United States District Court, D. New Jersey
B. SIMANDLE U.S. District Judge
matter originally arises from a state-court foreclosure
action against Plaintiffs Frederick and Stacey Bounasissi
(collectively, “Plaintiffs”) in the Superior
Court of New Jersey, Burlington Country, Chancery Division.
In this federal action, Plaintiffs allege, among other
things, that Defendant PHH Mortgage Services, Inc.
(“Defendant”) violated the Real Estate Settlement
Procedures Act (“RESPA”) and RESPA's
Regulation X when it proceeded with a foreclosure sale on
Plaintiffs' home, despite the fact that Plaintiffs were
engaged in a loan modification process at the time. Currently
pending before the Court is Plaintiffs' motion for
default judgment. For the following reasons, Plaintiffs'
motion will be denied. Moreover, counsel for Plaintiffs will
be ordered to show cause why the Complaint should not be
dismissed with prejudice. The Court finds as follows:
February 15, 2017, Plaintiffs filed the instant ten-count
Complaint in the U.S. District Court for the District of New
Jersey alleging, inter alia, that Defendant violated
RESPA and RESPA's Regulation X when it proceeded with the
foreclosure sale despite Plaintiffs' involvement in a
loan modification process, and that Defendant was unjustly
enriched by its conduct, engaged in unconscionable commercial
practices including fraud and misrepresentation, and violated
the Truth in Lending Act, Fair Debt Collection Practices Act
and the New Jersey Consumer Fraud Act. [Docket Item 1 at
¶¶ 65-73, 81-88, 90, 93-96, 99-100, 102-104,
110-111.] Plaintiffs also inexplicably claim that Defendant
is liable for civil penalties under the federal criminal
statute for wire fraud, 18 U.S.C. § 1343. [Id.
at ¶¶ 108.]
Clerk of Court issued Summons as to Defendant on February 16,
2017. [Docket Item 2.] According to an affidavit of service
filed by Plaintiffs upon the docket on October 8, 2017
[Docket Item 3], Defendant was duly served on July 28, 2017,
more than 150 days after Summons was issued. Plaintiffs
requested default against Defendant on April 5, 2018 [Docket
Item 7], which the Clerk of Court entered four days later.
Plaintiffs then filed the pending motion for default judgment
[Docket Item 11], which is unopposed.
Federal Rule of Civil Procedure 55(b)(2) authorizes courts to
enter a default judgment against a properly served defendant
who fails to a file a timely responsive pleading.
See Fed. R. Civ. P. 55(b)(2). Before granting
default judgment, a court must determine whether: (1) the
plaintiff produced sufficient proof of valid service and
evidence of jurisdiction; (2) the unchallenged facts present
a sufficient cause of action; and (3) the circumstances
otherwise render the entry of default judgment
“proper.” Teamsters Health & Welfare Fund
of Phila. v. Dubin Paper Co., No. 11-7137, 2012 WL
3018062, at *2 (D.N.J. July 24, 2012) (internal citations
omitted). The determination of whether default judgment is
proper depends on: (1) whether the plaintiff will be
prejudiced; (2) whether the defendant has a meritorious
defense; and (3) whether the default was the result of the
defendant's culpable conduct. United States v. $55,
518.05 in U.S. Currency, 728 F.2d 192, 194-95 (3d Cir.
an initial matter, the undersigned expresses serious doubt
that, on the facts alleged in the Complaint, the Court has
jurisdiction over this matter in light of the
Rooker-Feldman doctrine. The Court also finds that
Plaintiffs' claims are likely barred by New Jersey's
entire controversy doctrine. Finally, Plaintiffs do not
appear to have timely served Defendant pursuant to
Fed.R.Civ.P. 4(m), which requires service within 90 days of
the issuance of the summons; Plaintiffs did not move to
enlarge time for service. Accordingly, the Court may lack
jurisdiction and Defendant likely has several meritorious
defenses. Plaintiffs are, therefore, not entitled to default
Moreover, the Court will, upon its own motion, order counsel
for Plaintiffs to show cause why the instant matter should
not be dismissed under well-settled law of the
Rooker-Feldman doctrine and New Jersey's entire
controversy doctrine as applied to situations of this type.
Plaintiffs are attempting to overturn a state court
foreclosure judgment by seeking relief in this Court. Under
the Rooker-Feldman doctrine, the Court lacks
jurisdiction to hear such a claim. See, e.g.,
Otto v. Wells Fargo Bank, N.A., 693 Fed.Appx. 161,
163 (3d Cir. 2017) (“To the extent that [the
plaintiff's] complaint can be read to include a request
for the District Court to overturn or negate the state court
judgment of foreclosure, we agree that the
Rooker-Feldman doctrine bars the suit.”)
(internal citations omitted); King v. Wells Fargo Bank,
N.A., No. 18-cv-11316 (JBS/JS), 2018 WL 6522917, at *4
(D.N.J. Dec. 12, 2018) (barring federal suit attempting to
overturn or negate a state court judgement of foreclosure);
see also In re Madera, 586 F.3d 228, 232-34 (3d Cir.
2009); In re Knapper, 407 F.3d 573, 580-83 (3d Cir.
addition, New Jersey's entire controversy doctrine likely
bars Plaintiffs' claims in this case. This doctrine
requires litigants to assert all affirmative claims relating
to the controversy between them in one action, and to join
all parties with a material interest in the controversy, or
be forever barred from bringing a subsequent action involving
the same underlying facts. King, 2018 WL 6522917, at
*4. Plaintiffs failed to join Defendant in the original
proceeding in the Superior Court of New Jersey and may not do
so now. Moreover, Plaintiffs did not join Defendant in a
previous federal suit, which was dismissed with prejudice.
See Bounasissi v. New York Life Ins. & Annuity
Corp., No. 15-cv-7585 (JBS/JS), 2016 WL 4697333, at *1
(D.N.J. Sept. 6, 2016) (case involving the same Plaintiffs
arising from same foreclosure action). In any event,
Plaintiffs have had ample opportunity to raise all claims
related to this foreclosure action and New Jersey's
entire controversy doctrine likely prevents them from
attempting to raise these claims here.
Finally, Plaintiffs do not appear to have timely served
Defendant pursuant to Fed.R.Civ.P. 4(m). Under Rule 4(m), if
a plaintiff fails to serve a defendant within 90 days after
the complaint is filed the Court must dismiss the action
without prejudice against the defendant or order that service
be made within a specified time. Plaintiffs filed the
Complaint on February 15, 2017 and served the Defendant 163
days later, on July 28, 2017. Plaintiffs have provided no
explanation for their failure to timely serve Defendant.
the foregoing reasons, the Court will deny Plaintiffs'
motion for default judgment. Additionally, counsel for
Plaintiffs must show cause within fourteen days why the
Complaint should not be dismissed with prejudice for lack of
jurisdiction under the Rooker-Feldman doctrine
and/or because Plaintiffs' claims are barred by New
Jersey's entire controversy doctrine. Plaintiff's
counsel wall also be ordered to show cause within fourteen
days why the Complaint should not be dismissed ...