Ezell v. JPMorgan Chase Bank N.A.

• Decision Date: 31 January 2020
• Docket Number: Civil Action No. 18-1407 (FLW) (DEA)
• Parties: JAMES OLIVETTE EZELL, et al., Plaintiffs, v. JPMORGAN CHASE BANK NATIONAL ASSOCIATION, et al., Defendants.
• Court: U.S. District Court — District of New Jersey

JAMES OLIVETTE EZELL, et al., Plaintiffs, v. JPMORGAN CHASE BANK NATIONAL ASSOCIATION, et al., Defendants.

Civil Action No. 18-1407 (FLW) (DEA)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

January 31, 2020

*NOT FOR PUBLICATION*

OPINION

WOLFSON, Chief Judge:

Before the Court are separate motions to dismiss filed by Defendants PennyMac Loan Services, LLC ("PennyMac") and JPMorgan Chase Bank National Association ("Chase") (collectively, "Defendants"), seeking dismissal of Plaintiffs James Olivette Ezell and Sonia Ezell's ("Plaintiffs") First Amended Complaint ("FAC") for lack of subject matter jurisdiction and failure to state a claim, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), respectively. This case stems from a mortgage foreclosure action ("Foreclosure Action") that Chase brought against Plaintiffs in state court in 2008. Plaintiffs allege that Defendants engaged in fraudulent and deceptive conduct in relation to that Action, and bring federal claims, here, against Defendants for violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962; Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692(e)(5); Real Estate Settlement Procedure Act ("RESPA"), 12 U.S.C. 2601, et. seq.; the Truth in Lending Act ("TILA"), 15 U.S.C. 1601, et. seq.; Fair Housing Act ("FHA"), 42 U.S.C. §3601; and the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. § 1691. Plaintiffs also bring the following state law claims: violation of the New Jersey civil RICO statute, N.J.S.A 2C:41, et seq.; violation of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8- 2, et seq. ("CFA"); violations of N.J.S.A. 2C:20-7 (the crime of receiving stolen property); violations of N.J.S.A. 2C:21-17.3 (the crime of identity theft); declaratory relief pursuant to N.J.S.A. 12A:3-305 and N.J.S.A. 2A:50-56.1(a); fraud; unjust enrichment; negligent representation; fraudulent concealment; constructive fraud; civil aiding and abetting fraud; willful and wanton gross negligence; civil conspiracy to defraud; unlawful conversion; loss of consortium; defamation; harassment; and quiet title.

For the following reasons, Plaintiffs' federal claims are dismissed, with prejudice, as this Court lacks subject matter jurisdiction over Plaintiffs' RICO and FDCPA claims, and because all of these claims are barred by the applicable statues of limitations. Having dismissed all of Plaintiffs' federal claims, the Court declines to exercise supplemental jurisdiction over the remaining state law claims. Plaintiffs may, however, refile their state law claims in state court within 30 days of the date of the Order accompanying this Opinion, and the statutes of limitations for those claims would be tolled for that period.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

The following facts are taken from the FAC and are assumed to be true for the purpose of deciding these motions. On November 18, 2003, Plaintiffs and Washington Mutual Bank ("WaMU") executed a $240,000 mortgage and promissory note related to a property in Asbury Park, New Jersey. FAC at ¶¶ 1, 13. Nearly five years later, on August 1, 2008, Plaintiffs defaulted on their payment obligations under the note. Id. at ¶¶ 20-21. Thereafter, when WaMU went into receivership in September of 2008, the Federal Deposit Insurance Corporation ("FDIC") assigned WaMu's assets to Chase, including the at-issue mortgage loan, through apurchase and assumption agreement. Id. at ¶ 21. In December 2008, Chase then filed a complaint for foreclosure of Plaintiffs' mortgage in the Superior Court of New Jersey, Chancery Division, Monmouth County. Id. at ¶ 24.

In March 2014, while the Foreclosure Action was pending, Chase notified Plaintiffs that their mortgage loan had been assigned to PennyMac. Id. PennyMac sent Plaintiffs a letter on April 10, 2014, notifying them of the servicing transfer. Id. On October 13, 2016, after granting summary judgment against Plaintiffs, the Superior Court entered final foreclosure judgment. Id. at ¶ 60. Before a sheriff's sale could take place, however, James Ezell filed for Chapter 13 bankruptcy on December 17, 2016, in the Southern District of Alabama. Id. at ¶ 63. On December 30, 2016, after the bankruptcy filing, the Superior Court of New Jersey dismissed, without prejudice, all claims against Plaintiffs in the Foreclosure Action pending the resolution of the Bankruptcy Action, on the basis of the automatic stay provision of Section 362(a) of the Bankruptcy Code Id. at ¶ 64, Compl., Ex. HH.

On January 31, 2018, Plaintiffs filed the Complaint in the present action and filed the FAC on December 4, 2018, bringing twenty-two federal and state claims, alleging that Defendants used unfair, deceptive and unlawful practices—namely, pursuing the Foreclosure Action while falsely claiming that they owned the subject loan—to win a final foreclosure judgment against Plaintiffs. See, e.g., FAC at ¶¶ 25, 44. In that regard, Plaintiffs allege that WaMu, Chase, and PennyMac altered documents, including the original mortgage, to make it appear that they were the rightful owners of the mortgage loan, and submitted knowingly false and fraudulent documents to the state court in the underlying Foreclosure Action. Id. Plaintiffs also make an assortment of additional allegations, including that Chase never provided Plaintiffs a required TILA Notification of Assignment, Sale, and Transfer of Ownership, and thatPennyMac never responded to Plaintiffs' Qualified Written Request in 2014. Id. at ¶¶ 27, 170. Plaintiffs also assert that WaMU, which is not a party to this action, discriminated against Plaintiffs, who are minorities and disabled, in the execution of the original mortgage in 2003. In that regard, Plaintiffs argue that WaMU "willfully steered" Plaintiffs into signing a purportedly fraudulent and unconscionable mortgage loan with "predatory and high-cost terms," while at the same time "withholding from the Plaintiffs other financing options consisting of better terms and conditions" offered to white and non-disabled persons. Id. at ¶ 182.

In late 2018 and early 2018, Defendants separately moved to dismiss the FAC for lack of subject matter jurisdiction and failure to state a claim pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), respectively. ECF Nos. 29 and 33. Rather than rule on these motions, on May 3, 2019, this Court issued an Order staying and administratively terminating the matter pending the resolution of the Bankruptcy Action. ECF No. 35. After counsel for PennyMac informed the Court on June 19, 2019, that the United States Bankruptcy Court for the Southern District for Alabama had lifted the automatic stay, the Court reinstated the matter and relisted the pending motions to dismiss. ECF No. 37.

II. LEGAL STANDARD

Pursuant to Federal Rule of Civil Procedure 12(b)(1), a defendant may move to dismiss a case for lack of subject matter jurisdiction. See Fed. R. Civ. P. 12(b)(1). Because subject matter jurisdiction is required for a district court to reach the merits of a claim, "the court should consider the 12(b)(1) challenge first because if it must dismiss the complaint for lack of subject matter jurisdiction, all other defenses and objections become moot." Bishop v. Department of Homeland Sec., No. 14-5244, 2015 WL 2125782, at * 2 (D.N.J. May 6, 2015). Unlike a Rule 12(b)(6) motion, there is no presumption of truth attached to the allegations in the complaintwhen determining the court's subject matter jurisdiction. See id.; see also Mortensen v. First Federal Sav. & Loan Ass'n, 549 F. 2d 884, 891 (3d Cir. 1977).

A Rule 12(b)(1) motion to dismiss is treated as either a "facial or factual challenge to the court's subject matter jurisdiction." Gould Electronics, Inc. v. United States, 220 F. 3d 169, 176 (3d Cir. 2000). A facial attack, such as in this case, "is an argument that considers a claim on its face and asserts that it is insufficient to invoke the subject matter jurisdiction of the court because ... it does not present a question of federal law ...". Constitution Party of Pennsylvania v. Aichele, 757 F. 3d 347, 358 (3d Cir. 2014). In that regard, the court views only the allegations in the pleadings in the light most favorable to the plaintiff. U.S. ex Rel. Atkinson v. PA. Shipbuilding Co., 473 F. 3d 506, 509 (3d Cir. 2007).

Defendants also move to dismiss under Federal Rule of Civil Procedure Rule 12(b)(6). Under Fed. R. Civ. P. 12(b)(6), a complaint may be dismissed for "[f]ailure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). When reviewing a motion to dismiss on the pleadings, courts "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (quotations omitted). Under this standard, the factual allegations set forth in a complaint "must be enough to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Indeed, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "[A] complaint must do more than allege the plaintiff's entitlement to relief. A complaint has to 'show' such an entitlement with its facts." Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009).

However, Rule 12(b)(6) only requires a "short and plain statement of the claim showing that the pleader is entitled to relief" in order to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Twombly, 550 U.S. at 555. The complaint must include "enough factual matter (taken as true) to suggest the required element. This does not impose a probability requirement at the pleading stage, but instead...