United States District Court, D. New Jersey
WILLIAM J. MARTINI, U.S.D.J.
Deborah and James Schmidt filed this action on March 14,
2017, against Wells Fargo in connection with Plaintiffs'
home loan modification agreement. The complaint alleges that
Wells Fargo made misrepresentations to Plaintiffs about their
eligibility for a more favorable loan modification; that it
misapplied at least one mortgage payment, without
explanation; that it failed to provide information about its
servicing of Plaintiffs' loan; and that it violated
federal law by using an automatic dialing system to
repeatedly contact Mrs. Schmidt by phone without her consent.
The matter now comes before the Court on Wells Fargo's
motion to dismiss the complaint for failure to state a claim
pursuant to Federal Rule of Civil Procedure 12(b)(6). There
was no oral argument. See Fed. R. Civ. P. 78(e). For
the following reasons, Wells Fargo's motion to dismiss is
GRANTED in part and DENIED in
Deborah and James Schmidt purchased their house in Randolph,
New Jersey in 2002 by money mortgage with BNY Company LLC.
Complaint (“Compl.”) ¶ 2. On August 29,
2007, Plaintiffs refinanced their house with Defendant Wells
Fargo Bank at an annual interest rate of 6.375%.
Certification of Aaron M. Bender in Support of
Defendant's Motion to Dismiss (the “Bender
Cert.”) Ex. B. Plaintiffs made timely mortgage payments
through 2008 and 2009 despite serious financial difficulty.
Compl. ¶ 4. They were eventually granted a 6-month
moratorium on payments from January to June of 2010.
Id. Plaintiffs allege they made timely payments from
July 1, 2010 through January 3, 2012.
April 9, 2009, and December 22, 2009, Plaintiffs applied for
a modification under the Home Affordable Mortgage Program
(“HAMP”), a federal program launched in the wake
of the 2008 financial crisis to help distressed home owners
avoid foreclosure. See Heyman v. Citimortgage, Inc.,
2014 WL 4637034, at *1 (D.N.J. 2014). Plaintiffs were denied
HAMP modifications both times, because they were not yet
three months behind on their mortgage payments. Compl. ¶
4. Plaintiffs allege that on February 19, 2010, “Darian
at Wells Fargo . . . suggested that since by then plaintiffs
were behind almost 3 payments, they should request a HAMP
modification.” Compl. ¶ 4. Deborah Schmidt
submitted a HAMP modification request on March 15, 2010.
Id. at 6. Plaintiffs were again denied a HAMP
modification-this time because Wells Fargo wanted to monitor
the progress of Deborah's new business before determining
eligibility for a modification. Id. at ¶ 7.
Meanwhile, Plaintiffs were given an additional six-month
moratorium and instructed by Wells Fargo employee Ben Montang
to apply for reconsideration at the end of the moratorium.
They did so, but were denied again for a HAMP modification.
Plaintiffs were deemed ineligible for the HAMP program, they
agreed to a “non-HAMP” loan modification on
October 9th, 2012. Plaintiffs assert that the terms of the
modification were unfavorable and that they agreed only out
of desperation in order to avoid foreclosure. Wells Fargo
allegedly failed to provide Plaintiffs with an amortization
schedule or to answer questions about the loan structure
despite numerous attempts by Deborah Schmidt to communicate
with Wells Fargo by phone and in person. Compl. ¶
allege that on January 27, 2012, Wells Fargo refused to
accept Plaintiffs' mortgage payments. Compl. ¶ 4(c).
Debora Schmidt made several in-person visits to one of
Defendant's locations but was unable to “straighten
out the issue of the misapplied payment.” Compl. ¶
15. According to the complaint, all payments between August
2012 and August 2016 were timely made. Compl. ¶ 19. They
fell behind on their mortgage in September, 2016 but were
again denied a modification. Plaintiffs received a foreclosure
notice on January 15, 2016. Compl. ¶ 19. Plaintiffs
insist that all payments were made timely between August 2012
and January 2016. Id. Plaintiffs brought this action
on March 14, 2017. A foreclosure complaint was brought
against them on March 22, 2017, in the Morris County Superior
Court of New Jersey Chancery Division. Bender Cert. Ex A. The
complaint further alleges that between January 2013 and
January 2017 Plaintiffs received a torrent of
“robo-calls” concerning Plaintiffs' debt to
Plaintiffs' home and cell phones. Compl. ¶ 22.
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). In deciding a motion to dismiss under Rule
12(b)(6), a court must take all allegations in the complaint
as true and view them in the light most favorable to the
plaintiff. See Warth v. Seldin, 422 U.S. 490, 501
(1975); Trump Hotels & Casino Resorts, Inc. v. Mirage
Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998).
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 formulaic
recitation of the elements of a cause of action will not
do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007). Factual allegations must be sufficient to raise a
plaintiff's right to relief above a speculative level, to
make it “plausible on its face.” See Id.
at 570; see also Umland v. PLANCO Fin. Serv., Inc.,
542 F.3d 59, 64 (3d Cir. 2008). A claim has “facial
plausibility 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, 129 S.Ct. 1937, 1949 (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, 129 S.Ct. at
Court addresses each of Plaintiffs' five Counts in order.
Count 1 alleges that Wells Fargo violated the Real Estate
Settlement Procedures Act (RESPA) by failing to respond to a
written request for information about Plaintiffs' 2012
loan modification. Count 2 alleges that Wells Fargo committed
fraud by misrepresenting to Plaintiffs that they were
ineligible for a modification under the Home Affordable
Mortgage Program (HAMP), forcing Plaintiffs to sign a
predatory loan modification instead. Count 3 alleges that
Wells Fargo breached the covenant of good faith and fair
dealing implied in the parties' loan modification
agreement. Count 4 alleges slander of credit. And Count 5
alleges that Wells Fargo violated the Telephone Consumer
Protection Act (TCPA) by repeatedly using an automatic
dialing system to contact Plaintiff Deborah Schmidt regarding
late mortgage payments. Plaintiffs' TCPA claim plausibly
states a basis for relief; Counts 1 through 4 do not.
Plaintiffs' RESPA Claim
passed RESPA “to insure that consumers throughout the
Nation are provided with greater and more timely information
on the nature and costs of the [real estate] settlement
process and are protected from unnecessarily high settlement
charges caused by certain abusive practices that have
developed in some areas of the country.” 12 U.S.C.A.
§ 2601 (West). The statute requires a servicer to
acknowledge and respond to any “qualified written
request” for information made by a borrower. The
servicer must make any appropriate corrections to the
borrower's account or otherwise conduct an investigation
into the error and provide the borrower with a written
explanation or clarification. 12 § U.S.C.A. §