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Oliver v. American Home Mortgage Servicing

November 19, 2009

JOHN W. OLIVER, III, PLAINTIFF,
v.
AMERICAN HOME MORTGAGE SERVICING, INC., DEFENDANT.



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

OPINION

This putative class action case--one of about a dozen similar actions filed in this District--concerns plaintiff's claims that defendant charged excessive attorney's fees and costs in plaintiff's state court foreclosure action. Defendant has moved to dismiss plaintiff's claims for failure to state a claim. For the reasons expressed below, defendant's motion will be granted.

BACKGROUND

On July 30, 2003, plaintiff John Oliver III signed a note and mortgage with Option One Mortgage Corp., on which he subsequently defaulted. On January 3, 2008, Option One Mortgage instituted a foreclosure action against plaintiff in New Jersey Superior Court, Chancery Division. On July 1, 2008, the loan was transferred to defendant American Home Mortgage Servicing, Inc. During the foreclosure proceedings, plaintiff requested a reinstatement quote from defendant, which defendant provided on September 11, 2008. The reinstatement quote requested a total of $31,1550.30, inclusive of attorney's fees of $1,935.00 and costs of $1,518.00. On September 19, 2008, plaintiff paid defendant the full reinstatement amount. According to plaintiff's complaint, however, attorneys for defendant in the foreclosure action prepared another reinstatement quote dated September 26, 2008 which demanded a total of $29,403.48, inclusive of fees and costs of $1,701.18.*fn1 Thereafter, defendant dismissed the foreclosure with prejudice and discharged the mortgage and lis pendens.*fn2

Plaintiff now claims that defendant demanded, and was paid, fees in violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., New Jersey statutes and court rules. Specifically, he contends that he paid $3,453.00 in attorney's fees and costs when only $1,701.18 were due. He purports to bring these claims on his behalf and on behalf of similarly situated individuals who have also paid these allegedly excessive fees.*fn3

Defendant has moved to dismiss plaintiff's claims on several bases. Plaintiff has opposed defendant's motion.

DISCUSSION

A. Jurisdiction

Plaintiff has brought his claims pursuant to the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., as well as under New Jersey state law. This Court has jurisdiction over plaintiff's federal claim under 28 U.S.C. § 1331, and supplemental jurisdiction over plaintiff's state law claims under 28 U.S.C. § 1367.

B. Analysis

Defendant has moved to dismiss all claims in plaintiff's complaint on several bases, but primarily on the basis that his claims are barred by New Jersey's entire controversy doctrine. This Court recently dismissed essentially identical claims in Coleman v. Chase, Civ. A. No. 08-2215 (NLH/JS) pursuant to the doctrine, and the Court will do the same in this case.

As described in the Coleman Opinion, the fundamental principle of New Jersey's entire controversy doctrine, codified in Rule 4:30A of the New Jersey Rules of Civil Procedure*fn4 and applicable in federal court, Bennun v. Rutgers State University, 941 F.2d 154, 163 (3d Cir. 1991), is that "the adjudication of a legal controversy should occur in one litigation in only one court," and "is a reflection of the constitutional unification of the state courts and the comprehensive jurisdiction vested in the Superior Court established under our Constitution, which recognized the value in resolving related claims in one adjudication so that 'all matters in controversy between parties may be completely determined.'" Mystic Isle Development Corp. v. Perskie & Nehmad, 662 A.2d 523, 529 (N.J. 1995) (quoting N.J. Const., art. VI, § 3, ¶ 4).

The entire controversy doctrine serves three fundamental purposes: "(1) the need for complete and final disposition through the avoidance of piecemeal decisions; (2) fairness to parties to the action and those with a material interest in the action; and (3) efficiency and the avoidance of waste and the reduction of delay." DiTrolio v. Antiles, 662 A.2d 494, 502 (N.J. 1995). It is meant to constrain a plaintiff from "withhold[ing] part of a controversy for separate litigation even when the withheld component is a separate and independently cognizable cause of action." Paramount Aviation Corp. v. Agusta, 178 F.3d 132, 137 (3d Cir. 1999).

In determining whether successive claims constitute one controversy for purposes of the doctrine, the central consideration is whether the claims "ar[o]se from related facts or the same transaction or series of transactions" as the state court claims. Fields v. Thompson Printing Co., 363 F.3d 259, 265 (3d Cir. 2004). (quoting DiTrolio, 662 A.2d at 502 (1995)). The Supreme Court of New Jersey has explained that it is a "commonality of facts, rather than commonality of issues, parties or remedies that defines the scope of the controversy." DiTrolio, 662 A.2d at 503. It is the knowledge of the existence of a cause of action during the first proceeding that invokes the entire controversy doctrine. Maertin v. Armstrong World Industries, Inc., 241 F. Supp. 2d 434, 456 (D.N.J. 2002) (citing New Jersey state court cases). The party has such knowledge if she "knows, or should have known, of facts which establish that an injury has occurred and that fault for that injury can be ...


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