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Marchi v. Nationstar Mortgage, LLC

United States District Court, D. New Jersey

September 7, 2018




         The plaintiff, Anne Marie Marchi, pro se, is or was the owner of a property in Riverdale, New Jersey. Her First Amended Complaint ("1AC", ECF no. 7)[1] asserts a claim under the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2605 and Regulation X, 12 C.F.R. part 1024, that the defendants failed to give proper consideration to her loss mitigation application before scheduling a foreclosure sale. Now before the court is the motion (ECF no. 9) of defendants Specialized Loan Servicing Company ("SLSC") and Mortgage Electronic Registration Systems, Inc. ("MERS") to dismiss the First Amended Complaint for lack of jurisdiction and failure to state a claim. See Fed. R. Civ. P. 12(b)(1) & 12(b)(6). For the reasons expressed herein, the Rule 12(b)(6) component of the motion will be granted.

         I. BACKGROUND

         A. State mortgage foreclosure and adjournment of Sheriffs Sale

         On September 10, 2007, Ms. Marchi executed a promissory note for $140, 000, secured by a mortgage on her property at 773 Canella Way, Riverdale, New Jersey. (1AC ¶ 23; see copy of Mortgage, ECF no. 9-4 at 2). The lender was the now-defunct Countrywide Home Loans, FSB. On the mortgage, defendant MERS was the designated nominee for Countrywide, its successors and assigns. The loan was thereafter transferred to Nationstar Mortgage, LLC. (1AC ¶¶ 24-25). Defendant SLSC is the loan servicer. (1AC ¶ 16).[2]

         The loan went into default. On August 16, 2017, Nationstar Mortgage obtained a final judgment of foreclosure in the amount of $226, 286.17 in the Superior Court of New Jersey, Chancery Division, Morris County. (Docket No. F-025125-14. ECF no. 9-4 at 20). A Writ of Execution issued the same day. (ECF no. 9-4 at 22).

         Ms. Marchi apparently received an adjournment of the date of a Sheriffs Sale that was scheduled for January, 2018. On March 20, 2018, she applied to the state court for a further extension. (ECF no. 9-4 at 28-29). The state court granted the application. The Sheriffs Sale, then scheduled for March 29, 2018, was adjourned until July 5, 2018. (ECF no. 9-4 at 32).

         B. Allegations of the Complaint

         The First Amended Complaint contains a number of generalized allegations. Factually, however, it is focused on a single grievance. The defendants, it alleges, violated RESPA, 12 U.S.C. § 2605, and Regulation X, 12 C.F.R. part 1024, in the months leading up to a scheduled Sheriffs Sale.

         Nationstar Mortgage and SLSC are alleged to be loan "servicers" for purposes of RESPA and Regulation X. (1AC ¶ 37). Regulation X imposes certain obligations on a servicer who receives a completed "loss mitigation application" from a borrower. (1AC ¶¶ 38, 39). For example, if a servicer receives a loss mitigation application at least 45 days before a foreclosure sale, it must send an acknowledgement letter stating that the application is complete or requesting additional information. (1AC ¶ 40). When a loss mitigation application is complete at least 37 days before a foreclosure sale, the servicer must evaluate it and provide the borrower with written notice within 30 days stating whether it will offer the borrower any loss mitigation options. (1AC ¶ 42). In the meantime, the servicer is barred from taking certain actions, including "conducting a foreclosure sale." (1AC ¶ 43).

         On or before January 10, 2014, [3] Nationstar and SLSC received loss mitigation applications from Ms. Marchi. (1AC ¶ 44). SLSC nevertheless scheduled foreclosure sales for February 1, 2018 and March 29, 2018. (1AC ¶ 45). Between those two dates, on February 12, 2018, Ms. Marchi submitted a complete loss mitigation application and was contingently approved. The Sheriffs Sale was nevertheless scheduled for March 29, 2018, and was postponed "[o]nly through the efforts of the Plaintiff." (1AC ¶¶ 47, 49).

         These actions allegedly violated several subsections of section 6 of RESPA, as well as Regulation X. Ms. Marchi sues under Section 6 of RESPA, 12 U.S.C. § 2605(f), which provides as follows:

         (f) Damages and costs Whoever fails to comply with any provision of this section shall be liable to the borrower for each such failure in the following amounts:

         (1) Individuals In the case of any action by an individual, an amount equal to the sum of-

         (A) any actual damages to the borrower as a result of the failure; and

         (B) any additional damages, as the court may allow, in the case of a pattern or practice of noncompliance with the requirements of this section, in an amount not to exceed $2, 000.


         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 defendants, as the moving parties, bear the burden of showing that no claim has been stated. Animal Science Prods., Inc. v. China Minmetals Corp., 654 F.3d 462, 469 n.9 (3d Cir. 2011). For the purposes of a motion to dismiss, the facts alleged in the complaint are accepted as true and all reasonable inferences are drawn in favor of the plaintiff. N.J. Carpenters & the Trustees Thereof v. Tishman Const Corp. of N.J., 760 F.3d 297, 302 (3d Cir. 2014).

         Fed. R. Civ. P. 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." BellAtl. 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 W. Run Student Housing Assocs., LLC v. Huntington Nat Bank, 712 F.3d 165, 169 (3d Cir. 2013). 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.

         A Rule 12(c) motion for judgment on the pleadings is often indistinguishable from a motion to dismiss, except that it is made after the filing of a responsive pleading. Fed.R.Civ.P. 12(h)(2) "provides that a defense of failure to state a claim upon which relief can be granted may also be made by a motion for judgment on the pleadings." Turbe v. Gov't of Virgin Islands, 938 F.2d 426, 428 (3d Cir. 1991). Accordingly, when a Rule 12(c) motion asserts that the complaint fails to state a claim, the familiar Rule 12(b)(6) standard applies, making due allowance, of course, for any factual allegations that are admitted in the responsive pleading. Thus, 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 general, review is confined to the allegations in the pleadings. I am permitted, however, to consider "extraneous documents that are referred to in the complaint or documents on which the claims in the complaint are based" without converting this motion into one for summary judgment. Morano v. BMW of N. Am., LLC, 928 F.Supp.2d 826, 830 (D.N.J. 2013) (citing In re Burlington Coat Factory Sec. Litig.,114 F.3d 1410, ...

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