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Zebrowski v. Wells Fargo Bank

September 17, 2009

JAMES AND MELISSA ZEBROWSKI, PLAINTIFFS,
v.
WELLS FARGO BANK, N.A., AS SUCCESSOR IN INTEREST TO WELLS FARGO HOME MORTGAGE, DEFENDANT.



The opinion of the court was delivered by: Rodriguez, J.

OPINION

This matter comes before the Court on a Motion for Judgment on the Pleadings [Dock. Entry No. 20] filed by Defendant Wells Fargo Bank, N.A. (hereinafter "Defendant") on April 3, 2009. Plaintiffs James and Melissa Zebrowski (hereinafter "Plaintiffs") filed their Amended Complaint [Dock. Entry No. 17] on February 13, 2009. Defendant filed its Answer [Dock. Entry No. 18] on March 6, 2009. In its Motion for Judgment on the Pleadings, Defendant then sought dismissal of Counts VI ("Abuse of Process"), VII ("Violation of Civil Rights"), VIII ("Use of Process"), and IX ("Frivolous Action") of Plaintiffs' Amended Complaint pursuant to Federal Rule of Civil Procedure 12(c). (See Am. Compl. ¶¶ 72-89.) Plaintiffs opposed the motion through their Response [Dock. Entry No. 22] filed on April 20, 2009, asking the Court to instead grant Plaintiffs leave to amend their Amended Complaint. The Court heard oral argument on the motion on July 22, 2009, and the record of that proceeding is incorporated here.

I. Jurisdiction

Jurisdiction over this civil action is premised on federal question jurisdiction. See 28 U.S.C. § 1331. Federal question jurisdiction exists in "all civil actions arising under the Constitution, laws, or treaties of the United States." Id. Here, Plaintiffs pursue federal claims under 15 U.S.C. § 1681 (Count I: "Fair Credit Reporting Act"), 42 U.S.C. § 1983 (Count VI: "Violation of Civil Rights"), and 12 U.S.C. § 2602 (Count XI:*fn1 "Real Estate Settlement Procedures Act"), each of which is sufficient to confer federal question jurisdiction. (See Am. Compl. ¶¶ 60-95.) The Court then has supplemental jurisdiction over the remaining state-law claims. See 28 U.S.C. § 1367(a).

Plaintiffs alternatively premise federal jurisdiction on diversity jurisdiction.*fn2 See 28 U.S.C. § 1332. This jurisdictional basis is deficient on the face of the Amended Complaint, as Plaintiffs do not explicitly allege their citizenship, but instead state that they reside in New Jersey. (See Am. Compl. ¶ 4.) Residence is not equivalent to citizenship. See Robertson v. Cease, 97 U.S. 646, 648 (1878). In order for a federal court to properly hear a case by diversity jurisdiction, the plaintiff must affirmatively allege the diverse citizenship of the opposing parties. See 28 U.S.C. § 1332(a). Not only is Plaintiffs' actual citizenship absent from the Amended Complaint, but Defendant's citizenship is also in dispute. Plaintiffs allege that South Carolina is Defendant's state of incorporation and principal place of business. (See Am. Compl. ¶ 5.) Defendant, in its Answer, denies Plaintiffs' allegation of its citizenship, stating that it is "organized under the laws of the United States" and "its charter designates South Dakota as the location of its main office." (See Answer ¶ 5.) This assertion, however, fails to make clear Defendant's actual state of incorporation or principal place of business. Nonetheless, a proper allegation of diversity of citizenship is unnecessary to justify federal jurisdiction, as this case is properly in federal court under federal question jurisdiction.

II. Factual Background

In ruling on a motion for judgment on the pleadings, the court must accept as true all factual allegations in the plaintiff's complaint. See DiCarlo v. St. Mary Hosp., 530 F.3d 255, 262 (3d Cir. 2008) (internal citation omitted). Plaintiffs commenced this action in this Court for damages allegedly incurred from Defendant's inaccurate mortgage services. (See Am. Compl. ¶ 1.) Plaintiffs' Complaint sets forth the following facts.

Plaintiffs procured a mortgage and note from Defendant on December 13, 2002. (Id. ¶ 8.) Defendant currently holds the loan documents. (Id.) The documents prescribed that Defendant would pay Plaintiffs' real estate taxes from an escrow account. (Id. ¶ 10.) Defendant failed to timely pay the taxes in 2003 and 2005. (Id. ¶ 11.) As a result, Plaintiffs received delinquency notices, were charged late fees, and were forced to pay a sum to avoid a threatened tax sale of their property. (Id. ¶¶ 12-13.)

Upon Plaintiffs' request, Defendant granted Plaintiffs an escrow deletion so that Plaintiffs could pay their own taxes. (Id. ¶ 14.) When Plaintiffs attempted to make their tax payment around April 2006, the township refused to accept the payment, as Defendant had already made three payments in March 2006 without Plaintiffs' permission. (Id. ¶¶ 15-18.) Defendant assured Plaintiffs that the matter would be investigated and easily solved. (Id. ¶¶ 20-21.) Plaintiffs attempted to make their monthly payment to Defendant around June 2006, but Defendant informed Plaintiffs that no payments would be accepted until an investigation was completed to determine the exact amount Plaintiffs would reimburse Defendant for the tax payment. (Id. ¶¶ 23-26.)

About a month later, a representative named Mahn notified Plaintiffs that $6,017.98 would be due to reimburse Defendant for the tax payment, in addition to the scheduled monthly payment of $1,307.07. (Id. ¶¶ 27-28.) Mahn assured Plaintiffs that Defendant would not report any negative credit information to credit agencies, or place late fees or penalties on their account. (Id. ¶ 29.) Further, Mahn stated that Plaintiffs should disregard any loan modification paperwork they receive, as their account would be current once the payments were received. (Id. ¶¶ 30-31.)

In accordance with these instructions, Plaintiffs sent the reimbursement payment to Defendant around July 15, 2006, and the monthly payment around August 4, 2006. (Id. ¶¶ 33-34.) Plaintiffs received a letter from Defendant around July 28, 2006 regarding a loan modification, dated July 10, 2006 and postmarked July 20, 2006. (Id. ¶ 36.) The due date on the letter was also July 20, 2006. (Id.) Around August 9, 2006, Plaintiffs were served with foreclosure paperwork. (Id. ¶ 39.) About a week later, Plaintiffs received letters from Defendant dated August 2, 2006 that the loan modification had been cancelled and foreclosure proceedings would begin. (Id. ¶¶ 40-41.)

In an attempt to resolve the matter, Plaintiffs spoke to Defendant's representative, a supervisor named Revel, who advised Plaintiffs that Defendant had wrongfully paid the next quarter's taxes. (Id. ¶¶ 42-44.) Revel further advised that she would resolve the tax issue, send Plaintiffs proof of payments, and restore Plaintiffs' responsibility to pay the taxes. (Id. ¶ 45.) Although another representative indicated that Defendant had not received Plaintiffs' monthly payment and reimbursement, Plaintiffs' bank indicated that Defendant did in fact receive the funds. (Id. ¶¶ 46-47.)

In August 2006, Defendant filed a foreclosure action against Plaintiffs. (Id. ¶ 49.) Defendant provided Plaintiffs with a new payoff figure in October 2006. (Id. ¶ 51.) In order to save their home from foreclosure, Plaintiffs paid $18,000, a higher amount than the payoff figure Defendant provided Plaintiffs in July 2006. (Id. ¶¶ 52-54.) The new amount included attorney fees, court costs, interest and/or late fees. (Id. ¶ 55.) Defendant did not remove the negative credit reporting information from Plaintiffs' account. (Id. ¶ 57.) As a result of Defendant's actions, Plaintiffs allege that they suffered the mortgage foreclosure, emotional distress, credit damage, financial loss, and inconvenience/embarrassment, among other injuries. (Id. ¶ 59.)

III. Standard of Review

Motion for Judgment on the Pleadings

After the pleadings are closed, a party may move for judgment on the pleadings. See Fed. R. Civ. P. 12(c). In order to be granted a judgment on the pleadings, the moving party must clearly establish that there are no material issues of fact and that the moving party is entitled to judgment in its favor as a matter of law. See DiCarlo, 530 F.3d at 259. In considering a motion for judgment on the pleadings, the court applies the same standard as that for a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). See Turbe v. Gov't of the V.I., 938 F.2d 427, 428 (3d Cir. 1991).

Under Rule 12(b)(6), a complaint (or specific counts within a complaint) should be dismissed if the alleged facts, taken as true, fail to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6); In re Warfarin Sodium Antitrust Litig., 214 F.3d 395, 397-98 (3d Cir. 2000) (internal citation omitted). The defendant, as the moving party, bears the burden of proving that the plaintiff did not state a claim for relief in the complaint. See Hedges v. U.S., 404 F.3d 744, 750 (3d Cir. 2005) (internal citation omitted). While "detailed factual allegations" are not necessary, "a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of a cause of action's elements will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007) (internal citation omitted). The factual allegations must sufficiently "raise a right to relief above the speculative level on the assumption that all of the complaint's allegations are true (even if doubtful in fact)." Id. at 555 (internal citations omitted).

The court, in determining whether or not a claim should be dismissed, examines only the facts alleged in the complaint and its attachments, excluding other parts of the record.*fn3 See Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994). Further, the court accepts as true the well-pleaded allegations in the complaint, but does not accept "unsupported conclusory statements." See DiCarlo, 530 F.3d at 262-63. Relevant evidence and reasonable inferences drawn from the complaint are ...


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