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Schaffer v. Home Mortgage Corp.

United States District Court, D. New Jersey

March 31, 2019

DEREK SCHAFFER, Individually and on Behalf of Home Mortgage Corporation, and CARL DIANTONIO, Individually and on Behalf of Home Mortgage Corporation, Plaintiffs,
v.
HOME MORTGAGE CORPORATION, MARVIN J. ZAGORIA, DONALD E. SISSON, JOEL S. ARDGETTI, ESQ., LARRY WARNER, ROBIN HOLLAND, JANIS KOPLIN ZAGORIA, and PNC BANK, Defendants. DONALD E. SISSON, Counter-Claimant,
v.
DEREK SCHAFFER and CARL DIANTONIO, Counter-Defendants.

          DANIEL HENRY MARIANI MATTHEW R. MCCRINK MCCRINK, KEHLER & MCCRINK On behalf of Plaintiffs/Counter-Defendants

          DOUGLAS F. JOHNSON EARP COHN P.C. On behalf of Defendant Janis Koplin Zagoria

          DONALD E. SISSON Appearing pro se

          JAMES A. KASSIS SCHENCK, PRICE, SMITH, & KING, LLP On behalf of Defendant PNC Bank

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         This matter concerns claims by Plaintiffs that Defendants conspired to steal or convert Plaintiffs' funds deposited in an escrow account at PNC Bank intended as a good faith deposit for Plaintiffs' purchase of Home Mortgage Corporation. Defendants PNC Bank and Donald Sisson have moved to dismiss Plaintiffs' claims.

         For the reasons expressed below, Defendants' motions will be granted in part and denied in part.[1] Plaintiffs shall be afforded thirty days to move for leave to file a third amended complaint.

         BACKGROUND

         According to Plaintiffs' second amended complaint, [2] in early 2016, Plaintiffs Derek Schaffer and Carl DiAntonio entered into an agreement to purchase Defendant Home Mortgage Corporation from Defendants Donald Sisson and Marvin Zagoria. On March 10, 2016, Schaffer, DiAntonio, Sisson, and Zagoria went to a PNC Bank branch in Georgia. Schaffer and DiAntonio became signatories on a new account in the name of Home Mortgage Corporation (apparently called the “HMC-North account”), and deposited $100, 000 into the account as a good faith deposit to be held in escrow as part of the agreement between the parties to purchase Home Mortgage Corporation. A PNC Bank employee, Evelyn A. Stevenson, facilitated the transaction.

         Plaintiffs left the bank, but they contend that Sisson and Zagoria stayed behind. Plaintiffs claim that without their knowledge and permission, Stevenson added Sisson and Zagoria to the new HMC-North account as co-signatories. Plaintiffs relate that Sisson and Zagoria maintained a separate bank account for Home Mortgage Corporation at PNC Bank (referred to as the “HMC- because the Court will dismiss Plaintiffs' RICO claim, the parties' citizenships must be properly averred to confirm that this Court may exercise diversity jurisdiction. The parties will be directed, therefore, to file a Joint Certification of the Citizenship of the Parties within 10 days of the date of this Opinion and accompanying Order. See South account”).

         Plaintiffs returned to New Jersey, and in that same month of March 2016, obtained a license for Home Mortgage Corporation through the New Jersey Department of Banking, and opened a branch in Voorhees, New Jersey. Plaintiffs claim that they transacted mortgage business until December 2016.

         On December 16, 2016, Plaintiffs allege that they discovered various fraudulent activities by Sisson and Zagoria when the IRS froze the HMC-North and HMC-South bank accounts. Plaintiffs claim that Sisson and Zagoria improperly used $92, 000 of the $100, 000 that was supposed to be held in escrow as good faith money for the sale of Home Mortgage Corporation. Plaintiffs also allege that Defendants failed to pay them over $62, 800 in mortgage settlement funds, fees, and other charges.

         In addition to the money Defendants allegedly unlawfully converted, Plaintiffs claim that Defendants further defrauded Plaintiffs by failing to add Plaintiffs' names as corporate officers to Home Mortgage Corporation's corporate documents or to register the corporate documents with the Georgia Secretary of State, even though it was understood between the parties when they entered into the purchase agreement that Plaintiffs would be named as corporate officers to Home Mortgage Corporation as part of the purchase agreement.

         Plaintiffs have asserted fourteen counts in their complaint as follows:

Count I - Fraud/Fraudulent Inducement against all Defendants;
Count II - Breach of Contract against all Defendants;
Count III - Breach of Covenant of Good Faith and Fair Dealing against all Defendants;
Count IV - Conversion against all Defendants;
Count V - Intentional Misrepresentation against all Defendants;
Count VI - Negligent Misrepresentation against all Defendants;
Count VII - Disgorgement against all Defendants except PNC Bank[3];
Count VIII - Breach of Fiduciary Duty against all Defendants;
Count IX - Accounting against all Defendants except PNC Bank;
Count X - Civil Conspiracy to Commit Fraud against all Defendants;
Count XI - Imposition of Constructive Trust against all Defendants except for PNC Bank;
Count XII - Negligence against all Defendants;
Count XIII - Breach of Fiduciary Duty against PNC ...

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