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Thomas v. Jersey Mortgage Co.

United States District Court, Third Circuit

January 7, 2014



KEVIN MCNULTY, District Judge.

The Complaint in this action, Docket No. 1, brought by pro se Plaintiffs Mosell and Verna Thomas, alleges fraud and other acts in connection with a mortgage closing. Before this Court are Motions to Dismiss the Complaint, brought by Defendants Seterus and the Federal National Mortgage Association ("Fannie Mae"), Docket No. 4, Aurora Loan Service, LLC, Docket No. 6, and Jersey Mortgage Co ("Jersey Mortgage"), Docket No. 7. Giving the pro se Complaint a liberal reading, as I must, I find that the Thomases have stated a claim on which relief may be granted. Further factual development is required in order for this Court to fully consider the proper disposition of Plaintiffs' claims. Defendants' Motions to Dismiss will therefore be denied.

Plaintiffs, the Thomases, allege that Defendants committed various acts in conjunction with a mortgage closing in violation of various statutory provisions and/or the common law. The Complaint, Docket No. 1 ("Compl."), alleges that, beginning in June 2006, Defendants violated the "federal TILD (Laws), " (I take this to be a reference to the Truth in Lending Act ("TILA")); United States fraud laws, "US 15.4.6"; fraud and civil conspiracy laws, "15:4.6.2,"; and "7.7 breach of contract." Compl. at 2. The pleading is not artful, but it is clear that Plaintiffs intend to allege that Jersey Mortgage Co. quoted one mortgage interest and closing cost rate, but then increased the mortgage interest rate and doubled closing costs. Plaintiffs allege that a foreclosure on their house resulted, and that their physical and mental wellbeing, as well as their credit standing, has deteriorated. Compl. at 4.

The Defendants, Jersey Mortgage Co, Aurora Loan Service, LLC, Seterus, and Fannie Mae have moved to dismiss Plaintiffs' Complaint. Defendants raise arguments that may prove dispositive upon further development of the record. I nevertheless find that Plaintiffs have alleged a cause of action and I will deny Defendants' Motions to Dismiss at this time.


Mosell and Verna Thomas, filed their Complaint on January 31, 2013. The following factual allegations can be gleaned from the Complaint: The Thomases applied for a mortgage with Jersey Mortgage in or around June 2006. Jersey Mortgage Co. quoted one interest rate, but the mortgage terms, as executed, charged a higher interest rate. Additionally, Jersey Mortgage doubled the closing costs and hired the Thomases' then-attorney to represent it at the closing, leaving them "without legal representation." At some point thereafter, Aurora Loan Service purchased the mortgage from Jersey Mortgage and/or serviced it, Seterus serviced the mortgage, and Fannie Mae ultimately bought the mortgage. Compl. at ¶¶ 1-5. It appears that the primary alleged events giving rise to Plaintiffs' claims occurred during the negotiation and execution of the mortgage in 2006. The Complaint alleges, however, that the events giving rise to their claims started in June 2006 and continue "to present." Id. at 3.


Rule 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if it fails to state a claim upon which relief can be granted. The defendant, as 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). In deciding a Rule 12(b)(6) motion, a court must take the allegations of the complaint as true and draw reasonable inferences in the light most favorable to the plaintiff. Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (traditional "reasonable inferences" principle not undermined by Twombly, see infra).

Federal Rule of Civil Procedure 8(a) does not require that a complaint contain detailed factual allegations. Nevertheless, "a plaintiff's obligation to provide the grounds' of his entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, the complaint's factual allegations must be sufficient to raise a plaintiff's right to relief above a speculative level, so that a claim is "plausible on its face." Id. at 570; see also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008). That facial-plausibility standard is met "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). While "[t]he plausibility standard is not akin to a probability requirement'... it asks for more than a sheer possibility." Iqbal, 556 U.S. at 678.

Moreover, when the plaintiff is proceeding pro se, the complaint is "to be liberally construed." Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). "[H]owever inartfully pleaded, [it] must be held to less stringent standards than formal pleadings drafted by lawyers." Haines v. Kerner, 404 U.S. 519, 520-21 (1972).

Defendants also argue for dismissal for lack of jurisdiction under Federal Rule 12(b)(1). Rule 12(b)(1) challenges may be either facial or factual attacks. See 2 MOORE'S FEDERAL PRACTICE § 12.30[4] (3d ed. 2007); Mortensen, 549 F.2d at 891 (3d Cir. 1977). A facial challenge, which this appears to be, asserts that the complaint does not allege sufficient grounds to establish subject matter jurisdiction. Iwanowa v. Ford Motor Co., 67 F.Supp.2d 424, 438 (D.N.J. 1999). A court considering such a facial challenge assumes that the allegations in the complaint are true, and may dismiss the complaint only if it nevertheless appears that the plaintiff will not be able to assert a colorable claim of subject matter jurisdiction. Cardio-Med. Assoc., Ltd. v. Crozer-Chester Med. Ctr., 721 F.2d 68, 75 (3d Cir. 1983); Iwanowa, 67 F.Supp.2d at 438.


The Complaint alleges that the Thomases were quoted one mortgage interest rate, but charged another. In addition, they were required to pay twice the estimated closing costs. This, they allege, was the result of fraud by the Defendants. They also allege that their then-attorney was hired by Jersey Mortgage, depriving them of counsel (the sense may be that they were deprived of conflict-free counsel). They allege damages, including the foreclosure of their home and deterioration of their credit and health.

Defendants argue that it is not wholly clear under what statutory provisions Plaintiffs' claims arise. Defendants have a point. I am required, however, to give the Thomases' pleading a liberal reading. The Complaint plausibly alleges facts that may, if proven, establish claims of violation of the Truth in Lending ...

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