Wilson v. Roundpoint Mortg. Servicing Corp.
| Docket Number | Civil Action 21-19072 (CPO) |
| Decision Date | 31 August 2022 |
| Parties | RALPH F. WILSON, JR., Plaintiff, v. ROUNDPOINT MORTGAGE SERVICING CORPORATION, Defendant. |
| Court | U.S. District Court — District of New Jersey |
Thomas Gerard Masciocchi Keaveney Legal Group On behalf of Plaintiff Ralph F. Wilson, Jr.
Edward W. Chang Jonathan F. Ball Michael P. Trainor Blank Rome LLP One Logan Square On behalf of Defendant Roundpoint Mortgage Servicing Corporation.
CHRISTINE P. O'HEARN, United States District Judge This matter comes before the Court on a Motion to Dismiss by Defendant RoundPoint Mortgage Servicing Company (“RoundPoint”), (ECF No. 9), seeking to dismiss the Complaint filed by Plaintiff Ralph F. Wilson, Jr., (ECF No. 1) in its entirety. For the reasons that follow, the Court grants the Motion in part and denies it in part.
Plaintiff alleges that he was the sole signatory of a Note and Mortgage that entered default status at some point prior to the filing of this case. (Compl., ECF No. 1 ¶ 2A). Plaintiff made an application for loss mitigation relief and RoundPoint, the servicer of the loan, approved Plaintiff for a mortgage modification plan on March 30, 2020. (Compl., ECF No. 1 ¶¶ 1C, 2F). Plaintiff alleges that he accepted the offer and the parties thereafter entered into a Trial Plan Payment Agreement (“TP1”). (Compl., ECF No. 1 ¶ 2F-G; Count II ¶ 9). TP1 required Plaintiff to make three payments, each in the amount of $982.94, by May 1, 2020, June 1, 2020, and July 1, 2020, in order to be eligible for loan modification. (Compl., ECF No. 1 ¶¶ 2H, 2I).
Plaintiff made four payments, each for the required amount of $982.94, to RoundPoint over the course of four months. (Compl., ECF No. 1 ¶ 2J, Exh. B). Plaintiff alleges that RoundPoint then ceased communication and maliciously refused to issue a permanent loan modification despite his completion of the requirements of TP1. (Compl., ECF No. 1 ¶¶ 2K, 2M).
At that point, RoundPoint initiated a foreclosure proceeding in the Superior Court of New Jersey, Atlantic County, Chancery Division. (Compl., ECF No. 1 ¶¶ 2A, 2M). “In order to attempt a resolution,” Plaintiff was offered and again accepted a second trial period plan for a mortgage modification (“TP2”) on December 17, 2020. (Compl., ECF No. 1 ¶¶ 2N, 2O, 2Q). This agreement is identical to the first plan except for the payment amount, now $950.37, and the trial period payment due dates of February 1, 2021, March 1, 2021, and April 1, 2021.
Plaintiff alleges that he made the required TP2 payments but RoundPoint again refused to issue a permanent modification. (Compl., ECF No. 1 ¶¶ 2S, 2T). As a result, Plaintiff commenced this action on October 20, 2021 alleging: common law negligence/and or reckless indifference and/or intentional misrepresentation (Count I); breach of contract and breach of good faith and fair dealing (Count II); common law fraud and/or violation of the New Jersey Consumer Fraud Act N.J.S.A. (“CFA”) (Count III); and violations of the Truth-in-Lending Act (“TILA”) and Real Estate Settlement and Procedures Act (“RESPA”) (Count IV).
When considering a motion to dismiss a complaint for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6), a court must accept all well-pleaded allegations in the complaint as true and view them in the light most favorable to the plaintiff. Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 2005). A pleading is sufficient if it contains “a short and plain statement of the claim showing that the pleader is entitled to relief.” F.R.C.P. 8(a)(2).
A district court, in deciding a motion to dismiss, asks “not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claim.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 563 n.8 (2007) (quoting Scheuer v. Rhoades, 416 U.S. 232, 236 (1974)); see also Iqbal, 556 U.S. 662, 684 (2009) (); Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (“Iqbal . . . provides the final nail in the coffin for the ‘no set of facts' standard that applied to federal complaints before Twombly.”). “A motion to dismiss should be granted if the plaintiff is unable to plead ‘enough facts to state a claim to relief that is plausible on its face.'” Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011) (quoting Twombly, 550 U.S. at 570).
“An amendment must be permitted in the absence of undue delay, bad faith, dilatory motive, unfair prejudice, or futility of amendment.” Van Duyne v. Stockton University, No. 1921091, 2020 WL 6144769, at *2 (D.N.J. Oct. 20, 2020) (quoting Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002)). The futility of a proposed amended pleading is evaluated under the same standard of legal sufficiency as a motion to dismiss under Rule 12(b)(6). Travelers Indent. Co. v. Dammann & Co., 594 F.3d 238, 243 (3d Cir. 2010).
For the following reasons, Defendant's Motion to Dismiss, (ECF No. 9), is granted in part and denied in part. Count I (common law negligence and/or reckless indifference and/or intentional misrepresentation) is dismissed with prejudice since amendment would be futile. Count II, which asserts two claims, is dismissed in part without prejudice; Plaintiff has sufficiently stated a claim for breach of contract but the claim for breach of good faith and fair dealing is dismissed without prejudice. Count III also asserts two claims, common law fraud and/or violation of the CFA, both of which are dismissed without prejudice. Finally, Count IV also asserts two claims, violations of TILA and RESPA: the TILA claim is dismissed without prejudice, the RESPA claim alleging a violation of 12 C.F.R. § 1024.41 is dismissed without prejudice, and the RESPA claim alleging a violation of 12 C.F.R. § 1024.40 is dismissed with prejudice.
Plaintiff's Complaint asserts multiple common law tort claims, each of which is precluded by the economic loss doctrine.[1]
Under the economic loss doctrine, it is well established that plaintiffs are prohibited from “recovering in tort economic losses to which their entitlement only flows from a contract.” Duquesne Light Co. v. Westinghouse Elec. Co., 66 F.3d 604, 618 (3d Cir. 1995). Courts regularly dispose of these barred tort claims at the motion to dismiss stage. See Perkins v. Washington Mutual, FSB, 655 F.Supp.2d 463, 471 (D.N.J. 2009) (); American Fin. Resources, Inc. v. Countrywide Home Loans Servicing, L.P., No. 12-7141, 2013 WL 6816394, *6 (D.N.J. Dec. 23, 2013) (); Bracco Diagnostics, Inc. v. Bergen Brunswig Drug Co., 226 F.Supp.2d 557, 565 (D.N.J. 2002) ().
New Jersey law permits an exception to the absolute bar imposed by the economic loss doctrine when a defendant “owe[s] a duty of care separate and apart from the contract between the parties.” Saltiel v. GSI Consultants, Inc., 170 N.J. 297, 314 (2002). This exception, however, is seldom allowed when a parties' relationship is governed by a comprehensive contractual agreement. See New Mea Const. Corp. v. Harper, 203 N.J.Super. 486, 497 (1985); see also Int'l Minerals & Mining Corp. v. Citicorp N. America, 736 F.Supp. 587, 597 (D.N.J. 1990) (“Where a party does not owe another a duty of care absent the existence of a contract, a separate duty of care cannot arise simply by virtue of the existence of the contract.”). Further, “[u]nder New Jersey law, the mere existence of a mortgage agreement between plaintiff and defendant is insufficient, as a matter of law to create any duty of care owing from Defendant to Plaintiff' beyond the obligations of the contract. Brancato v. Specialized Loan Servicing, LLC, No. 15-6780, 2018 WL 2770137, at *9 (D.N.J. June 8, 2018) (quoting Bank of America, N.A. v. Westheimer, 2014 WL 809207, at *4-5 (D.N.J. Feb. 18, 2014)).
Here, Plaintiff's varied tort claims are based on a contractual relationship-namely the TP1 and TP2 agreements-and Plaintiff has not articulated an independent duty on which his claims could rely. To the extent that he relies on 12 C.F.R. § 1024.41 to state a duty, that argument fails because § 1024.41(a) expressly states that “[n]othing in § 1024.41 imposes a duty on a servicer to provide any borrower with any specific loss mitigation option.” To the extent that he relies on the Defendant's alleged violation of another court's order related to the foreclosure action, such a violation would be properly raised before that court and does not create an independent duty or other remedy before this Court. Thus, Plaintiff's tort claims against Defendant are barred as a matter of law by the economic loss doctrine and the Court will dismiss Count I with prejudice, for failure to state a claim.
Plaintiff alleges that the Defendant breached TP1 and TP2. “To prevail on a breach of contract claim under New Jersey law, a plaintiff must establish three elements: (1) the existence of a valid contract between the parties; (2) failure of the defendant to perform its obligations under the contract; and (3) a causal relationship between the breach and the plaintiffs alleged damages.” Sheet Metal Workers Intern. Ass'n v. E.P. Donnelly, Inc., 737 F.3d 879, 900 (3d Cir. 2013) (citing Coyle v. Englander's, 488 A.2d 1083, 1088 (N.J.Super. 1985)).
Defendant does not substantively address Plaintiff's breach of contract claim other than to...
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