consumer-fraud plaintiff
can recover reasonable attorneys’ fees, filing fees, and costs if that plaintiff can prove that the
defendant committed an unlawful practice, even if the victim cannot show any ascertainable loss
and thus cannot recover treble damages.”). For those reasons, the Court finds that the motion to
dismiss Count VI should be denied at this time.
ORDER
THIS MATTER having been opened to the Court by Defendants’ motions to dismiss
Plaintiffs Second Amended Complaint [ECF No. 7] for failure to state a claim; and the Court
having fully considered the submissions in support thereof, and any opposition thereto; and having
considered the arguments of the parties; and for good cause shown;
ITlSonthis )-S dayof1kc,20l8,
ORDERED that Defendants’ motions to dismiss (ECF No. 7) is DENIED.

PETER G. SHERIDAN, U.S.D.J.

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