United States District Court, D. New Jersey
DEBORA SCHMIDT and JAMES T. SCHMIDT, Plaintiffs,
FEIN, SUCH, KAHN & SHEPARD, P.C., Defendant.
MCNULTY, UNITED STATES DISTRICT JUDGE.
and James T. Schmidt bring this action under the Fair Debt
Collection Practices Act (FDCPA), 15 U.S.C. § 1692,
against the attorneys who represented their mortgagee in
connection with collection efforts and, ultimately,
foreclosure. The defendant, Fein, Such, Kahn & Shepard,
P.C. (the "Fein firm") has filed a motion (ECF no.
7) under Rule 12(b)(6) to dismiss the complaint for failure
to state a claim. For the reasons stated below, the motion
will be denied.
allegations of the Complaint are taken as true for purposes
of this motion only. Mr. and Mrs. Schmidt purchased a
residence at 14 Nina Place, Randolph, New Jersey, in 2002. In
2007, they refinanced their mortgage with Wells Fargo Bank.
In the fall of 2016, following unfortunate financial
reverses, the Schmidts defaulted on their mortgage.
Fein firm, acting as a debt collector, sent the Schmidts a
letter stating that they had not made their loan payment for
August 2016. In actuality, they made the August payment
within the grace period. They acknowledge, however, that they
failed to make payments in September 2016 and thereafter.
court action in foreclosure followed, in which the plaintiff
was represented by the Fein firm. The plaintiff was an HSBC
trust, which claimed to have obtained the mortgage by
assignment. This claim of assignment, according to the
plaintiffs, was fraudulent because the assignment violated
the trust's Pooling and Servicing Agreement (PSA) in that
it occurred after the trust's operations closed and was
in default at the time of the transfer.
January 2017, the Fein firm, acting as a debt collector, sent
the Schmidts three letters. Two of them stated that HSBC held
the mortgage, and one held that Wells Fargo held the
mortgage. Because HSBC allegedly did not actually own the
debt, and for other reasons, these letters misrepresented the
debt in a manner that would confuse a reasonable person, and
hence violated the FDCPA.
Standard on a motion to dismiss
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 §
l2.3O (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.
See Cardio-Med. Assoc, Ltd. v. Crozer-Chester Med.
Ctr., 721 F.2d 68, 75 (3d Cir. 1983); Iwanowa,
67 F.Supp.2d at 438. It "review[s) only whether the
allegations on the face of the complaint, taken as true,
allege facts sufficient to invoke the jurisdiction of the
district court." Common Cause of Penn. v.
Pennsylvania, 558 F.3d 249, 257 (3d Cir. 2009) (quoting
Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181,
188 (3d Cir. 2006)). In short, the standard on a facial
jurisdictional challenge is similar to the usual motion to
dismiss for failure to state a claim under Rule
12(b)(6), Fed. R. Civ. P., 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
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. Sent., 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
Fein firm moves to dismiss the complaint under the
Rooker-Feldman doctrine. See District of
Columbia Court of Appeals v. Feldman,460 U.S. 462, 482
(1983); Rooker v. Fidelity Trust Co.,263 U.S. 413,