![]() On December 31, 2018, LoanCare Now, this matter comes before the Court upon Freedom’s Motion to Dismiss, once again asking the Court to dismiss LoanCare’s fraud, tort, and unjust enrichment claims, as repleaded in the SAC. After Freedom moved for Judgment on Pleadings, this Court issued an Opinion and Order on Novem, dismissing LoanCare’s fraud, tort, and unjust enrichment claims from the Amended Counterclaim. Subsequently, LoanCare filed an Amended Counterclaim on J. On July 8, 2016, LoanCare filed an Answer and Counterclaim to Freedom’s Complaint. In May 2016, Freedom commenced this suit against LoanCare, claiming, among other things, breach of contract, unjust enrichment, and other misconduct by LoanCare. Additionally, LoanCare contends that it was forced to borrow millions of dollars, with interest, to cover the shortfalls caused by Freedom’s actions. LoanCare states that it 3 eventually recovered $89,021,242.09, but that Freedom continues to unlawfully withhold funds totaling $22,693,762.17. LoanCare alleges that Freedom, effectively, collected the requested funds twice: once from the custodial accounts and once from LoanCare’s own accounts. ![]() When it came time to execute the scheduled transfers, LoanCare was unable to access the custodial accounts and the banks defaulted to pulling the full $111,715,004.26 from LoanCare’s own cash accounts. Meanwhile, unbeknownst to LoanCare, Freedom allegedly worked directly with the banks to seize and block LoanCare’s access to these very same accounts. Based on these instructions, LoanCare scheduled various wire transfers and Automated Clearing House (“ACH”) debits, totaling $111,715,004.26, to remit the funds back to Freedom from the custodial accounts. Accordingly, in early May 2016, Freedom allegedly told LoanCare to transfer funds from shared custodial accounts back to Freedom. In anticipation of the termination date, Freedom instructed LoanCare to transfer any loans that it was servicing back to Freedom by May 3, 2016. In January 2016, Freedom advised LoanCare that it planned to terminate the Subservicing Agreement on June 30, 2016. From Februthrough June 30, 2016, the terms of the parties’ relationship were governed by the Amended and Restated Subservicing Agreement (the “Subservicing Agreement” or “Agreement”). 2 mortgage lender, to service various mortgage loans. FACTUAL BACKGROUND For approximately 15 years, LoanCare, a mortgage subservicer, worked with Freedom, a full-service residential 1 The Court shall apply Virginia law to this matter pursuant to § 10.6 of the Subservicing Agreement, which states that “his Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without giving effect to its conflict of laws principles.” See Dkt. For the reasons stated herein, the Motion to Dismiss will be GRANTED IN PART, as to Count Two, but DENIED IN PART, as to Count One, Count Three, and Count Five. ![]() Because Virginia law governs the dispute between the parties,1 Freedom contends that LoanCare’s fraudulent inducement, conversion, and unjust enrichment claims are subsumed by LoanCare’s Breach of Contract claim (Count Four) under Virginia’s “source of duty” rule. (pro hac vice) 401 East Las Olas Blvd., Suite 1200 Fort Lauderdale, Florida 33301 Counsel for LoanCare, LLC RENÉE MARIE BUMB, UNITED STATES DISTRICT JUDGE: This matter comes before the Court upon a Motion to Dismiss, filed by Plaintiff/Counterclaim Defendant Freedom Mortgage Corporation (“Freedom”) seeking dismissal of Count One (Fraudulent Inducement), Count Two (Conversion Before Termination), Count Three (Conversion After Termination), and Count Five (Unjust Enrichment) from the Second Amended Counterclaim (“SAC”), filed by Defendant/Counterclaim Plaintiff LoanCare, LLC(“LoanCare”). One Gateway Center, 25th Floor Newark, New Jersey 07102-5311 Counsel for LoanCare, LLC BOIES SCHILLER FLEXNER LLP By: Stuart H. FRIEDMAN KAPLAN SEILER & ADELMAN LLP By: Robert J. (pro hac vice) One Gateway Center, 4th Floor Newark, New Jersey 07102 Counsel for Freedom Mortgage Corp. APPEARANCES: LANDMAN CORSI BALLAINE & FORD, P.C. OPINION LOANCARE, LLC Defendant/Counterclaim Plaintiff. 116 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CAMDEN VICINAGE FREEDOM MORTGAGE CORPORATION, Plaintiff/Counterclaim Defendant, Civil No.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |