United States District Court, D. New Jersey
MICHAEL J. DAVIDSON, Plaintiff,
CALIBER HOME LOANS, INC., Defendant.
MEMORANDUM AND ORDER
G. SHERIDAN, U.S.D.J.
matter is before the Court on Defendant, Caliber Home Loans,
Inc."s ("Defendant" or "Caliber")
motion to dismiss for failure to state a claim, and standing
to sue (ECF No. 8). The Court has subject matter jurisdiction
as Plaintiff allege breach of the Real Estate Settlement
Procedures Act (RESPA) and the Fair Debt Collection Practices
about March 14, 2007, Plaintiff Michael J. Davidson
("Plaintiff or "Davidson") closed on a
residence in Point Pleasant Beach, New Jersey with Bank of
America (BA) by way of a note and mortgage. (Compl, ECF No.
1, at ¶ 1, 19). Plaintiff financed the purchase of the
residence by receiving a loan, as evidenced by a note and
mortgage (collectively referred to hereinafter as the
"loan documents"). (Id. at ¶¶
1-3, see Ex. 3). On or about November 8, 2012, the
loan documents were assigned to Nationstar Mortgage, LLC
("Nationstar"); and on August 18, 2016, the loan
documents were assigned to U.S. Bank Trust, N.A. Prior to the
assignment to U.S. Bank, on June 29, 2016, Caliber became
servicer of the loan. (Id. at ¶5).
November 2010, Plaintiff encountered adverse financial
issues, and stopped making his monthly payment. (Id.
at ¶ 20). As a result, Plaintiff defaulted on the loan.
(Id.) On April 16, 2013, Nationstar filed a
foreclosure complaint against Davidson in the Superior Court
of New Jersey, (the "Foreclosure Matter").
(Id. at ¶ 21).
March 1, 2017, U.S. Bank was substituted as Plaintiff in the
Foreclosure Matter, and on August 10, 2017, U.S. Bank
obtained an uncontested order for final judgment against
Davidson in the amount of $588, 770.00, and was given right
to foreclose. (Id. at ¶ 23; see also U.S.
Bank Trust, N.A., as Trustee for LSF9 Master Participation
Trust v. Michael Davidson, No. 12771-13, N.J.Super. Ct.
Ch. Div, Aug. 10, 2017). During the summer and fall of 2017,
Plaintiff alleges that he and Caliber had negotiations
regarding a short pay off of the loan. (Id. at
¶ 24). At some point, Plaintiff requested that Caliber
reconsider a previous settlement offer of $260, 000.
(Id. at ¶ 25).
September 26, 2017, more than a month after final judgment
was entered, Caliber responded to Davidson's request
through letter, and in a section of that letter titled
informed Davidson that the valuation of the home was $280,
000, and "[t]herefore, the offer of $280, 000 remains
firm," ("Settlement Offer"). (Id. at
¶ 25, Ex. 3) (emphasis in original). On September 30,
2017, Davidson answered that letter via e-mail,
stating "I have decided to ACCEPT the 280k. I have all
the funding in place in MY ACCOUNT and I'm ready to go.
Please email the contracts or whatever and we'll move
forward." (ECF No. 1-7). On September 30, 2017,
Plaintiff sent Defendant an e-mail correspondence confirming
acceptance of the Settlement Offer. (Id. at ¶
26). On October 5, 2017, Plaintiff sent a written
confirmation of the offer, which consisted of the previous
e-mail and his signature. (Id. at ¶ 28).
Shortly after, Defendant allegedly rejected the Settlement
Offer, and demanded full payment of the balance due on the
loan, which was in excess of $600, 000.00. (Mat¶29).
November 17, 2017, Davidson sent to Caliber a Notice of Error
pursuant to a regulation (12 C.F.R. §§ 1024.35(b)(l
1)) for "making an offer for a short payoff, receiving
formal acceptance from [Davidson], and then cancelling the
agreement" (the "NOE"). (Id. at
¶ 30, Ex. 4). On that same date, Davidson sent a Request
for Information ("RFI") pursuant to 12 C.F.R.
§ 1024.36 to Caliber with a Qualified Written Request
pursuant to 12 U.S.C. § 2605(e)(1)(B) requesting
detailed information related to Defendant's servicing of
the Loan. (Id. at ¶ 32, Ex. 5). In response to
the NOE, Caliber alleged that it had informed Davidson,
through e-mail on October 16, 2017, that the previous
correspondence "was not a settlement offer" and
instead was meant to "provid[e] additional clarification
as to why the settlement offer of $260, 000 made by Mr.
Davidson had been denied...." (ECFNo. 1-12).
filed the present complaint, alleging that Caliber has failed
to properly service the Loan, and has failed to correct their
error by refusing to honor the Settlement Offer. (Compl. at
¶ 40). At the time of filing this suit, Davidson alleged
the Foreclosure Matter was still pending, despite the final
judgment entered against him on August 10, 2017.
(Id. at ¶ 23, 40). This Court held oral
argument on the motion on June 4, 2018. After argument, this
Court notified the parties that it was considering abstaining
or staying this case pending resolution of the foreclosure
matter in state court. (ECF No. 19). The parties then
informed the Court that the foreclosure matter is complete,
as the final judgment and writ of execution in that matter
were issued on August 10, 2017. (Def. br., ECF No. 20). All
that remains is the sheriffs sale, which Defendant canceled
due to this pending suit. (Id.) It was after final
judgment was entered on August 10, 2017 that Defendant sent
Plaintiff correspondence which included a section titled
"Settlement Offer" where
Defendant informed Plaintiff that the valuation of the home
was $280, 000, and "[t]herefore, the offer of $280, 000
remains firm." (Compl. at ¶ 25, Ex. 3). For that
reason, both parties argue that abstention is not appropriate
here, and Plaintiff claims he is not asking this Court to
overturn the foreclosure judgment. Instead, Plaintiff insists
he is only asking this Court to enforce the settlement
agreement and award damages for Defendant's alleged
violations of the Real Estate Settlement Procedures Act and
the Fair Debt Collection Practices Act.
present suit brings claims for: (1) Breach of Contract (Count
I); (2) Violation of the Covenant of Good Faith and Fair
Dealing (Count II); (3) Violations of 12 C.F.R. §
1024.35, Failure to perform a reasonable investigation into
or to correct a noticed error (Count III); (4) Violations of
12 C.F.R. § 1024.36, Failure to properly and timely
acknowledge and respond to a request for information (Count
IV); (5) Violations of the Fair Debt Collection Practices Act
(Count V); and (6) Violations of the New Jersey Consumer
Fraud Act (Count VI).
motion to dismiss for failure to state a claim pursuant to
Fed.R.Civ.P. 12(b)(6), the Court is required to accept as
true all allegations in the Complaint and all reasonable
inferences that can be drawn therefrom, and to view them in
the light most favorable to the non-moving party. See
Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d
1380, 1384 (3d Cir. 1994). "To survive a motion to
dismiss, a complaint must contain sufficient factual matter,
accepted as true, to 'state a claim to relief that is
plausible on its face.'" Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Bell Atl Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). The Third Circuit
set forth a three-part analysis for determining whether not a
complaint may survive a motion to dismiss for failure to
state a claim:
First, the court must "tak[e] note of the elements a
plaintiff must plead to state a claim." Second, the
court should identify allegations that, "because they
are no more than conclusions, are not entitled to the
assumption of truth." Finally, "where there are
well-pleaded factual allegations, a court should assume their
veracity and then determine whether they plausibly give rise
to an entitlement for relief." Santiago v.
Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010).
means that [the] inquiry is normally broken into three parts:
(1) identifying the elements of the claim, (2) reviewing the
complaint to strike conclusory allegations, and then (3)
looking at the well-pleaded components of the complaint and
evaluating whether all of the elements identified in part one
of the inquiry are sufficiently alleged." Malleus v.
George, 641 F.3d 560, 563 (3d Cir. 2011). While a court
will accept well-pleaded allegations as true for the purposes
of the motion, it will not accept bald assertions,
unsupported conclusions, unwarranted inferences, or sweeping
legal conclusions cast in the form of factual allegations.
Iqbal, 556 U.S. at 678-79; see also Morse v.
Lower Merion School District, 132 F.3d 902, 906 (3d Cir.
1997). A complaint should be dismissed only if the
well-pleaded alleged facts, taken as true, fail to state a
claim. See In re Warfarin Sodium, 214 F.3d 395,
397-98 (3d Cir. 2000). The question is whether the claimant
can prove any set of facts consistent with his or her
allegations that will entitle him or her to relief, not
whether that person will ultimately prevail. Semerenko v.
Cendant Corp., 223 F.3d 165, 173 (3d Cir.), cert,
denied, 531 U.S. 1149 (2001).
pleader is required to 'set forth sufficient information
to outline the elements of his claim or to permit inferences
to be drawn that these elements exist.'" Kost v.
Kozakewicz,1 F.3d 176, 183 (3d Cir. 1993) (quoting 5A
Wright & Miller, Fed. Practice & Procedure: Civil 2d
§ 1357 at 340). "While a complaint attacked by a
Rule 12(b)(6) motion to dismiss does not need detailed
factual allegations, a plaintiffs obligation to provide the
'grounds' of his 'entitle[ment] to relief
requires more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do,
... . Factual allegations must be enough to raise a right to
relief above the speculative level, ... ...