United States District Court, D. New Jersey
MADELINE COX ARLEO UNITED STATES DISTRICT JUDGE.
the Court are Defendants' Motions to Dismiss, ECF Nos.
20, 21, 22, Plaintiff Laura J. Lannin's
(“Plaintiff”) Complaint, ECF No. 1, pursuant to
Federal Rule of Civil Procedure 12(b)(6). For the reasons
explained below, the motions filed by the Realogy
Defendants' and the Uzzolino Group Defendants, ECF Nos.
20, 21, are granted. Defendant NRT Title's motion, ECF
No. 22, is granted in part and denied in part.
matter arises out of Defendants' allegedly fraudulent
scheme to overcharge customers and give improper kickbacks to
each other while providing real estate closing services.
See Compl. ¶¶ 6-7. Plaintiff brings claims
against one individual and sixteen entities. The Defendants
can be grouped into three categories: (1) NRT Title; (2) the
Uzzolino Group Defendants; and (3) the Realogy
closed on her home in Morristown, New Jersey on January 18,
2018. Id. ¶ 30. Her mortgage lender, an
affiliate of Realogy, chose NRT Title to perform her title
searches. See id. ¶ 31. Plaintiff received an
invoice from NRT Title dated December 17, 2017, which
revealed that “markups were made to various
pass-through costs.” Id. ¶ 32; see
also id. ¶ 51 (“NRT Title has been hiding the
true pass-through costs via various means, including . . .
obtaining blank invoices or inflated/fabricated invoices from
its third party vendors.”). According to Plaintiff, NRT
Title also charged her “fees for services not actually
performed or impermissible under New Jersey law, ”
including, among others, fees for document review and a
messenger service. Id. ¶ 33. She also alleges
that A-Absolute Escrow Settlement (“A-Absolute”)
separately charged her a “‘settlement fee' of
$525 in addition to various other fees.” Id.
further alleges that “all Affiliated Title Insurance
Agency Defendants engaged in the same practices described
above, ” and that NRT LLC and Realogy “knew or
should have known about the foregoing illicit
practices.” Id. ¶¶ 52-53. In
addition, she alleges that Uzzolino was “the mastermind
behind the illicit billing practices for all Affiliated Title
Insurance Agency Defendants, ” id. ¶ 54,
and that the Affiliated Title Insurance Agency Defendants
“were and are sham ventures carefully engineered to
facilitate and disguise the payment of unlawful referral fees
and other kickbacks and things of value in exchange for
referrals of settlement services to and among the Defendants,
” id. ¶ 65. As a result, Plaintiff claims
that she paid more for settlement services than she would
have in the absence of the referrals and kickbacks. See
id. ¶ 67.
brought this suit on October 19, 2018 on behalf of herself
and all others similarly situated. She asserts five causes of
action: (1) violation of the New Jersey Consumer Fraud Act
(the “NJCFA”), id. ¶¶ 86-92;
(2) unjust enrichment, id. ¶¶ 93-98; (3)
breach of contract, id. ¶¶ 99-105; (4)
violation of Section 8(b) of the Real Estate Settlement
Procedure Act (“RESPA”), 12 U.S.C. §
2607(b), ¶¶ 106-11; and (5) violation of Section
8(a) of RESPA, 12 U.S.C. § 2607(a), id.
¶¶ 112-24. Defendants now move to dismiss each of
these claims on the ground that Plaintiff fails to state a
claim upon which relief can be granted.
considering a Rule 12(b)(6) motion to dismiss, the Court
accepts as true all of the facts in the complaint and draws
all reasonable inferences in favor of the plaintiff.
Phillips, 515 F.3d at 233. Dismissal is
inappropriate even where “it appears unlikely that the
plaintiff can prove those facts or will ultimately prevail on
the merits.” Id. The facts alleged, however,
must be “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). The allegations in the complaint
“must be enough to raise a right to relief above the
speculative level.” Id. Accordingly, a
complaint will survive a motion to dismiss if it provides a
sufficient factual basis such that it states a facially
plausible claim for relief. Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009).
New Jersey Consumer Fraud Act
state a claim under the NJCFA, a plaintiff must allege:
“(1) unlawful conduct; (2) an ascertainable loss; and
(3) a casual relationship between the unlawful conduct and
the ascertainable loss.” Harnish v. Widener Univ.
Sch. of Law, 931 F.Supp.2d 641, 648 (D.N.J. 2013);
see also Frederico v. Home Depot, 507 F.3d 188, 202
(3d Cir. 2007). “Unlawful conduct falls into three
general categories: affirmative acts, knowing omissions, and
violation of regulations promulgated under N.J. Stat. Ann.
§§ 56:8-2, 56:8-4.” Harnish, 931
F.Supp.2d at 648 (explaining that conduct is unlawful if it
is “misleading” such that it “stand[s]
outside the norm of reasonable business practice”);
see also Argabright v. Rheem Mfg. Co., 201 F.Supp.3d
578, 605-06 (D.N.J. 2016) (“False promises,
misrepresentations, and concealment or omission of material
facts all constitute deceptive practices under [the
brought under the NJCFA must also meet the heightened
pleading requirement of Federal Rule of Civil Procedure 9(b).
See Frederico, 507 F.3d at 200 (applying Rule
9(b)'s “stringent pleading restrictions” to
plaintiff's NJCFA claim). As such, a plaintiff must plead
“the who, what, when, where, and how.” In re
Advanta Corp. Sec. Litig., 180 F.3d 525, 534 (3d Cir.
1999) (internal quotation marks omitted); see also
Frederico, 507 F.3d at 200 (holding that Rule 9(b)
requires that fraud be alleged “with sufficient
particularity to place the defendant on notice of the
‘precise misconduct with which [it is]
charged'”). Where NJCFA claims are asserted against
multiple defendants, “[a] plaintiff must plead fraud
with particularity with respect to each defendant.”
Giercyk v. Nat'l Union Fire Ins. Co. of
Pittsburgh, No. 13-6272, 2015 WL 7871165, at *3 (D.N.J.
Dec. 4, 2015).
Title argues that Plaintiff's claim against them is
barred by the learned professional/semi-professional
exemption to the NJCFA. See ECF No. 22.1 at 28. The
Court disagrees that the exemption applies and finds that
Plaintiff adequately states a claim against NRT Title.
in New Jersey hold that “learned professionals”
are “beyond the reach of the [N]CFA] so long as they
are operating in their professional capacities.”
Macedo v. Della Russo, 178 N.J. 340, 342-46 (2004);
see also Plemmons v. Blue Chip Ins. Services, Inc.,
387 N.J. 551, 556 (App. Div. 2006) (finding an insurance
broker for homeowner's insurance to be a
semi-professional and thus excluded from liability under the
NJCFA for the performance of brokerage services). However,
the “learned professional/semi-professional
exemption” only “excludes insurance brokers,
acting within the scope of their professional license, from
liability, not insurance companies, selling insurance.”
Haskins v. First Am. Title Ins. Co., No. 10-5044,
2011 WL 5080339, at *3 (D.N.J. Oct. 25, 2011); Call v.
Czaplicki, No. 09-6561, 2010 WL 3724275, at *9 (D.N.J.
Sept. 16, 2010) (“The ‘learned professionals'
exemption applies only to insurance brokers and not insurance
companies.”). As such, NRT Title is not exempt from
claims brought under the NJCFA.
the Court finds Plaintiff's allegations sufficient to
state an NJCFA claim against NRT Title. Plaintiff alleges
that in December 2017, NRT Title charged her “fees for
services not actually performed or impermissible under New
Jersey law, including . . . $75 for ‘Document
Review' . . .; $50 for the ‘Messenger, '”
$300 for ‘Closing Prep' and $25 for
‘Secondary Mortgage Market Endorsement.'”
Compl. ¶¶ 32-33; see also id. ¶¶
34-49 (detailing why certain services were believed to be
duplicative or not performed). Drawing all inferences in
favor of the Plaintiff, the Court finds these allegations
sufficient to establish that NRT Title's conduct
“stand[s] outside the norm of reasonable business
practice, ” such that it would “victimize the
average consumer.” See Harnish, 931 F.Supp.2d
at 648. Plaintiff also alleges that NRT Title wrongfully
charged her at least $545 for title insurance as a result of
the misrepresentations. See Compl. ¶ 50. This
is sufficient to constitute an ascertainable loss that is
causally connected to NRT Title's unlawful conduct.
See Dzielak v. Whirlpool Corp., 26 F.Supp.3d 304,
336 (D.N.J. 2014) (explaining that “all that is
required” to establish ascertainable loss is an
allegation that plaintiffs “received something less
than, and different from, what they reasonably
expected” (internal quotation marks omitted)).
Accordingly, Plaintiff states a claim under the NJCFA against
The Uzzolino Group Defendants
Uzzolino Group Defendants argue that Plaintiff's
allegations are insufficient to satisfy Rule 9(b)'s
heightened pleading standard. The Court agrees.
fails to state with particularity the circumstances of the
alleged fraud such that any of the Uzzolino Group Defendant
would be put on notice of the precise misconduct with which
it is charged. See In re Advanta Corp. Sec. Litig.,
180 F.3d at 534. Instead, Plaintiff puts forth generalized
allegations regarding all of the Uzzolino Group Defendants.
See, e.g., Compl. ¶ 53 (“[A]ll Affiliated
Title Insurance Agency Defendants have engaged in the same
practices described above.”). Such “collectivized
allegations . . . do not suffice.” Giercyk,
2015 WL 7871165, at *3; see also Eli Lilly & Co. v.
Roussel Corp., 23 F.Supp.2d 460, 492 (D.N.J. 1998)
(“Rule 9(b) is not satisfied where the complaint
vaguely attributes the alleged fraudulent statements to
Plaintiff also argues that certain Uzzolino Group Defendants
are “directly implicated, ” see ECF No.
30 at 20-21 (referencing Pony Messenger Service, A-Absolute,
and Uzzolino), Plaintiff's Defendant-specific allegations
are equally insufficient. For example, Plaintiff alleges that
A-Absolute separately charged her a “‘settlement
fee' of $525.” Compl. ¶ 46. Without more,
however, this allegation does not satisfy Rule 9(b)'s
heightened pleading standard. See Zebarsky v. Bed Bath
& Beyond, Inc., No. 06-1735, 2006 WL 3454993, at *4
(D.N.J. Nov. 29, 2006) (“[T]he pleadings must state
what the misrepresentation was, what was purchased, when the
conduct complained of occurred, by whom the misrepresentation
was made, and how the conduct led plaintiff to sustain an
ascertainable loss.”). Similarly, Plaintiff alleges
that NRT Title charged her $50 for a messenger, “which
was paid to Defendant Pony Messenger Service, LLC.”
Compl. ¶ 41. Plaintiff then alleges that “[t]he
same day hand delivery of a title commitment to an
attorney's office is totally unnecessary in today's
era of emails and cheaper commercial overnight delivery
services.” Id. ¶ 42. Nevertheless,
“[m]ere customer dissatisfaction does not constitute
consumer fraud.” In re Van Holt, 163 F.3d 161,
168 (3d Cir. 1998) (finding the denial of insurance benefits
to which the plaintiffs believed they were entitled did not
constitute an unconscionable commercial practice).
addition, Plaintiff fails to allege facts with sufficient
particularity against Uzzolino. Plaintiff alleges that
“Uzzolino was the mastermind behind the illicit billing
practices for all Affiliated Title Insurance Agency
Defendants.” Compl. ¶ 54. Yet, the Complaint lacks
any factual support for this statement. See Tremco Canada
Div., RPM Canada v. Dartronics, Inc., No. 13-1641, 2013
WL 2444076, at *3 (D.N.J. June 4, 2013) (“Merely
asserting that [Defendant] made ‘false promises'
without giving any factual detail in support of that
statement is not enough to state a viable [N]CFA]
claim.”). The only other Uzzolino-specific allegations
are the following: (1) NRT Title is a joint venture between
Uzzolino and NRT LLC, Compl. ¶ 17; (2) Uzzolino owns or
partially owns a number of the other named Defendant
entities, id. ¶¶ 14-15; (3) the
Uzzolino-owned entities share the same business address,
id. ¶¶ 14-16; and (4) Uzzolino and all
other Defendants “plotted and carried out the
over-charge scheme, ” id. ¶ 54. However,
Plaintiff fails to allege what Uzzolino specifically did,
when he did it, or how.
Plaintiff alleged sufficient facts to justify piercing the
corporate veil of NRT Title such that Uzzolino could be held
individually liable. “[A] primary reason for
incorporation is the insulation of shareholders from the
liabilities of the corporate enterprise.” State
Capital Title & Abstract Co. v. Pappas Bus. Services,
LLC, 646 F.Supp.2d 668, 679 (D.N.J. Jan 15, 2009)
(internal quotation marks omitted). “Thus, in the
absence of extraordinary circumstances, such as fraud or
injustice, a court will generally decline to pierce the
corporate veil.” Id. To pierce the corporate
veil, a plaintiff must show: (1) “unity of interest and
ownership” such that “the separate personalities
of the corporation and the individual no longer exist”;
and (2) that “adherence to the fiction of separate
corporate existence would sanction a fraud or promote
injustice.” Id. (internal quotation marks
omitted). The Third Circuit considers various non-binding
factors in determining whether unity of interest and
ownership exists, including:
gross undercapitalization . . . ‘failure to observe
corporate formalities, non-payment of dividends, the
insolvency of the debtor corporation at the time, siphoning
of funds of the corporation by the dominant stockholder,
non-functioning of other officers or directors, absence of
corporate records, and the fact that the corporation is