Barrett v. Wash. Mut. Bank

• Decision Date: 16 July 2018
• Docket Number: Civ. No. 17-cv-7942 (KM)
• Parties: STARR BARRETT, Plaintiff, v. WASHINGTON MUTUAL BANK, FA; FANNIE MAE, FANNIE MAE AS TRUSTEEE FOR SECURITIZED TRUST FANNIE MAE GUARANTEED REMIC PASS-THROUGH CERTIFICATES REMIC 2003-128 TRUST, WELLS FARGO HOME MORTGAGE, AND DOES 1 THROUGH 100 INCLUSIVE, et al., Defendants
• Court: U.S. District Court — District of New Jersey

STARR BARRETT, Plaintiff, v. WASHINGTON MUTUAL BANK, FA; FANNIE MAE, FANNIE MAE AS TRUSTEEEFOR SECURITIZED TRUST FANNIE MAE GUARANTEED REMIC PASS-THROUGHCERTIFICATES REMIC 2003-128 TRUST, WELLS FARGO HOME MORTGAGE,AND DOES 1 THROUGH 100 INCLUSIVE, et al., Defendants

Civ. No. 17-cv-7942 (KM)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

July 16, 2018

OPINION

KEVIN MCNULTY, U.S.D.J.:

I. Introduction

This action arises from a state court mortgage foreclosure action which went to final judgment on July 31, 2017. Starr Barrett, as mortgagor/borrower, brings this action against Washington Mutual Bank, FA ("WaMu"), whose successor is JPMorgan Chase Bank, N.A. ("Chase"); Fannie Mae; Fannie Mae as Trustee for Securitized Trust Fannie Mae Guaranteed REMIC Pass-Through Certificates REMIC 2003-128 Trust; and Wells Fargo Home Mortgage. Defendants move under Fed. R. Civ. P. 12(b)(1) to dismiss the complaint on jurisdictional grounds, and under Rule 12(b)(6) to dismiss it for failure to state a claim. (ECF nos. 19, 20) For the reasons stated below, the motion will be granted and the complaint will be dismissed without prejudice.

INTRODUCTION

A. The Mortgage and State Foreclosure Action

On November 10, 2003, Washington Mutual Bank, FA ("WaMu") made a residential loan to the plaintiff, Ms. Barrett. The note is secured by a mortgage on the property, 1472A Liberty Avenue, Hillside, New Jersey. On September 25, 2008, JPMorgan Chase Bank, N.A. ("Chase") purchased certain assets of WaMu from the Federal Deposit Insurance Corporation ("FDIC") as receiver. The mortgage was assigned to Chase. (Declaration of Richard P. Haber ("Haber Decl."), ECF no. 20-2, ¶3) Barrett entered into a loan modification agreement with Chase on November 5, 2011. (Id. ¶ 4) Although the complaint alleges that the loan was sold to Fannie Mae and securitized, Morgan remains the mortgagee of record. (Id. ¶ 3) Barrett defaulted under the note and mortgage by failing to make the payment due on September 1, 2016. (Id. ¶¶ 5, 7)

On February 22, 2017, Chase filed a complaint in foreclosure in the Superior Court of New Jersey, Chancery Division, Union County. (Docket No. F-4449-17) (Haber Decl. ¶5 & Ex. D) The Superior Court entered a final judgment of foreclosure on July 31, 2017. (Id. ¶ 6 & Ex. E)

B. This Action

On October 6, 2017, Barrett filed this action in federal court. The Complaint ("Cplt.", ECF no. 1) asserts nine causes of action:

1. Lack of standing to foreclose and wrongful foreclosure

2. Fraud in the concealment

3. Fraud in the inducement

4. Unconscionable contract

5. Breach of contract

6. Breach of fiduciary duty

7. Quiet title

8. Injunctive relief as to sheriff's sale

9. Declaratory relief as to sheriff's sale

A separate motion to dismiss was filed on behalf of defendant Wells Fargo. (ECF no. 19) A motion to dismiss was also filed on behalf of all remaining defendants (including Chase as successor to WaMu). (ECF no. 20) ("Defendants," as used herein, will refer to those remaining defendants.)

C. Standard on a motion to dismiss

Defendants have moved to dismiss the Complaint for lack of jurisdiction, citing the Rooker-Feldman doctrine (see infra). Rule 12(b)(1) governs jurisdictional challenges to a complaint. These may be either facial or factual attacks. See 2 Moore's Federal Practice § 12.30[4] (3d ed. 2007); Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). A facial challenge asserts that the complaint does not allege sufficient grounds to establish subject matter jurisdiction. Iwanowa v. Ford Motor Co., 67 F. Supp. 2d 424, 438 (D.N.J. 1999). A court considering such a facial challenge assumes that the allegations in the complaint are true, and may dismiss the complaint only if it nevertheless appears that the plaintiff will not be able to assert a colorable claim of subject matter jurisdiction. Cardio-Med. Assoc., Ltd. v. Crozer-Chester Med. Ctr., 721 F.2d 68, 75 (3d Cir. 1983); Iwanowa, 67 F. Supp. 2d at 438.

Defendants and Wells Fargo have also moved to dismiss the Complaint for failure to state a claim, pursuant to Fed. R. Civ. P. 12(b)(6). 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 defendant, as 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 deciding a Rule 12(b)(6) motion, a court must take the allegations of the complaint as true and draw reasonable inferences in the light most favorable to the plaintiff. Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (traditional "reasonable inferences" principle not undermined by Twombly, see infra).

Federal Rule of Civil Procedure 8(a) does not require that a complaint contain detailed factual allegations. Nevertheless, "a plaintiff's 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." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, the complaint's factual allegations must be sufficient to raise a plaintiff's right to relief above a speculative level, so that a claim is "plausible on its face." Id. at 570; see also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008). 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.

In connection with the motions, defendants have attached records of the state court foreclosure proceeding. These are cited, not for the facts contained therein, but only in order to establish the nature and scope of prior proceedings between the parties, and the rulings of the state court. Such records are subject to judicial notice:

[O]n a motion to dismiss, we may take judicial notice of another court's opinion—not for the truth of the facts recited therein, but for the existence of the opinion, which is not subject to reasonable dispute over its authenticity. See Kramer v. Time Warner Inc., 937 F.2d 767, 774 (2d Cir. 1991); United States v. Wood, 925 F.2d 1580, 1582 (7th Cir. 1991); see also Funk v. Commissioner, 163 F.2d 796, 800-01 (3d Cir. 1947) (whether a court may judicially notice other proceedings depends on what the court is asked to notice and on the circumstances of the instant case).

S. Cross Overseas Agencies, Inc. v. Wah Kwong Shipping Grp. Ltd., 181 F.3d 410, 426-27 (3d Cir. 1999). See generally Fed. R. Evid. 201.

Defendants have also attached the underlying mortgage documents. Such documents, as well as the records of the foreclosure action, may be considered without converting a facial Rule 12(b)(1) challenge into a factualone, or a Rule 12(b)(6) motion into one for summary judgment. See Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014) ("However, an exception to the general rule is that a 'document integral to or explicitly relied upon in the complaint' may be considered 'without converting the motion to dismiss into one for summary judgment.' ") (quoting In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)); Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993).

Where a complaint is based on particular documents, a defendant may submit and rely on such documents in its motion to dismiss. The reasons for the rule are (1) that the plaintiff, having relied on the document, cannot claim unfair surprise; and (2) the plaintiff cannot base a claim on a document while shielding the document itself from view:

What the rule seeks to prevent is the situation in which a plaintiff is able to maintain a claim of fraud by extracting an isolated statement from a document and placing it in the complaint, even though if the statement were examined in the full context of the document, it would be clear that the statement was not fraudulent.

Burlington, 114 F.3d at 1426 (on 12(b)(6) motion to dismiss securities fraud complaint alleging misstatements in annual report, court may examine the report itself).

The very substance of this complaint is based on the mortgage and note and the alleged illegality of the state foreclosure proceedings. The mortgage and note, and the publicly filed pleadings and rulings of the court in those foreclosure proceedings may therefore be considered.

Where the plaintiff is proceeding pro se, the complaint is "to be liberally construed," and, "however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers." Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). Nevertheless, "pro se litigants still must allege sufficient facts in their complaints to support a claim." Mala v. Crown Bay Marina, Inc., 704 F.3d 239, 245 (3d Cir. 2013). "While a litigant's pro se status requires a court to construe the allegations in the complaint liberally, a litigant is notabsolved from complying with Twombly and the federal pleading requirements merely because s/he proceeds pro se." Thakar v. Tan, 372 F. App'x 325, 328 (3d Cir. 2010) (citation omitted).

ANALYSIS

A. Rule 12(b)(1) motion

1. Defendant Wells Fargo

Wells Fargo Home Mortgage is named in the caption of the Complaint. The body of the complaint contains no factual allegations against Wells Fargo, which is not so much as mentioned. In its brief, Wells Fargo states that it had nothing to do with this loan. That statement is confirmed by a review of the loan documents and the rulings in the state foreclosure proceedings.

Barrett's Response (ECF no. 25) offers nothing but a statement that Wells Fargo "is included in the suit because they may be a...