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Ogbin v. CitiFinancial Mortgage Co

November 19, 2009

MICHAEL AND LYNN OGBIN, PLAINTIFFS,
v.
CITIFINANCIAL MORTAGE COMPANY, INC., DEFENDANT.



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

OPINION

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

BACKGROUND

These are the facts alleged in plaintiffs' complaint: On January 11, 1995, plaintiffs Michael and Lynn Ogbin signed a note and mortgage with Ford Consumer Finance Company, predecessor of defendant CitiMortgage, Inc.*fn1 , on which they subsequently defaulted. On May 15, 2003, defendant instituted a foreclosure action against plaintiffs.*fn2 Sometime thereafter, plaintiffs requested a reinstatement and modification from defendant, which defendant provided. Plaintiffs and defendant entered into the loan modification agreement on April 21, 2006. The agreement modified the original January 1995 mortgage note. In the agreement, "the Defendant demanded attorney's fees and costs from the Plaintiffs in the amount of $5,147.00."*fn3 (Compl. ¶ 17.) On or about May 22, 2007, the loan was paid in full and the mortgage loan was discharged.

Plaintiffs now claim that defendant's demand for fees and costs violated New Jersey common law (breach of contract, negligence, breach of the duty of good faith and fair dealing, unjust enrichment), statute (Consumer Fraud Act, Fair Foreclosure Act, Truth-in-Consumer Contract and Warranty and Notice Act, Licensed Lenders Act), and court rules. Plaintiffs purport to bring these claims on their behalf and on behalf of similarly situated individuals who have also paid these allegedly violative fees.*fn4 Defendant has moved to dismiss plaintiffs' claims on several bases. Plaintiffs have opposed defendant's motion.

DISCUSSION

A. Jurisdiction

Plaintiffs assert that this Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332(d)(2), the Class Action Fairness Act (CAFA).

B. Analysis

Defendant has moved to dismiss all claims in plaintiffs' complaint on several bases, but primarily on the basis that plaintiffs have failed to meet the basic pleading requirements of Federal Civil Procedure Rules 8(a).*fn5 The Court agrees.

The entirety of plaintiffs' complaint is: (1) they entered into a mortgage with defendant; (2) they defaulted on that mortgage; (3) defendant instituted foreclosure proceedings; (4) plaintiffs requested a loan modification agreement; (5) defendant drafted a loan modification agreement; (6) the agreement contained an accounting for $5,147.00 in fees and costs owed to defendant as a result of plaintiffs' default of the original note; (7) plaintiffs voluntarily signed the loan modification agreement and agreed to its terms, including the itemization of the fees and costs; (8) a year later, the loan was discharged.

As noted above, based on these facts, plaintiffs claim that defendant's demand for approximately $5,150 in fees and costs constituted breach of contract, negligence, breach of the duty of good faith and fair dealing, and unjust enrichment, and violated the Consumer Fraud Act, Fair Foreclosure Act, Truth-in-Consumer Contract and Warranty and Notice Act (TCCWNA), Licensed Lenders Act and New Jersey court rules. There are numerous substantive deficiencies with these claims*fn6 , but superceding all other problems is the fact that plaintiffs never claim that they paid the requested fees and costs. Further, even if they amended their complaint to claim that they did pay those fees and costs, plaintiffs voluntarily contracted to pay the amount.*fn7 Morever, even if it can be held that the act of demanding violative fees and costs is itself a cause of action,*fn8 plaintiffs never specifically articulate how the $5,147.00 sum is violative of any law.

Plaintiffs respond that defendant's motion is premature because discovery needs to be undertaken in order to determine how the $5,147.00 figure was calculated by defendant. Once plaintiffs obtain that information, they will be able to explain how the costs and fees are impermissible.

Plaintiffs' view of the proper pleading standards has been renounced by the Supreme Court. Discovery cannot serve as a fishing expedition through which plaintiffs search for evidence to support facts they have not yet pleaded. See Bell Atlantic v. Twombly, 127 S.Ct. 1955, 1969 n.8 (2007); see also Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) ("Our decision in Twombly expounded the pleading standard for 'all civil actions' . . . ."); Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) ("Iqbal . . ...


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