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Barrett v. Washington Mutual Bank, FA

United States District Court, D. New Jersey

July 16, 2018




         I. Introduction

         This action arises from a state court mortgage foreclosure action which went to final judgment on July 31, 2017. Starr Barrett, as mortgagor/borrower, brings this action against Washington Mutual Bank, FA ("WaMu"), whose successor is JPMorgan Chase Bank, N.A. ("Chase"); Fannie Mae; Fannie Mae as Trustee for Securitized Trust Fannie Mae Guaranteed REMIC Pass-Through Certificates REMIC 2003-128 Trust; and Wells Fargo Home Mortgage. Defendants move under Fed.R.Civ.P. 12(b)(1) to dismiss the complaint on jurisdictional grounds, and under Rule 12(b)(6) to dismiss it for failure to state a claim. (ECF nos. 19, 20) For the reasons stated below, the motion will be granted and the complaint will be dismissed without prejudice.


         A. The Mortgage and State Foreclosure Action

         On November 10, 2003, Washington Mutual Bank, FA ("WaMu") made a residential loan to the plaintiff, Ms. Barrett. The note is secured by a mortgage on the property, 1472A Liberty Avenue, Hillside, New Jersey. On September 25, 2008, JPMorgan Chase Bank, N.A. ("Chase") purchased certain assets of WaMu from the Federal Deposit Insurance Corporation ("FDIC") as receiver. The mortgage was assigned to Chase. (Declaration of Richard P. Haber ("Haber Decl."), ECF no. 20-2, ¶3) Barrett entered into a loan modification agreement with Chase on November 5, 2011. (Id. ¶ 4) Although the complaint alleges that the loan was sold to Fannie Mae and securitized, Morgan remains the mortgagee of record. (Id. ¶ 3) Barrett defaulted under the note and mortgage by failing to make the payment due on September 1, 2016. (Id. ¶¶ 5, 7)

         On February 22, 2017, Chase filed a complaint in foreclosure in the Superior Court of New Jersey, Chancery Division, Union County. (Docket No. F444917) (Haber Decl. ¶5 & Ex. D) The Superior Court entered a final judgment of foreclosure on July 31, 2017. (Id. ¶ 6 & Ex. E)

         B. This Action

         On October 6, 2017, Barrett filed this action in federal court. The Complaint ("Cplt.", ECF no. 1) asserts nine causes of action:

1. Lack of standing to foreclose and wrongful foreclosure
2. Fraud in the concealment
3. Fraud in the inducement
4. Unconscionable contract
5. Breach of contract
6. Breach of fiduciary duty
7. Quiet title
8. Injunctive relief as to sheriffs sale
9. Declaratory relief as to sheriffs sale

         A separate motion to dismiss was filed on behalf of defendant Wells Fargo. (ECF no. 19) A motion to dismiss was also filed on behalf of all remaining defendants (including Chase as successor to WaMu). (ECF no. 20) ("Defendants," as used herein, will refer to those remaining defendants.)

         C. Standard on a motion to dismiss

         Defendants have moved to dismiss the Complaint for lack of jurisdiction, citing the Rooker-Feldman doctrine (see infra). Rule 12(b)(1) governs jurisdictional challenges to a complaint. These may be either facial or factual attacks. See 2 Moore's Federal Practice § 12.30[4] (3d ed. 2007); Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). A facial challenge 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.

         Defendants and Wells Fargo have also moved to dismiss the Complaint for failure to state a claim, pursuant to Fed.R.Civ.P. 12(b)(6). 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 plaintiffs 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 plaintiffs 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.

         In connection with the motions, defendants have attached records of the state court foreclosure proceeding. These are cited, not for the facts contained therein, but only in order to establish the nature and scope of prior proceedings between the parties, and the rulings of the state court. Such records are subject to judicial notice:

[O]n a motion to dismiss, we may take judicial notice of another court's opinion-not for the truth of the facts recited therein, but for the existence of the opinion, which is not subject to reasonable dispute over its authenticity. See Kramer v. Time Warner Inc., 937 F.2d 767, 774 (2d Cir. 1991); United States v. Wood, 925 F.2d 1580, 1582 (7th Cir. 1991); see also Funk v. Commissioner, 163 F.2d 796, 800-01 (3d Cir. 1947) (whether a court may judicially notice other proceedings depends on what the court is asked to notice and on the circumstances of the instant case).

S. Cross Overseas Agencies, Inc. v. WahKwong Shipping Grp. Ltd., 181 F.3d 410, 426-27 (3d Cir. 1999). See generally Fed.R.Evid. 201.

         Defendants have also attached the underlying mortgage documents. Such documents, as well as the records of the foreclosure action, may be considered without converting a facial Rule 12(b)(1) challenge into a factual one, or a Rule 12(b)(6) motion into one for summary judgment. See Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014) ("However, an exception to the general rule is that a 'document integral to or explicitiy relied upon in the complaint' may be considered Svithout converting the motion to dismiss into one for summary judgment.' ") (quoting In re Burlington ...

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