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Skypala v. Mortgage Electronic Registration Systems

September 1, 2009


The opinion of the court was delivered by: Irenas, Senior District Judge


This case is substantially similar to two other cases recently addressed by this Court: Rivera v. Washington Mutual, et al., --- F. Supp. 2d ----, 2009 WL 2001175 (D.N.J. July 10, 2009) (Irenas, S.D.J.) and Martino v. Everhome Mortgage, et al., --- F. Supp. 2d ----, 2009 WL 2365160 (D.N.J. July 31, 2009) (Irenas, S.D.J.). Plaintiff (and putative class representative) Edward Skypala, like the Riveras and Martinos, asserts that the defendants, a mortgage lender, its servicer, and its law firm, charged and collected "various fees not authorized by the loan documents or applicable law" and "overcharging defaulting borrowers of residential mortgages." (Compl. ¶ 14.) While this case was filed several months before Rivera and Martino, it was nonetheless filed by the same attorneys and the vast majority of the allegations are the same.*fn1

Presently before the Court are Defendants Mortgage Electronic Registration Systems, Inc. ("MERS") and M&T Mortgage Corp.*fn2 ("M&T")'s Motion to Dismiss, and Defendant Zucker, Goldbreg, and Ackerman*fn3 ("Zucker")'s Motion to Dismiss. The Court has reviewed the submissions of the parties, and for the reasons set forth below, Defendants' Motions will be granted.


As the Court has noted in the two aforementioned cases, the factual allegations in this Complaint, along with the others filed by Plaintiff's counsel, are sparse, and at times contradictory.*fn4 Nonetheless, the Court will endeavor to distill the factual history based on Plaintiff's Complaint and the exhibits attached thereto.

Plaintiff executed the mortgage and note at issue in this case on June 6, 1976. (Compl. ¶ 5.) The loan was originated by Blau Mortgage Company, a non-party to this suit. (Id.) On September 12, 2006, M&T sent Plaintiff a Notice of Intention to Foreclose. (Id. ¶ 6, Id. Ex. A.) Plaintiff alleges that M&T was the servicer of the loan on behalf of MERS.*fn5 (Id. ¶ 7.) Plaintiff then requested a payoff statement, which was sent by Zucker, on behalf of M&T and MERS, on November 27, 2006. (Id. ¶ 8, Id. Ex. B.) The payoff amount, due by December 27, 2006, included $111,017.07 payable to M&T and $2449.00 payable to Zucker. (Id. ¶ 10, Id. Ex. B.) The $2449.00 was comprised of $945.00 in fees, and $1504.00 in costs. (Id.) Plaintiff alleges that M&T participated in the preparation of the payoff statement. (Id. ¶ 9.)

Plaintiff further alleges that he paid the sums demanded in full on or about November 14, 2006.*fn6 (Id. ¶ 11.) Defendants then discharged the mortgage (Id. ¶ 13), and no foreclosure action was filed. (Id. ¶ 12.)

The Complaint asserts the following claims against M&T and MERS, all arising out of the alleged unauthorized fees it charged and various other overcharges: (1) breach of contract; (2) negligence; (3) breach of duty of good faith and fair dealing; (4) unjust enrichment;*fn7 (5) "unfair and deceptive assessment and collection of fees"; (6) violation of the Fair Foreclosure Act, N.J. Stat. Ann. § 2A:50-57(b)(3) ("FFA"); (7) violation of New Jersey Court Rules 4:42-9(a)(4) and 4:42-10(a); (8) violation of the New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56:8-2 et seq. ("NJCFA"); and violation of New Jersey's Truth In Consumer Contracts, Warranty and Notice Act ("TCCWNA"), N.J. Stat. Ann. § 56:12-14 et seq.*fn8 Zucker is a Defendant to claims 2 through 5 only.*fn9

Plaintiff proposes three statewide classes identical to those proposed in Martino and Rivera, except that the proposed class defendants are MERS (Compl. ¶ 20), M&T (Id. ¶ 21), and Zucker (Id. ¶ 22). See Martino, 2009 WL 2365160, at *3 n.9 (noting that the proposed statewide classes are virtually identical to those in Rivera).

As previously noted, M&T, MERS, and Zucker presently move to dismiss the Complaint in its entirety. For the reasons that follow, their Motions will be granted.


Federal Rule of Civil Procedure 12(b)(6) provides that a court may dismiss a complaint "for failure to state a claim upon which relief can be granted." In order to survive a motion to dismiss, a complaint must allege facts that raise a right to relief above the speculative level. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007); see also Fed. R. Civ. P. 8(a)(2). While a court must accept as true all allegations in the plaintiff's complaint, and view them in the light most favorable to the plaintiff, Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008), a court is not required to accept sweeping legal conclusions cast in the form of factual allegations, unwarranted inferences, or unsupported conclusions. Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). The complaint must state sufficient facts to show that the legal allegations are not simply possible, but plausible. Phillips, 515 F.3d at 234. "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." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).


As done in Rivera and Martino, the Court begins with the wrongful conduct alleged in the Complaint:

At all times relevant hereto, MERS, M&T and Zucker have engaged in a uniform scheme and course of conduct to inflate their profits by charging and collecting various fees not authorized by the loan documents or applicable law. The components of this scheme involve common tactics in which the Defendants have been overcharging defaulting borrowers of residential mortgages in the following manner, including but not limited to:

a) they charged attorneys fees and costs in excess of those actually incurred; Specifically, in the instant case no complaint had been filed. $910 represents the total fee which would have been charged for the foreclosure proceeding by Zucker.

b) costs of suit charged to the Plaintiff and class were excessive in violation of statute and court rule; Specifically, R 4:42-10 limits the taxable costs for searches at a minimum of $75 to 1% of the amount due but in no case more than $500. In the instant case the amount allowed would be $500.

c) recording fees charged were excessive of the actual fee; i.e. to file and discharge a lis pendens the fee was $60.00

d) Overcharging for the service of process. The statutes and court rules limit the reimbursement to a ...

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