Zirbser v. Wells Fargo Bank, N.A.

• Decision Date: 19 July 2019
• Docket Number: 19-cv-01099-RBK-KMW
• Parties: DOLORES T. ZIRBSER and BRUCE JON SPALLA, individually and on behalf of others similarly situated, Plaintiffs, v. WELLS FARGO BANK, N.A., Defendant.
• Court: U.S. District Court — District of New Jersey

DOLORES T. ZIRBSER and BRUCE JON SPALLA, individually and on behalf of others similarly situated, Plaintiffs, v. WELLS FARGO BANK, N.A., Defendant.

19-cv-01099-RBK-KMW

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CAMDEN VICINAGE

July 19, 2019

OPINION

KUGLER, United States District Judge:

THIS MATTER comes before the Court on Defendant Wells Fargo's motion to dismiss (Doc. No. 8 ("Def.'s Br.")) Plaintiffs Dolores T. Zirbser and Bruce Jon Spalla's Complaint. (Doc. No. 1 ("Compl.")) Plaintiffs allege violations of the New Jersey Consumer Fraud Act ("NJCFA"), breach of contract, and breach of the covenant of good faith and fair dealing on behalf of themselves and similarly situated New Jersey citizens. (Id.) For the following reasons, Defendant's motion to dismiss is GRANTED as to Counts I-IV and DENIED as to Count V.

I. BACKGROUND¹

This case is about a loan agreement for a home equity line of credit. Dolores Zirbser and Bruce Jon Spalla ("Plaintiffs") first took out a home equity line of credit with Wachovia Bank ("Wachovia") in July 2006. (Compl. at ¶¶ 10-11.) Wachovia then sold the loan to Wells Fargo("Defendant") in 2008. Plaintiffs argue that both Wachovia and Wells Fargo billed them for "erroneous fees" and accepted payments not authorized by the loan agreement. (Id. at ¶¶ 17, 21.)

Plaintiffs claim that Defendant improperly charged them for services not within the underlying loan agreement. (Id. at ¶ 40). Plaintiffs argue that Defendant also billed them for "erroneous fees" from 2011 to 2016. (Id. at ¶ 21.) For example, Wells Fargo charged Plaintiffs for: "(1) debit charges in lieu of what should be credits on 10-4-11; (2) an 'advance fee' on 8-4-14; (3) an 'access fee' on 8-27-14; and (4) debit charges in lieu of what should be credits on 9-20-16." (Id.) Plaintiffs argue that the underlying loan agreement never authorized Plaintiffs to secure "cash advances" from the Defendant. (Id. at ¶ 12.) Instead, the loan simply authorized the drawing of funds against the Plaintiffs' home equity line of credit. (Id.)

Plaintiffs filed suit against Defendant Wells Fargo on December 10, 2018. (Id. at ¶ 34.) The Complaint alleges five causes of action. All five claims relate to Defendant's charging of "cash advances" and "'pel' fees." (Id. at ¶¶ 16-17.) Count I claims that Defendant violated Section 2 of the NJCFA against a class of similarly situated New Jersey citizens. (Id. at ¶ 96.) Count II demands that Defendant refund the class for these NJCFA violations. (Id. at ¶ 103.) Count III similarly requests equitable relief for the violations. Specifically, Plaintiffs ask the Court to order Defendant to (1) cease billing New Jersey citizens for these illegal charges; (2) issue a corrective notice to class members regarding the illegal charges; and (3) restore all profits from illegal charges to class members. (Id. at ¶ 114.) Next, Count IV claims that Defendant breached the underlying loan agreement. (Id. at ¶ 121.) Finally, Count V states that Defendant violated the covenant of good faith and fair dealing. (Id. at ¶ 130.)

Defendant Wells Fargo filed the instant motion to dismiss on February 15, 2019. (Doc. No. 8 ("Def.'s Br.")) First, Defendant argues that Plaintiffs' claims are time barred becausedisputes as to the terms of the loan agreement are subject to a six-year statute of limitations under N.J. STAT. ANN. § 2A:14-1. (Def.'s Br. at 1.) Second, Defendant asserts that all claims within the statute of limitations period, if any, fail to meet the particularity requirements of Federal Rule of Civil Procedure 9(b). (Id.) Third, Defendant argues that the remaining claims—breach of contract and implied covenant—fail under Federal Rule of Civil Procedure 8. (Id.) The Court will consider these arguments in turn.

II. LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(6), a court may dismiss an action for failure to state a claim upon which relief can be granted. When evaluating a motion to dismiss, "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." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quoting Phillips v. Cty. Of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). A complaint survives a motion to dismiss if it contains enough factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).

In making this determination, the court conducts a three-part analysis. Santiago v. Warminster Township, 629 F.3d 121, 130 (3d Cir. 2010). First, the court must "tak[e] note of the elements a plaintiff must plead to state a claim." Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 675-79 (2009)). Second, the court should identify allegations that, "because they are no more than conclusions, are not entitled to the assumption of truth." Id. (quoting Iqbal, 556 U.S. at 679). Finally, "where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief." Id. (quoting Iqbal, 556 U.S. at 679). This plausibility determination is a "context-specific task thatrequires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679. A complaint cannot survive a motion to dismiss when a court can only infer that a claim is merely possible rather than plausible. Id.

III. DISCUSSION

As a preliminary matter, the Court must decide the applicable statute of limitations period. This question appears to turn on whether the underlying loan agreement is "sealed" or not. Plaintiffs claim that because the loan at issue is a "contract under seal," the applicable statute of limitations is sixteen years under N.J. STAT. ANN. § 2:14-4. (Compl. at ¶¶ 23-24.) Defendant, however, argues that because the loan is not "sealed," the applicable statute of limitations is six years under N.J. STAT. ANN. § 2A:14-1. (Def.'s Br. at 4-5.) In either case, the statute of limitations begins to run when a reasonable person knew or should have known of the alleged injury. See Caravaggio v. D'Agnostini, 765 A.2d 182, 187 (N.J. 2001) ("The standard is basically an objective one - whether plaintiff knew or should have known of sufficient facts to start the statute of limitations running.").

To be considered "sealed," the contract must include (1) a device; and (2) a statement of sealing. See Fidelity Union Trust Co. v. Fitzpatrick, 46 A.2d 837, 838-39 (N.J. 1946). As explained in Beneficial Finance Co. v. Dixon, a sealed contract must bear "a statement" that the contract is sealed and the "imprint or mark of a seal" or "the word 'sealed.'" Beneficial Finance Co. v. Dixon, 130 N.J.Super. 508, 327 A.2d 695 (Cty. Ct. 1974). Additional examples of devices that show a contract is sealed include an imprinted or raised seal, a special mark or character, and the notation "L.S." for locus sigilli. Id. Relatedly, "The mere recital of sealing, without a seal or other device by way of seal, does not constitute a seal." Reitmeier v. Kalinoski, 631 F. Supp. 565, 568 (D.N.J. 1986) (citing cases).

Here, the loan agreement is not "sealed" because it includes neither a device indicating the agreement is "sealed," nor an explicit statement of "sealing." Furthermore, the Court will not permit Plaintiffs to attach a new "sealed" document in their brief to cure the unsealed loan agreement in the Complaint.² Thus, because the loan agreement is not "sealed," the applicable statute of limitations is six years. N.J. STAT. ANN. §2A:14-1. Plaintiffs filed suit on December 10, 2018, and consequently are precluded from asserting any claim about which they had notice prior to December 10, 2012.

The six-year statute of limitations period bars much of the misconduct cited in the Complaint. Plaintiffs' attached individual billing statements from 2006 to 2009. (See Compl. at Exs. 2-10.) This evidence shows that they had notice in 2006 under the reasonable person standard. Caravaggio, 765 A.2d at 187. Because the statute of limitations started to run at the moment of billing statement receipt, Plaintiffs are now precluded from asserting these claims. See Kennedy v. AXA Equitable Life Insurance Co, No. 06-6082, 2007 WL 2688881, at *2(D.N.J. Sept. 11, 2007). The Court therefore DISMISSES any claims regarding fees prior to the December 10, 2012 period.³

A. Plaintiffs NJCFA claims and Rule 9(b)

There are three remaining fees charged by Defendant that the Court will still consider. These include "1) an 'advance fee' on 8-4-14; (2) an 'assess fee' on 8-27-14; and (3) debit charges in lieu of what should be credits on 9-20-16." (Pls.' Br. at 9.) Plaintiffs claim that Defendant violated the NJCFA by charging these fees. (Compl. at ¶ 41.) Defendant, however, argues that the Plaintiffs' NJCFA claims are not pled with the particularity required by Federal Rule of Civil Procedure 9(b) and should therefore be dismissed. (Def.'s Br. at 7.)

The Third Circuit has held that NJCFA claims must be pled with the "stringent pleading restrictions of Rule 9(b)." See Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007) (dismissing the NJCFA claims not pled with the particularity required by Rule 9(b)). To satisfy Rule 9(b)'s particularity requirement, a plaintiff must: (1) "state the circumstances of the alleged fraud with sufficient particularity to place the defendant on notice of the precise misconduct with which [it is] charged;" and (2) "plead or allege the date, time and place of the alleged fraud or otherwise inject precision or some measure of substantiation into a fraud allegation." Frederico, 507 F.3d at 200 (internal citations omitted). As the Third Circuit explained, Rule 9(b) requires a plaintiff to provide "the essential factual background that would accompany the first paragraph of any newspaper...