The opinion of the court was delivered by: Hon. William J. Martini
This action comes before the Court on Defendant Wells Fargo Bank, N.A.'s ("Wells Fargo") Motion to Dismiss Danny Stolba and Lois Roth's ("Plaintiffs") class-action complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set out below, Wells Fargo's motion will be GRANTED.
Danny Stolba and Lois Roth, both residents of New Jersey, are
homeowners and mortgage-holders. Wells Fargo Bank, N.A.*fn1
is a national banking association chartered in South Dakota
with its principal place of business in California. 28 U.S.C. §§ 1332,
1348; Wachovia Bank v. Schmidt, 546 U.S. 303 (2006).
Generally, Plaintiffs' Complaint alleges the following facts. As a result of his financial difficulties, Danny Stolba applied for a loan modification with Wells Fargo on or about March 2009. In response, Wells Fargo informed Mr. Stolba that he might qualify for a Trial Period Plan ("TPP") under the federally funded Home Affordable Modification Program ("HAMP"), whereby Mr. Stolba's mortgage would be modified in order to avoid foreclosure. Mr. Stolba made the TPP payments from July until October 2009, when Mr. Stolba was instructed by Wells Fargo to cease payment until December. On September 14, 2009, Wells Fargo placed Mr. Stolba on notice of its intent to foreclose on Mr. Stolba's property. After a convoluted back-and-forth between Mr. Stolba and Wells Fargo representatives, which included more paperwork, loan modification packets, and requests for additional information, Wells Fargo informed Mr. Stolba on July 21, 2010 that it could not provide a loan modification because it had not received all requested documents. Foreclosure proceedings were ongoing at the time the Complaint was filed.
In January 2010, Lois Roth applied for a similar mortgage modification with Wells Fargo and submitted supporting documentation. After another complicated back-and-forth with Wells Fargo, which included various attempts to remedy Ms. Roth's check-writing errors, Wells Fargo informed Ms. Roth that she was in foreclosure.
Plaintiffs filed the present collective and class action on December 17, 2010. Plaintiffs' Complaint contains seven counts. First, Plaintiffs allege (1) a breach of contract claim stemming from Wells Fargo's failure to provide permanent modifications, by wrongfully denying the existence of the modification agreements, and by instituting or continuing foreclosure proceedings on loans that were allegedly not in default. Similarly, Plaintiffs allege that (2) Wells Fargo breached the implied covenant of good faith and fair dealing. Plaintiffs further allege that Wells Fargo (3) fraudulently and (4) negligently misrepresented and failed to disclose material facts relating to Wells Fargo's loan modification and foreclosure processes, which were (5) allegedly performed negligently. Finally, Plaintiffs argue that Wells Fargo violated (6) the New Jersey Consumer Fraud Act ("CFA"), N.J.S.A. § 56.8-1, and (7) the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. Subsequently, Wells Fargo filed the instant motion seeking dismissal.
Motion to Dismiss. Federal Rule of Civil Procedure 12(b)(6) 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 Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
Although a complaint need not contain detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a mere formulaic recitation of the elements of a cause of action will not do. Twombly, 550 U.S. at 555. Thus, the factual allegations must be sufficient to raise a plaintiff's right to relief above a speculative level, see id. at 570, such that the court may "draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 556).
Defendant asserts a variety of defenses. This opinion deals with each in turn.
Fair Debt Collection Practices Act. Plaintiffs' federal cause of action alleges violation of the FDCPA. 15 U.S.C. § 1692 et seq. Wells Fargo argues that the FDCPA does not apply because it is not a "debt collector" under the Act.
The FDCPA defines debt collector as "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." Id. § 1692a(6). However, that term does not include "any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity . . . concerns a debt which was not in default at the time it was obtained by such person." Id. § 1692a(6)(F). Therefore, the servicer of a residential mortgage loan is not a "debt collector" if the loan in question is not in default when ...