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Tubbs v. North American Title Agency

June 5, 2009

ARTHUR R. AND JANE M. TUBBS, INDIVIDUALLY AND ON BEHALF OF OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
NORTH AMERICAN TITLE AGENCY, INC., NORTH AMERICAN TITLES GROUP, INC., AND INDEPENDENCE ABSTRACT & TITLE AGENCY, DEFENDANTS.



The opinion of the court was delivered by: Honorable Joseph E. Irenas

OPINION

Presently before the Court is Defendants' Motion to Dismiss the Amended Complaint (Docket No. 17). The Court heard oral argument on April 21, 2009, and has reviewed the submissions of the parties. For the reasons set forth below, Defendants' Motion will be granted.*fn1

I.

Arthur R. and Jane M. Tubbs (collectively, "Plaintiffs"), individually and on behalf of others similarly situated, have filed suit against North American Title Agency, Inc. ("Title Agency"), North American Title Group, Inc. ("Title Group"), Title Agency's parent company, and Independence Abstract and Title Agency ("Independence"), Title Agency's predecessor (collectively, "Defendants").*fn2 This case arises from fees charged by Title Agency when Plaintiffs refinanced their residential mortgages.

Prior to the refinancing, Plaintiffs had two existing mortgage loans with Wachovia Bank ("Wachovia"). (Am. Compl. ¶¶ 20-22.) Title Agency acted as the closing agent when Plaintiffs refinanced their mortgages with American Mortgage, Inc., on April 22, 2008. (Id. ¶ 23.) Among other fees and expenses paid at closing, Title Agency charged Plaintiffs $150 for "Release Recording Fees: Release." (Id. ¶¶ 25-28; id. Ex. E.)*fn3 While Plaintiffs paid Title Agency the "Release Recording Fees: Release" at closing, (Id. ¶ 30), Title Agency did not actually record the release of the mortgages with the Camden County Clerk's office.*fn4 (Id. ¶ 32.) Rather, Wachovia prepared and recorded the necessary documents with the Camden County Clerk's office, and passed through to the borrower the $40 per mortgage recording fee charged by the County. (Id. ¶ 34-35; id. Ex. F.)*fn5

Plaintiffs allege that Title Group was aware of Title Agency's actions and allowed them to continue. (Id. ¶ 38.) Furthermore, Plaintiffs allege that Independence engaged in identical practices prior to its acquisition by Title Group. (Id. ¶ 39.)

On June 25, 2008, Plaintiffs filed a Complaint against Title Agency and Independence, alleging violations of the Real Estate Settlement Practices Act ("RESPA"), 12 U.S.C. § 2601, et seq., the New Jersey Consumer Fraud Act ("CFA"), N.J. Stat. Ann § 56:8-1, et seq., and common law claims for breach of contract, breach of implied covenant of good faith and fair dealing, breach of fiduciary duty, and unjust enrichment. Defendants filed a motion to dismiss on August 28, 2008. In response, Plaintiffs filed an Amended Complaint on September 19, 2008.

Plaintiffs' Amended Complaint contains five counts. Count I alleges violations of RESPA against all Defendants for charging settlement fees for which no services were performed, based on the $150 "Release Recording Fees: Release."*fn6 Count II alleges violation of the CFA, against all Defendants. Count III alleges common law breach of contract against Title Agency and Independence only. Count IV alleges common law breach of implied covenant of good faith and fair dealing against Title Agency and Independence only. Count V alleges common law unjust enrichment against all Defendants. Defendants filed the instant Motion to Dismiss Plaintiffs' Amended Complaint on November 3, 2008.

II.

Rule 12(b)(6) of the Federal Rules of Civil Procedure provides that a court may dismiss any part of a complaint for "failure to state a claim upon which relief can be granted." In considering a Rule 12(b)(6) motion, the Court accepts as true all well pleaded factual allegations contained in the complaint and draws all reasonable inferences from such allegations in the light most favorable to the plaintiff. See Worldcom, Inc. v. Graphnet, Inc., 343 F.3d 651, 653 (3d Cir. 2003). To survive a Rule 12(b)(6) motion, "a civil plaintiff must allege facts that 'raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).'" Victaulic Co. v. Tieman, 499 F.3d 227, 234 (3d Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007) (internal citations omitted)). In addition to the allegations contained in the Amended Complaint, the Court may consider documents attached to or specifically referenced in the Amended Complaint, and matters of public record, without converting the motion to dismiss into one for summary judgment. See Mele v. Federal Reserve Bank of N.Y., 359 F.3d 251, 255 n.5 (3d Cir. 2004).

III.

Count I of Plaintiffs' Amended Complaint alleges that Defendants violated RESPA by charging a settlement fee for which no services were performed. Section 8(b) of RESPA states:

(b) Splitting charges

No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally ...


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