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Duran v. Equifirst Corp.

March 12, 2010

HERIBERTO DURAN AND MARIA S. DURAN, PLAINTIFFS,
v.
EQUIFIRST CORP., CARTERET MORTGAGE CORP., JON CANTOR, SMARTERTITLE.COM, LLC, BSI FINANCIAL SERVICES, INC., JOHN DOES NOS. 1 - 12, ABC CORP. NOS. 1 - 10, DEFENDANTS.



The opinion of the court was delivered by: William J. Martini, U.S.D.J.

OPINION

HON. WILLIAM J. MARTINI

MEMORANDUM OPINION

ADDRESSING DEFENDANT EQUIFIRST'S MOTION TO DISMISS*fn1

I. INTRODUCTION

Heriberto and Maria S. Duran, ("Plaintiffs"), filed a Complaint against five named Defendants and two sets of fictitious defendants alleging that Plaintiffs were fraudulently induced to execute a loan for their property located at 643 Atlantic Avenue, Perth Amboy, New Jersey, 08861 ("Perth Amboy property"). Defendant, Equifirst Corporation, ("Equifirst"), has filed a motion to dismiss the Complaint. The Court, for the reasons elaborated below, will GRANT the motion.

II. FACTUAL AND PROCEDURAL BACKGROUND

The Plaintiffs allege that they are the owners of the Perth Amboy property. They were solicited by Carteret Mortgage Corporation, ("CMC"), and its employee, Jon Cantor, over the phone to execute a mortgage for a lower fixed rate. Much of the loan process took place over the phone. Plaintiffs claim they were to receive a 40 year fixed rate mortgage at a lower rate. However, the Truth-in-Lending statement provided to the Plaintiffs "inaccurately stated the interest rate, total number of possible adjustments, amount financed and total payment." The Plaintiffs claim they were never notified by Mr. Cantor, the mortgage broker, that there were changes to the loan making it different from what was discussed with him originally. The closing occurred on or about December 18, 2006, and Plaintiffs "executed a Note with an adjustable rate loan at an initial interest rate of 9.55% in the amount of $299,200.00 and due in 30 years, as well as a mortgage to secure payment of the Note." Compl. ¶ 21, (Doc. No. 1). Equifirst is the assignee of the mortgage and note; BSI is the current servicer of the loan.

Plaintiffs allege that they received an adjustable rate loan, not the fixed rate loan that had been discussed. The Plaintiffs further allege that the refinanced loan was not necessary to make a "balloon payment" or to avoid foreclosure on the pre-existing loan. Id. ¶ 31. The Plaintiffs allege that the refinanced loan has not resulted in lower monthly payments or a shorter loan term. In sum, the Plaintiffs argue that the Defendants engaged in "predatory tactics," failed to provide proper disclosure documents, provided documents that were false and misleading, failed to classify the loan as "high cost" as required by statute, charged the Plaintiffs for services never provided, and that the Defendants never provided what was promised to Plaintiffs, namely a lower interest rate mortgage. Id. ¶ 23. Moreover, Defendants failed to notify Plaintiffs of changes reflected in the loan documents from what had been previously agreed to. Indeed, Plaintiffs allege that they only "realized that their loan was altered from the broker's promise" at the time the note adjusted [the] monthly payments. Id. ¶ 20.

The refinance occurred on December 18, 2006. The Plaintiffs initiated this action in New Jersey Superior Court on June 23, 2009. It was removed on August 4, 2009.

III. STANDARD OF REVIEW

The Defendants' motion to dismiss is brought pursuant to the provisions of Fed. R. Civ. P. 12(b)(6). This rule provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated, Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005), and dismissal is appropriate only if, accepting all of the facts alleged in the complaint as true, the plaintiff has failed to plead "enough facts to state a claim to relief that is plausible on its face," Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) (abrogating "no set of facts" language found in Conley v. Gibson, 355 U.S. 41, 45 46 (1957)). The facts alleged must be sufficient to "raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. This requirement "calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of" necessary elements of the plaintiff's cause of action. Id. Furthermore, to satisfy federal pleading requirements, the plaintiff must "provide the grounds of his entitlement to relief," which "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (quoting Twombly, 550 U.S. at 555).

In considering a motion to dismiss, the court generally relies on the complaint, attached exhibits, and matters of public record. Sands v. McCormick, 502 F.3d 263 (3d Cir. 2007). The court may also consider "undisputedly authentic document[s] that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the [attached] document[s]." Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). Moreover, "documents whose contents are alleged in the complaint and whose authenticity no party questions, ...


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