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Camden Vicinage v. Mortgage Electronic

August 10, 2011


The opinion of the court was delivered by: Kugler, United States District Judge:



This matter arises out of a putative class action filed by individuals who were allegedly overcharged during post-judgment payoffs following entry of a mortgage foreclosure. Presently before the Court is Plaintiffs' motion to remand pursuant to 28 U.S.C. § 1447. For the reasons discussed below, Plaintiffs' motion is DENIED.


In January 2006, a judgment of foreclosure was entered against Plaintiffs in New Jersey state court on a principal sum of $184,271.85 plus $2,799.72 in costs. (Am. Compl. ¶ 17). The award of $2,799.72 in costs also included $1,992.42 in attorneys' fees. Id. Pursuant to that judgment, Defendants Mortgage Electronic Systems, Inc. ("MERS"), GMAC Mortgage, LLC. ("GMAC"), and GMAC Bank (collectively "the GMAC Defendants") prepared a payoff statement. The payoff statement included a mortgage balance of $193,917.85 and $3,597.28 in attorneys' fees and costs. Id. at ¶ 22. Plaintiffs paid the sums the GMAC Defendants demanded in March 2006. Id. at ¶ 23. The GMAC Defendants then moved to dismiss the foreclosure action with prejudice and discharged the mortgage. Id. at ¶ 28.

Plaintiffs filed this putative class action in New Jersey Superior Court, Camden County, alleging six causes of action against the GMAC Defendants. The Complaint alleges: (1) breach of contract; (2) negligence; (3) breach of the duty of good faith and fair dealing; (4) unjust enrichment; (5) violation of the New Jersey Consumer Fraud Act; and (6) violation of the Truth-In-Consumer Contract Warranty and Notice Act. (Compl. ¶¶ 51-94). The Complaint alleges that the GMAC Defendants improperly calculated the post-judgment payoff balance on the mortgage. (Notice of Removal at 3). Specifically, Plaintiffs allege that the payoff statements they received from the GMAC Defendants improperly included, among other charges, attorneys' fees and costs in excess of those actually awarded by the state foreclosure judgment. Id. at ¶ 44. Plaintiffs also allege that the GMAC Defendants overcharged them for recording fees, service of process, certified mail fees, sheriff's commissions, and interest. Id. at ¶ 44 (d)-(i).

In April 2010, the GMAC Defendants removed the matter to the United States District Court for the District of New Jersey. The GMAC Defendants asserted jurisdiction pursuant to the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d). (Notice of Removal at 3). On April 22, 2010, The GMAC Defendants moved to dismiss the matter, pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a cause of action. In June 2010, the District Court remanded the matter to the Superior Court of New Jersey, Camden County. (Mem. Order at 1). The Court found that because "all of Plaintiffs' claims arose from the alleged $4,084.68 overcharge that was a subject of the state court foreclosure judgment," remand was proper. Id. at 3. The Court found that the Rooker-Feldman doctrine precluded a federal court from exercising jurisdiction over the class action because the class action was "inextricably intertwined" with the state foreclosure action. Id.

Plaintiffs filed an Amended Complaint on December 17, 2010. The Amended Complaint includes substantially all of the allegations in the Complaint. The Amended Complaint also alleges that the GMAC Defendants filed false affidavits during the foreclosure action in state court. In particular, the Amended Complaint alleges that Jeffrey Stephan, who is employed by GMAC Mortgage as the leader of its document execution team, signed as many as 10,000 foreclosures in one month without checking the accuracy of those documents or determining whether foreclosure was appropriate. (Am. Compl. ¶ 29). The Amended Complaint further alleges that John Kerr, Mr. Stephan's employee, executed the affidavits in Plaintiffs' foreclosure action using "the same process and procedure as Mr. Stephan." Id. at ¶¶ 34-35. As a result of that conduct, the Amended Complaint adds the following causes of action: (7) breach of contract; (8) negligence; (9) breach of the duty of good faith and fair dealing; (10) violation of New Jersey Consumer Fraud Act; and (11) violation of Truth-In-Consumer Contract, Warranty and Notice Act. Id. at ¶¶ 107-129.*fn1

On December 29, 2010, the GMAC Defendants removed this matter to this Court, alleging jurisdiction under CAFA, 28 U.S.C. § 1332(d). In February 2011, Plaintiffs filed the present motion. Plaintiffs concede that the elements of CAFA are satisfied, but argue that the Rooker-Feldman doctrine precludes this court from exercising jurisdiction. (Defs. Mem. in Opp'n to Pls. Mot. to Remand 2).


Under 28 U.S.C. § 1441(a), a defendant may remove an action filed in state court to the federal court with original jurisdiction over the action. Once an action is removed, a plaintiff may challenge removal by moving to remand the case back to state court. 28 U.S.C. § 1447(c). To defeat a plaintiff's motion to remand, the defendant bears the burden of showing that the federal court has jurisdiction to hear the case. Abels v. State Farm Fire & Casualty Co., 770 F.2d 26, 29 (3d Cir. 1995). Where the decision to remand is a close one, district courts should resolve all doubts in favor of remand. See Abels, 770 F.2d at 29 ("Because lack of jurisdiction would make any decree in the case void and the continuation of the litigation in federal court futile, the removal statute should be strictly construed and all doubts should be resoled in favor of remand."); Glenmede Trust Co. v. Dow Chemical Co., 384 F. Supp. 423, 433-34 (E.D. Pa. 1974) ("It is well settled that district courts should remand close or doubtful cases for two reasons. First, remand will avoid the possibility of a later determination that the district court lacked jurisdiction and, secondly, remand is normally to a state court which clearly has jurisdiction to settle the case").


A. Jurisdiction under the Class Action Fairness Act "Pursuant to CAFA, federal courts have jurisdiction over class actions in which the amount in controversy exceeds $5,000,000 in the aggregate, §§ 1332(d)(2) & (6), any class member and any defendant are citizens of different states, § 1332(d)(2)(A), and there are at least 100 members in the putative class, § 1332(d)(5)(B)." Kaufman v. Allstate N.J. Ins. Co., 561 F.3d 144, 149 (3d Cir. 2009).

Here, the Notice of Removal alleges diversity of citizenship. At the time the suit was filed, Plaintiffs were citizens of New Jersey. (Notice of Removal at 4). GMAC Bank is a Utah corporation with its principal place of business in Midvale, Utah. Id. MERS is a Delaware Corporation with its ...

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