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Gary and Beth Probola, On Behalf of Themselves and All Others v. Long & Foster Real Estate


January 16, 2013


On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-2269-11.

Per curiam.


Argued November 14, 2012

Before Judges Lihotz, Ostrer and Kennedy.

Plaintiffs Gary and Beth Probola appeal from a March 30, 2012 Law Division order dismissing their second amended class action complaint, with prejudice, for failure to state a claim. Rule 4:6-2(e). Plaintiffs alleged various causes of action against defendant Long and Foster Real Estate, Inc., resulting from a $345 "Document Fee" charged in addition to the agreed commission paid for brokerage services upon the sale of their residence.

On appeal, plaintiffs challenge as error the trial judge's analysis of their proofs and the conclusion reached that the facts alleged failed to set forth a basis for relief. We disagree and affirm. Alternatively, plaintiffs maintain the judge erred in dismissing the complaint with prejudice. We agree dismissal with prejudice was not warranted and therefore, modify the order of dismissal.


Plaintiffs initiated this action disputing the propriety of a separate $345 charge issued by defendant, which acted as plaintiffs' real estate broker in the May 15, 2009 sale of their Mercer County residence. The fee was listed on a line of the Form HUD-1 separate from commissions charged by defendant. Also, the broker's agreement, executed by plaintiffs when they hired defendant to act as their broker, included disclosure of both the commission, calculated as four percent of the sales price of the realty and the flat $345 fee labeled as "Document Fees." A separate addendum to the broker's agreement explained:

[Defendant] charges a Document Fee at the time of settlement to buyers and sellers who have received real estate services from [defendant].

The Document Fee charged to buyers and sellers who have received services is:

Three Hundred and Forty[-]Five Dollars ($345.00)[.]

This Document Fee, in part, covers the increasing costs of printing, processing, transmitting and storing the numerous required documents that are associated with the closing of a real estate transaction. The New Jersey Real Estate Commission mandates that all files be retained for a period of six years. A present-day real estate transaction typically involves multiple parties, multiple settlement service providers and as many as 250 pieces of documentation. A number of these documents are required disclosure forms designed to enhance the quality and level of service provided to the buyer and seller.

As customer needs for greater communication and disclosure increases, and as state and federal requirements become greater, so do administrative costs associated with these needs and legal requirements.

[Defendant] continues to invest heavily in up-to-date training and equipment for its agents and personnel. The Document Fee covers, in part, these increasing associated costs. [Defendant] continues our commitment to provide our customers with the highest level of service in the real estate industry.

The parties executed the addendum on December 10, 2008. At settlement, plaintiffs paid defendant the agreed commissions, as well as the document fee.

On September 7, 2011, plaintiffs filed a class action complaint, brought on behalf of themselves and other similarly situated persons who bought or sold a home in New Jersey since September 7, 2005, using defendant or an affiliated independent contractor as a broker, who were charged a commission and a $345 "Document Fee" as payment for real estate services provided. Plaintiffs alleged the "Document Fee" constituted "a completely phony fee for which no service [wa]s performed" and equated to charging "two separate fees for exactly the same service[.]" Additionally, plaintiffs averred the "Document Fee" addendum used in New Jersey transactions included "uniform, false written statements" and "knowing omission[s] of material fact[s]" regarding the fee, in violation of state law.*fn1 Plaintiffs alleged defendant's conduct violated the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -195, the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-14 to -18, and constituted a breach of the fiduciary duties owed by real estate brokers to their principals.

Plaintiffs' complaint was amended on September 9, 2011, prior to service upon defendant. On October 28, 2011, defendant filed a Notice of Removal in the Federal District Court for the District of New Jersey. See 28 U.S.C.A. § 1441(a) (granting a statutory right to remove "any civil action brought in a State court of which the district courts of the United States have original jurisdiction"). On plaintiffs' motion, the matter was remanded to the Superior Court. Probola v. Long & Foster Real Estate, Inc., No. 11-6334 (D.N.J. Jan. 20, 2012) (slip op. at 1-2), appeal dismissed, No. 12-2199 (3d Cir. June 1, 2012). Defendant had filed a motion to dismiss, the merits of which were not considered by the district court once it concluded it lacked subject matter jurisdiction. Id. at 1-3 (citing Trent Realty Assocs. v. First Fed. Sav. & Loan Ass'n of Philadelphia, 657 F.2d 29, 36 (3d Cir. 1981)). A second amended complaint was filed on January 27, 2012, and then on February 27, 2012, defendant re-filed its motion before the Law Division to dismiss plaintiffs' complaint pursuant to Rule 4:6-2(e).

Accepting all factual statements averred as true, defendant argued plaintiffs failed to state a claim upon which relief could be granted. Defendant pointed out there were no facts supporting an unconscionable business practice, misrepresentation, or fraudulent inducement. Further noting there was full disclosure of the fee from the inception of the relationship, defendant argued plaintiffs were informed and accepted the fee, which represented an off-set to costs related to document copying, storage, and other expenses; the parties had "freely" negotiated the brokerage agreement years before; and, at that time, plaintiffs had neither objected to nor challenged the $345 charge. Finally, defendant argued, "[m]ore than twenty paragraphs of [plaintiffs'] complaint" were cognizable as an alleged violation of the federal Real Estate Settlement Procedures Act (RESPA), 12 U.S.C.A. § 2601 to § 2617, which was time-barred. Defendant sought dismissal of the second amended complaint.

Plaintiffs opposed defendant's motion, arguing the disclosure, titled "Document Fee," was misleading and false because the fee "doesn't go for printing, processing, transmitting, [or] storing numerous documents for six years" and suggesting defendant was "disguising a price increase . . . [as] a document fee"; the addendum materially omitted facts; the additional charge was an unconscionable practice, which although time-barred by the limitations period of RESPA, was a per se violation of the CFA; and the conduct was a breach of a real estate broker's fiduciary duty. Support for plaintiffs' factual claims included the fact that in several states where defendant conducted business, the fee disclosure form contained a different explanation than the one used in New Jersey. Based on this distinction, plaintiffs concluded "one of those two explanations, if not both of them, [was] false."

Defendant disputed plaintiffs' argument that the form circulated to New Jersey residents was materially different from the "Explanation of . . . Fee Structure" form circulated elsewhere. It argued both documents explained the $345 flat fee in part covered costs associated with meeting "consumer needs for services and information[,]" namely "software, equipment, high-speed telecommunications lines, and training for its agents and personnel."

The motion judge considered the parties' respective arguments and issued an oral opinion on March 30, 2012. The judge observed:

[The New Jersey form] . . . says the document fee, in part, covers increased costs of printing, processing, transmitting, storing, whatever . . . .

Then it says ["]as customer needs for greater communication and disclosure increases and as state and federal requirements become greater, so do administrative costs associated with these needs and legal requirements, [defendant] continues to invest heavily in up-to-date training and equipment for its agents and personnel. . . . This document fee covers, in part, these increased associated costs.["]

[T]his is [a] somewhat broad description of what this fee, in part, covers[.]

This was a document that [plaintiffs] had the right to review. They had the right to read. They apparently signed it. Nobody forced them to sign it and to say that . . . somehow it induced them to enter into this deal without them knowing that there was going to be this extra fee, no. It says we're going to charge you a flat fee . . . , in part, . . . because we have all these other costs associated [with the transaction]. [Plaintiffs] could have said no, we don't want to pay [$]345 on top of four percent or else we want you to cut it down to a three and half percent because we understand we can negotiate this fee.

So, I don't see it as [plaintiffs] do, that this . . . induced them in any false way into entering into this relationship. So, I really don't see a showing of a consumer fraud action . . . because there does need to be a misrepresentation that is material to the transaction which is a statement of fact, found to be false, made to induce the buyer to make the purchase.

After finding defendant must incur some costs in training personnel and providing the noted storage services, the judge further concluded plaintiffs' claim of unconscionable practices lacked merit because plaintiffs "didn't have to sign and agree to" pay the "Document Fee" and nothing appeared unconscionable about the wording of the form.

The motion judge also rejected the notion that an untimely RESPA violation could be used to "trigger" a CFA claim and concluded the complaint was insufficient to support a cause of action for violation of the TCCWNA. The motion judge granted defendant's motion to dismiss and concluded plaintiffs' motion to compel discovery was moot. Plaintiffs' appeal ensued.



The standard applicable to our review of an order entered on a motion to dismiss under Rule 4:6-2(e) is well established. First, this court's review is plenary. Printing Mart-Morristown v. Sharp Electronics Corp., 116 N.J. 739, 746 (1989). No special deference is afforded the trial court's "interpretation of the law" or "the legal consequences that flow from established facts[.]" Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). Second, in our review, we apply the same test as the trial court. We examine the adequacy of the pleading, considering "whether a cause of action is 'suggested' by the facts." Printing Mart, supra, 116 N.J. at 746 (quoting Velantzas v. Colgate-Palmolive Co., 109 N.J. 189, 192 (1988)). We search the allegations of the pleading "'in depth and with liberality to ascertain whether the fundament of a cause of action may be gleaned even from an obscure statement of claim, opportunity being given to amend if necessary.'" Ibid. (quoting Di Cristofaro v. Laurel Grove Mem'l Park, 43 N.J. Super. 244, 252 (App. Div. 1957)).

Dismissal is appropriate only after "accepting all well-pleaded allegations in the complaint as true, and viewing them in the light most favorable to plaintiff, plaintiff is not entitled to relief." Smerling v. Harrah's Entertainment, Inc., 389 N.J. Super. 181, 186 (App. Div. 2006). "A pleading should be dismissed if it states no basis for relief and discovery would not provide one." Rezem Family Assoc. v. Millstone, 423 N.J. Super. 103, 113-14 (App. Div. 2011) (citation omitted). As suggested, at such a preliminary stage in the litigation, we grant "every reasonable inference of fact" in a plaintiff's favor and are not concerned with a plaintiff's actual ability to prove the allegation set forth in a complaint. Printing Mart, supra, 116 N.J. at 746 (citation omitted).


Plaintiffs' complaint is principally grounded on claims of consumer fraud. We briefly recite the general principles of the CFA.

The CFA is designed to "prevent deception, fraud or falsity, whether by acts of commission or omission[.]" Fenwick v. Kay Am. Jeep, Inc., 72 N.J. 372, 376 (1977). "[A]imed basically at unlawful sales and advertising practices designed to induce consumers to purchase merchandise or real estate[,]" Daaleman v. Elizabethtown Gas Co., 77 N.J. 267, 270 (1978), the broad, remedial CFA provides:

The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice[.] [N.J.S.A. 56:8-2.]

See also Lemelledo v. Benefit Mgmt. Corp., 150 N.J. 255, 264 (1997) (stating, given the broad language of the statute, the CFA must "be applied broadly in order to accomplish its remedial purpose, namely, to root out consumer fraud"); Coastal Group, Inc. v. Dryvit Sys., Inc., 274 N.J. Super. 171, 179 (App. Div. 1994) (detailing breadth of the CFA).

"'The capacity to mislead is the prime ingredient of all types of consumer fraud' proscribed by the [CFA]." Quigley v. Esq. Deposition Servs., LLC, 409 N.J. Super. 69, 78 (App. Div. 2009) (quoting Cox v. Sears Roebuck & Co., 138 N.J. 2, 17 (1994)), certif. denied, 201 N.J. 154 (2010). "[T]o constitute consumer fraud . . . the business practice in question must be misleading and stand outside the norm of reasonable business practice in that it will victimize the average consumer[.]" Ibid. (quotation marks and internal citations omitted).

Unconscionable practices fall into two general categories: affirmative acts and knowing omissions. Gennari v. Weichert Co. Realtors, 288 N.J. Super. 504, 534 (1996), aff'd, 148 N.J. 582 (1997). When a CFA claim alleges an affirmative act such as fraud or deception, "it is not necessary that plaintiff show either defendant's knowledge or intent or that the misrepresentation was of a material fact." Leon v. Rite Aid Corp., 340 N.J. Super. 462, 469 (App. Div. 2001). Furthermore, "'whether or not any person has in fact been misled, deceived or damaged'" is irrelevant because "[p]roof of an affirmative misrepresentation of a fact material to the transaction is sufficient to establish a violation[.]" Gennari, supra, 288 N.J. Super. at 533, 544 (App. Div. 1996) (quoting N.J.S.A. 56:8-2).

A real estate broker's "affirmative misrepresentation of material fact" is covered by the CFA. Id. at 534 (citation omitted). Moreover, the CFA "does not require a showing of knowledge of falsity or intent to deceive in order to hold the offender liable to the purchaser." Ibid. (citation omitted). Consequently, "the clear language of N.J.S.A. 56:8-2, . . . makes a real estate broker strictly liable for any material misrepresentation of fact he or she makes to a purchaser." Id. at 536.



On appeal, plaintiffs argue their complaint "plainly stated one or more viable theories of liability under the [CFA]." They suggest the motion judge erred in failing to accept the facts pled, which they believe formulate a cause of action. We recite the six bases identified in plaintiffs' complaint alleging defendant's use of the addendum and imposition of the "Document Fee" charge constituted a violation of the CFA.

Initially, plaintiffs state the addendum "contained false affirmative misstatements of fact" as to the "basis for the additional $345 'Fee' charged by [d]efendant to [p]laintiffs" because the fee was "not used for printing or processing documents related to the real estate sale, or for storing documents related to the real estate sale" but "[i]n actuality, the extra $345 'Fee' [wa]s simply an extra charge imposed at the direction of [defendant], which is not charged in exchange for any goods or any specific, articulable service by anyone." Essentially, plaintiffs assert defendant's explanation for the fee is an affirmative false representation. Plaintiffs admit State law requires defendant to store real estate documents for six years, see N.J.A.C. 11:5-5.4 (requiring brokers to retain records for "not less than six years"), and that it may well incur some expense for certain other items listed on the addendum. However, they argue document storage, as well as any other overhead costs, should be covered by the commission. This implies that because the items of expense were separated out and attributed to the "Document Fee," then the charge must accurately reflect the qualified expenses recited.

Next, plaintiffs maintain the CFA was violated because the addendum omitted material facts regarding the true basis of the $345 fee. Plaintiffs' complaint contends the costs enumerated in the addendum total less than $35, not $345; therefore, defendant knowingly withheld that most of the $345 was disguised profit, depriving plaintiffs of the ability to make an informed decision regarding payment. Plaintiffs argue that the different explanation offered to clients engaging defendant in states other than New Jersey prove the New Jersey addendum was false.

Another basis set forth in plaintiffs' complaint alleged to trigger CFA protections is that no goods or services were provided in exchange for the $345 fee, which plaintiffs called a "junk charge." Plaintiffs conclude defendant's practice of artificially inflating commissions by a "phony charge," while falsely creating the impression the fee represented reimbursement of incurred expenses, represents an unconscionable business practice.

Plaintiffs further maintain the "Document Fee" was a double charge for the same services rendered relative to the real estate closing. Alternatively, they argue the use of the "Document Fee" was a misleading "scheme designed to hide defendant's true rate for broker's services." Plaintiffs' complaint states defendant's use of the addendum misled its clients to believe it only charged a broker's commission of four percent of the sales price, when, in actuality, defendant has "effectively raised its commission rate in secret by disguising a price increase for its broker's services [by] a separate $345 'Document Fee[.]'" Finally, plaintiffs' complaint theorizes the additional fee violates RESPA as a duplicate fee and such an unconscionable commercial practice is a per se CFA violation.

Granting every indulgence to the facts stated in plaintiffs' complaint, and after considering the language of the addendum upon which all of plaintiffs' theories of liability are grounded, we fail to see how defendant's use of the addendum or the collection of the disclosed additional $345 charge satisfies the requirements of the CFA.

Plaintiffs concede defendant's broadly worded addendum sets forth a non-exhaustive list of overhead costs purportedly included within the "Document Fee." Also, plaintiffs agree defendant incurs some of the costs enumerated, thus refuting the averment that "none of these things were provided."*fn2

Further, plaintiffs acknowledge they received full disclosure of the fee prior to the execution of the broker's agreement and long before the actual closing on their residence. The charge was not hidden or added to the settlement sheet without notice. The fact that plaintiffs believe the expenses covered by the "Document Fee" should be included within the commission payment rather than added as a separate fee does not make defendant's action of adding an additional charge false, misleading or unconscionable.

Despite granting all reasonable inferences, Banco Popular N. Am. v. Gandi, 184 N.J. 161, 183 (2005), and applying "[t]he liberal standard that governs a motion to dismiss[,]" NCP Litig. Trust v. KPMG LLP, 187 N.J. 353, 365 (2006), we cannot construe plaintiffs' facts to present even the possibility of conduct proscribed by the CFA. See Gennari, supra, 288 N.J. Super. at 535 (holding the CFA requires a misrepresentation to be "one which is material to the transaction and which is a statement of fact, found to be false, made to induce the buyer to make the purchase").

The addendum is straightforward. It does not state or even infer defendant incurs exactly $345 to provide the listed services for each real estate transaction. Rather, the types of overhead expenses referenced, for which the fee is attributed, are neither limited nor exhaustive. The plain language of the addendum repeats the fee was collected "in part" for payment of the specified costs. An ordinary reasonable person reading the addendum would understand the contractual relationship, if accepted, included a flat fee in addition to the stated commission, which was collected at settlement, used in part by defendant to defray operational expenses. It is also evident that the payment of an additional fee would certainly affect defendant's bottom line.

We, like the trial judge, find nothing misleading or deceptive in the statements contained in the addendum. Moreover, plaintiffs were given the opportunity to reject the addendum if they believed the four percent commission realized upon the sale of their home would be compensation enough. Rather, they willingly agreed to the added charge, executing the addendum knowing the total fee due defendant was the percentage commission plus $345. See In re Holt, 163 F.3d 161, 168 (3d Cir. 1998) (holding "customer dissatisfaction does not constitute consumer fraud"); Turf Lawnmower Repair, Inc. v. Bergen Record Corp., 139 N.J. 392, 416 (1995) (holding price dissatisfaction is not covered by the CFA).

We also reject plaintiffs' contention that the addendum should have disclosed the "Document Fee" was remitted to defendant's corporate office and not completely paid to the local agents, who serve as independent contractors. We reject this claim as unfounded. The addendum states the types of costs extant; defendant had no obligation to detail its payment and expense structure between its corporate office and local contractors.

Next, we consider whether defendant's practice of charging "an unearned and/or duplicative $345 'Fee'" violates consumer rights created by RESPA, and thus, also forms a per se violation of the CFA. Following our review, we are not persuaded by plaintiffs' arguments.

Plaintiffs cite two RESPA provisions were violated by the "Document Fee." First, 12 U.S.C.A. § 2607(b), provides: "No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed." Second, 24 C.F.R. § 3500.14(c) prohibits "kickbacks and unearned fees[,]" which it defines as "[a] charge by a person for which no or nominal services are performed or for which duplicative fees are charged."

The primary purpose of RESPA is "to protect consumers from 'abusive practices' that result in 'unnecessarily high settlement charges.'" Cohen v. JP Morgan Chase & Co., 498 F.3d 111, 122 (2d Cir. 2007) (quoting 12 U.S.C.A. § 2601(a)). See also United States v. Gannon, 684 F.2d 433, 438 (7th Cir. 1981) ("Congress' aim was to stop all abusive practices that unreasonably inflate federally related settlement costs to the public." (emphasis in original) (citation omitted)); Freeman v. Quicken Loans, Inc., __ U.S. __, __, 132 S. Ct. 2034, 2038, 182 L. Ed. 2d 955, 959 (2012) (finding RESPA's purpose is to protect consumers "from unnecessarily high settlement charges caused by certain abusive practices" (quotation marks and citation omitted)).

It is not disputed that plaintiffs' second amended complaint expressly disclaims a federal cause of action, proclaiming "[p]laintiffs are not raising any direct claim under [RESPA.]" As determined by the trial judge and admitted by plaintiffs, the one-year limitations period for federal RESPA claims had expired prior to the filing of plaintiffs' complaint. 12 U.S.C.A. § 2614.

Further, plaintiffs' assertion that the $345 fee was split between defendant's corporate office and its local broker associates, does not support a RESPA violation. In Freeman, supra, the High Court examined the scope of RESPA's prohibition on fee sharing found at 12 U.S.C.A. § 2607(b), and concluded the provision was aimed at preventing two or more separate persons (e.g., attorneys and title companies, lenders and appraisers) from sharing unearned fees, resulting in inflated costs in the transaction. Id. at __, 132 S. Ct. at 2044, 182 L. Ed. 2d at 965. Consequently, the prohibition "cannot be understood to reach a single provider's retention of an unearned fee." Id. at __, 132 S. Ct. at 2036, 182 L. Ed. 2d at 958. See also 12 U.S.C.A. § 2607(c)(2) (expressly exempting from the fee split prohibition "the payment to any person of a bona fide salary or compensation or other payment . . . for services actually performed"); 12 U.S.C.A. § 2607(c)(3) (expressly exempting "payments pursuant to cooperative brokerage and referral arrangements or agreements between real estate agents and brokers"); 24 C.F.R. 3500.14(g)(v) (stating Section 8 of RESPA permits "payment pursuant to cooperative brokerage and referral arrangements or agreements between real estate agents and real estate brokers").

Even if plaintiffs' RESPA allegations were meritorious, we conclude the assertion of an untimely RESPA cause of action may not double as a cause of action under the CFA. Rather, plaintiffs must present facts standing on their own, which demonstrate a CFA claim. Otherwise, plaintiffs are simply bootstrapping a state CFA cause of action with a barred federal claim.


Plaintiffs also argue they have presented a claim under the TCCWNA, which provides in relevant part:

No seller, lessor, creditor, lender or bailee shall in the course of his business offer to any consumer or prospective consumer or enter into any written consumer contract . . . which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller, lessor, creditor, lender or bailee as established by State or Federal law at the time . . . the consumer contract is signed[.] [N.J.S.A. 56:12-15.]

Generally, the TCCWNA "establishes liability whenever a seller offers a consumer a contract, the provisions of which violate any legal right of a consumer." Bosland v. Warnock Dodge, Inc., 396 N.J. Super. 267, 278 (App. Div. 2007), aff'd, 197 N.J. 543 (2009). Where a plaintiff has alleged sufficient facts to establish a violation of a state statutory provision, this court has found such "allegations . . . sufficient to establish a potential violation of the TCCWNA because a consumer contract that violates a clearly established legal right . . . is also a violation of the TCCWNA." Id. at 278-79. See also United Consumer Fin. Servs. Co. v. Carbo, 410 N.J. Super. 280, 306 (App. Div. 2009) ("This court has held that the act of offering a consumer contract that violates a legal right of a consumer under the law is sufficient to establish a violation of this statute." (citation omitted)).

A plaintiff need not prevail on the underlying claim, or even establish every element of the underlying claim; plaintiff need only demonstrate the violation of "any clearly established legal right . . . established by State or Federal law" has occurred. N.J.S.A. 56:12-15. However, the TCCWNA can only be triggered if the right being invoked was "'clearly established'" by federal law at the time the challenged contract was offered to the consumer. McGarvey v. Penske Auto. Grp., 639 F. Supp. 2d 450, 458 (D.N.J. 2009), vacated in part by No. 08-5610 (D.N.J. Mar. 29, 2010) (slip op. at 2).

Plaintiffs' second amended complaint relies on perceived CFA and RESPA violations undergirding defendant's alleged liability for violating the TCCWNA. Since we have rejected the facts as supporting claims under the CFA and also concluded the assertions do not represent a prohibited split or duplicate fee under RESPA, we conclude any TCCWNA claim must also fail.

One additional note, the TCCWNA expressly excludes real property transactions, stating "[t]he provisions of this act shall not apply to residential leases or to the sale of real estate, whether improved or not, or to the construction of new homes subject to 'The New Home Warranty and Builders' Registration Act[.]'" N.J.S.A. 56:12-15 (citation omitted). Plaintiffs' contentions suggest an affirmative violation of RESPA in the course of brokering a real estate sale, conduct exempt from liability under the express language of the statute.*fn3


Plaintiffs challenge as erroneous the dismissal of their alleged breach of fiduciary duty claim, maintaining the judge failed to express sufficient reasons for doing so. Relying on Mango v. Pierce- Coombs, 370 N.J. Super. 239, 256 (App. Div. 2004), plaintiffs maintain defendant failed to comply with its fiduciary obligations. Although the judge's reasoning was not stated in the record, the claim is patently without merit.

In Mango, supra, this court held "[a] fiduciary duty exists between a real estate broker and [his or] her client[,]" which requires a broker to practice full disclosure, and "'exercise fidelity, good faith and primary devotion to the interests of his [or her] principal.'" Ibid. (quoting Ellsworth Dobbs, Inc. v. Johnson, 50 N.J. 528, 553 (1967)). Plaintiffs' complaint asserts adding the "Document Fee" to a commission was "contrary to plaintiffs' interests" as it was imposed "solely for the benefit of [defendant], at the expense of [p]laintiffs." We conclude this, as well as any other argument not specifically addressed in our opinion, lack sufficient merit to warrant further discussion in our written opinion. R. 2:11-3(e)(1)(E).


The motion judge dismissed plaintiffs' complaint with prejudice. The general rule is "[a] motion to dismiss should be granted only in rare instances and ordinarily without prejudice." Smith v. SBC Communs., Inc., 178 N.J. 265, 282 (2004). However, "'courts are free to refuse leave to amend when the newly asserted claim is not sustainable as a matter of law. In other words, there is no point permitting the filing of an amended pleading when a subsequent motion to dismiss must be granted.'" Notte v. Merchs. Mut. Ins. Co., 185 N.J. 490, 501-02 (2006) (quoting Interchange State Bank v. Rinaldi, 303 N.J. Super. 239, 256-57 (App. Div. 1997)).

Our discussion when reviewing the claimed causes of action highlights the flaws in plaintiffs' pleading, defeating the underlying claims. We are hard-pressed to envision actionable causes arising from the facts as asserted. Nevertheless, we do not agree plaintiffs should be precluded from the possible pursuit of relief if they can present information establishing a meritorious cause of action. Accordingly, we modify the order of dismissal, requiring it provide plaintiffs' complaint is dismissed without prejudice. We remand to the motion judge to correct the order of dismissal.

Affirmed as modified and remanded for correction of the final order.

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