NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

DOCKET NO. A-1776-11T1 DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE UNDER NOVASTAR MORTGAGE FUNDING TRUST, SERIES 2006-5, Plaintiff, v. WINDY MAZZELLA, NOVASTAR MORTGAGE, INC., A NEW JERSEY CORPORATION, Defendants, and WINDY MAZZELLA, Third-Party PlaintiffAppellant, v. US BANK, SAXON MORTGAGE SERVICES, INC., MERITECH, FEIN, SUCH, KAHN & SHEPARD, P.C., Third-Party Defendants, and ZUCKER, GOLDBERG & ACKERMAN, LLC, Third-Party DefendantRespondent. ___________________________________________________ Argued April 9, 2013 Decided August 6, 2013

Before Judges Messano and Ostrer. On appeal from the Superior Court of New Jersey, Chancery Division, Passaic County, Docket No. F-32573-08. Richard J. Kilstein argued the cause for appellant (Kilstein & Kilstein, LLC, attorneys; Mr. Kilstein, on the brief). Andrew C. Sayles argued the cause for respondent (Connell Foley, LLP, attorneys; Karen Painter Randall, of counsel; Mr. Sayles, on the brief). PER CURIAM Defendant, from the third-party 3, 2011, plaintiff order Windy Mazzella her appeals

November

dismissing

complaint

against the law firm of Zucker, Goldberg & Ackerman (ZGA) with prejudice for failure to state a claim. R. 4:6-2(e). We set

forth at length the unusual procedural history leading to the order. On August 22, 2008, Deutsche Bank National Trust Company (Deutsche Trust Bank), as Trustee filed under a Novastar Mortgage complaint Funding against

Series

2006-5,

foreclosure

Mazzella.

Mazzella filed her answer and third-party complaint Because the order

naming, among others, ZGA as a defendant.

under review resulted from a motion to dismiss pursuant to Rule 4:6-2(e), we accept as true the allegations contained in

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Mazzella's third-party complaint.

Cornett v. Johnson & Johnson,

414 N.J. Super. 365, 384 (App. Div. 2010). In 2007, Mazzella executed a forbearance predecessor agreement in (the

agreement)

with

Deutsche

Bank's

interest

regarding a loan on real property she owned.

Mazzella made

three payments in accordance with the agreement, but her fourth payment was refused. third-party defendants Mazzella claimed that ZGA and the other "refused to acknowledge the existence

and/or validity of said agreement."

ZGA served Mazzella with a A

notice of intention (NOI) to foreclose on January 4, 2008. different law firm filed Deutsche Bank's foreclosure complaint.

None of Mazzella's attorney's repeated attempts to contact ZGA regarding the NOI was successful. Mazzella claimed her

credit rating was adversely affected as a result. As to ZGA, Mazzella's third-party complaint alleged

violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.A. 1692 to 1692o, the Fair Foreclosure Act (FFA),

N.J.S.A. 2A:50-53 to -73, and negligence.

ZGA never filed an

answer and, according to Mazzella, never participated in pretrial discovery nor attended case management conferences. On

March 1, 2011, the judge informed all parties that the case was

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listed for trial on April 4.1

On March 23, ZGA filed a motion to

dismiss pursuant to Rule 4:6-2(e). On the morning of the scheduled trial, Mazzella and all parties except ZGA reached a settlement that was placed on the record. The judge determined ZGA's pending motion to dismiss

would be withdrawn, and the case would be transferred from the Chancery Division to the Law Division. judge entered an order: permitting On April 21, 2011, the ZGA to file its answer

within twenty days; setting forth a limited discovery schedule; and, adjourning the trial until September.2 Mazzella served

discovery requests which, she claims, went unanswered. Despite the April 21 order, on May 24, the judge issued a nine-page opinion granting ZGA's motion and dismissing

Mazzella's complaint against ZGA for failure to state a claim.3 It is unclear exactly what happened thereafter, but, the judge agreed to consider anew ZGA's motion to dismiss and permitted Mazzella to file opposition. ZGA essentially argued that "the

Mazzella's brief indicates that, by previous order, the judge forbade the filing of any motions without prior approval. However, there is no order in the record reflecting this limitation.
2

Although ZGA apparently filed an answer, it is not part of the record.

3

Apparently a conforming order was entered, but it is not in the appellate record.

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Court's reasoning in the May 24, 2011[,] Order should apply, and Mazzella's prejudice." The judge considered oral argument on August 5, 2011, and reserved her decision. On November 2, 2011, the judge entered claims against [ZGA] should be dismissed with

an order vacating her May 24 order and dismissing Mazzella's third-party complaint with prejudice. Accompanying the order

was a written opinion that was essentially the same opinion supporting the May 24, 2011 order. This appeal ensued.

Mazzella first argues that the judge "lacked jurisdiction" to decide the motion because she had earlier transferred the case to the Law Division. That argument lacks sufficient merit R. 2:11-3(e)(2).

to warrant discussion in this opinion.

Mazzella also contends that the judge erred in dismissing her complaint for failure to state a claim, arguing that, as to each specific cause of action, her pleading was adequate to withstand ZGA's motion. Alternatively, Mazzella argues that

dismissal with prejudice was inappropriate, and she should be permitted to file an amended complaint. Having considered these arguments in light of the record and applicable legal standards, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

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The standard that applies to consideration of a motion to dismiss pursuant to Rule 4:6-2(e) is well-known. Such motions are judged by determining whether a cause of action is suggested by the facts. Although the inquiry is limited to examining the legal sufficiency of the facts alleged on the face of the complaint[,] a reviewing court searches the complaint in depth and with liberality to ascertain whether the fundament of a cause of action may be gleaned even from an obscure statement of claim, opportunity being given to amend if necessary[.] [Nostrame v. Santiago, 213 N.J. 109, 127 (2013) (citations and quotations omitted) (first alteration in original).] "At this preliminary stage of the litigation the Court is not concerned with the ability of plaintiffs to prove the allegation contained in the complaint. For purposes of analysis plaintiffs Printing

are entitled to every reasonable inference of fact."

Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989) (citations omitted). We "apply a plenary standard of review

from a trial court's decision to grant a motion to dismiss," owing "no deference to the trial court's conclusions." Rezem

Family Assocs., LP v. Borough of Millstone, 423 N.J. Super. 103, 114 (App. Div.), certif. denied, 208 N.J. 368 (2011). Before turning to the judge's reasoning, we address one additional troubling procedural aspect of the proceedings in the Chancery Division. Rule 4:6-2 provides:

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If, on a motion to dismiss based on the defense numbered (e), matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided by R[ule] 4:46, and all parties shall be given reasonable opportunity to present all material pertinent to such a motion. ZGA's original motion was supported by a certification

dated March 21, 2011, from Brian Nicholas, then an associate with ZGA. Nicholas stated that ZGA's records revealed it was

asked by third-party defendant Saxon Mortgage (Saxon), the loan servicer, to serve Mazzella with the NOI. that the NOI instructed Mazzella "to Nicholas certified Saxon directly

contact

should she have a dispute with the amount due . . . or any of the contents of the NOI." Nicholas further stated that "[o]ur

office has no record of being contacted by Mazzella after the NOI was sent." Nicholas also certified that "[a]fter the NOI

was sent . . . my firm's involvement in this matter concluded." Although the judge relied, in part, upon the contents of Nicholas's certification, it is unclear from the record whether Mazzella was provided with "a reasonable opportunity to present all material pertinent to" ZGA's motion. contains no certification from Mazzella Ibid. or her The record attorney.

However, in opposing the motion when revived, Mazzella's counsel noted factual disputes that were obvious from the documents --

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for example, the NOI actually advised Mazzella to contact ZGA if she disputed the debt or any portion of it -- and he provided copies of a letter and follow-up emails he sent to ZGA after the NOI was served, disputing the amount of the debt under the

forbearance agreement. Despite her references to Nicholas's certification and

Mazzella's counsel's correspondence, the judge stated, "In this case, the motion to dismiss relies solely on the submission of documents referred to in the pleadings. Therefore, the court

should not treat this motion to dismiss as a motion for summary judgment." We have decided that the appropriate standard of

review is as set forth above, see Nostrame, supra, 213 N.J. at 127, and we conduct our review accordingly. Mazzella's complaint reiterated and incorporated some of the factual assertions made in her counterclaim against Deustche Bank and her cross-claim against other defendants. Regarding

violation of the FDCPA, Mazzella claimed that ZGA "repeatedly contact[ed] [her], demanding payment on a debt which [was] not owed even though they knew or should have known that defendant was not in default . . . ." The judge concluded that based upon

Nicholas's certification and Mazzella's acknowledgment that ZGA never responded to her letter and emails, Mazzella failed to state a cause of action under the statute. She noted, "[a]

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single communication by way of sending out an NOI does not give rise to a claim for 'harrassment or abuse' under the [FDCPA]." The judge also concluded, despite the actual language in the NOI to the contrary, that Mazzella was "clearly informed by the NOI to contact Saxon directly if she wished to dispute the amount of the debt." Before us, Mazzella cites a number of provisions of the FDCPA violated by ZGA. ZGA counters by arguing that none of

these specific provisions were pled and, in any event, giving Mazzella the benefit of all favorable assertions, she failed to establish any violation of the FDCPA. The FDCPA was enacted to eliminate "abusive debt collection practices by debt collectors" and to ensure that debt collectors who refrained from using unfair debt collection practices were not competitively disadvantaged. 15 U.S.C.A. 1692(e). "[T]he

[FDCPA] protects consumers . . . by creating procedural mandates for debt collection and prohibiting objectionable debt

collection practices." (2007). We reject ZGA's

Hodges v. Sasil Corp., 189 N.J. 210, 222

claim

that

Mazzella's

complaint

was

properly dismissed because she failed to specify what portions of the FDCPA were allegedly violated. whether the facts actually support a Nor need we consider cause of action under

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particular provisions of the FDCPA cited by Mazzella.

The judge

resolved certain issues -- for example, that ZGA never contacted Mazzella again after serving the NOI and performed no further work on the file -- by deeming the facts to be undisputed or by accepting Nicholas's certification. However, to defeat the

motion, Mazzella needed to demonstrate only that the "the facts alleged on the face of the complaint," when viewed "with

liberality," exhibited "the fundament of a cause of action." Nostrame, supra, 213 N.J. at 127. did so. Regarding the FFA, Mazzella claimed that ZGA "violated the [FFA] by instituting foreclosure proceedings . . . which they knew or should have known lacked merit[,]" "by relying upon a technically deficient [NOI]," and "by refusing to accept monthly mortgage payments . . . or to reinstate the mortgage." sought "statutory and punitive damages, costs of She suit, In our opinion, she clearly

attorney's fees, treble damages and . . . other . . . relief," based upon "economic and emotional damages" she incurred. In

dismissing the complaint as to the FFA, among other reasons, the judge concluded "there can be no private cause of action . . .

10

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against ZGA for initiating a foreclosure action in violation of the FFA, as this did not occur."4 Mazzella error. asserts several arguments as to why this was

However, we agree that there is no private right of

action for damages under the FFA, and, therefore, this count of the third-party complaint was properly dismissed pursuant to

Rule 4:6-2(e). Under the FFA, the NOI must "clearly and conspicuously

state" certain information "to make the debtor aware of the situation." N.J.S.A. 2A:50-56(c). "The statute does not

address the remedy for a violation of the notice of intention requirements . . . ." Guillaume, supra, 209 N.J. at 471.

However, the Guillaume Court concluded that "[a] trial court adjudicating a foreclosure complaint in which the notice of

intention does not comply . . . may dismiss the action without prejudice, order the service of a corrected notice, or impose another remedy appropriate to the circumstances of the case." Id. at 476. "In determining an appropriate remedy . . ., trial

We are unsure of the judge's meaning, since "[t]he notice of intention[,]" not the foreclosure complaint, "is a central component of the FFA, serving the important legislative objective of providing timely and clear notice to homeowners that immediate action is necessary to forestall foreclosure." US Bank Nat. Ass'n v. Guillaume, 209 N.J. 449, 470 (2012). We note that Guillaume was decided after the trial judge's decision.

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courts should consider the express purpose of the provision:

to

provide notice that makes 'the debtor aware of the situation,' and to enable the homeowner to attempt to cure the default." Id. at 479 (quoting N.J.S.A. 2A:50-56(c)). We agree with ZGA that there is nothing in the FFA or the Court's construction of the statute that hints at a cause of action for damages. Indeed, in this case, permitting such a

cause of action would seemingly not serve the remedial purposes of the FFA, i.e., to make the debtor aware of the situation and her ability to cure, see N.J.S.A. 2A:50-57, since Mazzella had already executed a workout agreement and made payments under the plan when ZGA allegedly served her with the NOI. In sum, that

portion of the third-party complaint alleging ZGA violated the FFA was properly dismissed pursuant to Rule 4:6-2(e). Because

the FFA provides no legal basis for the relief Mazzella claims, dismissal with prejudice is appropriate. Lastly, Mazzella asserted that ZGA "negligently instituted foreclosure proceedings" against her. count, reasoning "[t]he record is The judge dismissed that simply void of any

relationship between the parties which would impose a duty upon ZGA." Mazzella argues that an attorney owes a duty to non-clients in situations where the attorney knows, or should know, the non-

12

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client would rely upon the attorney's representations. e.g., Petrillo v. Bachenberg, 139 N.J. 472, 483-84 (1995). claims that ZGA invited reliance because the NOI

See, She

indicated

Mazzella could present any disputes to ZGA, and because Mazzella rightfully relied upon ZGA's obligation to abide by statutory requirements correctly breached. During oral argument on the motion, the judge seemed to limit Mazzella's claim to one for legal malpractice, but, that clearly was not the cause of action she pled. N. Am. v. Gandi, 184 N.J. 161, 182-86 In Banco Popular the Court imposed by it the owed FDCPA. no duty ZGA contends could the have judge been

assessed

that

(2005),

considered whether the plaintiff-bank's complaint for negligent misrepresentation against an attorney could withstand a Rule

4:6-2(e) motion to dismiss.

In reversing our affirmance of the

trial court's dismissal, the Court emphasized "that on a Rule 4:6-2(e) motion, the plaintiff must receive every reasonable

inference, and the complaint must be searched in depth and with liberality to determine if a cause of action can be gleaned even from an obscure statement, particularly if further discovery is taken." Id. at 183 (citations omitted). The court held "that

the [plaintiff's] claims, with all inferences accorded to them,

13

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were sufficient to pass the pleadings stage of the litigation." Id. at 186. Here, complaint These the as to negligence ZGA the count of Mazzella's factual third-party assertions. agreement,

incorporates existence of

earlier the

included

forbearance

Mazzella's actual performance under the agreement, ZGA's service of the NOI, its indication that Mazzella could contact ZGA if she disputed the debt, and ZGA's alleged failure to respond to Mazzella's correspondence. We conclude the complaint

sufficiently stated a cause of action for negligence. Having said that, we express no particular opinion on the merits of Mazzella's negligence claim. As the Gandi Court

observed, "We expect that after further discovery, . . . a trial judge will have a clear record on which to rule on any further motions." Id. at 186. We do not

Affirmed in part; reversed in part; remanded. retain jurisdiction.

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